In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Pet Supplies Plus franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Pet Supplies Plus franchise, based on Item 7 of the company’s 2020 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Pet Supplies Plus franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned Pet Supplies Plus outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of Pet Supplies Plus’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average weekly gross sales, annual gross sales, gross margin percentage, labor expense, rent, royalty and SAF (System Advertising Fund) fee expense, and EBITDA for the 120 franchised Pet Supplies Plus stores that were open and began operating prior to January 1, 2019 (“Reporting Franchised Stores”)
- 2019 average sales and gross margin percentage for dog consumables, dog hardgoods, cat consumables, cat hardgoods, all other, and total for the 120 Reporting Franchised Stores
Section I – Background Information
23 Things You Need to Know About the Pet Supplies Plus Franchise
Matches Donations to Benefit the World Wildlife Fund-Australia
1. At the end of January 2020, Pet Supplies Plus announced a fundraising initiative to benefit the World Wildlife Fund-Australia. In light of the tragic bushfires in Australia and its impact on their wildlife, Pet Supplies Plus along with its partners are matching up to $10,000 in donations to help save wildlife and protect and restore the bushland.
2. Pet Supplies Plus, along with Victor Pet Food, WellPet, Stella & Chewy’s, LLC, and Merrick Pet Care, came together to spread awareness and raise donations to help WWF-Australia. With more than 10.7 million hectares of Australian land being burned, the donations raised will aid Australia’s efforts to rebuild.
3. Every contribution made will have an impact and Pet Supplies Plus will match dollar for dollar, up to $10,000. Donations could be made through Pet Supplies Plus’ Facebook page, in addition to local store Facebook pages.
4. Founded in 1961, WWF’s global mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live and prosper in harmony with nature. WWF-Australia is part of the WWF International Network, the world’s leading independent conservation organization.
5. Chris Rowland, CEO of Pet Supplies Plus, said, “We are heartbroken about the devastation of the Australian wildfires and stand by the mission of WWF-Australia. Pet Supplies Plus has no boundaries when it comes to helping animals and we are encouraging neighbors and communities alike to help make a positive impact – every donation can make a difference.”
Reports Strong Mid-Year Development Numbers
6. At the end of June 2020, Pet Supplies Plus announced that it had accepted 12 new franchise agreements and one independent pet store conversion in the first half of 2020. The signed agreements will result in 20 new locations, including the brand’s first venture into the state of Washington. Other state developments agreed to this year include Texas, Massachusetts, California, and Illinois.
7. According to CEO Chris Rowland, “When you join the Pet Supplies Plus family, you’re entering a recession-resistant industry that’s been growing for decades. You’re also joining a fantastic leadership team dedicated to helping its owners succeed – whether it be in merchandising, marketing, eCommerce, supply chain, promotions, pricing, managing social media and more. We’ll be celebrating our 500-store opening this year, which speaks to the strength of our growing brand and the high rewards that franchising with us offers.”
8. Part of Pet Supplies Plus’ development success can be attributed to its robust online ordering platform, which has been on full display since COVID-19 hit. While Pet Supplies Plus locations, deemed essential businesses, remained opened during the pandemic, many owners transitioned their focus to online ordering, free curbside pickup in which customers only had to open their trunk, and offering same-day delivery as well. With a system capable of handling the influx of online traffic, the franchise’s eCommerce growth skyrocketed – jumping 2,275% from January 2020 to April 2020.
9. As consumers increasingly opt for an online ordering experience, Pet Supplies Plus demonstrated the strength and capabilities of its omni-channel shopping experience to neighbors, an endearing term used to refer to its customers. This service allows customers to shop with Pet Supplies Plus how and when they want.
10. Pet Supplies Plus is also well known for its high touch, interactive in-store shopping experience, which did not waver when the pandemic hit. The franchise diligently followed CDC guidelines and quickly implemented appropriate safety measures. All of which allowed Pet Supplies Plus to remain a one-stop-shop for all pet grocery needs, products, toys, and services.
11. Rowland added, “We experienced it during the recession, and we’ve seen it through the first half of this year: the needs and desires of pet parents to provide for their pets remains steadfast. Pets are family members, and while neighbors stocked up on essentials during this pandemic, they also visited our stores for an escape. We’re a quick trip for treats, toys and free resources to keep neighbors’ dogs, cats and small pets feeling loved.”
