Risk Score
Pending analysis
Investment Range
$520,520 - $1,357,600
Franchise Fee
$10,000
Total US Locations
29
Business Summary
Wag N Wash operates retail businesses that offer self-service pet bathing, professional pet grooming, and sell a curated selection of pet supplies, pet accessories, pet bakery items, and pet food in a small format store environment.
Corporate History
Wag N Wash, operating as WNW Franchising, LLC, was established on January 18, 2022, in Delaware and began offering franchises that same year. The brand's history dates back to its predecessor, Healthy Pet Partners, LLC (HPP), which was formed in Colorado in November 2005 and started franchising Wag N Wash stores in January 2006. WNW assumed the role of exclusive franchisor in 2022. In August 2023, Freedom VCM, Inc. acquired WNW's parent company, Franchise Group, Inc. (FRG), which oversees other diverse franchise brands such as American Freight, Buddy's Home Furnishings, and The Vitamin Shoppe. Wag N Wash benefits from affiliates like PSP Distribution, LLC for product supply and PSP Service Newco, LLC for store setup. Additionally, another affiliate, PSP Franchising, LLC, operates the Pet Supplies Plus franchise system.
Financial Overview
Investment Range
$520,520 - $1,357,600
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$49,900
Royalty %
4%
Marketing %
3.5%
Equipment Costs (Low)
$215,350
Equipment Costs (High)
$855,700
Working Capital
$150,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Going concern qualification
Financial Health Notes
Wag N Wash's financial statements indicate significant concerns about its financial health. The independent auditor's report includes a 'Going Concern Qualification,' meaning there is substantial doubt about Wag N Wash's ability to continue operating as a going concern. This is primarily due to the parent company, Franchise Group, Inc. (FRG), and its subsidiaries, including Wag N Wash, filing for Chapter 11 bankruptcy on November 3, 2024. These bankruptcy proceedings are currently ongoing and involve a restructuring plan. While Wag N Wash has secured $250 million in debtor-in-possession financing to maintain operations, its ability to continue as a going concern is contingent on successfully implementing a reorganization plan and emerging from bankruptcy, which is a process outside of its direct management control. The state of Michigan also explicitly notes that the franchisor's financial condition 'calls into question the franchisor's financial ability to provide services and support' to franchisees.
Financing Details
Wag N Wash does not offer any direct or indirect financing options to franchisees, nor does it guarantee any loans or other financial obligations. Franchisees are responsible for securing their own funding.
Performance Metrics
Total US Locations
29
Franchised Units
23
Corporate Units
6
Avg Square Footage
3,750
Franchising Since
2006
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
3
Litigation Summary
Wag N Wash, through its affiliates, has been involved in three litigation cases. Two of these are ongoing arbitration proceedings as of February 2024. In the first case, a former franchisee is accusing Wag N Wash's affiliate, Buddy's Franchising and Licensing LLC, of breaching a franchise agreement and engaging in unfair trade practices by not renewing the agreement. Buddy's has filed counterclaims, alleging the franchisee violated non-compete clauses and sold unapproved products. The second ongoing case involves Buddy's Franchising and Licensing LLC suing a franchisee and its owner for breaching multiple franchise agreements, violating intellectual property laws, and other claims. Both of these arbitrations are currently in settlement negotiations. A third case, which concluded in May 2020, involved the Federal Trade Commission and Buddy's Newco, LLC, an affiliate. This settled allegations that Buddy's Newco, LLC engaged in anti-competitive practices related to reciprocal purchase agreements.
Bankruptcy History
Wag N Wash's parent company, Franchise Group, Inc. (FRG), and several of its affiliates, including Wag N Wash itself, filed for Chapter 11 bankruptcy on November 3, 2024. These cases are being jointly managed by the U.S. Bankruptcy Court for the District of Delaware. The filing is part of a restructuring plan, which includes potentially converting some of the company's funded indebtedness into equity and the potential to sell some or all assets of the Buddy's and Vitamin Shoppe business segments. Wag N Wash, as a 'debtor-in-possession,' continues to operate its business under court supervision. The Bankruptcy Court approved $250 million in debtor-in-possession financing, which, combined with existing cash, provides Wag N Wash with liquidity to maintain operations and fulfill commitments to employees, customers, vendors, and franchise partners. The restructuring transactions are still pending court approval through a Chapter 11 plan of reorganization and/or sale process.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, Wag N Wash franchisees must provide written notice between 3 and 9 months before the current term ends. They must demonstrate the right to operate at their approved location or secure an acceptable substitute. Franchisees are required to complete all necessary maintenance, refurbishing, renovating, and remodeling of the store to meet Wag N Wash's then-current system standards and specifications, 90 days before the term expires, at their own expense. They must not be in breach of any agreements with Wag N Wash or its affiliates and suppliers, and must have satisfied all monetary obligations. Additionally, franchisees must sign Wag N Wash's then-current Franchise Agreement, which may have materially different terms but will maintain the same territory size, pay a $2,500 renewal fee, fulfill any current training requirements at their expense, and execute a general release in favor of Wag N Wash and its affiliates.
