My contract says 4 weeks notice to change or terminate the contract.
Your other option is to take on the other child and then let them give notice for breach of contract and leave. It still leaves you with the new child and able to replace. No different than if we give them notice for not fullfilling the terms of the contract . Once you don't adhere to something in it then the contract can be nullified.
I say take the new child on and put the ball in their court. They may stick it out for a bit to see how things go or they may get into a huff and move on. I would still send out the memo saying you intend to expand your daycare to include up to 5 children so they have some warning.

