Pet Care FRANCHISES are roaring - Franchisegrade.com · There are multiple franchised business...
Transcript of Pet Care FRANCHISES are roaring - Franchisegrade.com · There are multiple franchised business...
LEADERS OF THEPACK
SIT&STAY
WALKINGTOWARDSTHE FUTURE
AM IREADY TOINVEST?
Pet Care
are roaringFRANCHISES
®
THE AUTHORITYON FRANCHISING
03 UNLEASHING PET CARE Opportunities
05 How to Pick the LEADERS OF THE PACK
06 MADE THE GRADE™ Franchises Are Better
07 The History of PET CARE
09 SNIFFING OUT the Good Ones
10 SIT AND STAY! Not All Franchises are Created Equal
17 Walking Toward the FUTURE OF PET CARE
18 WHY BUY a Pet Care Franchise?
19 Why MADE THE GRADE™
20 AM I READY TO INVEST Into a Pet Care Franchise?
23 About FRANCHISE GRADE
THE BUSINESS OF PET CARE
If you’ve ever thought of opening your own business and have a passion for
animals, a Pet Care franchise can be an amazing start to your new direction in life. Our report gives you the research
needed to make the right decision.
UNLEASHING
PET CAREOPPORTUNITIES
Pet Care is a relatively new and emerging franchise sector as 85.7% of Pet Care franchises began in 2002 or later.
According to the American Pet Products Association (APPA), 65% of U.S. households own at least one pet with an estimated $62.75 billion spent on pets in 2016.
Pet Care franchises can be classified as two types of investment opportunities; Personal Services and Retail Products and Services franchises. Personal Services franchises are investments that cater to providing services to pets and pet owners, such as dog walking services. Retail Products & Services franchises offer opportunities to sell products to sell products ranging from bird seed to dog food.
These two types of investments mean a Pet Care franchise can be available for a diverse group of people as investment ranges can be as small as $15,000 to as large as $2,000,000.
We analyzed 42 individual Pet Care franchise investments in this report and identify which
pet care franchises are leading the pack.
The results (see below) are based on an analysis of 33 (79%) franchise systems
from the Personal Services sector and 9 (21%) franchise systems from the
Retail Products & Services sector.
PET CARE OPPORTUNITIES
PERSONAL SERVICES
RETAIL PRODUCTS& SERVICES
All franchises are not created equal.
Do your research.
In the Pet Care franchise sector there is a broad spectrum of franchise opportunities.
THERE ARE 7 TYPES OF PET CARE FRANCHISES:
There are multiple franchised business opportunities in each pet care type above. But don’t go chasing your tail on just any of them. To find the best, you must do your homework.
Franchising can be a path to your success. But all franchises are not created equal. Make sure to do your research and find the best franchise that fits your needs.
CATEGORY PERCENTAGEBoarding and Daycare 24%
Training 19%
Supplies and Grooming 17%
Supplies and Food 16%
Walking and Pet Sitting 12%
Veterinary and Other Services 7%
Waste Removal 5%
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use our services every year
The opportunity to work with you was amazing from start to finish! I invested my life savings but feel so good about buying this franchise.
Donna Ferris
My wife and I have been looking for a franchise for a while now and came across your website. The info’s been great and because of speaking with Kylie we picked a franchise to buy. We liked the amount of information we had got and highly recommend you to someone that wants to buy a franchise.
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HOW TO PICK LEADERS OF THE PACK
Using our proprietary Franchise Performance Index (FPI)™, we grade over 2,500 franchise systems for investment quality and identify healthy franchises. Only the top franchise systems receive our Made the Grade (MTG)™ designation.
Franchise Grade™ created our MTG™ program to designate which franchise system performs the best.
Each franchise is graded on these key factors:
INVESTMENTSTRUCTURE
ONGOINGFEES
SYSTEMTURNOVER
FRANCHISEERIGHTS
SYSTEMGROWTH
FRANCHISERELATIONS
FINANCIALTRANSPARENCY
12
5
3
6
4
7
Franchise Grade™ compared 42 Pet Care franchises and divided them into 5 grades: A+, A, B, C and D grade investments. 9 Pet Care franchises received an A or A+ grade!
