Why this Finance Exec Chose a Petcare Franchise as a Side Hustle

Welcome to another episode of Atlanta Franchise Today with host Leslie Kuban, expert franchise consultant and owner of FranNet Atlanta. Many corporate professionals dream of having a business of their own without having to abandon their corporate careers. Today’s guest today is doing just that, and we’re going to learn about his journey. Sam Delaney has enjoyed a 35-year career in corporate and nonprofit finance, but he’s an entrepreneur at heart, which is why he got into the franchising business. Now, he’s the owner of two Pet Supplies Plus franchises in Atlanta.

Transcription:

Leslie Kuban:
Sam, welcome to the show today.

Sam Delaney:
Good to be here.

Leslie Kuban:
Really glad to have you.

Sam Delaney:
Appreciate the invitation.

Leslie Kuban:
Absolutely. Well, I’m excited to learn about your business. First of all, for our viewers who may not be familiar with Pet Supplies Plus, tell us about your business and who your customers are?

Sam Delaney:
Pet Supplies Plus is, I wouldn’t call it a big box store, more kind of a small box. Number three behind PetSmart and Petco as far as size. 600 stores now nationwide, probably 200 are corporate and about 400 are franchise. So I’ve got two of the franchises in Georgia, Atlanta. There’s another person has one in Smyrna. There’s a few more in the outlying parts of Atlanta. So that’s Pet Supplies Plus as a corporation. We do supplies for dogs, cats, gerbils, you name it, dog food, cat food, travel supplies, health products, anything you want for a small animal. We do not sell dogs and cats, but we’ll sell you ferrets, Guinea, pigs, you name it, those type of small animals.

Leslie Kuban:
So you’re servicing the most important member of the family, the furry family member.

Sam Delaney:
Yes, yes, yes. Exactly.

Leslie Kuban:
Oh, good. Well, so you’re a career finance guy, CFO, operations.

Sam Delaney:
Yes.

Leslie Kuban:
Consulting. So how did you find your way into owning pet supplies businesses?

Sam Delaney:
Part of my time was a CFO for a pet insurance company. And so that kind of turned me on to the pet industry. And there’s a chart that I still have in my head that over the last 20 years, this is back in probably 2008, the pet industry grows 3% or 4% every year, even during recession. So it really stuck in my head, this is a great kind of industry. Also, 60% of homes have an animal and then 60% of those have more than one animal. So don’t you want to be in a business where lots of people have the products or things that you want? And so that kind of stuck in my mind back, I think at 2014, met Julie who used to work for you. And she took me through the process of looking at a franchise. And I think my price point was kind of low at the time as far as what you want to invest.
She showed me two or three things. I didn’t want to do a paint supply business, didn’t want to do kind of home improvement. So we kind of went our separate ways. A couple years later, I came back to her. I had gone to an emergency, what do you call it? Clinic at 7:00 AM. It was packed. So I called her, said, “do you have one of those?” She said, “no, I don’t have one of those, but I have four or five other things.” And Pet Supplies Plus was one of those. And so that’s what started the process.

Leslie Kuban:
And do you recall back at that timeline, kind of what was your thought process about you’ve got a career, but now you want to get into a business?

Sam Delaney:
Yeah.

Leslie Kuban:
So you got exposed to the growth of the pet industry in your corporate career, but what were your other criteria? Do you remember what your checklist was of what you were looking for?

Sam Delaney:
I wanted something fun.

Leslie Kuban:
Yeah.

Sam Delaney:
21 years with GE, I’m not going to say it was fun. It was rewarding. I learned a lot, but when you retire and this is kind of my retirement plan, I wanted something fun. And if nothing more, better or fun than kids or parents bringing their dogs in. And they’re so proud, they show you pictures, they talk about them, you get a chance to pet them. Everybody feels good. And they walk out, they feel good. You take the stuff to the car, great experience for them. Great experience for me. Great experience for our customers and employees. So that’s why I chose it.

Leslie Kuban:
Yeah. Yeah. So that was looking ahead to what you know you wanted your future to look like.

Sam Delaney:
I hope so.

Leslie Kuban:
You wanted to have some fun. Right. Right.

Sam Delaney:
Exactly. Exactly.

