In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Hounds Town USA franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Hounds Town USA 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 Hounds Town USA franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Hounds Town USA 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 Hounds Town USA’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 actual gross sales, rent, payroll, owner’s salary, royalties, advertising/marketing, utilities, insurance, supplies, professional fees, miscellaneous expenses, total operating expenses, net profit, franchise related adjustments, and net profit less franchise related adjustments for the 7 Hounds Town USA Businesses that had been in operation for at least one full year as of December 31, 2019 (5 franchised and 2 affiliate-owned)

• 2016, 2017, 2018, and 2019 actual gross sales for the 7 Hounds Town USA Businesses that had been in operation for at least one full year as of December 31, 2019 (5 franchised and 2 affiliate-owned)

Section I – Background Information

20 Things You Need to Know About the Hounds Town USA Franchise

Signs Multi-Unit Deal, Selling Out Bergen County with Plans for Further Expansion in New Jersey

1.  At the end of August 2020, Hounds Town USA announced that it had signed a deal for multiple locations in Bergen County, New Jersey, selling out the area. Since January, the existing Bergen County Hounds Town USA has seen a 25% increase in both revenue and occupancy since the same time last year – proving quarantine pup adoption has been a business boon for the brand.

2.  Phillip Michael, one of Hounds Town USA’s newest franchisees, will open an additional Bergen County location that will serve the Hillsdale area. Michael says it was his past experiences with other doggie daycares that inspired his decision to invest in his own. He added, “It was a pain to find a place for my dog during my honeymoon where I didn’t have to worry about him getting sick or hurt. I saw the struggle I went through to find a trustworthy place to put him. I thought it was time for me to enter the pet industry.”

3.  With both Michael and another franchisee in the area signed on to each open a new location, the area is entirely sold out – but that doesn’t mean Hounds Town is done growing in New Jersey. Hounds Town USA has plans to expand further into New Jersey with a remaining capacity of 30 to 35 locations across the state, and the brand is especially focused on growing in Hudson, Essex, and Morris counties.

4.  As adoptions and foster relationships continue to rise, the demand for pet care is growing, and so is Hounds Town USA. With more locations in development than currently open, the brand is positioned for success amidst an economic downturn.

5.  Jackie Bondanza, president of Hounds Town USA, said, “The spark in pet adoption has created quite the growth opportunity for Hounds Town. We’re excited to bring doggie daycare to areas of New Jersey that are going to need it, and we’re even more excited to have Phil joining the brand. His passion for business and his love of animals is really the perfect pairing that we look for in our franchisees, and he’s been a great addition to the family.”

6.  Michael is looking forward to growth with the brand as well, saying he plans to bring Hounds Town USA to South Florida after he gets his Bergen County location up and running. “I want to help grow Hounds Town. It’s not just about taking care of the dogs – it’s about giving owners a great place to leave their dogs,” Michael said. “I love that it’s a family-based franchise, and the team makes me feel like I’m part of a family rather than looking at me like dollar signs.”

Promotes a Message of Inclusivity to Celebrate Pride Month

7.  In late June 2020, Hounds Town USA talked about how it sets itself apart from the competition by making sure to never discriminate against any breed of dog. Jackie Bondanza, president of Hounds Town USA, said all dogs and owners are welcome to have a chance to interact at each Hounds Town USA location. Now, Hounds Town USA is proud to celebrate that core value of inclusivity during Pride Month.

8.  Bondanza said, “For the past twenty years, Hounds Town USA has been proud to operate as a place of acceptance for any dog and any owner. That core value has been a huge part of our business since Day One, and I’ve been turning to that core value during these challenging times. Hounds Town USA is founded on inclusivity, and I think it is more important than ever to promote that.”

9.  Mike Gould, CEO of Hounds Town USA, also noted that, by nature, dogs don’t discriminate, and the brand takes that same approach with customers. “We don’t think about dogs in terms of breeds – Hounds Town USA is all about inclusivity, whether it be for our franchisees, team members, customers or dogs,” he said. “Pride Month is a celebration of inclusivity and we are proud to join some of the country’s biggest brands in supporting our LGBTQ community.”

10.  Joe Allbaugh and his partner Cody own Hounds Town USA Pittsburgh, one of the brand’s top performing locations. The couple was excited to join the brand in October of 2019 as members of the LGBTQ community.

11.  According to Allbaugh, “We were originally drawn to Hounds Town USA due to the tremendous support they provide to new franchisees. The flexibility of the business model allows us to have ownership in something, without having the stress of taking it on all by ourselves. After talking to Mike and Jackie, it was clear that Hounds Town USA creates a supportive, open environment and is extremely supportive of the LGBTQ community.”

