Hounds Town USA Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Hounds Town USA is a pet-services franchise providing dog daycare, boarding, and grooming with an emphasis on open, social play. Franchisees run a facility managing staff, animal care, and client billing.
FranchiseVerdict summary · 2026
A Hounds Town USA franchise requires a total initial investment of $668K – $1.1M, including a $49K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $723K[2]. SBA 7(a) loans show a 0.0% charge-off rate across 76 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $668K – $1.1M
- 84th pct Pet Services
- Avg gross sales
- $723K
- Outlet subset30th pct Pet Services
- Royalty
- 6.0%
- 16th pct Pet Services
- Units
- 97
- 81st pct Pet Services
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Pet Services · color = vs category peers
Green = favorable by >10% vs Pet Services avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $668K – $1.1M including a $49K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $723K/year (median $659K) (reported for a subset of outlets rather than the whole system).
- RISKVerdict A (Strongest tier), verdict score 88/100 (higher is better). SBA loan charge-off rate of 0.0% across 76 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHSystem growing at 77.8% CAGR over 3 years with 97 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Hounds Town USA, LLC
- CEO title
- Chief Executive Officer
- Robert Flanagan
- Incorporated in
- FL
- HQ
- 150 E. Robinson St., Unit 2008, Orlando, FL 32801
- Auditor
- Kezos & Dunlavy
- Audited financials
- Franchisor revenue
- $5.2M
- vs $2.7M prior year
Overview
About
- CEO
- Robert Flanagan
- Headquarters
- FL
- Founded
- 2007
- FDD year
- 2026
- States available
- 19
Can you afford it, and what does the money buy?
Entry cost runs 27% above the typical pet services franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $49K | $49K |
| Working capital (3–6 mo) | $30K | $100K |
| Equipment, build-out, other | $588K | $973K |
| Total initial investment | $668K | $1.1M |
Source: Hounds Town USA 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $668K – $1.1M
- Bottom third — review vs category
- Liquid capital req'd
- $30K – $100K
- Middle of category vs category
- Franchise fee
- $49K – $49K
- Middle of category vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 0.1%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $106 |
| Training fee | $2K |
| Transfer fee | $25K |
| Renewal fee | $25K |
| Inventory (initial) | $500 – $2K |
| Total fee load | 0.1% of rev |
A 0.1% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales land near the pet services norm.
Reported for a subset of outlets rather than the whole system
Source: FDD 2026 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$108K
15.0% margin
Unlevered ROIC
11%
EBITDA / total invested capital
Payback
8.9 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Hounds Town USA unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
11%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Hounds Town USA units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.2M
on $5.8M purchase
Total debt
$4.6M
SBA $2.9M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Reported for a subset of outlets rather than the whole system
- Avg gross sales
- $723K
- Per unit, per year
- Median gross sales
- $659K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- net revenue and noi
- Sample size
- 29 outlets
- vs category median 12 · large
- Range (low → high)
- $323K→$1.4M
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 9 / 10
- vs category median 4 / 10 · above
Compared against 68 Pet Services brands
Revenue is only 0.8x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $723K/year in gross sales. Revenue-to-investment ratio: 0.8x. Reported for a subset of outlets rather than the whole system.
Fee burden
Total ongoing fee load of 0.1% — below the Pet Services average of 9.3%.
Disclosure
Transparency score 9/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 77.8% CAGR over 3 years across 97 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Pet Services averages
How Hounds Town USA Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 97
- Opened
- 20
- Last reporting year
- Closed
- 1
- Terminated
- 2
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.0%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 99%
- vs corporate-owned
- Net growth (3-yr)
- +77.8%
- Net unit change over 3 years
- 3-yr CAGR
- +77.8%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 20
- Closed (3yr)
- 1
- Terminated (3yr)
- 2
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 8 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 76
- Loan volume
- $43.5M
- Median loan
- $596K
- 50th percentile
- Charge-off rate
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 31
- Defaults
- 0
- Typical loan rate
- 8.7%
- avg rate to borrowers
- Franchised industry avg
- 10.4%
- brand beats franchise avg ↓
- Jobs supported
- 836
- 1.9 per loan
- Lender concentration
- 33%
- top lender's share
Borrower mix: 99% went to startups / new businesses, 1% to established operators
Franchise vs independent — in pet care (except veterinary) services, franchised businesses charge off at 10.4% vs 11.3% for independents — franchising is associated with 8% lower SBA default risk in this category.
Top lenders financing Hounds Town USA franchisees
Showing 3 of 31 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Hounds Town USA's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 7-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 0.0% charge-off rate across 76 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Hounds Town shows signs of growth-at-all-costs franchise model with aggressive unit expansion, questionable financial performance metrics, and prior litigation over support obligations.
Litigation (Item 3)
No litigation disclosed in Item 3.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Kezos & Dunlavy
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 88 / 100 verdict
- 01MINORExplosive 45.9% YoY unit growth is unsustainable and suggests aggressive recruitment over profitability focus; typical mature franchises grow 5-15% annually
- 02MINORNet income of $155,505 on $597,260 revenue (26% net margin) appears inflated — industry standard for pet services is 10-15%; suggests either aggressive accounting or cherry-picked top performers in Item 19
- 03HIGHLitigation history involving breach of contract on buildout assistance indicates franchisor-franchisee disputes over support promises; 'dismissed with prejudice' may reflect settlement rather than merit
- 04MINORHigh royalty rate (6%) combined with high investment ceiling ($1.06M) creates substantial fixed costs with thin margins; breakeven analysis needed
- 05MINORFranchise fee ($49K) seems low relative to investment range, suggesting franchisor prioritizes recruitment velocity over franchisee success
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 0.1% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | exclusive |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory population | 100,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Denver, Colorado (or Orlando, Florida if franchisor elects for litigation) |
| Jury trial waiver | Yes |
| Governing law | FL |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation disclosed in Item 3.
Items 10, 11
Training & Operations
- Classroom training
- 30 hrs
- On-the-job training
- 57 hrs
- Training location
- Orlando, FL (HQ), Denver/Lafayette, CO, or Ronkonkoma, NY (affiliate location), or via Learning Management System
- Ongoing training
- Required
- Time to open
- 15 mo
- From signing to launch
- Site selection
- franchisee (subject to franchisor approval)
- Franchisor financing
- Not offered
- Item 10
- POS system
- QuickBooks and point-of-sale software from approved supplier
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: QuickBooks and point-of-sale software from approved supplier
Item 20 · call current owners
Franchisee Contacts
17 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Hounds Town USA · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Hounds Town USA franchise?
The total investment to open a Hounds Town USA franchise ranges from $668K – $1.1M, with an initial franchise fee of $49K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Hounds Town USA franchise owners earn?
According to Item 19 of the Hounds Town USA FDD, the average gross sales per unit is $723K. The median is $659K. Important context: Reported for a subset of outlets rather than the whole system. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Hounds Town USA FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Hounds Town USA FDD and qualifies whose outlets they describe.
What is Hounds Town USA's franchise failure rate?
Based on SBA 7(a) loan data, Hounds Town USA has a charge-off rate of 0.0% across 76 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Hounds Town USA franchise locations are there?
As of their most recent FDD filing, Hounds Town USA has 97 total units in the United States, including 96 franchised units and 1 company-owned units. 20 new units were opened in the latest reporting year.
Is Hounds Town USA a good franchise to buy?
FranchiseVerdict rates Hounds Town USA as a A-grade franchise with a verdict score of 88 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Hounds Town USA, you can request corrections or provide updated information.
Other Pet Services franchises
Compare similar franchise opportunities in the Pet Services category
Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.