April, Part 2- Kids and Pets: Still Popular

A grocery store for pets

Pet Supplies Plus is a franchised chain of 220 stores, the majority of which are located east of the Mississippi. VP of Franchise Development, Harold Carney, describes the concept simply: "We are a grocery store for pets. We were founded by grocery guys and we lay our stores out like a grocery store. It's a format that grocery stores have been teaching people to shop in for decades." Carney says the company even merchandises and advertises like grocery stores. "Our advertising circulars that we send out look just like something from Safeway - except instead of Purina, it would have premium brand dog foods and lots of kitty litters, bird cages, pooper scoopers, and so on."

Pet Supplies Plus stores stock over 10,000 items for pets of all kinds. "We have some livestock in there, meaning live animals such as birds and fish, but no dogs or cats. Mostly though, we carry food and other supplies," says Carney. He continues, "Food is always going to be a big part of this industry because obviously you don't buy a cage or a crate for your dog every time you come to the store. You buy kitty litter and food and treats every time you come in so those things are a huge part of the business. But we also carry all of the stuff from aquarium filters to lizard lights."

Gone are the days when most people would just pick up a bag of kibble while doing their weekly grocery shopping. Today, more and more pet owners shop for their pets in a pet specialty store. Carney says several factors have contributed to this trend. "One factor has been the growth of the premium brand dog and cat foods. People have become more knowledgeable about feeding their animals. They want to feed them a better quality product and premium brands aren't sold by mass merchants. You can't get Science Diet at your local grocery store."

Carney says another factor driving customers into the pet specialty retailers is the ongoing revolving menagerie experienced by many households. "A lot of households that have a dog and a cat also have multiple other pets such as an aquarium or hamster or turtle. WalMart and grocery stores don't have anything for those." Before specialty pet retailers such as Pet Supplies Plus, buying supplies for anything other than dogs or cats meant making a special trip to a hobby store that catered to specific animals. "That's where people used to go to shop and maybe they would have a small supply of dog or cat food but really those stores were into their fish or birds. Now people can come to our stores and get anything they need for their fish but they also get exposed to all the other pet items. It becomes a one stop shopping for pets. The pricing is better than the grocery store and we've got a much better selection. For example, if your dog is getting old, you might want some food with glucosamine for sore joints," says Carney.

PSP doesn't sell anything to its franchisees
Pet Supplies Plus does not sell inventory to its franchisees. "That makes us rather unique in the franchise industry," says Carney. "We do not have a wholly owned distribution network. We are constantly meeting with the manufacturers to get national pricing but that is carried through independent distributors. We arrange with the manufacturers to set the program up, but then the franchisees buy their own inventory from the distributors."

Pet Supplies Plus is a direct competitor to pet specialty giants Petco and PetSmart. "Our typical store is about 8000 sf and within that area we'd have as large a selection as a PetSmart that's three times our size. We compete by being smaller and more convenient. Being smaller also makes it much easier to provide good customer service," says Carney. The success of Pet Supplies Plus also depends on carefully selecting its franchisees. "Our franchisees are all owner/operators," says Carney. "That way we know our franchisees are dedicated owners who get involved in the community, get to know their customers, and really takes care of the stores and their customers."

Carney says Pet Supplies Plus plans to continually open new stores and will be pushing farther into the West in the future. "We need a fairly substantial population to support a Pet Supplies Plus. We get calls from people in small towns who think because there is a local WalMart, that means it can support a PSP. But that's just not the case. Whether or not you choose to shop at WalMart or Lowe's or Home Depot, the fact is that 100% of the population uses the products they sell. Best case scenario, only 60% of the population has pets and there is plenty of competition to sell them supplies. We want to see 100,000 plus people in the trade area," states Carney.

Contact Information: Harold Carney, VP Franchise Development, Pet Supplies Plus, http://www.petsuppliesplus.com, (248)374-1900.

Number 1 in the number 2 business

Pet Butler has been providing pet waste removal services to homes and multi-family communities since 1998. The concept is obviously unique. Founder and CEO, Matt Boswell, says, "It really grabs someone's attention that someone would 1) scoop poop for money, 2) that they can make money at it, and 3) that people are actually buying franchises all over North America." Boswell says no potential franchisees are actually looking for a pet cleanup franchise. "They run across it one way or another. First they laugh at the idea and then they are intrigued by it and finally they are almost enamored by it. Once they realize how lucrative it can be and how much demand there is, they love the idea."

The demand for the service is definitely there. There are over 70 million pet dogs in the U.S., each "going" an average 23 times a week. "That really fills a yard up fast," says Boswell. "Not to mention it is hazardous to the environment. While taking away the hassle of cleaning up after pets around the yard, we also give pet owners time to enjoy their pets, their yard, and their family. In our time-starved society, people hire us more to get their time back with their family than they do to clean up their yards."

Most customers use the service twice a week, but it can be any frequency - three times a week, every other week, or maybe just monthly. There are also one-time Spring cleanups. The cost for a customer being serviced twice a week averages about $20 a week. There are also additional services to plump up the bottomline such as odor eliminator spray to get rid of urine smells in the back yard. "We have services like simply spraying off your deck or different training aids that teach dogs where they can go," says Boswell. "With the additional services the average once-a-week customer will pay approximately $80 a month. That's about twice what a normal pooper scooper company charges."

Not bad for a service that only takes a few minutes per visit. "Most people think we're in the yard 30 minutes plus, but my guys average 5-7 minutes easily. We drive 5 minutes, then scoop 5 minutes and so on. If we had houses back to back we could do 120 houses in a day, but half the time is drive time," says Boswell.

Call center and billing services provided
Pet Butler takes a lot of the headache out of running the business so that franchisees can concentrate on the "fun" stuff, which is Boswell's term for marketing and scooping. He explains, "Scooping is not necessarily fun but you're out in the environment and you get to see the dogs and you're working in nice yards. But franchisees really love the idea that we handle the phone calls and every bit of billing forever. We field calls in our call center 72 hours a week. When a potential customer calls in, we answer all the questions. We quote prices, we tell them what day their route is on, when they'll be cleaned, and their technician's name. Then we put it all into our ARF software, which puts the customer on the technician's route in real time. Each technician in the field has a Blackberry Nextel device that they log in through the wireless Web so they can see their routes in real time. It also tracks them, times when they're in each yard and also between each yard while they're driving. And we do the billing too."

The demand is there, but the challenge according to Boswell is marketing. "Everybody loves us and they need the service. The one big obstacle we have to overcome is awareness. Not many people know this industry exists so we are all about marketing. There are no big government regulations; you don't have to buy big equipment or have a big retail office, and you don't invest in inventory. But you do have to spend time and money on marketing in this business. That's why we train our franchisees in every area of marketing. We are extremely serious about our marketing," states Boswell.

Pet Butler is the first coast-to-coast pet cleanup service and the future looks bright. "We currently have 35 franchises including 10 that are company owned across the US. The growth has blown us away. In 6 1/2 months of offering franchises, we have 25 open with five more in the pipeline," says Boswell. "We do plan on having 200 new franchisees launched in the next 4 1/2 years. By 2010, we expect to be doing $500K a week while offering service to at least 50 million people. The pet industry is exploding. Home services are exploding. And franchising is growing quite quickly as well. So with the combination, you can't go wrong."

Contact Information:Matt Boswell, CEO, Pet Butler, http://www.PetButler.com, 1-800-738-2885.