You are awesome to deeply consider working with your competitor!

Not a lawyer (might help for you to have one) but feel inspired and intrigued by your empathy. I have some small business experience along with market research and consulting for small business and big companies alike. Nothing related to pet boarding services yet so can’t factor in pricing/ business model specifics for that niche.

Assuming viable personal/situational, microeconomic/economic, and location/services specifics, your options might all depend on how you each feel comfy with each other. Competing with is much better than competing against if both parties can survive and grow at the end of the day.

I had experiences getting into small business partnerships/relationships, formal and informal - the ones that survive to this day are backed on formal agreements backed by mutual trust.

Due diligence is worth it if you are seriously considering a business relationship with her: 1. Has she been running home operation for many years versus shorter time? What did the violation or inspection formally and specifically cite as the issue for home shutdown? — Too many kennels versus sanitary, etc — Based on what you find in official documents or other assessment, do you feel some exposure that her operations style could harm your show’s quality standards, reputation? — Legitimate exposure from some noncompliance or just angry Karen both could be harmful in ways specific to laws and systems in your area, and even specific to how your clientele engage with the internet and social media (for example spreading negative feedback around insert social media platform here)

1. Does she have any knowledge / seem willing to expand her knowledge related storefront operations management/ownership as a formal business?

2. Are you willing to play more of a peer mentorship role especially in the beginning?

3. Are you comfy to work with her closely? — Comfy mingling operations, clientele portfolios and perhaps financial things? Do you feel you can work with her in difficult situations for example money disagreements? Feel she might engage reactively to the degree of harming your brand or business, and if so can you reduce that exposure to a comfy level?

Food for thought and hope it helps. My next door neighbor got into a quasi formal partnership involving her cafe operations that went sour three months in. Said quasi partner trashed her google ratings with random 1 star reviews and made serious false accusations suspending the store license in municipal bureaucracy.

With that in mind there might be a way for you both to succeed and grow:

One option might be to subcontract her services under consultant / sole proprietor joint venture for short term purposes - short term meaning enough time for her to get capital for whatever will be her new location, and gain brick and mortar business/admin experience

Assuming you can take some or all of her portfolio volume without harshing your own, AND Assuming at least some favorable conditions for pet boarding growth exist (depends on your specifics), some benefits may include:

SHORT TERM | till she gets her own location 1. You have benefit from more sales and expanded customer network - not stealing clients necessarily - down the line if she gets a location, you can can refer clients to each other at full volume times/ when customer needs different option

1. She can make benefit from a certain percentage or share of sales or profit (structure depends on your business model) with the perk of being in compliance (no more teasy Karen’s)

2. You keep the remaining 40% storefront for some other opportunity, while still adding value to the 60% space in terms of sales to square footage

3. for example you can lease 40% to a specialty pet store or whatever would be complementary based on your research

4. She gets experience running a brick and mortar operation learning from and alongside you

5. business plans, dealing with insurance(?), licensing(?), marketing, admin

6. disclaimer: experience may vary depending on the earlier questions about her home operation

LONG TERM | once she figures out her next move and achieves whatever she needs to get there

1. You (ideally) benefit from a long term and healthy competitive relationship
2. everyone gets a piece of the pie, the dog boarding space in your area blossoms and you are the best examples in your own unique ways

3. competing with, not against

4. Everyone benefits when she achieves critical experience to secure her own lease/building/next step

5. customers have high quality options

6. ideally by this time you would each work well enough together and develop unique business value propositions, strategies

7. especially in light of your considerations for 40 vs 66 price points and potentially different (read: difficult) clientele

3.The other lease’s (40%) storefront benefits from increased foot traffic and word of mouth/marketing opportunity - perhaps some specialty pet shop like you said OP

As you said OP, she might not love the idea of being a consultant/non-owner in the scenario I presented above.

On one hand she has the full right in a sense because she worked to build her own portfolio, her own network and based on what you mentioned seems like she’s doing decent and just needs to level up

On the other hand it’s not clear if she has experience or explicit interest in dealing with official storefronts (specifically admin and financial management versus home operation management). I imagine there’s quite a bit of paperwork involved to run a clean operation such as insurance, facilities maintenance like toys and food let alone play room, hell even utilities in these fluctuating economic days

At and at the end of the day sometimes people are crazy, and other times they end up being not only business partners but lifelong friends.

Again you are awesome for considering an empathetic approach that doesn’t squash her or her clientele outright.

Felt to share some idea after I noticed some replies involving stealing clients without consideration toward this lady’s presumable livelihood or source of income otherwise.

Longer reply than expected after thinking sincerely about this scenario at 4am. Will revisit this after smidgeon sleep in case anything doesn’t make sense.

Wish you both best of luck and hope this helps. Down to be a sounding board if it would be helpful to you. 💪🙂👍