A Rapidly Expanding Pet Franchise in a High-Demand Market:
Well Groomed Pets is a retail pet wellness and grooming franchise system with significant growth momentum. Since incorporating in 2021 and launching in 2022, we have sold 100 territories, with 20 salons currently open and an additional three expected by the end of 2024. Our average franchisee operates 3.5 salons, demonstrating confidence in our model's scalability. We have established nine national partnerships, and we are the first dog grooming business to receive an endorsement from the American Kennel Club (AKC) in over 140 years.
The pet wellness and grooming industry is experiencing strong growth, with over 26,000 businesses in the U.S., most of which are independently owned. As one of the leading franchise brands, Well Groomed Pets brings a contemporary retail experience to a rapidly expanding market where demand far outstrips supply. Key trends such as increased pet ownership, rising spending on canine wellness, and a growing focus on specialized services create a compelling market opportunity.
Our Differentiator: Unique Data Insights and Scalable Revenue Streams
Our distinctive value lies in our approach to canine wellness. Unlike veterinarians, who see dogs less frequently and for shorter durations, dog groomers interact with pets 20-30 times more often, and each appointment lasts 8 times longer on average. At Well Groomed Pets, we leverage this unique position by conducting a comprehensive 50+ point wellness check on every dog. With 19 salons, we have already gathered over 2 million data points, providing invaluable insights into canine health that no other entity offers. Collectively, our open salons identify more than 5,000 wellness issues monthly and we see this growing to 10,000 per month by year end. We see significant opportunities to add new monetization opportunities to our franchise system and franchisees.
In addition to traditional franchise fees and royalties, we see a near term opportunity to 11x our current monthly recurring revenue (MRR) and this capital campaign will help us reach this objective.
The Growth Plan: Scaling Up to Maximize Market Potential
In 2022, we surpassed our first-year revenue projections by over 30%. In 2023, we exceeded our second-year projections by 25%. Currently, our burn is below $20k per month putting us into striking distance of being cash-flow positive and this investment goal will allow us to add new marketing and growth intiatives.
The capital we seek will be used to achieve 37 additional franchise sales over the next 12 months. This will mark a 200+ unit milestone. This growth will enable us to grow our MRR by 5x as new revenue streams are introduced. We are on tract to reach $20 million in revenue by 2026. Some Unit Economics:
Franchise Fees ($55,000)- This is a one time up front fee franchsiees pay us to be in our system. We collect and keep 100% of these funds as we do not use brokers.
Franchise Royalties ($1,250 Y1 and $2,500 Y2)- This is our MRR. Unlike other franchises that charge their franchisees a percentage on sales, we flat rate our royalties. This provides much more predictable cash flow.
Referral Revenue- Similar to Rover and Wag- we have a powerful technology and workflow that connects pet parents to pet service providers. Rover earns about 20% of the transaction value. Wag earns about 30%. We earn 70%.
Wellness Product Sales- Currently, we operate like an affiliate selling most of our wellness products online. However, due to the workflow of our grooming business we enjoy some of the highest conversion numbers in the pet category. Amazon converts at about 13%. Chewy converts at 9.9%. We convert at 44%.
Finally, we have an accelerating EBITDA. Because we only sell multi-territory franchise products, our Client Support and Client Success costs drop with every new salon that is opened. As owners open their first salon- the costs are high. However, as they open their second salon, costs drop by 60% or more. By the time they open their third salon- the owners operate almost entirely automously from our support system. This allows us to enjoy much lower support costs than our competitors.
The Investment Terms: Attractive Returns and Clear Use of Funds
The current investment round is structured as a Priced Round with a $16 million pre-money valuation. The first $500k into this round includes a bonus 25% warrant coverage.
Use of Funds: Strategic Allocation for Maximum Growth Impact
1. Expand our client success teams to ensure continued franchisee success and expansion.
2. Increase advertising, marketing, and PR efforts to achieve 37 new franchise sales within the next 12 months.
3. Cover operating expenses to support our accelerated growth plan.
Expectations: What You Can Expect and What We Are Hoping to Achieve.
1. Regulary Updates: Generally, we provide an investor update every other month so you don't have to chase leadership for news.
2. Opportunities to Add Value: While our team has substaintail startup experience, we approach this venture with great humility. We are eager to receive creative contributions from our stakeholders (especially in the area of marketing automation and operational efficiency).
3. Lean Leaders: Perhaps it is our previous entrepreneurial successes and failures that drive our culture of lean business but it is indisputable that we have accomplished a lot with minimal capital resources. Your investment will be spent carefully with a keen eye on growth and increasing enterprise value. Everything else is a distraction.
Our Law Firm is K&L Gates
Our Parnters Include: The American Kennel Club, Fear Free, Andis, Hydra, Sketchers, Groom Curriculum, Pet Meds and more.
Our Tech Stack is rooted in Microsofts Azure architecture
Total FTE: 12
Total PTE: 6
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