While a dog bakery franchise may sound appealing, there are a number of important things that you should consider before putting your money on the table.
A franchise offers you guidelines, professional support and the experience of others. However, you may also be committing yourself to years of payments—whether your dog bakery succeeds, or not!
There are hundreds of franchises available for you to purchase. You will recognize many of them—like McDonalds or Dunkin Donuts. But they vary greatly in what they provide for you and what you can expect from them.
Entire books have been written specifically about home business franchises and how to decide whether to purchase one for your business. Here are some available at Amazon.
I will give you a quick overview here, so that you understand if this may be an option for you.
If you are seriously interested in purchasing a dog bakery franchise, you need to do a lot more homework before arriving at a decision.
Three Dog Bakery is an example
of a dog bakery franchise.
Advantages of a Dog Bakery Franchise
So, why would you decide to purchase a bakery business franchise? Here are some of the reasons that people choose to purchase a franchise.
The franchisor (This is who you purchase the franchise from…) has developed a business model. You just need to learn about their system and follow directions.
Training does vary from franchise to franchise. Ask questions about this.
Product or Service
A franchisor has already developed the products that you will sell. It’s important to note that you may or may not be allowed to sell other dog treats and products.
Often the franchise will sell the ingredients or products that you need. If so, you may be required to purchase from them.
Accounting and Finance Systems
Usually a franchise provides software for your accounting and records. This is also how they keep track of your sales, etc.
Depending on the franchise, you may be required to have a minimum number of sales or pay a commission on your sales to the franchise.
Training for You
Usually a week to a month of training is provided at the company headquarters.
Sometimes a company representative will come to your location to help you get started.
The company will keep track of market trends, etc. and provide its franchisees with information to help them with strategic planning.
Because the franchisor often gets a commission for sales that you make, they will be experienced at knowing what works and what doesn’t.
The parent company has already learned the legal requirements and set up a quality control system that you will be required to follow.
Pricing your Dog Treats
While the franchisor is not permitted to dictate pricing, they will give you guidelines to set your prices.
You can get some ideas about pricing dog treats if you visit my product pricing article here.
Real Estate or your Dog Bakery Store Front
If your franchise requires purchase of a building, the company should help you with the selection of the site.
Hiring and Firing
The parent company may help you with guidelines for hiring and firing.
Dog Bakery Equipment
You will be told exactly what equipment is necessary to be in the dog bakery business.
A dog bakery franchise may require
equipment like display cases.
Disadvantages of a Dog Bakery Franchise
While it may sound pretty good to purchase a dog bakery franchise and let someone else do the upfront work involved, there are some disadvantages to consider.
When making your decision, consider your current business skills and how much up front work you are willing to do.
Cost of a Franchise
This can run from a mere $10,000 to hundreds of thousands. For example, in 2001, Auntie Anne’s, the pretzel franchise, required that a candidate for a franchise invest between $156,000 and $252,000 – just to get started. Some of this can be borrowed.
You will be required to pay an initial franchisee fee and often advertising fees (.5 – 4% of total sales), and there may be other fees.
This used to be one of the draws for purchasing franchises. However, franchisors no longer guarantee exclusivity.
Don’t expect protection on this front.
Length of the Contract
Make sure you understand if you are obligated to continue the relationship for 5, 10, or even 20 years.
If you have a binding contract, you might be obligated to pay franchise fees – even if your business fails.
I’m listing this separately. Commissions or royalties often range from 3 to 8% of your total sales. You will pay this as long as you are in business.
Loss of your Independence
If you are the type of person who likes to make your own decisions, you may not like a dog bakery franchise. Decisions are often made, only with the blessings of the parent company.
So how do you decide if a dog bakery franchise is for you?
If you have the money and don’t want to be bothered with the research and work required for a business start-up, then you might be a candidate for a dog bakery franchise.
If you think this might be for you, make sure you do your homework—before signing on the dotted line!
Here are a few things that you should consider:
UFOC The Uniform Franchise Offering Circular
This is a legal document that all franchises are required to provide to potential franchisees (you). It explains the contract that you are going to sign.
Read it carefully, and I also suggest that you have a lawyer read it also. Paying a lawyer to do this may save you thousands of lost or mis-spent dollars in the end. Do your due diligence!
Call or Visit Current Franchisees
This is one of your best sources of information.
Have a good list of questions to ask them. Often they will give you very frank and honest information about the company.
But do be considerate of their time. Franchisees are in business and often very busy. Don’t take more of their time than necessary.
Free Training Session
Often a franchisor will allow you to attend a training session even before you sign a contract. If you go, there may be subtle, or not so subtle pressure to become a franchisee.
How Much Money will You Make?
Franchisors are not permitted to tell you what you can expect to make financially.
Don’t fall for the old “income on the napkin” trick. This is when the franchise representative writes a number on a napkin, since he isn’t allowed to tell you an income number.
Somehow, the napkin always ends up in the company representative’s pocket! Hmmm…
Will you have an exit?
What if your business just doesn’t work out? What provisions are there for you to get out of the relationship—if any?
So, if you are considering purchasing a dog bakery franchise, make sure that you understand what you will get from the deal—and what you will be required to provide.
Franchises are not for everyone, but they can be a great way to start a dog bakery business, a business that has already proven itself.
Without having to do all the research and development!
However, keep in mind that you are not buying a turn-key business, where you can walk in the door and start selling dog treats. You will need to do quite a bit of work to get your dog bakery started. But with a franchise, you do have someone to consult if you have questions.
This dog bakery start-up guide that will help you, no matter what you decide to do…and it could help you avoid the costs of a dog bakery franchise.