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According to the 2019-2020 APPA National Pet Owners Survey, 67% of U.S. households own a pet, which equates to 84.9 millions homes. Suffice it to say that pet franchises are booming, and it’s no surprise as the pet market has reached nearly $100 Billion. Take a look at this chart from American Pet Products:
For 2020, it estimated that $99.0 billion will be spent on our pets in the U.S.
*(Other services include boarding, grooming, insurance, training, pet sitting and walking and all services outside of veterinary care)
So we took a look at 8 of the most popular pet franchises based on rankings in Entrepreneurs Franchise 500 and broke down the numbers.
In categories like children’s services, we can get really specific with comparisons of only education franchises (which we’ve done here) or only children’s entertainment franchises. In the pet category, however, we don’t see a large enough sample set for each individual sub-category so we’ve grouped them all together here. You’ll notice that missing from our analysis entirely is any franchise under the Vet Care and Product Sales category, estimated to be worth $30 Billion in 2020. It’s not that they don’t exist, but Veterinary care has only recently entered the franchise realm and thus the few franchise brands that offer vet care have not yet cracked the Franchise 500.
Since this was published in May, Oakscale has partnered with an exciting new concept called PetWellClinic, which has 5 locations based out of Knoxville, Tennessee. It boasts an initial investment range lower than the average range represented in this article, and has had explosive growth in a matter of months with agreements signed to develop 33+ locations in Pittsburgh, South Florida, and New Jersey. For more information - fill out our franchise application to get in touch.
Because each pet franchise is fairly unique in its offering, we see a wide range of investment levels for this category. Franchises like Camp Bow Wow and Dogtopia require the largest investment as they are larger facilities that offer a multitude of services like doggie daycare, pet boarding, and grooming. They require more construction and more furniture, fixtures, and equipment.
On the other end of the spectrum, franchises that offer just one service, like Aussie Pet Mobile which offers grooming services, or Sit Means Sit Dog Training which offers only dog training, less space (or no real estate at all!) is required and thus the investment is dramatically less.
The 4 franchises that are retail-based pet supplies stores have a very wide range of investment for similar reasons. It will depend on the square footage of the location you choose to build as well the inventory needed to stock that location. In the case of Wild Birds Unlimited, they only sell products related to birds so inventory is limited and you only need a small space. Thus the investment level is quite a bit lower than a “sell-everything” store like Pet Supplies Plus.
To better understand investment levels, you’ll want to read our Franchise Basics Guide to franchise costs.
$320,255 - $756,473
$751,000 - $1,458,500
$49,775 - $145,850
Franchise Fees for pet franchises range between $30,000 and $60,000. The highest fee is charged by Aussie Pet Mobile, which may be counter-intuitive since it has one of the lowest investment levels as a whole. The franchise fee makes up nearly 40% of the highest estimated initial investment. Wild Birds Unlimited features the lowest franchise fee of $30,000, which in contrast makes up roughly 12% of the highest estimated initial investment.
To better understand these fees, you’ll want to read our Franchise Basics article that covers franchise fees, but in short, you’ll want to make sure you’re getting value out of your franchise fee. Just because a fee is significantly less expensive than another does not necessarily make it a better investment.
The royalty range for pet franchises spans anywhere from 3% to 8%. The average doesn’t really tell us much as there are really two categories here: franchises that charge between 3 and 4.5% and then franchises that charge between 7 and 8%. If you remove Pet Wants from the analyses, we see an association between lower royalties and retail-based pet supply stores, and then higher royalties and service based pet franchises.
Why is this? One potential explanation is that profit margins are typically higher in service-based businesses because there are very limited (or potentially zero) Costs of Goods so there’s more room for both you, the franchisee, and the franchisor to make money. Profit margins are typically a bit lower in retail or product-based businesses because there is a Cost of Goods associated with each sale. The franchisor may also be making a margin on the goods you are selling (i.e. they buy dog biscuits for $1, sell them to you for $2, and you then sell in your store for $4). In that case, they are comfortable making less money from the royalty.
Read up on royalties in our Franchise Basics article.
*Aussie Pet Mobile
**Pet Supplies Plus
Note: The Royalty data does not include Sit Means Sit Dog Training which charges a flat fee of $600 per month and thus could not be factored into the average.
Who would have guessed that a store selling only bird supplies would be the largest pet franchise in the U.S.? Not us, but it’s true. Wild Birds Unlimited is the largest pet franchise in the U.S. with more than 300 locations! You could point to the fact that they’ve been franchising since 1983, but there’s only one franchise system that got an earlier start, and that’s the franchise with the least number of locations, Petland, which began franchising in 1971. So while the ramp-up time for Wild Birds Unlimited is significant, it’s obviously not the only factor. To become a large franchise system, you have to have a great concept, impressive unit economics, and solid leadership. In fact, you may find Pet Wants’ story more impressive, growing to 124 franchises in less than 5 years.
The size of a system can be a confidence booster for prospective franchisees because they know that many others have already bought in. But don’t sleep on a franchise just because it hasn’t boomed. There are some serious advantages to getting in early to a franchise that hasn’t experienced massive growth just yet. We detail those advantages here and here.
182 Franchise Units
147 Franchise Units
322 Franchise Units
71 Franchise Units
Training hours can be quantified but not qualified. After all, I think we’d all rather have one day of intense, valuable training than a full week of mediocre training. Since we haven’t been to each of (or any of) these franchises’ trainings for new franchisees, the only analysis we can really provide is that Sit Means Sit Dog Training offers significantly more training time than the other franchises. Perhaps because franchisees need not only learn how to operate the business, but also how to train dogs, which is second in difficulty only behind the art of herding cats.
*Sit Means Sit Dog Training
So, that’s a quick snapshot of the pet franchise category. As always, you’ll want to better understand why the franchise fees and royalties are what they are. Lower fees and royalties do not necessarily equal better opportunities.
To fully understand each franchise opportunity, you’ll want to follow our guidelines for researching franchises. Good luck!
The 8 Pet Franchises Included in this Analysis: Pet Supplies Plus, Dogtopia, Camp Bow Wow, Wild Birds Unlimited, Petland, Sit Means Sit Dog Training, Pet Wants, Aussie Pet Mobile.
*Disclaimer: The data published was aggregated from each brand’s page as seen on the Entrepreneur 500 Franchise list. The accuracy of this data is reliant on the accuracy of the Entrepreneur.com information collected. If you are interested in buying one of the brand’s mentioned in this post, you should verify all fees and data provided above directly with the franchisor during the course of your due diligence.