Fetch's Story
Premium Pet-Hotel Chain
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Get in TouchFetch is a fast-growing dog daycare and boarding operator in the United States. A family office that owned one of its flagship properties began discussing an unusual transaction with the founders: in exchange for temporary rental relief, the landlord would receive an equity position in the business.
Fetch wanted to free up cash to support the launch of a second location nearby. The family office was open to the idea, but only if the economics were more attractive than continuing to collect rent in the usual way. Alehar was engaged to evaluate the opportunity and help structure a deal that balanced upside with protection.
Chapter 1
Where They Were
The core question was straightforward but commercially important. Would giving up rental income in the short term create more value through equity participation than sticking with a traditional lease? For Fetch, the appeal was immediate liquidity that could be reinvested into expansion without taking on as much debt. For the landlord, the opportunity was to turn a promising tenant relationship into a more valuable long-term position.
But the answer depended on execution. A second site would need to ramp successfully, labour would need to remain manageable, and the build-out would need to stay under control. Before either side moved forward, they needed a clearer view of the trade-offs, risks, and the deal structure that could make the arrangement workable.
Chapter 2
What We Did
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 labour, 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 labour. 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 specialised 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.
Chapter 3
Where They Are Now
Both sides now have a clearer basis for evaluating the opportunity, including the financial trade-offs, the risks that matter most, and the type of structure that aligns incentives.
For the family office, the work provided a more disciplined way to compare lease income with potential equity upside. For Fetch, it created a clearer picture of how rental relief could support expansion without relying entirely on additional debt. Rather than treating the request as a simple rent concession, both parties can now consider it as a structured strategic option with defined economics and clearer protections.