Training & Support Program
Franchisor Assistance
Wag N Wash provides comprehensive support to its franchisees, starting with pre-opening assistance. This includes defining a protected territory, supplying lists of required inventory and equipment along with approved suppliers, and granting access to a detailed electronic Operations Manual. Wag N Wash also offers an initial tuition-free training program, which lasts at least 80 hours and up to 160 hours for franchisees without prior retail or pet industry experience. For the grand opening, Wag N Wash collects a $20,000 fee to manage an advertising campaign on the franchisee's behalf. Assistance is also provided for site selection using a designated real estate representative, reviewing and approving leases, and supplying prototypical designs for store layout, signage, and decor. Wag N Wash must approve all architects and contractors involved in the store build-out. After opening, Wag N Wash offers ongoing assistance by providing pricing guidance upon request, delivering electronic updates to the Operations Manual, and continually developing operational standards and procedures. It also helps with inventory selection and provides access to and maintenance of its proprietary Point of Sale (POS) system. Wag N Wash may also organize annual conferences for franchisees. Additionally, Wag N Wash has implemented an e-commerce program that includes online-based in-store pickup and delivery from store services, in which franchisees may be required to participate.
Initial Training Hours
160
Training Location
Wag N Wash's designated training location
Ongoing Support
Wag N Wash offers various ongoing support services to its franchisees after their stores open. This includes providing assistance with pricing upon request and continuous electronic updates to the Operations Manual. Wag N Wash regularly develops new standards, techniques, policies, and procedures for store operations, and assists with inventory selection by designating initial and ongoing inventory items and approved vendors. Franchisees also receive access to Wag N Wash's proprietary Point of Sale (POS) computer system, along with related technology services. Additionally, Wag N Wash may organize annual conferences for franchisees, and its personnel may perform onsite inspections to ensure quality and uniformity within the system.
Franchise Requirements
Ideal Candidate Profile
Wag N Wash is seeking franchisees who demonstrate strong entrepreneurial and managerial abilities, a keen sales aptitude, and a dedicated focus on customer service. While prior experience in retail or the pet industry is beneficial (potentially reducing initial training hours), it is not a strict requirement. Candidates are expected to be personally responsible for their store's operations, even if they delegate daily management to a trained Key Manager. Financial qualifications include having adequate capital to cover the initial investment. Ideal candidates should possess good moral character, a solid business reputation, and a favorable credit rating, along with the inherent aptitude and ability to effectively operate the business. Prospective franchisees must not be involved in any business that directly competes with Wag N Wash, either as a licensor, independent operator, or licensee of a similar business or chain.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
Wag N Wash territories are generally defined as a radius around the approved location, taking into account population and projected household growth. Typically, a territory consists of approximately 60,000 people in more populous areas, but may be reduced to about 30,000 people in less densely populated markets. The final size is determined at Wag N Wash's sole discretion, and there is no guaranteed minimum territory.
Staffing Notes
Wag N Wash requires that either the franchisee dedicates full-time attention to managing the store or delegates the day-to-day operations to a Key Manager. This Key Manager must successfully complete Wag N Wash's initial training program before taking on managerial duties. All Wag N Wash stores must always have at least one individual on staff who has completed this initial training. If a franchisee operates multiple stores, each location must have a trained Key Manager. Franchisees must inform Wag N Wash of the identity of their Key Managers and any employment status changes, and remain personally responsible for their store's operations. If a Key Manager leaves, a replacement meeting Wag N Wash's standards must be hired and complete initial training within 30 days. Key Managers must work full-time at the store, not engage in other business activities without prior consent, and all employees must sign confidentiality and non-compete agreements.