Pet Care Franchises and New Competition

Camp Bow Wow continues to sell franchises at a fast clip. They have a nice offering and compelling business model for pet lovers. But keep reading…

I’ve visited a good number of non-franchised doggie daycare and doggie hotels, and most were extremely well run and popular.

In my opinion, it’s not the type of business that requires the burden of franchise relationship. For example, Camp Bow Wow requires a $50k franchise fee, 6% royalty, and $300k-500k in total startup costs. A sensible, business-oriented person would ordinarily do much better spending that $50k on advertising and promotions, keep the 6% spread, and not be burdened by the franchise requirements should you have to scale back or alter your operations.

The Competition

The margins in this pet-care business are high, and the big boys have noticed. PetsMart have invested heavily to convert part of their stores into PetsHotel, providing services such as day and overnight care, grooming, training, groomed while staying at the “hotel”. Many locations also have The Pet Hospital with Veterinarians on-site. If I’m a franchisee, how do I compete? There are a few ways, such as pick-up and delivery of pets (I don’t think PetsHotel currently does this)…but that’s a time consuming endeavor and another layer of expense.

My Conclusion

This is a tough decision betweeen I’m Neutral On It or I Wouldn’t Buy It with respect to doggie day/night care franchises. We’ve listed a few pet franchises before, and I can imagine low-competition areas where you can get away with the cost/benefit of a franchise. However, in my own community which even has its own pet service review web site (Chicago), I wouldn’t buy it. There is no evidence here that a franchise give you a leg up on the heavy day/night care competition here.

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Here’s a free tip for franchisors – start a franchise specifically for veterinarians called “VetPet Suites”. This franchise would be sold ONLY to veterinarians. Vets are easy to target in your sales effort, they are generally doing well financially, and can leverage their own reputations to build both the day/night pet care buisness and simultaneously expand their own vet practice. They will have an immediate competitive advantage over all other non-vet pet care business (except PetsHotel with The Pet Hospital).

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