I agree with Amanda, I can not think of any cons as a daycare provider. As a parent, if you feel entitled and want to make your own rules than I guess you would see a contract as a con.
IMO, daycares that do not have contracts are not taking this job seriously and view it as way to make extra money while staying home or are doing this until a better job comes up. This is my career and my business...I do whatever I need to do to stay in business, be professional and be taken seriously. I would never even consider working without a contract.