Patrick: Hey, you have Patrick Findaro, co-founder at Vetted Biz and managing partner Visa Franchise. Really excited to have on the co-founder and COO of D.O.G. Hotels, an emerging leader in the pet care industry, based here in Miami as well. Juan co-founded the company back in 2013. We’re gonna talk about the pet care industry, different services that D.O.G. Hotels offer opportunities for expansion. And if you have any questions, just put them in the comment box and we’ll try to bring the questions on live for Juan to answer.
Again, this is Patrick Findaro, co-founder at Vetted Biz and managing partner at Visa Franchise. At Vetted Biz, we help you find, vet and buy businesses as well as franchises. Right now, we have over 1,800 franchises available on our portal, including D.O.G. hotels as well as 1,600 or so businesses for sale principally in the State of Florida. So, take a look, www.vettedbiz.com.
And then on Visa Franchise, if you’re a foreign national looking to move to the U.S., we have quite a large portfolio of franchises including D.O.G. Hotels, which should be eligible for the E-2 investor visa. So, at Visa Franchise, we can help you find and analyze different businesses, principally, franchises that qualify for the E-2 visa. And Vetted Biz is open to Americans and foreigners alike who prefer a more self-guided approach to their business search and analysis process.
Again, Patrick Findaro here, very excited to have on Juan Cochesa from D.O.G. Hotels. The D stands for daycare, O, overnight, and G, grooming. They were founded in 2013. There are currently four stores open, and they have another three in development. So I’m gonna go ahead and bring Juan on. Again, if you have any questions, put it in the comment box. If you like the video, like it. You might be seeing this on YouTube, Facebook, or LinkedIn. Share with your friends, follow our page if you’re interested to keep updated with different franchises and businesses to explore.
So, without further ado, I’m gonna add Juan on to the live stream. Hey, Juan.
Juan: Hey, Patrick.
Patrick: How’s it going?
Juan: Good. Thank you for having me. Amazing opportunity to be here.
Patrick: Yeah, I know. Thanks again for joining. So.. tell us, you know, how you got into the pet care industry, a little bit about your background.
Juan: Yeah. Well, I’m from Venezuela. I came here to the U.S. about 2010, I think it was, yeah. It’s hard to remember now. I did an MBA in International Business in San Francisco, and then I got this opportunity through some friends and my present partners, that they share the same passion for dogs. And, actually, one of them got a small puppy, it was a Golden Retriever, three months old.
Patrick: Oh, wow.
Juan: Yeah. And he was planning a trip, which I think it was something pretty…her name was Cosa, he needed to board Cosa pretty soon, so he tried to find something in Miami and he didn’t. He found some…
Patrick: Wow. What did he do?
Juan: I think it was either a vet, or he ultimately found a friend where Cosa could stay. So that was like a click. He started talking to us and asked me, I lived in California at the moment, if the industry of pet care was doing well there, I said, “Yeah.” I mean, I visited two or three in San Francisco, which wasn’t the best, but in LA and Southern California, it was…
Patrick: Yeah. Southern California is definitely, you know, dog-friendly. People bring their dog everywhere, and I feel like South Florida is similar. We have a bernedoodle, and you can bring dogs pretty much everywhere.
Juan: Exactly. Yeah, the same. So, you know, there the industry was booming. There were, like, a lot of places not just in LA but in the cities and towns closer to Los Angeles. And we got an idea, actually, from a place from there and we started looking at something and we found it. We found a good place in Wynwood where we started the first one, and it was great. I mean, our first year, we kinda struggled because people, they have to get used to using these services.
Some of them, they don’t even know. Even today, almost 10 years later, they don’t know that daycare and overnighting places like us exist. They think only vets and maybe some grooming that have small daycare places is what it is, but they don’t know there are some big places where you can leave your dogs. And some of the dogs, they don’t even wanna leave, right? So, yeah, that’s how we founded our first one, and after that, everything started coming along.
Patrick: That’s exciting. I wanna get more into D.O.G. Hotels, but, first, tell us a little bit about the pet care industry. I understand adoption rates are going way up because of COVID and everyone’s getting a new puppy…
Patrick: Yeah, I’d love to hear it from you.
