Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Chatter Q&A: Peter H. Thomas, Chairman and CEO of Thomas Franchise Solutions, Dogtopia’s New Strategic Partner

by Franchise Chatter on October 29, 2012

in Franchise Chatter Exclusive, Pet Franchise, Q & A Interview

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Dogtopia, a leading national dog daycare and spa franchise, has entered into a strategic partnership with Thomas Franchise Solutions, Ltd. (TFS), an investment firm dedicated to guiding and growing select unique franchise concepts. With the new partnership, Dogtopia plans to expand its brand to more than 400 locations across the United States and Canada over the next 7 years.

“Upon being introduced to Dogtopia, we instantly recognized the passion for personalized care and exceptional customer service, both of which have propelled the company to be a successful, growing franchise for more than 10 years,” said Peter H. Thomas, chairman and CEO of Thomas Franchise Solutions, Ltd. “As a new partner and a future Dogtopia franchisee, we have made it our mission to position the company for success today and in the future.”

TFS was founded in January 2012, and Dogtopia is the first franchise concept in its portfolio.

Thomas was the past chairman and founder of Century 21 Real Estate Canada, Ltd., which ultimately developed franchises in every Canadian city from coast to coast and achieved more than $9 billion in sales. Thomas developed the Four Seasons Resort in Scottsdale, among many other successful real estate and finance businesses.

Thomas is also the author of Be Great and the creator of LifePilot, a values-based system for achieving goals.

Franchise Chatter (FC):  Please tell us about Thomas Franchise Solutions, the global private equity, advisory, and franchise marketing company you formed earlier this year to invest in franchise opportunities.

Dogtopia Interior PhotoPeter H. Thomas (PHT):  There are two main elements to TFS, and they complement each other. Through our investment fund, TFS makes capital investments in private growth-stage companies throughout North America that have franchising as their core expansion strategy.

Through our Strategic Advisory Group, TFS consults with and supports emerging and growth-stage companies, helping them develop strategic business plans and providing practical advice and direction on how to transition through the various stages of franchising, culminating in successful exit strategies.

FC:  Why did you decide to focus your investment dollars on franchise companies in particular?

PHT:  I have been a successful franchisee and franchisor since 1974. I founded Century 21 Canada, and built it into the leading real estate brokerage nationwide. I’ve served as Chairman of the Young Entrepreneurs Organization, and I see tremendous opportunities for entrepreneurs to grow via franchising. In addition, I believe investment in franchise companies — with their recurring streams of royalty income and diverse paths to profitability — provides investors with an attractive alternative to the volatility of traditional markets in today’s environment.

FC: Can you walk us through your due diligence process and investment criteria for evaluating franchises to invest in?

PHT:  Before investing in a company, we assess seven major sets of issues in depth. Some elements of our method are proprietary, but I can say that among the issues we examine are the growth potential of the industry in which the company competes, the company’s ability to build sustainable competitive advantages and barriers to entry, the strength of the franchise system (including the strength of the franchisees and their satisfaction with the franchisor’s efforts to support them), and the ethical stature of the company and its leaders. We are a values-driven firm, so it is essential that the company share our values.

FC:  What did you see in Dogtopia that made you decide to invest in the company?

PHT:  Dogtopia passed every one of our tests with flying colors. Its customers love it. Its franchisees are successful. Its management team is exceptionally strong for a company of its size, and Amy Nichols is an extraordinary CEO. The market for pet care services has continued to grow despite the recession — people really love their dogs, and they want the best for them. That’s Dogtopia.

FC:  What is the scope of your strategic partnership with Dogtopia?

PHT:  TFS has taken a significant stake in the company, and will advise Amy and her team on all aspects of its operation and future growth.

FC:  Based on your evaluation of the company, what areas of the Dogtopia business have the most room for improvement?

Dogtopia Interior PhotoPHT:  Dogtopia provides tremendous support for its franchisees already. But our investment will allow Amy and her team to provide even more services as their franchise network grows. We’ll launch an online university to make an extensive collection of training videos available to franchisees 24/7. We’re adding staff to provide even more day-to-day support to the field. We’re working to enhance our POS system, increase our marketing efforts, provide more support in real estate site selection, and more.

FC:  How are you planning to work with the management team of Dogtopia to grow the business and increase the value of your investment?

PHT:  Amy and I serve as a two-person Board of Managers for the company. And TFS can supply additional resources anytime they’re needed.

FC:  What are your growth targets for Dogtopia in 2012, and beyond? How many franchise locations are you planning to open, and where?

PHT:  We expect to see Dogtopia spread across the entire U.S. and Canada within this decade. Our research makes clear that there is a strong and increasing demand for high-quality pet care services, and Dogtopia is exceptionally well-positioned to deliver them.

FC:  Aside from pet services, what other franchise categories are you considering for future investments, and why?

PHT:  We are primarily interested in companies that are in the healthcare, real estate, business services, consumer products, and consumer services sectors, as we see several growth opportunities within each of these sectors. However, we do sometimes consider investments outside these core categories when we see evidence of unique potential.

FC:  Do you have any advice for prospective franchisees who are in the process of evaluating franchise opportunities to invest in?

PHT:  Do your homework. You should put as much careful thought and scrutiny into your investment in a franchise system as we would. But don’t just assess the franchisor — look into your own mirror and make sure that investing in a franchise business is right for you. People that can’t work within a system and be willing to follow proven processes, and people who don’t have the people skills to manage challenging customers and employees, probably aren’t right for franchising. It’s better to realize that about yourself sooner rather than later.

FC:  Is there anything else you wish to share about Dogtopia or Thomas Franchise Solutions?

PHT:  We fully expect that TFS will play a leading role in the franchise industry in the U.S. and Canada. The resources we bring and the group of franchise experts we’ve assembled have positioned us to play a leadership role, and we intend to do exactly that.

To learn more about Thomas Franchise Solutions, visit thomasfranchisesolutions.com or call their Phoenix office at 480.703.6767.

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