Choosing which franchise to invest in is a significant decision. It’s important to feel secure and supported by not only the franchisor but by the industry as well, especially if faced with external pressure, such as global economic instability.

The US pet industry has significantly grown over the years, reaching $123.6 billion in 2021. Meanwhile, the global pet care market was valued at $148.1 billion in 2021, and with a compound annual growth rate of 6%, values are expected to reach $358.6 billion by 2027.

Not only does the pet industry continue to be on the rise, but there are no signs of slowing down. This presents significant prospects for those who are in this industry or are considering entering it, making it a franchise opportunity that is rooted in a great deal of stability.

To determine if the pet industry can withstand economic instability and be considered “recession-resistant”, one must only look at how it performed during past recessions – the proof is in the pudding, or in this case, in the dog treats.

THE COVID-19 RECESSION & PET ADOPTIONS

The most recent recession occurred near the beginning of the COVID-19 pandemic, from February-April 2020. Experts have called this the shortest recession in US history, but there were still significant declines in employment and production, along with a 19.2% drop in GDP.

The pandemic altered the way many people lived, and with whom they lived with, as many added a new furry family member to the mix. From March 2020 to May 2021, approximately one in five Americans acquired a pet, and 90% of households who got a dog during this time still have them today, according to an ASPCA pandemic pet ownership survey. As a result, spending on pets went up, and 2020 saw a total spend of $83.74 billion in the US, a 6.8% increase from 2019.

Millennials, who make up the largest percentage of pet owners in the US, spent the most amount of money on pet care during the pandemic, and 49% of those in this generation surveyed say it makes them happy to pamper their pet, while 42% refer to their pet as a child. While there are a number of items and services pet parents invested in during the pandemic, millennials and part of Gen Z (older than 18) drove much of the growth of dog daycare services.

Some of the top factors that contributed to getting a pet since March 2020 included increased time and isolation, greater amounts of free time, and feeling lonely during the pandemic. As well, since the pandemic began, there were adjustments to how pet parents cared for their pets, as a national survey found that 58% reported that they now value their pets more, while 50% are more affectionate to them compared to pre-pandemic.

Similarly, during the “Great Recession,” which occurred from December 2007 to June 2009, the pet industry also grew, with total pet spending in 2008 reaching $43.2 billion, and increasing to $45.5 billion in 2009 despite the continued economic uncertainty.

WHY DOG DAYCARE?

The pet industry has shown steady growth since the mid ‘90s. Even when other expenses were scaled back, pet parents still invested in their pups. During the recent pandemic, dog daycare was declared an essential service in several major markets across North America by local governments. Paired with the influx of new pet parents, this created an ideal opportunity for dog daycares to grow during this time.

Dogtopia‘s CEO, Neil Gill, says that making dog daycare our core revenue channel has shown the resiliency of our franchise model, as around 74% of revenue comes from this service. He says that while it is a “harder channel to drive,” it has shown to be recession-resistant. This is also evident in Dogtopia’s future projections, as we expect to open 400+ locations by 2025. Dogtopia was also named among the best franchises to buy post-pandemic by MSN Money, and was named a top recession-proof business in 2021 by Franchise Business Review.

Dog daycares are also recession-resistant purely out of necessity among many pet parents. With more employees back in the office, it means there’s less time to spend supervising their pups at home to give them the attention they deserve. Plus, with 82% of pet parents worrying about their dog while they are away from them and 47% saying they frequently leave work earlier than they should to take their dog out, doggie daycare can be the solution they are looking for.

Additionally, seven in ten American pet parents admit to taking better care of their pet than themselves, which helps illustrate why the dog daycare and lodging market, which is among the top services in demand for 2022, are projected to grow by $8.2 billion between 2020-2024.

FUTURE RECESSION PROJECTIONS

Experts are able to better predict upcoming recession based on a number of factors, one being raising inflation rates, which the US has reported as of late. While there are differing opinions on when a recession could hit, some say it could occur in the US at the start of 2024, with others predicting mid-2023. And while economists are calling this upcoming recession mild/moderate, it may still lead to economic turmoil, making the industry one chooses to invest in over the next decade very significant.

With the expected growth in the pet care market for the next several years, in conjunction with its success throughout past recessions, it is fair to say that dog daycare has proven itself to be resistant to recessions.

At Dogtopia, dog daycare is the “leader of the pack” in our franchise model. However, it is not the only thing that brings in revenue. Our franchisees have multiple revenue channels, including daycare, overnight stays, our doggie spa, and more. Securing various ways to generate profit can be a great way to face any economic instability, as it can offer a reliable and steady cash flow.

If you are interested in taking that next step and pursuing a franchise with us, we encourage you to look at our detailed FAQ page that outlines key pieces of information about your investment. If you meet our baseline requirements, you can also fill out our online inquiry form to access further details.