Our Business Model

Most Pet Supplies Plus stores are located in the same markets as national competitors, and we continue to open new stores in those same markets. PSP beats the competition by providing our Neighbors consistent, knowledgeable service and unbeatable prices. As a PSP Franchisee you can become a part of this successful strategy. As mass marketers' sales slump, pet specialty retailers are trending upward. Our successful business model allows our franchise owners to:

  • Be profitable at smaller volume levels.
  • Enter smaller markets and trade areas than our competitors.
  • Carry brands that many competitors cannot.

Average weekly sales

  1. We calculated each Reporting Affiliate Store's “Average Weekly Gross Sales” by taking the sum of Gross Sales achieved by each Reporting Affiliate Store during the Measurement Period and dividing it by the total number of weeks in the Measurement Period. Reporting Affiliate Stores were then organized into three groups: the Top Third, the Middle Third, and the Bottom Third, based on Average Weekly Gross Sales. The average for each third was calculated by taking the sum of each Reporting Affiliate Store's Average Weekly Gross Sales for each third and dividing it by the number of Reporting Affiliate Stores in each category. We calculated the Reporting Affiliate Stores' Average Weekly Gross Sales of all stores by calculating the sum of each Reporting Affiliate Store's Average Weekly Gross Sales and dividing it by the total number of Reporting Affiliate Stores.
  2. The “Average Annual Gross Sales” for each 3rd of Reporting Affiliate Stores was calculated by taking the sum of each Reporting Affiliate Store's Annual Gross Sales for each third and dividing it by the number of Reporting Affiliate Stores in each category. We calculated the “Average Annual Gross Sales” for all Reporting Affiliate Stores by taking the sum of all of the Reporting Affiliate Stores' Annual Gross Sales and dividing it by the number of Reporting Affiliate Stores.
  3. The “Annual Gross Margin Percentage” for each Reporting Affiliate Store was calculated by dividing each Reporting Affiliate Store's “Gross Profit” by their Annual Gross Sales. Gross Profit is calculated by subtracting “Cost of Sales” from Annual Gross Sales. “Cost of Sales” includes the cost of acquiring merchandise including all pet food, pet supplies, pets, and products required in connection with pet grooming and bathing services, net of discounts, rebates, allowances and freight charges. The “Average Annual Gross Margin Percentage” for each 3rd of Reporting Affiliate Stores was calculated by taking the sum of each Reporting Affiliate Store's Annual Gross Margin Percentage for each 3rd and dividing it by the number of Reporting Affiliate Stores in the 3rd. We calculated the “Average Annual Gross Margin Percentage” for all Reporting Affiliate Stores by taking the sum of all of the Reporting Affiliate Stores' Annual Gross Margin Percentages and dividing it by the number of Reporting Affiliate Stores.
  4. “Annual EBITDA” for each Reporting Affiliate Store's is defined as the Annual Gross Sales for each Reporting Affiliate Store less Cost of Sales and “Store Operating Expenses”. Store Operating Expenses include all expenses required to operate the Store, including wages, payroll taxes and benefits, occupancy costs, supplies, credit card fees, advertising and other costs, but excludes start-up expenses, royalty fees, depreciation, interest and income taxes. The “Average Annual EBITDA” for each 3rd of Reporting Affiliate Stores was calculated by taking the sum of each Reporting Affiliate Store's Annual EBITDA for each 3rd and dividing it by the number of Reporting Affiliate Stores in the 3rd. We calculated the “Average Annual EBITDA” for all Reporting Affiliate Stores by taking the sum of all of the Reporting Affiliate Stores' Annual EBITDA and dividing it by the number of Reporting Affiliate Stores.
  5. The “Annual EBITDA Percentage” was calculated by dividing each Reporting Affiliate Store's Annual EBITDA by its Annual Gross Sales. The “Average Annual EBITDA Percentage” for each 3rd of Reporting Affiliate Stores was calculated by taking the sum of each Reporting Affiliate Store's Annual EBITDA for each 3rd and dividing it by the sum of Reporting Affiliate Stores Annual Gross Sales in the 3rd. We calculated the “Average Annual EBITDA Percentage” for all Reporting Affiliate Stores by taking the sum of all of the Reporting Affiliate Stores' Annual EBITDA and dividing it by the sum of all Reporting Affiliate Store's Annual Gross Sales.
  6. Of the 112 Reporting Affiliate Stores, 14 Reporting Affiliate Stores (13%) achieved an Average Weekly Gross Sales that exceeded the $65,800 Top 3rd Average Weekly Gross Sales; 54 Reporting Affiliate Stores (48%) achieved an Average Weekly Gross Sales that exceeded the $51,357 Middle 3rd Average Weekly Gross Sales; and 94 Reporting Affiliate Stores (84%) achieved an Average Weekly Gross Sales that exceeded the $37,783 Bottom 3rd Average Weekly Gross Sales. 52 Reporting Affiliate Stores (46%) achieved an Average Weekly Gross Sales in excess of the $51,773 Average Weekly Gross Sales for all Reporting Affiliate Stores.
  7. Of the 112 Reporting Affiliate Stores, 14 Reporting Affiliate Stores (13%) achieved an Annual Gross Sales that exceeded the $3,487,389 Top 3rd Average Annual Gross Sales; 54 Reporting Affiliate Stores (48%) achieved an Annual Gross Sales that exceeded the $2,721,941 Middle 3rd Average Annual Gross Sales; and 94 Reporting Affiliate Stores (84%) achieved an Annual Gross Sales that exceeded the $2,002,524 Bottom 3rd Average Annual Gross Sales. 52 Reporting Affiliate Stores (46%) achieved an Annual Gross Sales in excess of the $2,743,982 Average Annual Gross Sales for all Reporting Affiliate Stores.
  8. Of the 112 Reporting Affiliate Stores, 18 Reporting Affiliate Stores (16%) achieved an Annual Gross Margin Percentage that exceeded the 37.1% Top 3rd Average Annual Gross Margin Percentage; 58 Reporting Affiliate Stores (52%) achieved an Annual Gross Margin Percentage that exceeded the 34.8% Middle 3rd Average Annual Gross Margin Percentage; and 98 Reporting Affiliate Stores (88%) achieved an Annual Gross Margin Percentage that exceeded the 32.7% Bottom 3rd Average Annual Gross Margin Percentage. 53 Reporting Affiliate Stores (47%) achieved an Average Annual Gross Margin Percentage in excess of the 35.0% Average Annual Gross Margin Percentage for all Reporting Affiliate Stores.
  9. Of the 112 Reporting Affiliate Stores, 12 Reporting Affiliate Stores (11%) achieved an Annual EBITDA that exceeded the $506,874 Top 3rd Average Annual EBITDA; 57 Reporting Affiliate Stores (51%) achieved an Annual EBITDA that exceeded the $303,481 Middle 3rd Average Annual EBITDA; and 95 Reporting Affiliate Stores (85%) achieved an Annual EBITDA that exceeded the $126,782 Bottom 3rd Average Annual EBITDA. 56 Reporting Affiliate Stores (50%) achieved an Annual EBITDA in excess of the $314,115 Average Annual EBITDA for all Reporting Affiliate Stores.
  10. Of the 112 Reporting Affiliate Stores, 12 Reporting Affiliate Stores (11%) achieved an Annual EBITDA Percentage that exceeded the 15.0% Top 3rd Average Annual EBITDA Percentage; 60 Reporting Affiliate Stores (54%) achieved an Annual EBITDA Percentage that exceeded the 10.9% Middle 3rd Average Annual EBITDA Percentage; and 97 Reporting Affiliate Stores (87%) achieved an Annual EBITDA Percentage that exceeded the 6.2% Bottom 3rd Average Annual EBITDA Percentage. 52 Reporting Affiliate Stores (46%) achieved an Annual EBITDA Percentage in excess of the 11.4% Average Annual EBITDA Percentage for all Reporting Affiliate Stores.