Juan: We don’t know the numbers yet because usually, these numbers started getting more accurate by mid-year or, yeah, the second trimester of the year. What we know, and we read some news, in major cities in the U.S. where shelters were empty. So the shelters are empty because the adoption rate it’s high. Most of the shelters in the U.S. in the big cities usually are non-kill shelters. And even if they kill shelters…the word I hate it but that’s how they call it, they don’t put down the dog unless they get full capacity, right?
Juan: So if you see that a shelter is empty, it’s because humans are adopting the dogs and getting new dogs. So that was a great sign. And we started to feel it in some of our stores in December because, usually, you get either puppies, or if they’re not puppies and they’re new dogs, that means they’re adopted, right? So we also ask a question to the client, and we get a good influx of new clients that it’s not usual in a year like last year. That’s a good sign.
Patrick: And it’s a common thing… clients at a pretty high rate? Like, what’s the drop off of a dog, you know, month-over-month if they’re using D.O.G. Hotels’ services?
Juan: The services, oh, it varies. We have clients that come every day, like, taking your kids to school. So you take them in the morning with us, they go to work, the clients, and then after work, they come and pick it up, same as school, right, even Saturdays. Saturdays, they come to us. And we also have some clients that use us only for overnight, so, only when they travel, they use the hotel, and then they’re gonna use daycare for…
Daycare didn’t stop last year. Of course, we had some drops in The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue…. in that segment, but it wasn’t as big as boarding, of course. But we can talk more about the COVID situation later. I know we have some questions about it. So, talking about the industry, as I said, about eight years, nine years ago, we were starting, so we don’t have many numbers from 10 years ago. What we have… the steady growth of the pet service industry in the last five years. So, the pet industry as a whole, it has five major segments which is pet food, of course, then you have…
In pet food, you have 50% in the industry is Petco and PetSmart. And then the other PPR small stores, and Amazon is actually getting bigger, of course.
Juan: Yeah. And then you have supplies of medicine and other big supplies for the pet industry. You have vet care. And the last one, it’s grooming and boarding, which right now, they are doing in the same segment. So it’s not five, it’s gonna start to be four, the last one being pet care as a whole, which is grooming, boarding, daycare, and everything together. So that segment that we are in…D.O.G. is into right now, we sell some products but it’s not our main income, and we also have it as a small store, small section in our receptions. What our main income and our main focus is on services, of course, which we will talk about. That segment is the smallest one. So the pet industry, 2019, is projected to be…2020, it’s about $100 billion, okay, worth, yeah. It’s not huge but it’s starting to be big, but 60% of that is pet food.
Juan: Yeah. And about 15% of that, which is the last segment, is the services.
Patrick: All right.
Juan: The catch is the last five years, the services is a segment that’s growing more out of the other three, right.
Patrick: And on the service side, who do you compete with? Are there national brands? Is it people…like, are there not many professionals? I’d love to hear who you guys are competing with.
Juan: So that’s a sign of what I said about the industry being new. It’s one of the signs that you see, yeah, so this industry is pretty small, right? You see in the U.S. and you imagine that you have, what, 10, 20 brands. You know, like human hotels, how many human hotels do you have? How many brands of that do you have? Well, in the U.S., there’s only two major competitors. There is Dogtopia, which was founded in 2002, and then you have Camp Bow Wow, which was founded in 2000. Those are the two big guys. They were primarily the first stores in the U.S. or the first pet service centers in the U.S., right? That was 18, 20 years ago.
So, Dogtopia, it’s mostly like us. We have the same concept, sizes are usually the same. They tend to be a little bit bigger than us, probably that’s because they’re more expensive, but Fees paid by a franchisee to their franchisor in order to operate a franchise location. They are usually on a weekly or monthly basis…. More and marketing fees are the same. But, yeah, the store as it is, it’s about 20%, even double as us. They have a pretty big range from starting point to point.
A million, 1.2 or something like that, and it starts at 600. So I think it depends on the city. They have 140 stores in a lot of states in the U.S., so I guess it depends on the city.
