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For Retirement Play, Father Joins Daughter in Dogtopia


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Day care, not overnight boarding, is the majority of Dogtopia's business, which at least one franchisee says makes the brand more recession-proof.

John Ledbetter spent 30 years with Liberty Mutual, serving large, commercial customers in insurance, risk management and crisis management. Now he owns a Dogtopia franchise in The Woodlands, Texas, north of Houston, with his daughter as operations manager.

"It has been an incredible ride," he said, since opening the store a year ago and generating just short of $1 million in revenue its first year. "When I was hitting 30 years with Liberty, my daughter was graduating from Texas A&M in animal science," and they went into business together. 

"It's amazing watching your kids. She's much smarter than I am. She's just a sharp, sharp gal," he said.

Ledbetter was far down the path toward buying a Camp Bow Wow franchise instead, which he calls Dogtopia's biggest competitor. "We saw seven or eight of their operations, and then their management team was really switching over. They lost the CFO, COO right about that same time," and he's a big believer in stable leadership.

"I believe research is critical. I had one employer since I was out of college. If I want to do something, I want to do something for the long term," he said.

He's a fan of Neil Gill, Dogtopia's CEO, and the management team. "It starts at the top…setting that vision that's so critical," he said. 

Dogtopia was a Franchise Times Zor Awards winner in 2017, receiving the annual distinction along with nine other brands based on profitability for the franchisee. We're revisiting some of those winners this week to see how operators are faring during the pandemic.

CEO Gill said he'd been monitoring the pandemic's impact early on. "I watched the impact to the retail in China. I used Starbucks as a barometer. We weren't caught like a deer in headlights like a lot of organizations were," he said.

Last year he implemented Microsoft Teams across the whole system, and this year switched to virtual training for franchisees. "We've had more people take up the virtual training than the on-site. It's amazing how things shift," he said. 

An Australian, Gill's background is in restaurants and hospitality, including with Gloria Jean's coffee and the Chili's chain. He invested in Dogtopia in September 2015, now with 133 units open and 240 units sold but not open, with 86 of those in some form of site search. New locations do not have retail, like the sites originally did, and 74 percent of revenue comes from dog day care with the rest from overnight boarding. 

"We're the only brand in the country that has driven day care as a core revenue channel," he said. "I think it's the harder channel to drive."

Ledbetter said he initially didn't buy Gill's insistence on making daycare, not overnight boarding, the mainstay of the business because boarding's profit margins are so much higher. But leaders in Ledbetter's past, he said, "taught me to stay away from the crack. And in the dog business, crack is boarding," with margins as high as 40 to 50 percent compared to 25 to 30 percent for day care. 

"We trusted Dogtopia. Through the 2008 financial crisis, it's proven that day care is the recession-proof part of our business," and today's pandemic-related shock is reinforcing that rule. 

Read more from our Zor Awards update series this week:

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 

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