Camp Bow Wow founder and Chief Executive Heidi Ganahl shelved plans for a day-care business for dogs after her husband died in a plane crash 20 years ago.
Now, after leaving a career in pharmaceutical sales, creating two startups that sputtered and spending most of a million-dollar insurance settlement, Ms. Ganahl has reminted herself a millionaire. She has agreed to sell Camp Bow Wow to VCA Inc. and join the Los Angeles pet health-care company to plot Camp Bow Wow's expansion.
VCA, which has a stock market value of $3.3 billion, operates more than 600 animal hospitals and provides diagnostic services to others. Terms of the transaction weren't disclosed. Franchisers such as Camp Bow Wow often are bought for single-digit multiples of the yearly fees they receive from franchisees. Camp Bow Wow collected about $4 million in such fees last year.
As part of the deal, Ms. Ganahl plans to hire a president to run Camp Bow Wow's day-to-day operations, while she, as chief executive, focuses on strategy. Camp Bow Wow's core business offers day care for dogs at franchise-owned facilities, starting at about $25 a day, as well as overnight boarding for between $40 and $60 a night.
'My vision for Camp Bow Wow was to have 1,000 units, to really be the player in pet care,' says Heidi Ganahl, pictured in Golden, Colo. 'I don't have the capital to do that.' MATTHEW STAVER FOR THE WALL STREET JOURNAL
Since settling on a franchise model in 2003, the company has sold 152 franchises in the U.S. and Canada. Of those, 122 camps and seven house-call franchises are running, two are corporate-owned, with the rest in development. Some of the franchises also offer dog training.
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The company said that together, the businesses employ about 3,500 people and last year generated systemwide sales of $71 million.
In the 1990s, Ms. Ganahl and her husband had planned to start a dog-care business after an unsatisfying search for boarding for their two mutts. But before they got started, her husband died while riding in a biplane that crashed.
With the insurance money, Ms. Ganahl started a catalog business that sold baby bedding. But she found the mail-order business mundane and her choosy customer base difficult to deal with so she shut it down. Next, she started consulting for people who, like herself, found themselves suddenly wealthy. She said she pulled the plug on that business because few clients followed her advice and the frequent retelling of her own story was draining.
With her settlement nearly spent, her brother urged her to reconsider dog day care. Against the advice of friends, family and veterinarians, the pair in 2000 converted a Veterans of Foreign Wars hall in Denver into Camp Bow Wow. A second location in Broomfield, Colo., followed and a decision to franchise was made in 2003.
Ms. Ganahl, 47 years old, recently spoke about her experiences in franchising and why she is selling now.
Edited excerpts:
WSJ: Why did you become a franchiser?
Ms. Ganahl: I started Camp Bow Wow with $80,000 I had left from the million-dollar settlement. I maxed out every credit card, took every bit of home equity I could. I used that for the first two camps and I didn't have any other capital. The cool thing about franchising is you're using other people's money to build your brand instead of going the corporate store route and having to have a lot of cash to build out each location.
WSJ: Did adding franchises resolve the cash problem?
Ms. Ganahl: Franchising is a tough model. Not a lot of franchisers can get loans or raise money from investors or private-equity guys. You usually have to give up control or a big percent of the company to get money in. I have tried everything I can to not do that along the way.
WSJ: What was your biggest mistake with Camp Bow Wow?
Ms. Ganahl: I underestimated the importance of cash. Whenever I had extra money, I put it into technology, whether it was the intranet for franchisees, point-of-sales systems, search-engine optimization. I was so focused on growing the business aggressively that there were many times I was pushing tight on payroll and I'd have to use a credit card.
WSJ: What do you think about competition from new, home-based dog-sitter sites like DogVacay.com and Rover.com?
Ms. Ganahl: The Uber-ization of the pet-care space is important and we want to be part of that wave. But we also don't want to spend $40 million to build a program to do it. We're talking to one of the leaders in this space about a partnership. They'll make staying at Camp Bow Wow one of the choices and we're going to help them train and certify pet sitters.
WSJ: Why sell now?
Ms. Ganahl: My vision for Camp Bow Wow was to have 1,000 units, to really be the player in pet care. I don't have the capital to do that and I didn't want to go out and sell the business to any old private equity. I'd rather play with a great name in the pet industry that I trust.
WSJ: What challenges arose from employing family?
Ms. Ganahl: My family members were awesome employees. My dad did franchise sales for me, my uncle was my head of operations, my aunt did my training. It worked really well for a while. The bigger we got, the harder it was to keep them in these lofty general positions. I started to make decisions about what would make them happy, rather than what was good for the business. That was the point I knew I had to move some of them out or give them soft landings and hire people who are more objective and have the right skills to take us to the next level.
WSJ: How did you tailor Camp Bow Wow to appeal to the widest customer base?
Ms. Ganahl: We gave it a mountain-lodge look. We wanted it kind of rugged. The frou-frou spas fit for some places, like Manhattan, but in your typical suburb, it's, "Oh, come on, my dog doesn't need a manicure, but I do want him to behave and not rip up the couch when I'm gone."
WSJ: The American Pet Products Association expects nearly $5 billion will be spent on services like boarding and grooming this year. What are your customers like?
Ms. Ganahl: Some of our top clients spend upward of $20,000 a year at camp. A typical client probably spends $1,500 a year. They bring their dog once or twice a week and then they'll board every time they go on vacation.
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