Patrick: And you’re competing with any of the apps, like, just independent people that just wanna do it as kind of a side hustle and watch people’s dogs?
Juan: Yeah. What do you mean? For what?
Patrick: In terms of, like, if someone needs to have their dog sat overnight, going to D.O.G. Hotels, or probably their other option is using one of those apps to find someone to take care of their dog.
Juan: Yeah, that’s big. Right now, you’d find Rover, and there’s another one which is big, too. But I’d spoken with the Dogtopia guys and some other competitors in the industry when I went to these major events. We don’t consider them to be the same competition or the same concept because you have clients which prefer to use the petsitting, and then you have clients which prefer to use the pet centers or service industry, which is us, yeah. It’s almost impossible or tough to find a person that’s willing to do both, depending on the situation. It’s either one or the other, right?
Patrick: And what would be some of the reasons that it’s better to do pet center or why some people prefer going the pet center route?
Juan: Well, because petsitting, you’re giving your dog to somebody that you don’t know, right? Pet center, you don’t know either, but at least you know they have 40, 50 dogs in there. I mean, they must be doing something good, right?
Patrick: There’s cameras.
Juan: Yeah, there’s cameras, you can come in. Our centers, specifically, have open doors and open windows in which you can see everything that’s going on. Then with the sitting, of course, you have the reviews. This is starting to be something like an Airbnb, right, where you have the reviews and you’d see other clients that… But at the end of the day, you’re leaving your dog in a house of a stranger, and…
Patrick: I’ve seen somewhere that Airbnb costs are going up for these pet sitter options, where it’s…
Juan: That’s the other thing.
Usually, pet sitting is more expensive than pet centers, so that’s another downturn for…the difference between if you go to…
Patrick: Less professional, more expensive. Maybe there is less dogs there but not as accountable as behind…
Juan: Yeah, but I understand the point. I mean, I understand the point. You don’t want to leave your dogs with 50 other dogs or you think he’s gonna get hurt, right, in the parks.
Patrick: Yeah. I’m sure you have some…yeah, I see all the time walking our bernedoodle, there were some dogs that were not properly socialized and they won’t do great at a bigger center. But other dogs like ours, they love that.
Juan: Exactly. That’s…
Patrick: puppies, and they’ve been around dogs since right after they got their shots just a few months older.
Juan: Yeah. That’s probably another reason why they prefer going, probably, to dogsitting, right? And we have these trial days where the first day you come in and the dog has to be tested with us first, with humans, and then we put them in the park or with some other dogs outside to see how it goes, right? And then the trial day, if he gets approved or he graduates from a trial day, then, of course, he can come in. And, sometimes, we have the opportunity where we have to tell our clients, “Hey, look, we need to either try again or let’s get some training first before the dog can come to daycare,” and that happens, right?
Patrick: And some of your centers will fill up. Because I think one of our employees tried to get her dog into a D.O.G. Hotels, and I don’t think…
Juan: Yeah, yeah. December, it’s been pretty good, and we didn’t expect it. We thought 2020 was gonna be as it was, but it started to pick up. And we don’t like to schedule some…like, five trial days or six trial days at the same time because, I mean, it’s not honest. So I think it’s even a good policy that clients will appreciate, right? It’s like, “Hey, look, I wanna see only four dogs that I don’t know, right, and then tomorrow you can come and schedule a trial,” yeah. So, trial days are recommended to be scheduled, then after you pass this trial day for daycare, you can just drop off any time.
Juan: It’s not normal that we get full for daycare. If we start to get full for daycare, then we’d start, of course, making reservations, but it’s nothing that happens yet. That’s a good sign to open a new one if you get full for daycare.
Patrick: And can you just tell me, I guess, a little bit how the service works, the different service options? We talked about the daycare, overnight. Is one of the segments a lot more When the earnings in a given period of time is more than the expenses in a business…. than the others? Just kinda curious to hear a little bit more about the services.
Juan: Yeah. So daycare is pretty straightforward. So, how it works, you just leave the dog in the morning, or you can pay for six hours or less or you can pay for the full day, right? Then you can bundle days and buy a package of 10 days or you can pay a monthly fee, which becomes like school, becomes like a gym, right? You can come any day you want.
