Small-Business Success Story: A Doggie Day Spa Scales Up

Kiplinger's spoke with Jef Strauss, 55, cofounder and owner of Wag N' Wash, a Denver-based pet store franchise, about how they got started. Read on for an excerpt from our interview:

Why a dog wash? Dan and I both kept long hours at work, and we felt it was unfair to our aging companion, Gini, a dalmatian. We wanted to be able to take her to work with us. Because Gini didn’t like baths, washing her at home was an incredible chore. We'd seen self-serve dog washes that weren't user-friendly. Meanwhile, we saw a TV show about dog-biscuit bakers. And we were passionate about pets. So we decided to open a self-serve dog wash and biscuit bakery.

What do you sell? We provide customers with a large, sterile tub, a drying table with blow-dryer, a smock, products and tools that are appropriate to your dog's coat, and assistance. Our packages cost from $14 to $20. When our customers requested grooming and pet food, we added them. We looked for foods that were natural and healthy for dogs and cats. We also carry leashes, collars, toys and bedding, and we support local pet nonprofits and rescue groups. Our customers enjoy socializing with each other, and they often make dog washing a family event.

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And the bakery? We bake dog biscuits almost every day. We also have a gourmet deli, where we prepare and sell pet treats, such as poochie ravioli, sushi, pizza, beef or turkey loaves, liver brownies and even birthday cakes.

How did you start? We opened our first store in 1999. No bank would give us a loan, so we took a $100,000 home-equity line of credit to lease and outfit space. Dan quit his job to run the store, and, for the first three years, I kept my job and worked evenings and weekends to help Dan. To open our second store in 2004, I sold property, and we got a loan after visiting about 20 banks.

Why franchise? We wanted to grow, but we didn't want to run a store that was too far away from home. We think you need to be grounded in your community to succeed. We spent about $50,000 in legal fees to write our franchise disclosure document [required under the Federal Trade Commission's franchise rule]. After selling a few franchise agreements ourselves—the first in 2006—we realized that we really didn’t understand franchising. So we hired a company called RainTree to help us expand nationally.

How much does a store cost? Our franchise fee is $40,000 for one store, $90,000 for three and $150,000 for five. It costs an average of $340,000 to launch one store. Franchisees pay us a weekly royalty equal to 5% of gross sales.

How big are you now? We own five stores ourselves. We have five franchise locations and five more in the works in as many cities.

Are you making a living? Yes, we both take salaries. Our average annual gross sales for a store that has been open two years or more is more than $1.3 million.

Do you taste the treats? Sure. Everything we use is human-grade. The treats aren’t super delicious to humans, but you can still share them with your pet.