The pet industry is booming. As recently stated in an industry report on Franchise Direct, “People LOVE their pets—and they’re spending the money to prove it.” But does this mean that you should buy a pet franchise in 2024? Here are some key considerations from franchisee attorney Jeffrey M. Goldstein.
The State of the Pet Industry in the United States
People certainly do love their pets. While pet ownership has long been on the rise, pet ownership spiked during the COVID-19 pandemic. As a result, there are more pets in the United States today than ever before—with approximately two-thirds of all U.S. households owning at least one pet. This means that the need for pet supplies and other pet-related products is at an all-time high as well. As Franchise Direct reports:
“Thirty years ago (1994), the amount of total pet industry spending in the United States only totaled $17 billion. Now, the total is over eight times that amount and climbing. In 2022, the total amount of expenditures on pets in the United States was $136.8 billion, up from $123.6 billion in 2021 and $90.5 billion five years prior in 2018.”
This is based on data from the American Pet Products Association (APPA), which provides the following breakdown of spending on pet-related products in 2022:
- Pet Food and Treats: $58.1 billion
- Veterinary Care and Products: $35.9 billion
- Supplies, Live Animals and Over-the-Counter Medications: $31.5 billion
- Boarding, Grooming, Training, Pet Sitting, Walking, Insurance and Other Services: $11.4 billion
Along with the COVID-19 pandemic, Franchise Direct’s pet industry report also attributes the recent increase in pet ownership (and pet-related spending) to what it calls the “rise of ‘pet parents.’” According to the publication, young adults are now more likely to put off marriage until later in life, and “those who are delaying marriage and childrearing until later in life are more likely than average to own a pet in a trial run for parenting – if they want to become parents at all.” As the publication goes on to explain, “[t]he change is so pervasive that it’s made its way into our everyday language, evidenced by the increase in the use of the phrases ‘pet parents’ and ‘fur babies’ vs. the traditional phrase of ‘pet owners.’”
Reasons to Consider a Pet Franchise in 2024
Another recent article on Franchise Direct discusses three “powerful reasons” to buy a pet franchise. Along with the financial potential presented by the recent boom in pet ownership, the article highlights the following benefits:
- “Flexibility in Operations” – As the article explains, there are numerous different types of pet franchises. Whether you are interested in opening a retail outlet or operating a mobile pet-based business out of your home, there are currently several options available.
- “Personal Fulfillment” – For pet lovers, owning a pet franchise provides the opportunity to build a business around their passion for pet care and pet ownership. As the article states, “today’s successful pet franchise owners want the satisfaction of working closely with animals, providing valuable services to pet owners, and contributing positively to the lives of pets, because it’s incredibly rewarding on a personal level.” Conversely, if you don’t find these to be rewarding, then buying a pet franchise might not be right for you.
- “Extremely Loyal Customer Base” – The article posits that pet owners tend to be loyal customers, although it does not provide any data to support this assertion. However, if pet owners come to trust and rely upon your franchise to meet their pets’ needs, then you may be able to build a reliable customer base that translates to long-term business success.
The benefits of owning a pet franchise vary case by case, and your likelihood of success as a pet franchisee will depend on numerous factors—from the specific franchise you choose to your personal background and your commitment to your franchise’s success. Thus, while owning a pet franchise can be a good option, it isn’t necessarily a good option for everyone.
Additional Considerations When Purchasing a Pet Franchise
Along with considering the potential benefits of pet franchise ownership, it is important to consider the risks as well. Buying any type of franchise is a long-term investment, and informed decision-making is critical for ensuring that you give yourself the best possible chance of achieving a positive ROI. With this in mind, here are a few additional considerations for purchasing a pet franchise in 2024:
- Initial Term and Renewal Rights – As a pet franchise owner, it could take several years to recoup your initial investment (if you are able to recoup it at all). As a result, the duration of the initial term of your franchise agreement is extremely important, as is ensuring that your franchisor does not have undue discretion regarding renewal.
- Territorial Protections or Exclusivity – Does the franchise you are considering come with a protected or exclusive territory? For retail businesses in particular, territorial rights can be extremely important.
- Purchasing Restrictions and Mandatory Suppliers – Many franchisors impose purchasing restrictions or require their franchisees to use mandatory suppliers. This often increases the cost of goods sold, which can severely limit franchisees’ profitability. While some purchasing restrictions are legal, others are not.
Again, these are just examples. Making an informed decision about purchasing a franchise requires thorough due diligence, a careful review of the Franchise Disclosure Document (FDD) and a clear understanding of the franchise agreement’s terms. If you are thinking about buying a pet franchise in 2024, we encourage you to contact us to learn more.
Discuss Your Pet Franchise Opportunity with Franchisee Attorney Jeffrey M. Goldstein
Are you thinking about buying a pet franchise in 2024? If so, franchisee attorney Jeffrey M. Goldstein can help you make an informed buying decision, and he can represent you in franchise agreement negotiations with the franchisor if desired. To learn more in a free and confidential consultation, please call 202-293-3947 or tell us how you would like to be contacted online today.
