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Paradise for pets

Surrounded by good people and furry friends, Fred Goldsmith has found the secret to success for Pet Paradise Resorts

By Wendy Bautista

When he needed a place to leave his Bichon Frise, Fred Goldsmith, current CEO and chairman of Pet Paradise (www.PetParadiseResort.com), did what any good “pet parent” would do—he shopped around for the best, and what he found was a facility in St. Augustine.

“I toured the facility and met the owner, Frank Charles. After leaving Samantha there for the 10 days I was gone, along with my daughter’s dog Sally, I got into a conversation with Frank about the business,” says Goldsmith.

“Frank told me about a conversation he was having with the Jacksonville International Airport, and that’s where the light kind of got started for me. It was not so much to build something better, it was the airport concept,” says Goldsmith. “Part of the reason people will go to you is because it’s convenient—and if you’re at the airport, it’s not out of the way; you’re going to the airport.”

Getting going

Goldsmith met with Frank and bought the St. Augustine facility in December 2002, “mainly to start working on reporting, policies, procedures, and the kinds of things you would do if you were going to try and build multiple locations,” says Goldsmith.

In May 2003, he bought another facility in Palm Coast called Happy Dog Inn, which “offered an in-ground swimming pool, lots of play areas for the dogs to run, indoor/outdoor rooms…the things I envisioned for Pet Paradise going forward,” says Goldsmith.

They operated those two facilities while working the architectural drawings and the structural, mechanical things for the airport location. Goldsmith says he probably talked with more than 200 different kennel owners during the process, mainly to find out the good and the bad aspects. He wanted to make sure that when they built, they were building all the things they needed and not making some of the same mistakes the others had made.

Goldsmith jokingly adds, “Of course, I made lots of mistakes anyway. But as we built the current 13 locations, we think we’ve got the model down now where we can’t make too many more mistakes.”

Like a hotel

While being a Wendy’s franchisee, Goldsmith started a software company called Tridata Inc. He basically started writing software to help him run his own franchise, but as a bi-product of that he got into labor management working with hotel restaurants.

“The labor management system for hotels is really what got me into the hotel market—and as you might imagine, we’re running a hotel,” says Goldsmith. “Although I’ve never owned or operated a hotel, if you write software for an industry, you get used to what they need.”

Just as a hotel would, Pet Paradise has statistics on revenue per available room, occupancy, rack rate, and check-out times. When people come in, they have to check in their pet. The dogs then go to their individual suites with raised cots and indoor/outdoor access and auto-fill water bowls, and cat guests go to the cat room where they have an individual seven-level cat condo.

“People do the things they do at the Ritz, and the pets come here and they do the things that they would do at the Ritz,” says Goldsmith. “It’s just a vacation for them. This is for the parent who wants to make sure their ‘kids’ are getting the best that’s available—and that’s what we do.”

Goldsmith says really what they sell is peace of mind. When the customer is gone, they can use the Web cameras to check on their pets or they can certainly call, but Pet Paradise wants the customer to know that when their gone, their pets are having a great time—they are not stuck someplace they don’t want to be. Sometimes owners will even receive a video of their pet.

Working the plan

Knowing the industry and the potential of Pet Paradise, Goldsmith came up with a business plan, which helped assemble his impressive board of directors (see sidebar). Two board members, David Messerlie and John Foster, were friends of Goldsmith’s who had read the business plan and decided to invest in the early rounds, which got them through buying St. Augustine and Palm Coast.

The other board members—Dean Beckwith, Bob Hood, Fernando Acosta-Rua, Dan Rice, Buck Griswold, and Gary Chartrand— joined as the concept expanded.

“Actually, when we got started with this, it was people coming to me. Normally, if you’re trying to start a new business, you’re out in front of venture capitalists. But these guys heard about the concept, thought it was a good one, and came to me and said they would like to be involved,” says Goldsmith.

For the most part, Goldsmith knew the board members socially as they all live at the beach, but he made it clear that they didn’t invest because they were friends. “They might have looked at the business plan because we were friends, but they invested because the opportunity looked like something to build,” he says.

Good people

Goldsmith’s board is not just figure heads; they all play a part in the success of Pet Paradise, with many of the great ideas they’ve implement coming from experiences the board has had.

There are nine board members total and when they have a board meeting, all nine members are there. He says they are really just a great bunch of guys with vast amounts of experience and vested interests, but all of them do it because they were in business and have a business mind.

“If you look at the resumes of the people on the board, you would think they could be running General Electric—and to think they are involved with 13 dog kennel facilities is kind of ‘wow,’ but they have a lot of faith in our long-term goals.

“Even when I sit here and look around, I can’t believe it because really if you picked up General Electric’s 10k and read that that was the board, it would make sense to you,” says Goldsmith. “Everybody would go, ‘Gosh they’ve got the guy from McDonnell Douglas and AT&T and Acosta and Siemens, what a board,’ and we’re sitting in here talking about 13 dog kennels.

“The point to all of this is like most great minds, they can’t stop. You can retire from Boeing, but your mind is still business because you’ve done it for 35 years. That’s what they bring to the table,” says Goldsmith.

Mutual admiration

After the last board meeting, Goldsmith and John Foster went to dinner and were talking about the knowledge that was in the room. “John was just so impressed. Here I am impressed with his and John is with everybody else! It really is unique for a company this size to have that much talent,” says Goldsmith.

