Week 7: Fat Shack & Scenthound
Late night food done right and a recurring revenue pet franchise
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To franchise owners,
I hope you all had a great unofficial end of summer over Labor Day Weekend! Franchise Breakdowns is back today with a new format - one that I believe is more concise and easier to read. If you ever have any constructive feedback on the newsletter, don’t hesitate to reply to this email with suggestions!
Today’s edition highlights Fat Shack and Scenthound.
Fat Shack was started in 2010 by college student Tom Armenti, who attended The College of New Jersey (TCNJ). Tom wanted to bring his college and surrounding town a better solution to late night eats, so he started his journey with just $5,000 and a partnership with a local bagel shop that allowed him to run his late night restaurant from 6pm to 4am. Tom quickly outgrew the bagel shop, and decided to move Fat Shack full time to Northern Colorado in 2011, where it became an instant hit and has grown into a full fledged franchise!
Scenthound is a dog grooming franchise with a membership model for customers, meaning recurring revenue for franchise owners. The traditional service offering is grooming services, but additional lines such as baths, ear cleaning, nail clipping, and teeth brushing are done at each “Scenter” too. This franchise has exploded in the last year, and has been requested multiple times from readers, so let’s get to it!
Breakdowns below👇
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Fat Shack
Fast Facts
Background
Founded in 2010 in NJ, franchising since 2015
26 locations open nationwide
Serves late night-focused food, highlighted by sandwiches stuffed with traditional appetizers like chicken fingers, jalapeño poppers, french fries, etc.
Fees + Investment
Royalty: 6% of gross sales
Brand Fund: 0% right now, but can be up to 1.5% of gross sales
Franchise Fee: $25,000
Initial Investment: $112,750 - $291,250
Financial Performance
The following chart shows the average annual gross sales for franchisee owned units that operated for the entire calendar year 2020 (10 locations)
The Wolf’s Take 🍟
Who doesn’t love some late night food huh?! As Mr. Wonderful from Shark Tank says, there are two times when a consumer doesn’t care how much money they spend:
“when they’re drunk, or when they’re in love”
Fat Shack definitely capitalizes on a consumers late night munchie cravings - if you can look at those sandwiches and not feel a craving in your stomach than you are stronger than I am! The financials look impressive as well, with average revenue of franchised locations coming in at about 3.75x the high end of the investment range.
All in all I love the story of the founder who started this while in college, and it looks like it could be a franchise poised for massive growth.
Recent Press
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Scenthound
Fast Facts
Background
Founded in 2015 in Jupiter, Florida; franchising since 2018
8 locations open at the start of 2021, with 80 units in development
Offers dog grooming services with a membership model for customers
Fees + Investment
Royalty: 6% of gross sales
Brand Fund: 1% of gross sales
Franchise Fee: $49,900
Initial Investment: $180,950 - $297,950
Financial Performance
The following representation is from four (4) Scenthound stores in operation that are owned by the affiliate Scenthound Corporate Stores, LLC in 2020
Note: These stores do not operate under population or territory restrictions, which might not be the case for a new franchisee
The Wolf’s Take 🍟
Recurring revenue always makes investors excited, and for dog grooming franchises Scenthound is the first I’ve seen to implement the membership model. The numbers are solid too, as affiliate stores show the possibility to achieve a 3:1 investment to net income ratio.
Overall, this is yet another franchise that has benefited from the boom in the pet industry, as nationwide pet services are desperately expanding to try and keep up with the record number of pets American homeowners look after.
Recent Press
That’s it for this week’s Franchise Breakdowns. Feel free to reply with any questions or feedback, or leave a comment. If someone sent this your way and you haven’t subscribed yet, you can also do that below. Thanks and see you next week!
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The Wolf of Franchises does NOT guarantee the financial performance of any franchise mentioned. The decision to purchase a licensed affiliate or franchise must be based on your own independent research. The Wolf of Franchises is not liable for any representation made by an affiliate, associate, marketing material, or Franchise Disclosure Document of a franchise with respect to real estate, financial, operations, or marketing performance of the business being acquired.
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