The biggest advantage is that an agency can offer families subsidy. If you live in an area with a lot of families with low incomes that require subsidy then it might help to fill up since it gives you a bigger pool to draw from. Realize the agency will take some of the money so you will end up making less than with the private families. The agency also has their own rules and does monthly inspections which I found intrusive in the sense of they are surprise so you never knew when meaning any day could be disrupted.

A big con is age restrictions with an agency which you don't have if you are private. Depending on the ages of your own children or how many will be the deal breaker. Your own children count so if you have 2 of your own you can only take in 3 other children for care to equal 5. Privately your own don't count so you can have 5 daycare plus your own. Also with the agency the age restrictions will become an issue as the older kids move to full time JK but you can still only have 2 under 2, 3 under 3 or whatever the rule is.

In some areas fewer families are looking for subsidy so they don't see the benefits since the parents end up paying the agency more money then they would have to pay a provider directly. This means the agency has fewer children to place so the caregiver still ends up with spaces she needs to fill privately but now has to also live under the agency restrictions even though even when no agency children are placed.