And the dog is all day in the park. We have big parks where we can feed all of the dogs. We separate them by sizes. Sometimes, it’s size plus temperament because we have small dogs with the big dogs. Sometimes, we have, like, a French bulldog who thinks like he’s a huge dog, so he has to go with the big dogs. And then, sometimes, we have this big labrador or labradoodle that he thinks he’s a small dog and we put him with the small dogs, right? So we separate them by temperament or by size and… That’s it.
So, daycare, it’s just being in the park and enjoying the time, right? We take care of them while you’re at work, so the dog is not at your apartment or your house by himself. And then the boarding dogs overnight, they’re also in the park all day. So that’s another competitive advantage or good thing about D.O.G. is that we don’t put the dogs away during the day, we just put them away at night when they go overnight, right?
Juan: Yeah. So the overnight, same human hotel, you just come and stay with us for a night. It can be as long as you want, of course, depending on the travel or the plans that you have. And the grooming is bathing or a haircut, depending on the dog. If the dog has long hair, he can get a haircut, or if he’s short hair or just needs a bath, then you have the bathing and grooming area.
Patrick: I imagine… opportunities to basically upsell your existing clients, where if you have a regular client that’s coming every month, you get reminders to start getting grooming done…
Juan: Yeah. So we have a system, an operating system that…it’s pretty good, it’s pretty functional on that. We’ll send you reminders for vaccines, send you reminders for upcoming reservations, or, “Hey, we haven’t seen you in two months. Like, we can offer you a discount,” or something like that. It’s very customizable, so you can change and adopt it as you want and send reminders to your clients. And then you can send surveys as well after the hotel for the clients, yeah. So it’s very simple. So you imagine how a hotel for human works, and then you just try to put it as much as possible for dogs, and then add a daycare at the same time.
Patrick: So, for a franchisee, all the systems are there? They’re just coming in and… Is it more just on the managing people side?
Juan: So, operations are, I wouldn’t say simple, of course, but they’re not tough, but you have to get used to it, right? Handling dogs is way different than handling humans. So, at the end of the day, your humans are your clients, and the humans are the ones who are gonna pay and gonna like the services, right? But to make them happy, you need to make the dog happy, right? And that’s where the tough part comes.
So, operations, how it goes, right? How you receive a dog, how you put him in the park, how many dogs you have in the park, temperaments, temperament test, what time you put them in the hotel, how much you feed the dog, bathing routines, grooming routines. So that’s part of the expertise that we have and we offer the franchisee, right? So we offer the key of how to make money and how to make the human happy through having dogs in our places, right? And now managing your employees, it can be very similar to other companies, right? But we also have this training program that comes with our franchise, plus the operations and/or the operating…
Patrick: So, franchisee, you know, we were talking a little bit before we got online, there’s an option to be an owner-operator where they’re working 50 hours or so a week and they’re very dedicated to the business or hiring a full-time manager, right?
Juan: Yeah. So there’s also the option that we can manage it as well, right?
Patrick: That’s right.
Juan: Yeah. So the operator can come as an operator, excuse me, and a manager where he can be all day, almost every day of the week in the store, right? You can also hire a manager and be the operator and then work kind of part-time. So, oversee the operations, be on top of the manager, be on top of everything, be on top of finances, profit and losses, your accounting, probably, like, deals that you make with partners, or…basically how an operator of a store works. Or then you can also get a management fee with us and then we can manage the store…
Patrick: And I know at least one of our clients is like that. He’s more of an investor. He can’t allocate day-to-day time to the business, so he invested a capital on… And you guys… minority partner operating the business.
Juan: Correct. So one of the partners that we made through Visa Franchise, yeah, actually the first thing he said, “Hey, look, I love the business. I trust the business and I believe in it, but I would love for you to manage it, and I would love to be a silent investor, and I’m happy with it,” right?
Patrick: And so, these types of investors that are more just, you know, checking financial controls and maybe strategy from time to time, are they able to invest anywhere in the U.S., is it South Florida? I guess, tell me where you wanna expand, where you could help in operations, and then, also, where do you wanna expand for those that can be owner-operators.
