Reference no: EM132328031
Please read the first text and answer questions 1 and 2. In the second text you can find the answer of question 3.
Heidi Ganahl: Before I started Camp Bow Wow, I had a business plan written, but a lot of folks said, "That's a crazy idea; it'll never work." And I was so very entrepreneurial, so I wanted to try some other businesses, and those didn't work out so well, I think, because the passion wasn't the same. And I really wasn't completely devoted to the concepts. Hi, I'm Heidi Ganahl, CEO and Founder of Camp Bow Wow. But I learned so much in starting those two other companies, that I don't know that I would've been successful with Camp Bow Wow if I hadn't done that.
>> Sue: I'm trying to remember the first time I met Heidi. I believe I met her in here. So my initial contact with Camp Bow Wow was as one of the first customers in this camp. Hi, I'm Sue. I'm the Owner of Camp Bow Wow [inaudible]. Her passion for this business just comes out all over the place. So that's definitely contagious, and it was something that got me excited about doing this.
[ Music ]
>> Heidi Ganahl: I opened the first Camp Bow Wow in December of 2000. So this is our 10-year anniversary, or 70 in dog years, as we like to say. And we started franchising about two or three years, two and a half years later, in 2003. And we've awarded over 200 franchises nationwide. One of the most important thing about franchising is being able to take and replicate the original business, and as it evolves, keep everybody on the same page, all the facilities looking the same, the service the same, and the attributes of the brand the same. And that has been challenging, because when you get 200 people that have all these creative, cool ideas, even though they know they bought into a franchise, they still want to tap into that creativity and add their own [inaudible] to the business. I've found that the best way to get people committed to a vision and following through and executing on that vision is to have an open-door policy, and let people communicate their ideas and be part of the growth and the execution out there of the brand. And if you do that, you'll come up with some amazing things that you wouldn't have if you weren't open to involving your team and your franchisees and their staff. But what Americans love, and what the great thing about franchising is, is consistency, and keeping everything the same, no matter which location you go into. So you've got to balance that every day with the 200 franchisees and the 2,000 employees that work at the camps, and home buddies, and just really try to temper their wonderful ideas with what's best for the brand. And at the end of the day, it's really just all about the animals, and making sure that they are healthy and happy and safe, and the leadership style just follows from that.
>> Sue: I think Heidi's been really successful with this business, not just because of her passion, but because she's such a strong businesswoman, and she is constantly striving to be the very best in this industry. I think Heidi is an incredible example of both humility and authenticity. I mean... she's very down-to-earth. So I don't think she brings a lot of ego to the table. She knows what she has to offer and is confident with it. But doesn't take it beyond there. And she's certainly authentic. I mean, I've seen her in different situations where it was really stressful, or really just tough spots to be in, and she's approached it from a personal level. I think I see that in her a lot: that she takes a personal approach to problems, as opposed to a corporate or "us versus them."
>> Heidi Ganahl: One of the aspects of leadership that doesn't come as naturally to me is defining -- there's a line between friends and family and businesses. I have a lot of family and friends in the business, and I've built friendships with a lot of the folks that have joined our franchises. And it's very difficult to hold those folks accountable. And I'm very visionary, I'm very goal- oriented, and I have pretty lofty aspirations for the brand and for the company. And so for folks to meet those, they have to meet certain milestones along the way. And in order to do that, you have to be very focused and measuring what you're managing.
>> Sue: Well, I think we've had a pretty unique relationship with Heidi because she did own this camp before I bought it. So we definitely did go through a transitional period. I think we both kind of had to find our way through that and figure out how much space to give each other.
>> Heidi Ganahl: And we shared a lot of ideas and a lot of experiences as she went through that initial stage of getting the camp to where she wanted it to be rather than what corporate wanted to be. Soon I had to really work at negotiating a relationship around that and negotiating what was best for her versus what was best for us when we were running for the camp.
>> Sue: In the midst of that, her leadership skills, I thought, were great in terms of focusing on the right things, being pretty clear about expectations, and being open to letting go of some of that. As I got my feet underneath me and I got more solid with how I was running the camp, she was able to back off and give me that latitude.
>> Heidi Ganahl: As the company has grown over these 10 years, my ability to lead the company has been shifted from very intense micromanagement of day-to-day details to more of a strategic look at what's best for the company and growing the brand. And I've brought in some key folks to help me do that, that I couldn't afford to do or didn't have the resources to do in the beginning. And it's been wonderful. It's allowed me to really focus on what's best for the brand and the vision of the company, rather than, "How do I get through the day and get through all the things that need to get done?" My vision for Camp Bow Wow continues to grow and expand, and I drive my team and franchisees a little bit nuts, because I am always thinking of new, creative ways that we can leverage the Camp Bow Wow brand and do more things for our customers. So with home buddies covering the in-home pet care, [inaudible] covering the dog training component, and now we have the foundation. It's really becoming a one-stop shop for customers in any pet service that they need. And that was my ultimate vision for Camp Bow Wow. So now it's just taking it worldwide.
1. What is Heidi's policy for dealing with "wonderful franchisees ideas" which conflict with BowWow mission?
2. What characteristic of leadership does Heidi say is an area she is working on within herself right now?
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.
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.
The company said that together, the businesses employ about 3,500 people and last year generated systemwide sales of $71 million.
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.
3. Why did Heidi sell her company?