Pays It Forward with Food and Toy Donations, Announces 4 Months of Additional Shelter Support
12. In late June 2020, Pet Supplies Plus outlined big plans to give back in 500+ communities over the next four months. Local outreach initiatives include:
13. July: Pet Supplies Plus partnered with multiple pet food brands to provide shelters, rescues, and adoption organizations around the country with over 16,000 bags of cat and dog food valued at over $200,000 and more than 17,000 pet toys, valued at over $180,000. The food and toys arrived in Pet Supplies Plus stores the week of July 5-10, and were delivered to organizations near and dear to the local store’s heart in the days following.
14. Partners involved in the initiative included Blue Buffalo, Stella & Chewy, Science Diet, Diamond, Natural Balance, Nutri Source, Whole Earth Farms, Nestle Purina, Mars Petcare, Wellpet, and KONG.
15. August: Pet Supplies Plus partnered will Hill’s Science Diet to help support the Clear the Shelters initiative, which is a community-driven, nationwide pet adoption campaign dedicated to placing pets with the perfect animal-loving home.
16. September: The brand, along with local store owners and operators, also established a goal to sponsor at least 500 pet adoptions come September. The neighborhood retailer, celebrating a growth milestone amid the opening of its 500th location, plans to help at least 500 pets find their forever home, by covering their adoption fees or related expenses.
17. October: Pet Supplies Plus locations across the nation will host local adoption events in-store to honor National Adopt-A-Shelter Dog Month – with surprises in-store from pet partner, KONG.
18. Chris Rowland, chief executive officer of Pet Supplies Plus, said, “Pets have the power to bring people together and provide comfort and joy in the homes of our neighbors and within their communities. We wanted to leverage the relationships we have with our network of generous pet partners to help support local organizations and shelters facing extra challenges right now. We’re incredibly humbled to have the platform and ability to support our neighbors and their pets through these outreach efforts. Given our neighborhood and community focus, we felt it was the most appropriate way to commemorate our growth.”
19. Pet Supplies Plus was founded in 1988 by Harry Shallop and Jack Berry, in Redford, Michigan. Shallop and Berry used grocery stores as inspiration for the layout of Pet Supplies Plus. The first store featured wide aisles and well-stocked, neatly displayed shelves. Pet Supplies Plus claims that it is the first pet store to mimic a supermarket, and the concept was an immediate success.
20. Shallop and Berry started franchising Pet Supplies Plus the following year. Growth continued over the next decade and by 1995, there were 100 Pet Supplies Plus stores around the U.S. This number doubled by the early 2000s.
21. At the start of the next decade, in 2010, Pet Supplies Plus was acquired by Irving Place Capital, a private equity group. Under this new leadership, Pet Supplies Plus expanded even further and in 2017, the brand hit a milestone of 400 stores in operation.
22. In 2018, Pet Supplies Plus was sold to Sentinel Capital Partners. Today, there are Pet Supplies Plus stores in over 33 states.
Entrepreneur’s Franchise 500
23. Pet Supplies Plus ranked No. 50 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Pet Supplies Plus franchise costs, based on Item 7 of the company’s 2020 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Pet Supplies Plus’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 187
- Outlets at the End of the Year: 212
- Net Change: +25
- Outlets at the Start of the Year: 212
- Outlets at the End of the Year: 234
- Net Change: +22
- Outlets at the Start of the Year: 234
- Outlets at the End of the Year: 261
- Net Change: +27
- Outlets at the Start of the Year: 198
- Outlets at the End of the Year: 211
- Net Change: +13
- Outlets at the Start of the Year: 211
- Outlets at the End of the Year: 218
- Net Change: +7
- Outlets at the Start of the Year: 218
- Outlets at the End of the Year: 218
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
- This Item sets forth historical gross sales information for franchised outlets for the measurement period of January 1, 2019 to December 31, 2019 (the “Measurement Period”), which was provided to Pet Supplies Plus by its franchised Stores.
- During the Measurement Period, there were 261 franchised outlets and 218 affiliate-owned outlets, which is a total of 479 outlets.
- Pet Supplies Plus has not audited or independently verified the data submitted by the Stores and no assurance can be offered that the data does not contain inaccuracies that an audit might disclose.
Part 1 – Average Gross Sales, Gross Margin, EBITDA, Rent, Royalty and System Advertising Fund Fee Expense, and Labor Expense for Reporting Franchised Stores (January 1, 2019 to December 31, 2019)
- Part 1 sets forth average weekly and annual gross sales data, gross margins, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), rent expenses, royalties and system advertising fund fee expenses, and labor expenses for the 120 franchised Stores that were open and began operating prior to January 1, 2019 (the “Reporting Franchised Stores”).
- The Reporting Franchised Stores’ performance data is segmented into groups by vintage. During the Measurement Period, there were 261 total franchised outlets.