Juan: Yeah. So, for now, if we had to handle the operations of a business, I would say, of course, South Florida. So, south of Fort Lauderdale, maybe, or probably closer…maybe Orlando or south of Orlando, it’s where we think we can go. We have some areas of A payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off over time to borrow in purchasing a business…., which we can get at least 5 to 7 more stores than we have right now, so end up being 14. And then for partners that we have that are willing or interested in buying territories or buying a whole market, well, we have some cities of interest in the U.S.. But, basically, anywhere in the U.S. we can go and we can make it happen. We know that major cities like Houston, Austin, Raleigh, North Carolina…
Patrick: …Californians moving to Texas.
Juan: Yeah, California, there’s a lot of competition so that’s why it’s tough to manage, but Texas…
Patrick: Texas where you have a big migration, and it’s probably a lot cheaper, at least.
Juan: It is, yeah, yeah. But, yeah, we can go anywhere. We even have conversations to take it out of the country, so, in Dominican Republic, in Colombia. So we want to be…we can be anywhere.
Patrick: And, like how much…a single unit including everything, the franchise fee, the build-out, the furnishings, some working capital, what’s the all-in range to open up a center?
Juan: So the range in our franchise disclosure document says $450,000 to $550,000, and, of course, that was updated last year. But we wanna update it this year to $500,000 and $600,000, so adding a little bit more of, like, $50,000. We’ve had some inconvenience with our manufacturers, especially the mechanical side of the investment. But, yeah, I would say no more than $600,000 is what gets you everything, and this includes $100,000 in working capital, which our projections will take you to breaking even, so…
Patrick: About how long…what month does it break even, usually?
Juan: Twelve, 16, no more than a year and a half, yeah.
Patrick: Okay. So the key is just building a group of clients, and then after that…?
Juan: Yeah. Yeah, that’s a great thing to be in this business because you don’t need that many clients, right? If you are another business, you need to have a huge clientele so they can come, and come, and come, right? And a business like us, if you have 50 to 60 dogs which come often, say, for daycare, say, for boarding, like travel, that’s it. That’s everything you want, right?
Of course, as much as possible you need to get even to grow. There’s some dogs as well that leave, they either move to another town or they just wanna stop using daycare services for a while. But I see the same dog every day…I see the same 10, 15 dogs every day at any store that I go. And you start a relationship, and when you start that, they don’t change to another store, right? If you go to a restaurant and you don’t like their pasta, you just change… restaurant, right? Here, you don’t do that. You trust the people are taking care of your dogs.
Patrick: You have to… a couple of times and then you might switch, but…
Juan: Exactly, yeah. But you wanna be there because your dog wants to be there, their dog doesn’t wanna leave, so…
Patrick: They get excited.
Juan: Yeah, and they get excited. But creating this relationship takes time, that’s why they break even…
Patrick: What are some of the ways you, you know, speed the relationship creation? Like, is it through social media marketing? How are you guys acquiring clients?
Juan: Social media marketing is a key because you need to put your presence out there. Also, search engine optimization is what we invest a lot in because the key interaction is when the client is trying to come to you, and that usually happens in search engines like Google. You search dog boarding in my area, right? And if you’re the first all the time and you have the best reviews, then they’re probably gonna call you first.
Patrick: You get the first shot.
Juan: Yeah, correct. So if you’re looking for the client, it’s tough to find somebody because it’s not that, “Hey, yeah, I saw this hotel. You see your dog and now let’s give it a try,” right? No, that’s usually not how it works. It’s like you have the necessity, you look for it, you find us, and then you ultimately make the deal, right? So you need to find…
Patrick: That’s great. Yeah, you’re not finding them, they’re finding you, which is a good place to be.
Juan: Exactly. Exactly. So that’s the best place to go. And you optimize your investment in marketing as well because you are almost sure they’re gonna come to you if they find you.
Patrick: Sure. It makes sense. And in terms of… for prospective franchisees that don’t have half a million dollars sitting around, what are some ways that they can finance this investment? Are there options of, like, SBA loans, or how could they go about financing it?
