Published on 19 Aug 2022 Time 6 min read Last update by 28 May 2024

Woof Gang Franchise Has Amazing Returns in 2024

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This article is based on its 2022 FDD

Contents

Woof Gang Franchise claims to be the leading specialty retailer of pet food, pet supplies, and professional pet grooming in North America. As of the end of 2021, the company had 139 locations, all franchised.

How is Woof Gang Franchise Positioned in the Pet Care Industry?

Three of the biggest franchise contenders in the pet market are Pet Supply Plus, Camp Bow Bow and Woof Gang. However, none of them own more than 5% of the market share, resulting in a highly fragmented market. The industry brings in $8.4 billion in revenue annually, with profits of $952 million. It is expected to have an annual growth rate of 2.7% between 2022 and 2027. Woof Gang Bakery also competes in the Pet Care market against big brand companies such as Walmart, Petco, etc.

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How Much is a Woof Gang Franchise?

The initial Woof Gang Franchise Fee is $49,900. You have to pay this upfront fee when opening a Woof Gang franchise.

Woof Gang Franchise Cost

The estimated total investment necessary to begin the operation of a Woof Gang Franchise ranges from $155,300 to $280,400. The following costs are part of the upfront costs included in the initial investment for a Woof Gang. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Woof Gang franchise in 2022.

Low Amount High Amount To Whom Payment is to be Made
Initial Franchise Fee 49,900 49,900 Us
Opening Start-Up Package 5,000 5,000 Us
Travel/Expenses for Training 1,200 5,000 Third Parties
Leasehold Improvements / Construction 25,000 80,000 Landlord, Lender or Contractor(s) and Vendors
Rent 7,500 25,000 Landlord
Computer and Point of Sale System 2,500 5,000 Vendor
Equipment (Freezer, Grooming Equipment and Signage) 11,000 30,000 Vendors
Licenses 500 2,000 Various govemment agencies
Insurance 1,500 3,500 Insurance Companies
Legal and Professional Fees 1,200 5,000 Third-party professionals
Opening Inventory 35,000 45,000 Vendors
Working Capital 15,000 25,000 Employees, Vendors, Utilities, etc
Total 155,300 280,400

Woof Gang Franchise Requirements

Woof Gang Bakery has the following criteria taken directly from its website:
A passion for people and pets
Enjoy a fast-paced and dynamic environment
Possess natural customer service skills
A willingness to follow training and operational standards
Have a genuine desire to fulfill a community need
Operate a store in your own neighborhood
Commitment to ethical business practices
$500,000 net worth / $150,000 liquidity

Ongoing Fees

Royalty: 7% of Gross Revenues
National Marketing Fee: 2% of Gross Revenues

How much do Woof Gang franchise owners make?

Average Monthly Gross Revenue

June 1, 2021 to May 31, 2022
Average Monthly Gross Revenue $55,474
Median Monthly Gross Revenue $50,841
Number of Franchises (and Percentage) that Met or Exceed Average Monthly Gross Revenue 57 (45%)
Average Total Gross Revenue for Time Period $665,693 (12 Months)
Median Total Gross Revenue for Time Period $610,089 (12 Months)
Number of Franchises (and Percentage) that Met or Exceeded Average Gross Revenue for Time Period 57 (45%)

2021 Woof Gang Average Franchise Sales: $665,693

Initial Investment (midpoint) %Profit margin of average franchise sales Estimated Profits
$217,850 10% $66,000
15% $100,000
20% $133,000

Based on the median sales provided by Woof Gang’s franchise locations, at an average of a 15% profit margin it will take 2.5 to 4 years to recoup your investment. This includes roughly a year to find the location, build out the site, staff your store and pass breakeven. You may not get a 15% profit margin which would elongate getting a return on your investment.

