In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Dogtopia franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Dogtopia franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Dogtopia franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Dogtopia outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Dogtopia’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 and 2017 average, median, highest, and lowest store sales for all franchised Dogtopia outlets that were open and operating for the entire applicable period of operation (open for all of 2018, open 8+ years, open 4-7 years, open 3 years, open 2 years, and open 13-24 months, respectively)
- 2018 average total gross sales, cost of goods sold, payroll expenses, controllable expenses, non-controllable expenses, property expenses, royalty fees, marketing fund fees, total expenses, and EBITDA for the franchised Dogtopia outlets that were open for all of 2018
- 2018 and 2017 average, median, highest, and lowest store sales for the 6 company-owned Dogtopia outlets that were open for all of 2018
- 2018 average total gross sales, cost of goods sold, payroll expenses, controllable expenses, non-controllable expenses, property expenses, royalty fees, marketing fund fees, total expenses, and EBITDA for the 6 company-owned Dogtopia outlets that were open for all of 2018
Section I – Background Information
24 Things You Need to Know About the Dogtopia Franchise
Opens 100th Location
1. In late June 2019, Dogtopia announced that it had achieved a major milestone with the opening of its 100th doggy daycare center. With 250 additional locations in the pipeline (at the time of the announcement), Dogtopia was ranked No. 204 among Entrepreneur magazine’s Franchise 500 as one of the Fastest Growing Franchises – a tribute to the company’s steady growth and success over the years, with a more than 300 percent increase since current ownership and management took control of the company in 2015.
2. The milestone 100th doggy daycare center is located in the Chicago area in Deer Park, Illinois. The new owners and local entrepreneurs of the Deer Park location, Kara Ferguson and Rob Gillman, welcomed dogs and pet parents to the daycare center for a grand opening on June 29 from 10 a.m. to 2 p.m. The first 100 people received Dogtopia swag bags and a day of free daycare.
3. All attendees were able to enjoy music, a doggie food truck with dog-only treats, a photo booth, selfies with the fabulous @liviethemork from Instagram, doggie watering spots hosted by Second City Canine Rescue, food, tours, and much more.
4. This was a free community event to celebrate an important milestone for Dogtopia and the Dogtopia Foundation. Foundation recipients America’s Vet Dogs and Chicago-based Sit, Stay, Read were both on site to showcase their important work.
5. Kara Ferguson, owner of Dogtopia of Deer Park, said, “It’s such an honor and privilege to be part of the Dogtopia family and to know that we have helped play a vital role in the brand’s growth. Opening a dog daycare has been a lifelong dream of ours and we are excited to have the opportunity to work alongside the Dogtopia Support Office and our franchise partners to live out the brand’s mission – ‘To enhance the joy of dog parenthood and enable dogs to positively change our world.’”
6. The brand’s rising popularity with both franchisees and pet parents is evident by Dogtopia’s tremendous growth – a 35 percent increase in store numbers over the course of one year.
7. “When reflecting on Dogtopia’s impressive growth over the past couple of years and how far we’ve come, it’s a major milestone for us to reach 100 open daycares in such a brief time. I am beyond proud to be part of a company that is so passionate, loyal and committed to improving the lives of dogs and pet parents in local communities throughout North America,” said Neil Gill, president and CEO of Dogtopia.
Launches National Initiative to Hire Adults with Autism
8. In early August 2019, Dogtopia released a system-wide Autism Employment Manual to equip the company’s franchise locations with the tools needed to hire employees with autism. Dogtopia partnered with the Southwest Autism Research & Resource Center (SARRC) and the Dogtopia Foundation to build the manual. The manual is split into five sections to educate and inform Dogtopia owners on the best ways to hire, train, and make a difference in the lives of employees with autism.
9. Working closely with SARRC and the Dogtopia Foundation, Dogtopia’s new educational tool teaches and guides owners on how to diversify their teams while bringing on a dedicated employee with a unique set of skills.
10. According to Daniel Openden, Ph.D., BCBA-D, president and CEO of SARRC, “Nationally, it’s reported that 86% of adults living with autism spectrum disorder are either underemployed or unemployed. We hope this employment manual not only helps serve as a resource, but a roadmap to franchise owners across the U.S. We’re grateful to partners like Dogtopia, that are committed to building opportunities for people seeking the chance to contribute through meaningful, competitive employment in our community.”
11. Neil Gill, president and CEO of Dogtopia and chairman of the Dogtopia Foundation, added, “Across the country, Dogtopia currently employs nearly 20 adults living with autism, and we are hoping this manual provides a valuable tool to help ensure our daycare centers are equipped to hire an adult with autism and ensure a positive experience for both them and the team.”
12. When given the opportunity, individuals with ASD can bring a unique perspective and understanding to a work environment. One person’s unique strengths may be a game-changer for an employer or organization.
13. “Hiring employees with autism has positively transformed our workplace,” said Connie Emery-Walker, Dogtopia’s East Coast corporate store operations manager. In fact, Dogtopia of Tysons Corner in Virginia has hired 10 employees with autism. “Our team is proud of our social mission to employ individuals with autism and our pet parents have thanked us for what we are doing for the autism community.”