Juan: So the Small Business Administration is an option. It’s not a guarantee. We are inside the pool of businesses that they can…
Juan: Yeah, approved. Yeah, sorry, that’s the word. And the bank will solely depend on the investor. They find that we have a great business plan, we have a good company, it’s a solid plan with stores that work here. So we’ve had some clients that made finance to their banks, and everything they asked from us, which is profit and loss from other stores or the franchise agreement, the business plans for other stores…
Patrick: So you will collaborate quite a lot to ensure that they get the proper financing. Do you also help with, like, the real estate negotiations and finding real estate?
Juan: Yeah. So we have a huge team that works with real estate. We find the places. We have an architect, we have engineers, we have the contractors as well. So we can take care of everything from the get-go until we open the store, or you can also jump in and decide, “Hey, look, I have some companies that I worked with before,” and we can compare prices, you know, compare budgets, and then we work together.
We can also, I think we’ve had this before with one of your clients, we can also take…not do 100% of investment but maybe 80%, 70% or something less, and then we might make the decision and say, “Okay, yeah, let’s partner up.” And then we partner up as a company to that franchise, or we find the other percent with our actual investors that we have. Most of our investors, I would say all of them wanna keep growing with us. And, yeah, they always call me and say, “Hey, Juan, if you have something, just give me a call.” You know, if it’s 10%, 20%, whatever it is, I just study the opportunity, and I would like to be there, right?
Patrick: That’s exciting. So it seems like you’re growing a community, too.
Juan: It is, right? The investors, they wanna know each other and they wanna be together, right? And it’s normal. Every time I have a new investor, they usually tell me, “Hey, look, can I call the other store to see how it works,” right? And you can call the managers, you can visit the other stores, you can call the other investors to see how the experience was…
Patrick: Yeah. It’s really important. I mean, if anyone’s investing serious capital, it’s good to do your Vetted Biz goes through a vetting process and evaluation of all businesses featured on our website to make sure they comply with the Vetted Biz standard and are reliable business opportunities for future small business owners…., talk to existing… or existing franchisees.
Juan: So I don’t know if that’s easy to find, Patrick, what you say about getting to a company that will offer that to you like, “Hey, you can talk to our investors. We can open you the books of your store… “
Patrick: And some franchise owners, like, are very happy to make the instructions and be very involved, and then other ones kinda shy away from it often if they have something to hide, or it could just be a very, very large system. And, you know, a good benefit to D.O.G. Hotels are relatively small, so you can… Because once you get to a certain stage, you know, hopefully not, but probably you won’t be able to operate hotels, you’re not gonna be as involved in some of the negotiations and support on the financing side.
Juan: Yeah, totally. So I think that’s why right now, it’s a great opportunity to come in where we can be involved as much as possible and we have the time and the space to do it. And probably in the future, as you said, you know, that’s a problem that we wanna have. That’s a problem that we wanna have, is that we don’t have time to be on top of everything, of course.
Patrick: And why did you decide to franchise instead of just growing through your corporate locations?
Juan: Well, it’s kinda like an opportunity that was presented to us. We had two friends that wanted to invest in D.O.G., and we didn’t wanna sell some shares of the corporation and then put some corporate stores, right? We were pretty small. We only had one store and the idea. And we talked to some lawyers, to some advisors, and they said, “Hey, start to franchise. I think this is a great concept for the franchise. Usually, we don’t recommend this to other industries or other types of businesses. With you, it can get out of your hands.” Yeah, I think this one could be good, right? Operations are not that tough, your profit and loss is pretty simple. It’s just rent and payroll, that’s it. So I think you can do it, right? And…
Patrick: …sustainable way because there are some systems that, you know… You were founded, eight years ago and you have a healthy unit count but you’re not just going out and selling a franchise to anyone that has the capital.
Juan: That’s the other thing. We study our partners. At the end of the day, they’re gonna be our partners, and the success of D.O.G. is gonna be attached to these franchises, right?
Patrick: It’s almost like a marriage. Like, how long is the franchise agreement for?
