1. Evaluating the economics of rent versus equity
We began by gathering three years of financial and operating information, including income statements, payroll records, reservation logs, and pricing history. We tied revenue to operational drivers such as occupancy, grooming add-ons, and premium play packages, and linked costs to labor, marketing, and maintenance patterns.
Using that foundation, we built two parallel scenarios. One assumed rent continued as normal and expansion was financed through bank debt. The other assumed a rent holiday in exchange for a minority equity stake for the landlord. We then tested the economics under cautious, likely, and ambitious growth assumptions, including sensitivities for wage inflation, digital marketing costs, and construction overruns.
This helped show when the value of the equity could exceed the present value of the forgone rent, and how narrow or wide that advantage became under different operating outcomes.
2. Identifying the main risks in the expansion case
The analysis highlighted three core pressure points. The first was demand ramp at the new site. Success depended on strong visibility, referral partnerships, and a well-executed launch. The second was labor. The market for pet-care staff was tight, and wage pressure or overtime could compress margins. The third was build-out risk, since the second site required specialized construction and even moderate overruns could erode the equity case.
We translated each of these risks into financial terms so the family office could see how they would affect return expectations rather than treating them as abstract concerns.
3. Designing a phased structure to protect both sides
To balance upside with caution, we proposed a phased structure. The landlord would pause rent for an initial period and receive a modest equity position, with clear milestones linked to occupancy, customer satisfaction, and site-level profitability determining whether the arrangement could be extended and the equity position increased.
This gave Fetch room to direct more cash into expansion while giving the landlord a structured way to monitor performance before giving up too much rental income. The emphasis was on creating a framework that rewarded execution and reduced the risk of either party being locked into a poor outcome too early.