A franchise investment must be graded A or A+ to be designated as MTG™ and is called a healthy franchise throughout this report. Those investments
graded B, C or D are called unhealthy. You’ll clearly see the top performing franchises and how they compare to others.
Where applicable, we have broken down the Pet Care category into quartiles based on their overall grade. The top 25% include the A and A+ graded franchises, while the B, C and D graded franchises are
distributed across the 2nd, 3rd and bottom 25%.
At Franchise Grade™, we work like a dog to identify the best investment options for prospective franchisees.Our research is fact based and represents objective investment analysis for prospective franchisee investors.
MadeFranchises Are Better
The Grade™
THE HISTORY OFPET CARESince 2010, we’ve seen an increase of 42.9% in the total number of Pet Care franchise systems in operation.
Part of the reason that 64% of Pet Care franchises have less than 25 outlets is the amount of new franchises that entered this category in the Personal Services sector since 2003.
This surge of new Pet Care franchises is reflected in franchisee turnover and growth figures. There was a 13% decrease in the number of outlets from the beginning of 2010 (1,921 outlets) to the beginning of 2016 (1,681 outlets). Despite this, the median growth rate has been positive. Our research revealed that 3 systems account for over 50% of all closures, meaning that a small number of Pet Care franchises have negatively affected the overall pet care statistics.
According to the American Pet Products Association (APPA), there was $17 billion spent on pet care in the U.S. in 1994. This number has increased steadily each year. There was $60.28 billion spent on household pets in 2015. An estimated $62.75 billion was spent
There has been $269.4 million invested in Pet Care franchises
since 2010.
on Pet Care in the U.S. in 2016. This increase is linked to the increased demands of the household, such as more working residents in a household, which leads to time constraints. This has increased the need for pet services, such as dog walking, waste removal, boarding and grooming.
There has been $269.4 million invested in Pet Care franchises since 2010. $81.4 million has been invested in healthy Pet Care franchises and unhealthy franchises received $187.9 million in investments.
Although people like you invested millions of dollars in Pet Care franchises, less than half invested in a healthy franchise. This proves that you must investigate further into an investment – to discern the strengths and weaknesses of a franchise prior to spending a large sum of money.
There have been 800 Pet Care franchise outlets opened since 2010. The surge of Personal Services franchises in Pet Care almost doubles the franchise industry average for franchisee growth.
HealthyFranchises
$18
7,99
7,98
5
$81,457,963
2010 - 2015
TOTAL CASHINVESTED
UnhealthyFranchises
Our goal is to make it easy for anyone to get into franchising.Jeff Lefler, CEO
“
SNIFFING OUT
THE GOODONES
The median franchisee growth illustrates that healthy Pet Care franchises are growing faster than the unhealthy franchise opportunities.
The median turnover rate indicates that healthy franchises have far less franchisee turnover. This means that investments into healthy franchises are successful and new franchisees continue to grow their businesses.
PET CARE FRANCHISES
MEDIAN FRANCHISEE
GROWTHHealthy 13.9%
Unhealthy 5%
PET CARE FRANCHISES
MEDIAN TURNOVER
RATEHealthy 5.2%
Unhealthy 10.3%
Franchise Grade gives you the data and predictive analysis to make the right business decisions to help you grow.
With Access To:
#1 Franchise Database The World’s
25mDATA
POINTS
450kFRANCHISEECONTACTS
18kCANDIDATE
PROFILES
12kEXECUTIVECONTACTS
4kFRANCHISE
SYSTEMS
13kFDDS
exciting as owning a franchise is, you need to remember that it is an investment.
Providing a service for pets or selling pet food might be a passion, but no matter how excited you are, investigate the numbers.
We reviewed Pet Care franchises for investment value analyzing a variety of factors from investment structure, ongoing fees, franchisee rights, franchise relations, system growth, system turnover and financial transparency.
AS
SIT AND STAY
NOT ALL FRANCHISES ARE CREATED EQUAL
INVESTMENT RANGEWhen investing into a franchise, you need to consider the size of the investment. How much can you afford? Always have a cushion because business is unpredictable at times and you need to have capital for a rainy day.