He says that sometimes there is a stigma that goes along with somebody that ran a multibillion dollar company with 50 thousand employees, but you won’t find it with this board. “There are people with big jobs that will tell you how important they are, but these guys would never tell you—I can’t even get them to brag when I need them to like in front of an investment group,” says Goldsmith. “They just don’t do it, they won’t do it—but that’s the kind of people they are and why I’m crazy about them.”

Inner workings

American Pet Resorts LLC (the parent company of Pet Paradise) has 13 owned facilities (no franchises) in four states throughout the southern region of the country, nine are located throughout Florida, two are in Houston, and one each in New Orleans and Charlotte, N.C.

In total, they are just under 200 employees, including all 13 facilities and the corporate office, with the Web design, legal, graphic design, and marketing being done in house. Goldsmith says they’ve got an organization here now internally where they can continue to grow and not have to do anything else from the administrative side.

He thinks they will be back on board with another two or three locations this year, and as money frees up maybe more. He says it can be difficult because in order for him to buy an already built location, it has to meet Pet Paradise standards.

“If we buy a facility, it may be one that has a play yard but it’s not artificial grass, or has an area that could handle a pool but they haven’t put one in, but when I get through, it’s got to look and feel like Pet Paradise—and the offer has to be something you understand,” says Goldsmith. “If you don’t know what you are going to get when you walk into a place, then you’ve lost your brand.”

For the love of it

Goldsmith spends as much time at the corporate office as he has to, but his love is to be over at the kennel, which is right next door. “We’ll be in meetings talking with lawyers or accountants and I will just stand up, and they know I’m gone,” he says. “I’ll go and play for 20 minutes with the kids and when I come back, we’ll start again.”

He says playing with the pets and seeing them happy helps remind him what they do because you can sometimes forget. “When we began, we just had an idea that if we built the Ritz Carlton but could be the same price as a Days Inn, they would come—and that ended up being the case. We are just trying to make sure we are meeting the needs of the pets and the people.”

Wendy Bautista is editor of Advantage: The Resource for Small Business. She can be reached at Wendy@advantagebizmag.com or 904-536-2234.

Business vitals

Owner: Fred Goldsmith

In business since: 2002

Projected growth: “We envision a national chain. We are at 13 and were on the path to 25 by 2012 when the economic downturn took the banks out of play. It’s not new news that banks aren’t doing regular banking and they are certainly not in the lending business, so until the world kind of gets straightened out, we’ve got acquisitions we are looking at now and a couple of relationships we are building—one of which is with  Park ‘N Fly, an offsite parking facility at airports.

They have 18 facilities at 14 airports and we are involved with them at five of those airports now. There’s a growth strategy there with Park ‘N Fly and the reason that is good is they got a customer base of people that already come to the airport and so just getting your name out is a challenge when you are in any business.”

How you can do it

“I’ve found all my life that if I surround myself with people a lot smarter than me, then I win,” jokes Goldsmith. “But having a good business plan that piques the interest of others and makes them want to invest in your idea also helps.”

The board of directors

Fred Goldsmith, CEO and Chairman, led an investor team to purchase Pet Paradise Resort in 2002 and has been the CEO and driving force behind the growth of the company.

Fernando Acosta-Rua, COO and executive vice president of finance, has been involved with American Pet Resorts LLC since August 2004 and joined the company in an operating capacity in January 2007. As a former partner with L&L Capital Partners, Fernando led an investment group to invest $4 million in American Pet Resorts LLC in October 2005.

John Foster, a director and founding investor in American Pet Resorts LLC, held a variety of executive and managerial positions, primarily in marketing and operations, during a 30-year career in the telecommunications industry. His later assignments at AT&T included regional vice president-marketing, president and CEO of a wholly-owned subsidiary in Jacksonville, Fla., and president and managing director of AT&T Services Group, Europe.

Robert H. Hood, Jr., a director and investor in American Pet Resorts LLC, is the past president of Douglas Aircraft Company, the commercial aircraft division of McDonnell Douglas Corporation. He served as president of Douglas Aircraft Company from February 1989 until April 1996.

David Messerlie, a director and investor in American Pet Resorts LLC, is the president and chairman of the board of directors of LCI Ltd., the world’s largest supplier of inorganic fluoride for water fluoridation and the production of silicon Tetrafluoride for the silicon wafer market.

Dean Beckwith, a director and investor in American Pet Resorts LLC, held a variety of executive and managerial positions in the computer and telecommunications industries for over 33 years. He created a joint venture company, ROLM Sales and Service, which was purchased by Siemens AG. He became SRVP of Services for that company and later SRVP of service for Siemens Private Communications in Munich, Germany.

Dan Rice has served as president and CEO of Mayport Venture Partners, LLC since its founding in 2000. Prior to assuming this position, Rice was a partner in one of America’s premier law firms, McGuireWoods LLP.

E. Bulkeley “Buck” Griswold is the founding partner of L&L Capital, an investment banking and consulting firm focused on middle market and emerging companies. Buck has more than 40 years’ experience in the financial services and investment management sectors.

Gary Chartrand is executive chairman of Acosta Sales and Marketing and has been the pivotal force behind Acosta Inc., one of the most effective in-store sales, marketing and service companies in the industry. Chartrand joined Acosta in 1983 as a business manager and subsequently was promoted to vice president, regional vice president of Florida, president, and in 1996, president/CEO.


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