Leslie Kuban:
But if we all could plan that well, right?

Sam Delaney:
And hopefully make some money too. But yeah, let’s have some fun also.

Leslie Kuban:
Yeah. So you started the business while you’re busy in your career. You’re still busy-

Sam Delaney:
True.

Leslie Kuban:
… in your career. So tell us, how did you make that work? How did you get the business started while holding down a demanding role?

Sam Delaney:
So I signed the contract with Pet Supplies Plus sometime in maybe late 2016. And then you go about the process of trying to find a location. Found a location. Was supposed to open April of 2017, got within two or three months and went, “uh-oh, I’m over my head.” Even if I had the full time, the operations of it. I just didn’t know. I had never been in retail. So luckily I found someone whose name is Keith Wright. He’s my right hand person. He was running the store for the corporate side. Luckily he came over to the franchise side. He does all the scheduling, inventory, et cetera. I do the back room accounts payable, payroll, and it works really well.

Leslie Kuban:
Do you remember when you got started what kind of time did it take you? So you’re kind of behind the scenes.

Sam Delaney:
Yes.

Leslie Kuban:
You’re doing ownership stuff behind the scenes.

Sam Delaney:
Exactly.

Leslie Kuban:
What kind of time did that take you do you remember?

Sam Delaney:
It kind of varies. I mean, I try to be in the store a couple days a week, most of the weekends. I’ve never really timed it out. Probably 15, 20 hours a week.

Leslie Kuban:
Okay.

Sam Delaney:
Just as far as payroll, accounts payable, be in the store. It’s not a time consuming in one chunk. It’s a little bit here, a little bit there, a little bit there. You just try to fit it in as you can.

Leslie Kuban:
Yeah. Spread it out.

Sam Delaney:
Exactly.

Leslie Kuban:
Do you remember what were your biggest challenges when you were first getting started, those first 90 days open for business?

Sam Delaney:
There’s three things I think are a challenge. First of all is rent. It doesn’t change. You can’t change it. It’s very expensive. Then headcount, people. And obviously with COVID, it’s become even more of a challenge. And now our biggest inventory we talked about a few minutes ago is inventory.

Leslie Kuban:
Yeah. Yeah.

Sam Delaney:
Inventory is going higher because of inflation. We’re not selling at the same pace to offset it. So that’s another challenge. So those are three big ones that you kind of have to manage, rent, people and the inventory.

Leslie Kuban:
Sounds like running a small business.

Sam Delaney:
It is. That’s exactly right.

Leslie Kuban:
Well, very good. And along the way, you’ve expanded into a second location.

Sam Delaney:
I have.

Leslie Kuban:
And that was by acquisition.

Sam Delaney:
It was.

Leslie Kuban:
So tell us about that story. Just kind of how it came about how you went about that?

Sam Delaney:
Sure. Another franchisee in Marietta had a store. I think he’d been there probably since the mid ’90’s. He had gotten tired of the location. He has been probably even more successful in places like Carrollton, Athens, more of the outskirts of Atlanta. He wanted to get out of Atlanta. He called the corporate office, it would have been December 2019. He wanted to sell it to them, but they didn’t want one corporate store in Georgia. So one of the people that was one of my regional managers called me and said, “there’s an opportunity. No pressure. Take a look. If you want it, great. If not, we’ll call the next person.” So did two or three months of due diligence, worked out a great deal for both sides I hope for him. It worked out well for me. But it’s March 2020.

Leslie Kuban:
Mm.

Sam Delaney:
March 1st, 2020 took over the store.

Leslie Kuban:
Oh my goodness.

Sam Delaney:
Who knew?

Leslie Kuban:
Yeah. Yeah. What was your due diligence process like if you think back? You’re evaluating, the plane is already in flight.

Sam Delaney:
Exactly.

Leslie Kuban:
So there’s moving parts to it. How did you go about your evaluation?

Sam Delaney:
Actually I thought this was easier than to start up. I’ve done startups before. To me taking something over is easier. You have something in place. He gave me all his financials, which are fantastic. I think because it just may be how old the store was, the sales were declining. So I saw opportunity to get the sales to ramp back up. If you probably did some things to the store, we’re going to talk about that in a minute. But looked at the financials, looked at inventory. Location was probably the biggest thing. The average household income in this area, Marietta is twice what is in Acworth where the store is. So to me it just screamed opportunity, and luckily has turned out pretty well.