Pet Care franchises provide a variety of investment ranges, meaning there is a Pet Care franchise for every budget.
There is a difference between Pet Care franchises in the Retail Products & Services sector and in the Personal Services sector. Personal Services are predominantly home-based or mobile and do not require a store front location or inventory as part of the investment. This means that the service-based franchises tend to be lower investment ranges.
AVERAGE TOTAL INVESTMENT
The data below identifies that the average initial inventory costs of Pet Care franchises is significantly higher in Retail Products & Services Pet Care franchises.
AVERAGE INITIAL INVENTORY COST
SECTOR LOW HIGHRetail Products & Services $240,641 $628,037
Personal Services $153,724 $408,658
LOW $41,000
HIGH $106,625
LOW $4,454
HIGH $8,464
RETAIL PRODUCTS & SERVICES
PERSONALSERVICES
ROYALTY RATESAll franchise investments have some form of fees that are paid to the franchisor called royalties. Royalties are paid to the franchisor before your operating expenses or personal wage. Make sure the franchise generates enough revenue to be profitable after royalties and advertising fees are paid.
Average Pet Care franchise royalties are comparable to other Personal Services franchises
FRANCHISEE RIGHTSA franchise may offer territory rights, granting you, the franchisee, a protected or exclusive territory. The difference between territories can be significant. A protected territory can allow a franchisor and other franchisees to market into and recruit from a franchisee’s territory.
A higher percentage of Pet Care franchises offer an exclusive territory compared to other Retail Products & Services, Personal Services franchises and the overall franchise industry. An exclusive territory is desirable as it grants strong protection to the franchisee for the term of their franchise agreement.
HealthyFranchises
6%
UnhealthyFranchises
8%
AVERAGE ROYALTY RATE
Pet Care - 23.8%
Retail Products& Services - 27.6%
Personal Services - 30.3%
Franchise Industry - 26%
DEFINED
PROTECTED
EXCLUSIVE
Pet Care - 75.9%
Retail Products& Services - 70.1%
Personal Services - 67.5%
Franchise Industry - 54.4%
Pet Care - 33.3%
Retail Products& Services - 19.8%
Personal Services - 21.3%
Franchise Industry - 15.7%
FRANCHISEETERRITORY
but higher than Retail Products & Services franchises.
An interesting statistic is that the healthy Pet Care franchises have lower royalties than unhealthy comparisons. This difference is one of the reasons certain Pet Care franchises perform better than others.
FRANCHISE RELATIONSFranchise Relations is a term that refers to the quality of the relationship between the franchisor and its franchisee. It’s important to review the amount and type of litigation or lawsuits, disclosed by the franchisor.
When seeking an investment, you should look for a franchise that has positive franchise relations, where there is minimal (if any) disclosed litigation and where the franchisor has a dispute resolution process in addition to mediation.
Pet Care has a low amount of litigation in comparison to the Retail Products & Services and Personal Services sectors.
71.4% of all Pet Care franchises have zero litigation.
PetCare
28.6%
RetailProducts
& Services
39.6%PersonalServices
39.8%
% OF FRANCHISES WITH LITIGATION
FRANCHISEE TURNOVEREvery franchise system has turnover. Franchise Grade analyzed the following five types of turnover:
1
3
2
4
5
Transfers: When a franchisee location is sold (transferred) to another franchisee
Non-Renewal: When the franchisor or franchisee chooses not to renew their agreement after it expires
Terminations: When the franchisor terminates a franchisee’s agreement
Reacquired: When the franchisor reacquires the franchisee’s location
Ceased Operations and Other Reasons: When the franchisee closes down and stops operating the business
6%
9%
12%
15%
Pet Care8.1%
Retail Products& Services
12.5%
PersonalServices10.4%
FranchiseIndustry11.5%
Pet Care7.7%
Retail Products& Services
9.4%
PersonalServices
8.1%
FranchiseIndustry
8.9%
FRANCHISEE TURNOVER 6 YEAR AVERAGE
AVERAGE
MEDIAN
HealthyFranchises
4.3%UnhealthyFranchises
9.1%Made The Grade™ franchises have low franchisee
turnover
FRANCHISEE GROWTHYou should look to invest in a franchise system that is growing. Growth reflects market demand for the franchise’s products and services as well as confidence on the part of franchise investors.