Juan: It’s 10 years, but we want to renew it as much as possible, right? It’s renewable as much as you want, and we grow this community that I told you, too, right? We wanna have an investor that’s willing to keep investing with us and have this investment community be attached to us because we offer them the best opportunity they have, right? And to have that, you have to study your partners, and you have to make a good relationship from the beginning, and you have to make them happy, give them the opportunity to succeed and to succeed with our stores.
Patrick: Well said. What are you looking for in a prospective franchisee?
Juan: Well, I think what I said kind of talks about the person that we want to be committed to, a person that’s willing to trust in your brand, that’s willing to invest in the future with us again, if possible, of course, because I know…
Patrick: Do they need to have, like, any industry experience or any professional background?
Juan: Yeah, based on their profile, we’d say there is no need to have background in the industry or investments. If you wanna be involved, of course, I will say it’s a plus to have some experience, but I think our training program, it’s pretty good to be somebody that has never been into a dog hotel can handle it very well. So you just have to be committed to be a part of it and then come to the training. Right now, of course, with the situation, we can do everything online. And I think that’s more than enough.
Patrick: Great. So I’m looking at the date, right now it’s Friday, January 22nd, 2021. A year before, you know, I was thinking there’s a crazy virus happening in China, you know… and, yeah, who would’ve thought. Fast forward from there into March and we’re in a full-out pandemic. How has your business adapted to that? How do you see the market developing during COVID and after?
Juan: Well, the first months, of course, it was tough. So if the travel industry it’s getting a hit, we’re gonna get a hit, definitely. Fifty percent of our sales are overnight, so, yeah, if our clients are not traveling, either for pleasure or business, then you’re not gonna make money. And that was the tough part, right? We had a 75% year-to-year lost in sales.
Patrick: That’s not bad, yeah. On the overnight or overall?
Patrick: Okay. Yeah, yeah.
Juan: Overall. But that was only the first two, three months, right? After that, it was something that was manageable. It was, like, 15%, 20% year-to-year less, right?
Patrick: So you’re saying the period of March to May was bad, 75% drop compared to the last year?
Juan: Compared to 2019, correct, yeah.
Patrick: But in terms of year-over-year, was it a 20% drop, 30% drop?
Juan: No. Year-over-year was 70%.
Patrick: Year-over-year, 70%?
Patrick: And was that because the first few months you were barely making money?
Juan: Almost no sales.
Patrick: Yeah, closed.
Juan: So we see…
Patrick: What’s it now, like looking at January this year compared…well, like, has this month been a lot better, or what would you say now it’s done?
Juan: That’s what I was saying. The good thing is that, and I think we talked about this before the meeting, December was starting to be really good and we started to get busier, and we didn’t expect it, right? And then in January, I think we can make it almost the same as 2019 if not 10%, 7% less year-to-year, which is pretty good compared to the situation that we are in, right?
Patrick: So, basically, that’s being back on track.
Juan: Correct, yeah. It’s basically being back on track, yeah. And the stores that we’re opening this year, I think, we’re gonna open in a great opportunity of growth. This is tough to say, but some stores, some competitors which are small, didn’t survive this pandemic, yeah, and those clients are gonna end up being with us or with the new franchises that we’re opening.
So there’s also opportunities coming in this type of situation. And you know, you’ve studied this the same as me, and for every crisis, there’s opportunities, right? And I think the opportunity that we have given your company, my company, and the company of anybody that’s watching us here is that if you survive this crisis, if you survive the end of this crisis, then that’s an opportunity we have because I don’t think everybody will do it.
So the trend of the market keeps growing, of the industry. There’s no sign of slowing down. And, as you mentioned, last year was one of the biggest adoptions for dogs in the recent 10 years, right? And that’s gonna end up being services that they need. It’s gonna end up being pet care they need. And I’m pretty sure that’s gonna happen…
Patrick: …Miami travel compared to other airports is starting to really pick up.
Juan: Yeah. So I saw that the holidays, year-to-year, was about 50% less, which was tough, and then in January, it kinda started picking up…
Patrick: I think it’s like an 80% drop, something like that.
