Risk Score
Pending analysis
Investment Range
$142,500 - $896,000
Franchise Fee
$78,000
Min Cash Required
$50,000
Total US Locations
21
Business Summary
Pet Evolution Franchising LLC offers regional development franchises that focus on promoting the sale of Pet Evolution unit franchises and providing support services to these unit franchisees. A Pet Evolution unit franchise operates a pet supply store that sells high-quality pet food and products, offers pet grooming services, including in-store and mobile nail trimming, and provides in-store self-service dog washing stations. Unit franchises also offer product delivery to customers.
Corporate History
The Pet Evolution concept was initially created by its co-founders in 2010. This led to the opening of the first Pet Evolution store in Woodbury, Minnesota, in February 2012, which initially focused on retail pet food. In 2015, this location expanded its services to include pet grooming and self-service dog washing stations. A second store in Arden Hills, Minnesota, opened in November 2018. The predecessor entity, Pet Evolution, LLC (originally incorporated in 2011 as Tails & Pales, LLC), transferred all its intellectual property, including the Pet Evolution trademark, to Pet Evolution Franchising LLC in February 2021. Pet Evolution Franchising LLC itself was formed in January 2021 and began offering both unit franchises and regional development franchises that same month.
Financial Overview
Investment Range
$142,500 - $896,000
Franchise Fee (Low)
$78,000
Franchise Fee (High)
$650,000
Minimum Cash Required
$50,000
Equipment Costs (Low)
$2,000
Equipment Costs (High)
$5,000
Working Capital
$100,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Pet Evolution Franchising LLC's financial condition raises concerns about its ability to provide services and support to its franchisees. The franchisor explicitly highlights this as a special risk. As of December 31, 2023, Pet Evolution Franchising LLC reported a negative members' deficit (stockholders' equity) of ($3,589,236). The company experienced significant net losses, with ($1,396,895) in 2023 and ($1,284,981) in 2022. The estimated initial investment required to open a regional development franchise for Pet Evolution Franchising LLC significantly exceeds the franchisor's stockholders' equity.
Financing Details
Pet Evolution Franchising LLC does not offer any financing, directly or indirectly, to its regional development franchisees to help establish their businesses. The franchisor also does not guarantee any notes, leases, or other obligations that franchisees may incur.
Performance Metrics
Total US Locations
21
Franchised Units
21
Corporate Units
0
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Pet Evolution Franchising LLC has no litigation to report. Item 3 of the Franchise Disclosure Document explicitly states that no litigation is required to be disclosed.
Bankruptcy History
Pet Evolution Franchising LLC has no bankruptcy history to report. Item 4 of the Franchise Disclosure Document states that no bankruptcy information is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
Pet Evolution Franchising LLC requires its regional developers to meet several conditions to renew their franchise agreement. Regional developers must not be in default under their agreement or any other agreement with Pet Evolution Franchising LLC or its affiliates during the last six months of their current agreement. They need to provide written notice of their intent to renew at least 180 days before the agreement expires. For renewal, regional developers must sign Pet Evolution Franchising LLC's then-current regional development agreement, which might have significantly different terms, including a new development schedule. They must also sign any required ancillary agreements, execute a general release of claims, and pay a renewal fee. The renewal fee is calculated by multiplying $1,500 by the number of stores operating in their development territory at the time of renewal.
Training & Support Program
Franchisor Assistance
Pet Evolution Franchising LLC provides its regional development franchisees with several forms of assistance. Before opening, Pet Evolution Franchising LLC designates the development territory, provides an initial training program, loans a copy of the Regional Development Manual, and supplies a list of approved suppliers. During the agreement term, regional developers receive a share of the initial franchise fees and transfer fees collected from unit franchisees in their territory, as well as a monthly developer fee equal to 40% of royalties collected from those unit franchisees. Pet Evolution Franchising LLC also offers telephone support during normal business hours for operational issues, provides additional training as needed, and offers technology services like an intranet, email address, and electronic reporting. Pet Evolution Franchising LLC will assist with the initial training for the first two unit franchisees in the regional developer's territory at no extra charge and maintains necessary franchise registrations.
Initial Training Hours
17
Training Location
Online/virtual
Ongoing Support
Pet Evolution Franchising LLC provides its regional development franchisees with ongoing support, including telephone support during normal business hours for operational issues. They also offer additional training if required to maintain industry competitiveness or upon request, though this may incur a fee of $500 per day plus travel expenses if not held at their offices or virtually. Regional developers also receive technology services such as an intranet, an email address, and electronic reporting. Pet Evolution Franchising LLC will assist with the initial training for the first two unit franchisees in the regional developer's territory at no additional charge.
Franchise Requirements
Ideal Candidate Profile
Pet Evolution Franchising LLC seeks regional developers who have prior business ownership experience, experience in franchising, or management experience.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Full-Time
Territory Type
Limited
Territory Size Requirements
Pet Evolution Franchising LLC defines regional development territories based on geographic areas, typically an entire state or county. The exact size of a Development Territory is determined by the number of unit franchise licenses to be granted within that area, with a minimum of 6 licenses and usually no more than 50.
Staffing Notes
The Pet Evolution regional development business requires the regional developer to participate personally, on a full-time basis, in its day-to-day operation. If the regional developer is a business entity, its majority owner must be involved in the day-to-day operation of the business. Unless otherwise approved by Pet Evolution Franchising LLC, the regional developer may not have a manager or other on-premises supervisor. All management and sales personnel working in the regional development business must sign confidentiality and noncompetition agreements. The regional developer is solely responsible for hiring, compensation, employment terms, working conditions, supervision, scheduling, employment records, discipline, and termination of its employees, and for providing workers' compensation insurance. Pet Evolution Franchising LLC does not provide facilities, equipment, or house or transport the regional developer's employees, nor does it provide tools or materials required for employees to perform services for the regional developer. These individuals are not Pet Evolution Franchising LLC's agents or employees, and Pet Evolution Franchising LLC is not a joint employer of these individuals. If required by Pet Evolution Franchising LLC, the regional developer must obtain a written acknowledgment from each employee stating they are an employee of the regional developer, not Pet Evolution Franchising LLC.