Since 2010, there have been800 Pet Care outlets opened.
The Personal Services sector is growing at a faster rate than Retail Products & Services sector. Personal Services has a 6-year average franchisee growth rate of 67.1% while Retail Products & Services has a 6-year average of 23.9%.
This pattern is reflected in Pet Care specific franchises within these two sectors. Pet Care franchises in the Personal Services sector have a 6-year average franchisee growth of 33.1% while Pet Care franchises in the Retail Products & Services sector have a 6-year average of 6.3%.
FINANCIAL TRANSPARENCYThe key component of Financial Transparency is whether or not a franchisor provides a Financial Performance Representation (FPR) under their Item 19. By providing prospective franchisees a FPR the franchisee has the opportunity to construct a pro forma income statement and cash flow projection. This allows you to make a more informed decision regarding a specific franchise investment.
A franchisor is allowed, but not required, to disclose financial information about their franchisees. Some franchise systems don’t provide any financial data based on franchisee performance because it isn’t mandatory. This approach raises some serious concerns.
In addition, most franchise systems that provide an FPR only show the franchisee gross revenue but no expense data. It’s not only how much gross revenue a franchisee generates, rather it’s about what you can put in your pocket at the end of the day after all bills are paid. You are investing into a business. You should be able to pay yourself a higher than expected wage 100% of Made The Grade™
franchises disclose an FPR, 77.8% disclose Expense Data
FPR100%
FPR57.6%
EXPENSEDATA
77.8%
EXPENSEDATA
27.3%
HealthyFranchises
UnhealthyFranchises
Our analysis revealed that 66.7% of Pet Care franchisors disclose an FPR. 38.1% of those disclosures include Expense Data.
Through extensive collaboration with franchisors, Franchise Grade® has developed a rich portal to support your franchise growth and development.
The Authority on Franchising, Franchise Grade®, collects 2,500+FDDs every year.
We analyze millions of data points ranging from franchise fees, initial investments, territory rights and state by state growth.
Our Franchise Intelligence™ provides you with resources to help attract the right candidates and sell more franchises.
FRANCHISEINTELLIGENCE
powered by: Franchise Grade®
Rich interactive data visualization tools make it easy for you and your team to compare competitive franchise investments.
Choose the amount of data to show candidates and present the analysis in a variety of competitive benchmarking options, highlighting your offering.
Use our FDD Audit to identify the advantages, risks and opportunities of your franchise while educating your candidates on franchising.
Become a Made The Grade™ certified franchise, using our 3rd party validation to sell more franchises.
Use our mapping software to pinpoint development options and map any franchise’s growth across the US.
Geo-target advertising on our website promoting your franchise to over 20,000 visitors a month.
Competitive research is measured and analyzed enabling your team to move candidates through the sales process more efficiently.
Using data and analytics will increase a candidate’s confidence in your offering, helping you sell more franchises.
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life. Services such as grooming, walking, pet sitting, boarding and daycare have become necessities for a beloved pet while people are busy.
According to research firm Mintel, 75% of millennials have dogs compared to only 50% of the overall population. Over 50% of millennials have cats compared to only 35% of the overall population. Millennials use technology to buy services for their pets, providing additional opportunities for service based franchises to grow.
Due to these factors, Pet Care franchises in the Personal Services sector will continue to see steady grow compared to those in Retail Products & Services sector.
WALKING TOWARDThe Future of Pet Care
amount of money spent on Pet Care in the U.S. continues to increase year after year. According to the American Pet Products Association’s (APPA) report on Pet Industry Market Size and Ownership Statistics, it is estimated that $62.75 billion was spent on pet care in the U.S. in 2016. This is a 226.4% increase over the $38.5 billion spent in 2006.
This increase is attributed to the increased time constraints on daily
THE
Why Buy aPet CareFranchiseThere are several reasons why a Pet Care franchise is an attractive and healthy franchise opportunity.
Pet Care franchises offer a versatile range of investments
that appeal to various budgets and business backgrounds.
Versatile
The majority of the systems are less than
15 years old and have less than 25 franchised outlets. This means that there are plenty of smaller franchises with available territories.