Leslie Kuban:
Good. And your same manager is helping you with your second location?

Sam Delaney:
He’s overseeing both. Exactly.

Leslie Kuban:
Okay. Okay. Great.

Sam Delaney:
Yes.

Leslie Kuban:
Great. So let’s talk a little bit about your relationship with the brand, if you can.

Sam Delaney:
Okay. Yes.

Leslie Kuban:
So Pets Supplies Plus is a pretty big company.

Sam Delaney:
It is.

Leslie Kuban:
I mean, several hundred locations.

Sam Delaney:
Yep.

Leslie Kuban:
Institutionally backed.

Sam Delaney:
Mm-hmm.

Leslie Kuban:
So it’s not a small fledging company by any-

Sam Delaney:
No, no.

Leslie Kuban:
… stretch of the imagination.

Sam Delaney:
Nope.

Leslie Kuban:
And that comes with you’d expect sophisticated systems.

Sam Delaney:
Mm-hmm.

Leslie Kuban:
You’re at a big company again.

Sam Delaney:
True.

Leslie Kuban:
So which some people might look at that as being restrictive. I’m just curious, what’s your take on that? Being a part of a large organization like that, what that has been like?

Sam Delaney:
I found it very positive. First of all, they help with distribution. They already have negotiated great rates with other distributors to get you the product. They help you with pricing, store set up, and they will send any resource to you if you need that help. Are there some things you don’t like to do? Yeah, of course. But they do a great job of explaining it to you. Another thing is really good is you now have probably 400 other friends who are franchisees. You can pick up the phone anytime and ask, hey, I’m having trouble with this or what’s going on in your store? And you get that immediate feedback. I’ve never called anyone, they said, “no, I’m too busy.” They either say, I can’t talk now I’ll call you back. So to me, it’s a positive. I need the help.

Leslie Kuban:
Yeah. Right, right. And you pay for that with the upfront fees.

Sam Delaney:
It’s only 3% royalty on your sales. When you compare that to other franchisees I think it’s very competitive.

Leslie Kuban:
Yeah. Yeah. It is. It is. That’s on the low side.

Sam Delaney:
Yeah. I believe it is.

Leslie Kuban:
I have to say. So Sam, I get calls all the time from people who are in executive roles like you are and they want to get into a business and generate passive income, is the word that I hear.

Sam Delaney:
Yes. Yes.

Leslie Kuban:
Passive. And I have my opinions about that, but you’re doing this. How do you feel about the word passive when it comes to business ownership, even though you’re working full time.

Sam Delaney:
Let’s focus on income.

Leslie Kuban:
Yes.

Sam Delaney:
It’s been five years in. I can’t say I’ve made money. It has been money going out. But to me it’s more of a long term. If you’re trying to get in this for two or three years, it’s not going to work. You got to look at the long term. It’s been, like I said, five years. I can see light in the tunnel in a couple more years. And so from that standpoint, that will then focus on the word income. As far as passive, that’s okay. I’m a finance person. I do my own taxes. So you manage that appropriately.

Leslie Kuban:
Yep. Yep. And I just think that’s good for people to hear.

Sam Delaney:
Oh, sure.

Leslie Kuban:
Especially if you’re going about this as a side gig.

Sam Delaney:
Yes.

Leslie Kuban:
You’ve got to employ people to help you run the day to day of it.

Sam Delaney:
Yes.

Leslie Kuban:
And it’s a longer term gig.

Sam Delaney:
Oh, absolutely.

Leslie Kuban:
And that can be worth it, but you’ve got to have a longer term perspective.

Sam Delaney:
Yeah.

Leslie Kuban:
It’s not a short term kind of income replacement solution.

Sam Delaney:
No. That was part of the discussion with Julie was the price point early was low. This price point you get in is a lot higher. And then there’s other costs you don’t think about. So one of the stores we put in new lighting.

Leslie Kuban:
Mm-hmm.

Sam Delaney:
We have to replace pumps on a fish tank. We have to probably do the floors. And so you put a drop ceiling in. Those things slowly eat at your bottom line. But once you get those in, you get that kind of capital cost in, and hopefully four or five years out then you have income at the bottom line.