1For purposes of this Item 19, Gross Sales is defined as the total revenue earned by a Store. We calculated each individual Reporting Franchised Store’s “Average Weekly Gross businessSales” by taking the Gross Sales achieved by each Reporting Franchised Store during the Measurement Period and dividing it by the number of weeks in the Measurement Period. The Reporting Franchised Stores were then organized into three groups: the Top Third, the Middle Third, and the Bottom Third, based on Average Weekly Gross Sales. The average for each third was calculated by taking the sum of each Reporting Franchised Store’s Average Weekly Gross Sales for each third and dividing it by the number of Reporting Franchised Stores in each category. We calculated the average of the Reporting Franchised Stores’ Average Weekly Gross Sales by calculating the sum of each Reporting Franchised Store’s Average Weekly Gross Sales.

2Of the 55 Reporting Franchised Stores, 9 Reporting Franchised Stores (16%) achieved an Average Weekly Gross Sales that exceeded the $61,290 Top 3rd Average Weekly Gross Sales; 27 Reporting Franchised Stores (49%) achieved an Average Weekly Gross Sales that exceeded the $45,354 Middle 3rd Average Weekly Gross Sales; and 45 Reporting Franchised Stores (82%) achieved an Average Weekly Gross Sales that exceeded the $32,927 Bottom 3rd Average Weekly Gross Sales. 24 Reporting Franchised Stores (44%) achieved an Average Weekly Gross Sales in excess of the $46,792 Average Weekly Gross Sales for all Reporting Franchised Stores.

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