14. The Dogtopia Foundation enables dogs to positively change our world through funding programs focused around service dogs for veterans and first responders, youth literacy programs, and employment initiatives for adults with autism. The Foundation’s aim is to identify needs, fill gaps, and integrate knowledge for continuous improvement in the three areas of focus. By connecting dogs with the organizations the Foundation supports, the Foundation will help returning veterans, children and adults with autism reach their full potential.
Opens First Dogtopia @ Work Campus
15. In mid-October 2019, Dogtopia announced the unveiling of its first Dogtopia @ Work campus. The dog daycare and spa-only location is exclusive to the employees of Wolverine Worldwide in Rockford, Michigan and will bring the company-subsidized dog daycare to the company’s 750 employees.
16. This corporate extension advances Dogtopia’s position as the industry’s leader. With more than 100 locations across North America (at the time of the press release), the brand is the fastest-growing provider of specialty dog daycare, and entering corporate campuses is a new initiative that will expand the brand’s footprint and reach more pet parents.
17. The new Wolverine Worldwide dog daycare center is operated by franchisee Tim Parker, who also owns Dogtopia of Grand Rapids.
18. Neil Gill, president and CEO of Dogtopia, said, “Wolverine Worldwide’s employees asked, and the leadership team listened. Dog daycare was the top benefit request among its 750 workers. We’re thrilled to directly meet that need conveniently on site. The corporate campus model makes perfect sense as companies seek to be pet-friendly without having to manage which dogs are current on vaccinations, remaining respectful to those with allergies and removing the risk associated with dogs of different sizes and temperaments in common areas together. This is a win-win as it provides these employees safe socialization, exercise and education for their dogs while providing Dogtopia a brand-new channel for us to share our quality daycare service.”
19. According to Blake W. Kreuger, chairman, president, and CEO of Wolverine Worldwide, “It’s important for us to continue to invest in our workplace environment in a way that aligns with our values as an employer of choice, and enriches the daily experience and quality of life of our workforce. We’re extremely excited to have Dogtopia’s presence and friendly staff at our global headquarters to provide pristine care for our employees’ pets while they help drive our business forward.”
20. Dogtopia was founded in 2002 by Amy Nichols in Tysons Corner, Virginia. Nichols came up with the idea for Dogtopia because she felt guilty leaving her dog Griffin home alone all day while she worked long hours at a telecommunications company.
21. She felt that Griffin needed socialization and exercise while she was at work, and two years later she launched Dogtopia to fill this need. Dogtopia features large playrooms designed for different types of dogs and also offers baths and other spa services for its canine clients.
22. The first Dogtopia was a success and Nichols opened a few more locations in the area. By 2004, the business had grossed $1 million and Nichols decided to start franchising Dogtopia the following year.
23. After a few more years of growth, in the fall of 2012, Nichols signed an agreement with Thomas Franchise Solutions to expand the company to more than 400 locations in the U.S. and Canada over the next seven years. While 2019 passed without Dogtopia hitting this target, there are now over 100 Dogtopia locations across North America.
Entrepreneur’s Franchise 500
24. Dogtopia ranked No. 71 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Dogtopia franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Dogtopia’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 32
- Outlets at the End of the Year: 36
- Net Change: +4
- Outlets at the Start of the Year: 36
- Outlets at the End of the Year: 50
- Net Change: +14
- Outlets at the Start of the Year: 50
- Outlets at the End of the Year: 67
- Net Change: +17
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 4
- Net Change: 0
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 5
- Net Change: +1
- Outlets at the Start of the Year: 5
- Outlets at the End of the Year: 8
- Net Change: +3
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
- The following financial performance representation includes the following data: (i) Gross Sales data for the years 2017 and 2018 for both corporate and franchised outlets; (ii) EBITDA data for the year 2018 for both corporate and franchised outlets.
- The financial performance figures are based on the historical results from the Dogtopia businesses described below.
Part 1 – Franchised Outlets
- The following table represents the Gross Sales data for all “qualifying” franchised outlets. A “qualifying” franchised outlet is any franchised Dogtopia store that was open and operating for the entire applicable “period of operation.”
- The “period of operation” refers to the total period of time that the franchised outlet was open and operational prior to the end of the applicable measuring year. For example, the period of operations for 13-24 months for 2018 means that the franchised outlet was open for the entire 2018 calendar year and all or a portion of the 2017 calendar year.
- Dogtopia had a total of 67 franchised outlets as of December 31, 2018. Of this amount, the data for 42 franchised outlets was included since only 42 of these franchised outlets were open for all of 2018, all others were open for less than the full year.
- Dogtopia had a total of 50 franchised outlets as of December 31, 2017. Of this amount, the data for 32 franchised outlets was included since only 32 of these franchised outlets were open for all of 2017, all others were open for less than the full year.
- In making this financial performance representation, Dogtopia has relied upon information reports of Gross Sales submitted by franchisees. Neither Dogtopia nor any independent certified public accountant has independently audited or verified the information.
- For purposes of this financial performance representation, Gross Sales means the total of all revenue derived from operating the location, whether from sales for cash or credit, and irrespective of collection, including sales of merchandise, products, and services, but excluding sales tax, proceeds from the sale of equipment not in the ordinary course of business, and franchisor pre-approved promotional discounts (provided physical evidence of the promotion/coupon is retained).