12.  In celebration of Pride Month, Joe and Cody have put up decorations in the store, including a Pride flag and some pink flamingos supplied by Gould. According to Allbaugh, customers responded very well to the inclusive atmosphere.

13.  Bondanza added, “Dogs don’t hate, they are tolerant of all people. If you have a dog that even looks like it has a little Pit or Rottweiler in it, it could be turned away from other facilities. At Hounds Town, we focus on the dog’s temperament instead of what they were born as. We don’t try to change a dog’s personality, we accept dogs for who they are and help them find the right homes so they can live their best lives. We believe that is how people deserve to be treated as well.”

14.  That people-centric approach proved to be a key asset during the COVID-19 pandemic. With the support of Hounds Town USA, owners like Allbaugh were able to stay open and support their communities and essential workers.

15.  The franchise has also introduced a number of new programs to support its local communities and develop new revenue streams for franchise owners. The pet care brand’s new Fresh Air Fund, for example, offers long-term stays (two to four weeks) for dogs currently in animal shelters, relieving the burden on shelters and providing crucial socialization skills for dogs, making them more adoptable.

16.  According to Bondanza, “We know lives aren’t always easy right now, but we want the Hounds Town USA experience to be as pleasant, simple and fun as possible for both dogs and their owners. Our brand is about inclusivity, friendliness and openness, and we believe those core values have never been more important to celebrate.”

Company History

17.  Hounds Town USA was founded in 2001 by Michael S. Gould in Port Jefferson, Long Island, New York. Gould had several decades of experience working with dogs as he was a founding member of the NYPD canine unit in 1982. He went on to become the Commanding Officer of the Nassau County Canine Unit, a position he held until he retired from the police force in 1999. As he was getting ready to retire, Gould felt that he was equipped with the knowledge to open a high quality, interactive pet care facility.

18.  The first Hounds Town USA location was a success and by 2003, Gould had leased the space next door to make room for more dogs. A year later, Gould opened a second Hounds Town USA in Ronkonkoma, New York. After a few more years of successfully running both Hounds Town USA locations, Gould opened a third location in 2012.

19.  Three years later, Gould started franchising Hounds Town USA and more locations opened in the Northeastern U.S. In 2018, Hounds Town USA started opening stores outside of this area and there are now locations across a handful of states.

Entrepreneur’s Franchise 500

20.  Hounds Town USA did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Hounds Town USA 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 Hounds Town USA’s 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

Franchised

2017

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  4
• Net Change:  +2

2018

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  5
• Net Change:  +1

2019

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  9
• Net Change:  +4

Company-Owned

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2018

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  2
• Net Change:  +1

2019

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• As of December 31, 2019, there were 11 Hounds Town USA Businesses in operation, nine franchised locations (“Franchise Locations”) and two affiliate-owned locations (“Affiliate Locations”).

• The following tables and accompanying footnotes contain historical financial performance representations for the five Franchise Locations and two Affiliate Locations that have been open at least 12 months as of December 31, 2019 (“Reporting Group”).

• Part 1 and Part 2 report on results from the 2019 fiscal year (January 1, 2019 to December 31, 2019) (“2019 Reporting Period”).

• Part 3 reports on results from the 2016-2019 fiscal years (“2016-2019 Reporting Group”).

• Four Franchise Locations opened in 2019 and have been excluded from the Reporting Group. Also, one Franchise Location terminated before executing a lease and has been excluded from the Reporting Group.

• Franchised Hounds Town USA Businesses will share many of the same characteristics as Affiliate Locations, including degree of competition and services and goods offered.

• Affiliate Locations pay Royalties and Brand Fund Contributions, but are not subject to the Local Advertising Requirement. Hounds Town USA does not yet collect the Technology Fee.

• Hounds Town USA Businesses are open seven days per week. Each Hounds Town USA Business is typically open between 58-68 hours per week (Monday-Friday from 6 or 7 a.m. to 7 or 8 p.m., Saturday from 9 a.m. to 5 p.m., and Sunday from 11 a.m. to 1 p.m.).

• All Hounds Town USA Businesses are closed from 12 p.m. to 2 p.m. Monday through Saturday, but many are still staffed. Total staffing hours per week are approximately 75-85 hours, including approximately 5 hours on weekends for after-hours care.

Part 1 – Year Open, Store Size, and Miscellaneous Customer Information for the Reporting Group During the 2019 Reporting Period

• Part 1 provides general store/customer information for the Reporting Group during the 2019 Reporting Period.

Location 1 (Franchise)