Juan: Correct. Yeah. There were almost no travels at all. Right here, I mean, you live here in Miami as well, and… there’s nothing going on, right? It’s crazy, but…
Patrick: New Yorkers and people from San Francisco that are down here, and they run on the street. They’re bringing their dogs and… some opportunities for you with those folks that are…
Juan: Which are usually…they’re called snowbirds. They’re gonna end up staying, most probably. And I think that’s a future trend. I trust this industry, I trust the stores. I think the situation is gonna get way better by the second semester of the year. We’re probably gonna have half the numbers as 2019 or probably better.
Patrick: How do you see, you know, the 21st Century changing for, like, the pet service industry? Besides, like, growth, are people gonna be looking for different types of services or different focuses on the providers? How do you see the next, like, 10 to 20 years in this space?
Juan: So I think the stores like us, it’s the ones that are gonna be the future of services, right? Because the hotels that were usually famous or that were usually known between the industry were those big branch hotels where you have 300 or 400 rooms, right, and you have big yards and you’d leave all the dogs, right? But you have to travel either to rural areas or outside of the big cities to get to these hotels, right? Right now, you’re gonna have these boutique hotels in downtown areas, and that’s our goal. That’s where we wanna be. We wanna be in Wynwood, we wanna be Brickell, we wanna be in Miami Beach, right?
Patrick: Right. Miami Beach, great location. It’s gonna be very easy for people to walk their dog over there, drop it off, or drive real quick.
Juan: It is. I’ve been looking for sites in Miami Beach for the past seven years. After Wynwood, it was…my main goal was to be Miami Beach. And I found some, but I didn’t wanna get it. I wanted to be in the middle of it, right, and pay, of course, a proper rent.
Patrick: And it was a CrossFit before, which seems like a…
Juan: What’s that?
Patrick: It was a CrossFit facility before?
Juan: No, next door is the CrossFit.
Patrick: Right next door, that’s right.
Juan: That was a restaurant. It was called Chinese Laundry, I think it was.
Patrick: So you’ve been able to reconvert some different spaces then, I imagine?
Juan: Yeah, yeah. Usually, you have to pay for demolition and then you have an empty space.
Patrick: Sure. Well, Juan…
Juan: So I see that’s the future, that’s the future. And I think this is one of the best industries to be. Something I think I didn’t mention when we were talking about it, this and the childcare sector are the two most growing industries in the U.S. right now. Well, that was pre-COVID, of course. After COVID, everything is…
Patrick: Yeah. I think childcare definitely got hit a bit hard for a bit. And, like, it’s similar to your business but it’s on the upward trend. I don’t think you’re as good as you guys. They’re definitely down more than, like, flat or 10%. I think it’s worse than that, but it’s on an upward trajectory. And on the macroeconomics side, it’s just gonna continue to boom. So I think it seems like those that survive this crisis, like you alluded to earlier, are gonna be pretty well-positioned for this wave.
Juan: I think so. And that’s the idea, and that’s where wanna be.
Patrick: And, yeah, Juan, obviously, you speak Spanish from Venezuela, but we have a lot of Spanish-speaking clients at Visa Franchise, so we could definitely look at doing an interview in Spanish in the future, too.
Juan: Sure. Definitely, yeah. Whatever you want. Just let me know and then we can make it happen, of course.
Patrick: Perfect, Juan. Well, I wanna thank everyone that joined and yourself. If you liked this video, like it on Facebook, LinkedIn, and YouTube, follow us. If you wanna enter in a contact and schedule an initial call with Juan, we’ll send an email for those that registered right after this, and if not, you can visit the D.O.G. Hotels profile on Vetted Biz. I’ll send a quick link to this video so you can schedule a time to speak with Juan and learn more about D.O.G. Hotels.
Juan: Sure, yeah. I mean, anything you need, anything you think that’s gonna help to make a decision on a future investment, I’m there for it. We can have a conversation, we can have a call. If you live around, you can visit the stores, of course. And that’s it. Yeah. Thank you very much for being here. Thank you so much, Patrick, for an invitation, and looking forward to the next one.
Patrick: Perfect. Juan, really appreciate it.
Juan: Thank you.