Paws on Chicon: Why Founderpath Passed on a 25%-Profit Pet Store Empire
Keith Zeiler and Tim Andrews built three Austin pet stores with 20–25% net margins, a patented self-serve dog wash, and a frozen yogurt SKU sold for $4.99 with 57¢ of cost. They wanted help turning the fro yo into a franchised system. On camera, no deal was made — because what they actually needed was supply-chain expertise, not capital.
Locations Open
Year-2 Growth
Net Profit Margin
Fro Yo Gross Margin
Deal Snapshot
The full picture: what Keith and Tim built, what they pitched, and why the deal did not close on camera.
The business
Business
Paws on Chicon
Founders
Keith Zeiler (founder, certified pet nutritionist) & Tim Andrews (spouse / co-founder)
Locations
3 Austin stores · opened October 2018, March 2021, May 2025
Category
Brick-and-mortar · Pet food, supply, and grooming
First-year revenue
Strong six figures
Year-2 growth
900%
Net profit margin
20–25%
Hero SKU
Frozen yogurt for dogs · $4.99 retail · 57¢ all-in cost (88% gross margin)
Self-serve dog wash
$18.99 per wash · 300 monthly users per store · enclosed private bays
Food share of revenue
50% · margins 20–25% (lowest category)
Toy share of revenue
15% · 50%+ margins
Retention recipe NDA
Staff signed for $10,000 per breach — proprietary fro yo formulation
The pitch
What they pitched
A franchised fro yo system: branded machine + proprietary mix + cups + 5¢ royalty per cup
Target customers
Independent pet retailers, coffee shops, dog parks
What they actually wanted
Help with food science, co-packing, and bulk packaging supply chain
What they did NOT need
Capital — the stores already throw off 20–25% net margin
The outcome
Outcome
No offer made
Capital deployed
$0
Why no deal
Mismatch — Founderpath funds operators, not co-packing supply chains
What did happen
Founderpath offered to help structure a franchise model on a future call
Founder reaction
Continuing to grow profitably without outside capital
The Numbers
The unit economics that made Paws on Chicon a 20–25% net margin business — and the reason capital wasn’t actually the gap.
Category mix and margins
Pet food (premium kibble + raw)
50%
20–25%
Toys (Fluff & Tough hero brand)
15%
50%+
Self-serve dog wash ($18.99)
Recurring traffic
95%+ on a $50 / month bottle
Frozen yogurt for dogs ($4.99)
Anchor SKU
88% (57¢ cost / $4.99 retail)
Raw bar (jerky, ears, novelty)
Margin booster
50%
Frozen yogurt unit economics
The single most replicable SKU in the business. The reason Keith and Tim wanted to franchise it.
- Sell price (5oz)
- $4.99
- All-in cost
- $0.57
- Topping add-on
- $0.59
- Gross margin
- 88%
Capital history
Pre-2018
Founders run a Seattle real estate company
Buy a house in Austin two blocks from a building under construction
2018
Liquidate Northwest investment property to acquire the Chicon site
Self-funded — no outside capital
Oct 2018
Paws on Chicon opens
First $10K of revenue clears in month one
2019
Year-2 explosion
900% growth · COVID drives pet adoption boom
2020
Frozen yogurt SKU launches
Won "Coolest Pet Store in America" — recipe under staff NDA
Mar 2021
Second store opens
Self-funded from operating cash flow
May 2025
Third store opens
Three locations — 20–25% net profit across the company
2026
Founderpath conversation: no deal
Founders pitched a franchise system; capital wasn’t the gap
Why This Didn’t Close
Four reasons no offer was made on camera — and what an operator in Keith and Tim’s shoes would need to put in place before capital becomes the right next step.
They didn’t need capital
Three Austin stores running at 20–25% net profit margin throw off enough cash to self-fund any reasonable expansion. The first three stores were each opened from operating cash flow or a personal real estate liquidation. There was no working-capital gap, no inventory crunch, no Toast Capital balance to refinance — the financials simply didn’t produce a question that capital answered.
The pitch was supply chain, not capital
Keith and Tim wanted help with food science, co-packing, and bulk-packaging supply for a franchised fro yo machine. That’s an operational service line — “find me a co-packer in China” — not a financing problem. Founderpath underwrites operators, not procurement chains. Wrong product for the right founders.
The franchise model wasn’t built yet
A franchised fro yo concept needs a documented FDD, a unit-economics model for franchisees, a tested machine-and-mix system at scale, and ideally 1–2 corporate-owned proof units beyond the home base. Paws had the recipe and the demand but not the franchise infrastructure. Capital before that work is built generally goes unused.
The recipe IP is real but not patent-protected yet
Staff sign a $10,000 NDA per breach on the fro yo formulation. That’s a contract, not a patent. Funding a national rollout against unpatented IP is risky for a lender — once the system is in 100 locations, the formula is reverse-engineered. The IP needs to be locked down (process patent or trade-secret architecture) before the franchise scales.
When capital would actually unlock this business
The right time for Founderpath capital here is once the franchise system is documented, one or two corporate proof units exist beyond Chicon, and the IP is locked. At that point, capital funds machine inventory and franchisee buildout — exactly what brick-and-mortar new location buildout financing is for.