Young Industry
A higher percentage of Pet Care
franchises offer exclusive territory compared to the rest of Retail Products & Services, Personal Services and the franchise industry.
Territory Rights
The top 25% of Pet Care franchises have
low turnover, mostly attributable to transfers which are indicative of healthy franchises.
Low Turnover
66.7% of Pet Care franchises disclose financial performance representations
in their Item 19 helping you construct a pro forma income statement and cash flow projection.
Financial Transparency
Why
Pet Care franchises designated MTG™ offer a lower risk investment when compared to all Pet Care franchises:
Pet Care franchises are healthy options for a successful business
1
3
6
2
4
5
Better franchise growth
Higher percentage of transfers
77.8% of FPRs include Expense Data
Lower franchise turnover
An average of zero litigations per franchise system100% provide an Item 19 financial performance representation (FPR)
MadeThe Grade™
LETUS HELP
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franchise.
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Do I have the experience and skills needed to operate a Pet Care franchise?
Don’t be a scaredy cat. Pet Care franchises include a broad spectrum of services and retail opportunities. However, you should
have the desire to enjoy your work and the ambition to further your knowledge of current pet products, grooming or training
methods and how to avoid potential dangers. Healthy franchise systems will
also provide the training and support needed to operate their franchise. Any lack
of experience owning a business can be supported by a franchise investment.
AM I READY TO INVEST?
are some questions a franchisee needs to
answer before investing in a Pet Care franchise:HERE
Do I enjoy the challenge and satisfaction of managing others?
In order to be a successful Pet Care franchisee, you need the skills and
experience of managing others. Pets are cherished members of a family that are entrusted to your care and capabilities,
so it is important that staff members and caregivers maintain a positive approach
when handling both the animals and their families. You will need to be diligent in
making sure that the right people are in place. You will also need to provide the
right tools so that your staff have the necessary knowledge and products to
complete their tasks.
Do I have the right personality?
You should enjoy working with both people and animals. As a business owner, you’ll
working like a dog to grow your business. You need to be comfortable handling
chaotic situations and regaining control of the environment. Pet parents can be just
as unpredictable as their pets, so you must be quick to react in unexpected situations. A calm and assertive approach to handling staff, pets in your care and nervous or new
pet parents is key to maintaining a happy and profitable environment.
What does a successful franchisee look like?
Passionate About Life
Strives For Wealth Creation
Craves learning
Desires Change
Dreams BIG
Takes Calculated Chances
Determined To Succeed
Confidence In Skills
Finds Trusted Advisors
Fierce Competitiveness
Does this sound like you?It’s time to be a SUCCESSFUL FRANCHISEE.
Call 1-800-975-6101
to learn more
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ABOUT FRANCHISE GRADE®
Franchise Grade is The Authority on Franchising. Using our proprietary Franchise Performance Index, we grade over 2,500 franchise systems for investment quality and identify healthy franchises. Every franchise system’s data is published on our website and prospective franchisees use our services to help them find the best investment opportunities. Only the top franchise systems can receive our Made the Grade™ (MTG) designation. Franchise systems using the MTG™ designation attract better candidates and sell more franchises.
Franchise Grade is the only source of comprehensive information about franchising, and here’s why:
• It is totally fact based• It represents only objective analysis• It is graded and reviewed for franchisee investors• It is the largest database in franchising
Franchise Grade is the source of franchise industry data for major media publications such as Bloomberg, Forbes, Inc. Magazine, Newsday, Time, Black Enterprise and The Wall Street Journal.
Disclaimer:
This report product is supplied by FranchiseGrade.com Inc. (Franchise Grade) for the sole use of subscribers and/or purchasers.
All information contained within this report is obtained by Franchise Grade from sources believed by Franchise Grade to be reliable and accurate. Any forecasts, calculations or predictions contain within this report are believed to be accurate as the data and methods will allow. Due to the possibility of human or mechanical error, the information within this report is provided “as is” and no warranty of any kind is provided.
Franchise Grade makes no representation to any person or entity with regard to the completeness or accuracy of the data and information contained herein, and it accepts no responsibility and disclaims all liability for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or information contained herein.
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