Leslie Kuban:
Yeah. Yeah. So talk about your plans for the future. You’ve got two locations.

Sam Delaney:
Sure. Yep.

Leslie Kuban:
Now, good manager in place. Kind of what’s ahead for you with the business?

Sam Delaney:
We have about 1,700, we call them neighbors that are customers because we’re in the neighborhood. Want to get to about 2,500 is our goal. And I’m thinking that’ll be another three or four years. And then we’ll come into play. The thing I really want to share with people is when you come to visit the store, bring your animal. We love dogs, cats, whatever you want to bring to the store. We also have self-served dog wash. The Marietta store has grooming. We have curbside service. We have auto ship. So any way you want to come we want to meet you. As far as taking care of your animal, we could do that. But please try us, bring your animal in. We actually have price points about 2% lower than PetSmart, Petco. Obviously corporate does that analysis. And also we price match. For some reason we’re higher, you just show us whether it’s Chewy’s or PetSmart, it’s cheaper, we’ll price match.

Leslie Kuban:
And I would imagine that this is a great opportunity for your customers to… Because you’re in neighborhood centers.

Sam Delaney:
Exactly.

Leslie Kuban:
So there’s other errands they can run and pick up what they need.

Sam Delaney:
So both locations are in the strip malls and they’re next to a Kroger. One is on Highway 92, right across from Woodstock Furniture. That’s the one in Acworth. And the one in Marietta is Shallowford of Sandy Plains next to a Kroger across from Home Depot. So when you’re doing your regular shopping just stop in and come see us.

Leslie Kuban:
Yeah. Well, I read recently, this is a Morgan Stanley quote.

Sam Delaney:
Mm-hmm.

Leslie Kuban:
Actually that the pets industry is a $100 billion industry.

Sam Delaney:
Yes.

Leslie Kuban:
And is expected to be a $275 billion industry come 2030. So hope to see some of those new pet owners spending more money on their pets coming through your doors.

Sam Delaney:
Well, it’s helped a lot with COVID. Let’s talk a little bit about COVID in that it was tough on us from a standpoint, we were considered essential business so we were allowed to stay open. But obviously we had employees that we had to keep safe. It’s funny, in March, our sales went through the roof. I’d never forget, one of my managers called me during the day. It was probably maybe the day before we shut down, and our sales were just exponential. I said, “what is going on?” And nobody knew.

Leslie Kuban:
Yeah.

Sam Delaney:
And so month of March sales are excellent. April dropdown because people were buying two, three bags at a time, but what turned out was people were lonely at home. What did they do? They went to the adoption agency, got dogs, cats, you name it. And so business really picked up very nicely from COVID. So that’s kind of a side benefit from all the things that were negative with COVID.

Leslie Kuban:
Well, that’s good news to hear for your business.

Sam Delaney:
Absolutely.

Leslie Kuban:
So, so. Well, it’s so delightful to have you in the show.

Sam Delaney:
Thank you.

Leslie Kuban:
We got connected through Julie.

Sam Delaney:
Yes.

Leslie Kuban:
Years ago.

Sam Delaney:
Yes.

Leslie Kuban:
And to hear how your story has progressed is really good.

Sam Delaney:
It’s nice to meet you in person.

Leslie Kuban:
But it’s great. Yes. Yes. Well, how can our viewers get in touch with you if they would like to come and bring their pet and enjoy what you have to offer?

Sam Delaney:
Website is petsuppliesplus.com. You put in Acworth or Marietta. As I said before, right across from Woodstock Furniture, Highway 92 in Acworth between 75 and 575. And then Sandy Plains and Shallowford Road in Marietta next to Kroger. That’s the best way to find us is either give a call, look us up, Google, you name it. You’ll find us. Come on in we’ll take good care of you.

Leslie Kuban:
Well, good. Good. Well, I’m so delightful to have you on the show.

Sam Delaney:
Thank you.

Leslie Kuban:
To share about your business and your journey.

Sam Delaney:
I appreciate it.

Leslie Kuban:
Folks, thanks for joining me again for another episode on Atlanta Franchise Today. I’m Leslie Kuban and I look forward to seeing you again next week.


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