Menu development financing for brick and mortar operators →Could YOUR Business Get a Deal?
Paws on Chicon didn’t need capital — but most brick and mortar operators do. Founderpath funds operators with non-dilutive capital from $50K to $5M for new locations, equipment, inventory, marketing, and Toast Capital refinance. Here’s the bar.
Annual revenue
$250,000+ at one or more brick-and-mortar locations
Operating history
12+ months of paying customers — not pre-revenue
Margins
Net profit margin (10%+) and at least one 50%-plus gross margin SKU
Use of funds
Specific and time-bound: new location, equipment, inventory, marketing, or refinance
Data we connect
POS, bank, accounting — same systems Paws shared
Equity given up
Zero. Always.
What Founderpath Looks For
Five lessons from a pet store empire that ran the numbers but didn’t fit the underwriting today — and what every operator can pull from the conversation.
- 01
Specific use of funds beats a “help me grow” pitch
The difference between a deal that closes and one that doesn’t is usually specificity. “We want to franchise the fro yo” is a vision. “We need $300K to buy 50 fro yo machines and 100,000 cups, deploying to these named partners over 6 months” is fundable. Operators who walk in with a number, a use, and a timeline almost always get an offer.
- 02
A 20–25% net margin is unusually fundable
Most brick-and-mortar businesses run 5–15% net margins. Paws is at 20–25%, driven by an 88%-margin fro yo SKU and a 50%+ margin toy category. That kind of profitability is exactly what Founderpath underwrites against — and exactly why Keith and Tim don’t actually need outside capital today.
- 03
Franchise capital comes after the franchise system, not before
Funding a franchise concept before there’s a documented FDD, unit economics, and 1–2 corporate proof units typically doesn’t work. Build the system first, prove the unit economics outside the founders’ home location, then come back for capital to scale machines and buildouts.
- 04
IP protection is what makes a multi-location concept bankable
A staff NDA is enforceable but not scalable. Once a recipe is in 100 locations, reverse-engineering becomes trivial. Process patents, trade-secret architecture, and ingredient-supply lock-ins are what protect IP at scale. Lenders price unprotected IP at a steep discount because it can be replicated.
- 05
Founderpath funds operators, not supply chains
Keith and Tim asked for help with co-packing and bulk-packaging procurement. That’s a service problem, not a capital problem. Founderpath underwrites operators with revenue and margin. If your real ask is “help me find a manufacturer,” the right partner is a CPG operator network or a 3PL — not a debt provider.
Frequently Asked Questions
The Paws on Chicon conversation, explained.
No offer was made on camera. The founders, Keith Zeiler and Tim Andrews, were running three Austin pet stores at 20–25% net profit margins and were not looking for working capital. They pitched a franchise system for their proprietary frozen yogurt SKU — that’s a supply-chain and franchise-development problem, not a financing problem.
Two reasons. First, capital wasn’t the gap — Keith and Tim already had the cash flow to fund 10 machines themselves. Second, the franchise system itself wasn’t built: there was no documented FDD, no published unit economics for franchisees, no corporate proof unit beyond the founders’ own stores, and the IP was protected only by a $10,000 staff NDA rather than a patent or trade-secret architecture. Funding a national rollout before that work is finished tends to mean capital sits idle.
Yes — 20–25% net profit margin across three stores. The fro yo SKU runs 88% gross margin ($4.99 retail / $0.57 cost), the toy category runs 50%+ margins, and pet food (50% of revenue) runs 20–25%. The integrated dog-wash drives 300 monthly users per store at $18.99 each.
Yes. The bar is at least $250,000 in annual revenue, 12 or more months of paying customers, healthy gross margins, and a specific use of funds tied to growth — new location buildout, equipment, inventory, marketing. Paws fit each criterion; what they didn’t have was a use of funds tied to capital they couldn’t generate themselves.
Three things: (1) a fully documented franchise disclosure document with audited unit economics for franchisees; (2) one or two corporate-owned proof units beyond the home stores demonstrating the fro yo concept works in non-Paws locations; (3) IP protection beyond a staff NDA — a process patent on the formulation or a trade-secret architecture controlled through ingredient-supply contracts. Once those are in place, capital funds machine inventory and franchisee buildouts.
On camera, Nathan offered to come back as a strategic adviser on the franchise model itself — how to structure the FDD, set the franchise fee, design the per-cup royalty, and choose between corporate-owned and franchised expansion. The capital conversation was deferred until that structure was in place.
Three things: (1) Keith is a certified pet nutritionist, which builds trust on food selection; (2) the self-serve dog wash bays are fully enclosed for privacy, unlike most competitors’ open-tub setups; (3) the proprietary fro yo SKU uses goat milk, turmeric, and ginger — a healthier alternative to the dairy-based "pup cups" most retailers serve.
Most likely a revenue-based facility for new-location buildout or franchisee equipment buildout — repayment as a percent of monthly revenue, capped at a fixed multiple. Founderpath also offers term loans for larger established multi-unit operators ($1M-plus revenue).
Full Episode Transcript
The full conversation between Nathan, Keith, and Tim — lightly cleaned for readability.
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