Many factors affect the sales, costs, and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other Pet Care stores; the extent of market penetration and brand awareness that Woof Gang stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.

woof gang

Is the Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Woof Gang franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $5 Million Net Sales
Estimated Selling Price = Net Sales * 0.55

When you go to sell a Woof Gang franchise based on the median multiple of .55 and AUV in 2021 of $665,693, it would sell for ~$336,000. This is higher than the midpoint investment of $217,850. Not bad to net >$100,000 on the sale as well as potentially earning ~$100,000 a year while you own your Woof Gang business.


The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.


For 5+ Woof Gang locations the valuation could be as much as double the single unit valuation.

woof-gang-franchise

Woof Gang (Franchisor) Income Statement Key Insights:

Woof Gang Bakery, Inc. Consolidated Statements of Operations Years Ended December 31, 2021, 2020 and 2019

2021 2020 2019
Royalties $4,419,688 $3,262,850 $2,716,488
Retatil Sales 7,099 53,344 233,638
Franchise Salds 60,380 215,813 227,291
Build out Sales 79,683 183,220 168,067
Product Sales 32,950 96,896 74,795
Transfer of franchise, net 58,820 30,000 37,500
Corporate marketing 40,093 53,494 49,573
Other income 41,160 21,228
Total Revenue 4,739,873 3,916,845 3,507,352
Cost of sales 255,251 347,960 415,587
Gross profit 4,484,622 3,568,885 3,091,765
Operating expenses
Salaries and wages 1,414,926 1,029,766 813,701
Comissions 1,200,259 697,513 733,631
Rent 190,967 270,321 401,445
Materials and supplies 33,128 5,206 7,366
Advertising 41,059 78,041 67,762
Travel 94,933 52,058 79,431
Subcontract labor 5,168 22,444 19,435
Office expense 33,446 81,534 61,422
Insurance 67,893 50,953 55,654
Meals and entertainment 57,355 36,508 50,456
Utilities 60,529 39,256 35,109
Vehicle Lease 74,193 62,464 39,134
Repairs and maintenance 11,249 5,026 11,773
Licenses 3,337 681 1,100
Printing 8,994 3,143 1,726
Depreciation and amortization 24,116 28,507 29,866
Franchise expenses 388,944 390,727 367,293
Professional fees 68,292 217,279 275,828
Show and exposition 86,153 69,374 119,290
Training 2,434 3,419 5,159
Charitable donations 24,605 7,530 4,139
Bank Charges 2,432 2,653 3,958
Other operating 43,037 29,842 11,411
Total operating expenses 3,937,539 3,184,245 3,196,089
Income (loss) from operations 547,083 384,640 (104,324)

Woof Gang is a very profitable business for the franchisor with retained earnings of $547,083 in 2021 compared to a loss of $104.324 in 2019. This is a good indication of high growth as a company overall.

Woof Gang Franchise

How many Woof Gang units have opened and closed?

System-wide Outlet Summary

Outlet type Year Outlets at the Start of the Year Outlets at the End of the Year Net Change
Franchised 2019 97 111 14
2020 114 124 13
2021 124 139 15
Company-Owned 2019 0 0 0
2020 0 0 0
2021 0 0 0
Total Outlets 2019 97 111 14
2020 111 124 13
2021 124 139 15

Over the last three years, the company has been expanding. Franchised units have steadily increased. Over the last three years, franchises have opened at a rate of 14 units a year. This is an indicator that these stores are performing well. Between the start of 2019 and the end of 2021, the company grew from 97 to 139 locations which is a growth of 43%. The map below shows territories where Woof Gang already has locations. They are, however, always looking to expand.

woof gang

Conclusion

Woof Gang offers people the opportunity to be a part of a business that is not going to die anytime soon. Pet ownership has drastically increased during the pandemic, leading to a dramatic increase in the need for pet grooming and retail services.

Furthermore, during the past couple years, disposable income spending has increased, leading to more money on non-essential activities like pet grooming. Very few franchise opportunities offer a payback period of 2.5 to 4 years including the expenses for a general manager. Most franchises with a payback period under 4 years, assume the owner will be working in the business full-time.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Pet Care Industry.

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