Side-by-Side Comparison of Dog Franchises
Are you interested in a dog business and looking for a side-by-side franchise comparison? We compare all of the major dog franchise opportunities in an easy-to-read chart, comparing these businesses with regard to franchise fee, royalty fee, staffing requirements and startup costs.
Comparing Pet Franchises
Once you’ve decided you’d like to own a business in the pet sector, your questions will likely focus on return on investment. The chart below indicates the typical initial investment (or startup cost). However, you need much more information than that.
What will your ongoing costs be? The staffing needs and royalty rate (both included in the chart below) give you only a small piece of the picture. The FDD (franchise disclosure document) is required to show you these initial costs, but you must ask the franchisor many questions to understand the ongoing operating costs.
Royalty rates in and of themselves do not tell you all you need to know. Royalties are calculated based on gross sales. But a high-grossing concept typically has very high operating costs, so you’re paying more in royalties, despite the lower rate, on top of payroll, rent, etc.
Ultimately, one key item you must know is net profit, as well as net profit margin. These are numbers that give you a more accurate prediction of how profitable your business might be.
Item 19: Financial Performance Statements
Some, but certainly not all, franchisors include this information in Item 19 of their FDD. Item 19 is where a franchisor has the option to disclose statements of financial performance. If a brand does not include an Item 19 disclosure, you’ll need to ask them why they did not – what exactly are they withholding?
A franchisor is not legally permitted to make any statement to you about financial performance if that information is not included in their Item 19. So if a franchisor starts sharing numbers with you that aren’t in their Item 19, again you must be wary and ask why.
Zoom Room, so that you are aware, does include one of the most robust Item 19 disclosures you will find anywhere. It includes full P&L’s (profit and loss statements) for all locations, as well as net profit, net profit margin, the cost to acquire customers, average lifetime revenue of customers, YOY sales growth benchmarked against the pet industry as a whole, and much more.
“How soon will I be profitable?” is certainly the most common as well as the most logical question on the mind of many franchise candidates. Of course, the same can be said about someone buying a house – what will it be worth in a few years? Or someone purchasing a stock. Even the best investment could theoretically be run into the ground by a bad operator, so franchisors, just like realtors and stock brokers, can’t give you clear answers like these – only what’s listed in Item 19.
That said, there do exist a few crystal balls. For example, one excellent forecaster of future profitability is the ratio of LTR (lifetime revenue) to CAC (cost to acquire a customer). If this ratio is strong, that is excellent. If the franchisor can’t tell you these numbers, that is worrisome, as they are key metrics to running any business.
Another great indicator is NPS (net promoter score). This highlights the likelihood that a customer will actively recommend you to his or her friends and family. Many top CEO’s look upon this one metric as one of the best predictors of future growth. A business may have high sales today, but if the NPS is low, you could very well be looking at a short-lived bubble.
PET FRANCHISE COMPARISON: Other Terms
As you research pet franchises, it’s also important to consider the following:
Any boarding kennel, dog daycare, pet sitting, dog walking or grooming business means people leaving their dogs with you. Even for a home-based business the liability implications may be substantial. The Zoom Room is not a drop-off facility; because owners are with their pets 100% of the time, liability is significantly reduced.
Payroll and Management
If you’ve managed low-paid employees before, the headaches of employee management require no explanation. High turnover and subpar standards of animal care are commonplace. Sharp rises in minimum wage have caused skyrocketing payrolls costs, too. The Zoom Room requires only two employees working at any given time, one of whom is often the franchisee.
Any facility that offers overnight boarding or pet care is by definition open 24/7. That means you are on the clock 24/7. That means your phone will ring. A lot. Consider your own lifestyle and peace of mind when making this decision.
Some of the pet franchises listed offer only one product. You know the importance of a diversified portfolio; the same applies to a business.
Hidden Costs and Fees
Be sure to examine the FDD carefully (and/or with the assistance of a qualified franchise attorney) in order to suss out hidden costs and fees. These have been on the rise in recent years. Some franchisors believe that many entrepreneurs will place a great emphasis on the franchise fee, and they therefore artificially lower this fee while adding other required fees. These may include but are not limited to: construction fees, training fees, real estate fees, lease review fees, national convention fees, technology fees, insurance, email fees, requirements for local advertising spending, national advertising fees, renewal fees, transfer fees, and additional training fees.
The franchise comparison chart below does not include all of these potential extras, so once again – caveat emptor – read that FDD carefully.
The Fun Factor
We saved the best for last. Wouldn’t you love to love what you do? Perhaps we’re biased, because your daily life as a Zoom Room owner includes throwing dog birthday parties, running the agility course, teaching therapy dog training, puppy preschool, dog tricks, Urban Herding, competitive agility league, hosting a Doggy Disco fundraiser for a local rescue, and much more. Make sure you’re head over heels in love, while at the same time ensuring that the franchisor knows their numbers.
PET FRANCHISE COMPARISON
Note: Home-based and mobile pet franchises are not included on this franchise comparison chart, as they represent a completely different business model – one with generally lower initial costs and lower earning expectations.
That said, we should at least mention the other available dog training franchises. The Dog Wizard uses prong collars and e-collars in their training methods. They do not have any dog training facilities – classes are conducted in outdoor public spaces. Their royalties are 10% – the highest of any pet franchise. At the Zoom Room we practice only positive-reinforcement dog training, and conduct all training, distraction-free, in a dedicated state-of-the-art dog training gym.
Sit Means Sit, primarily home-based, relies heavily on the use of e-collars. Most of their franchisees provide in-home training only; others offer board-and-train options. In either case, the e-collar is central to their training method.
The Dog Stop is primarily a doggy daycare requiring 8-12 employees at minimum and a 10,000 to 20,000 square foot facility. But they do embrace positive training, which we love! The initial investment is double that of a Zoom Room, and training would be just one aspect of the business. Instinct is also positive reinforcement training, but costs even more, with facilities in the 10,000 square foot range and an emphasis on board and train, and some steep required marketing fees not included in the chart below.
Franchise Comparison Chart
|Pet Franchise||Initial Investment Low||Initial Investment High||Franchise Fee||Royalty||Min. # of Employees|
|The Dog Wizard||$56,200||$72,800||$40,000||10.0||N/A|
|Sit Means Sit||$24,275||$128,850||$17,500||$900/mo||N/A|
|Splash and Dash||$119,250||$211,600||$48,500||7.0||3|
|Three Dog Bakery||$225,000||$399,000||$40,000||5.5||2|
|Hounds Town USA||$339,300||$628,500||$49,000||6.0||2-8|
|Wag ’n Wash||$226,050||$673,850||$49,500||3-5||5-8|
|The Dog Stop||$259,800||$738,150||$49,500||6.0||8-12|
|Instinct Dog Training||$142,640||$889,280||$40,000||8.0 or min||6-8|
|Pet Supplies Plus||$439,870||$1,317,725||$49,900||3.0||12-15|
|Camp Bow Wow||$1,089,000||$1,524,000||$50,000||7.0||8-20|
Listed in increasing order of initial cost