- Things get heated when the sharks deal with a husband-and-wife team.
- Kevin O'Leary, Barbara Corcoran, Kevin Harrington, Daymon John, Robert Herjavec
Michael and Babz Barnett, "Romp n' Roll" a children's entertainment center franchise; Currently have 10 locations (2 self owned and 8 franchises) all over the US. $4 MM in revenues in last 5 yrs. $300K for 10%. Gym, art and music class for toddlers all under one roof. 3 Mo to 6 yrs old. 20 classes per week per location. They think competition Jimboree is old school and an outdated concept. $1.2 M in sales last yr and 30% profit margin. Acquistion is through mom groups. 1% of sales go to marketing. O'Leary is out as he doesn't buy into the business model, specifically just 1% spend on marketing. Daymon is out as the business is not for him. Harrington is also out as no brand potential. Barbara recently saw a Jimboree close down in her neighborhood and is out. Herjavec is the only shark left and feels that the Barnett's are still not giving him enough attention and pandering to sharks who are already out. He offers $300K for 51%. Babz counters at $300K for 20%. Herjavec is out.
Update on: Stress Free Kids (Episode 103): The books are launched in Borders bookstore nationwide.
Marix Stone & Dr. Nancy Tanchel, "Hells Bells" a helmet company that has a patented method to produce 3-D designs. $500K for 20%. on track to deliver $300K in sales in ongoing year. Need investment to be able to mass produce these helmets. Regular helmet sells for $175 and profit margin is over 50%. Harrington thinks there is potential, but the deal is overpriced and bows out. Ditto for O'Leary. Barbara isn't into the helmets space, and is out. Daymon offers $500K for 50% due to the potential of the licensing deal. Marix and Nancy accept.
Alfonzo Dowe, "The Twister" a golf ball cleaner; $85K for 40%. Sold about a couple of thousand dollars worth. He is a police officer and admits that he is not a businessman. Sells for $19.99. Costs $6 to make. Harrington is out as he sees this as a seasonal gift product and not for core golfers as this does not help improve their score. Barbara hates golf and is out. Herjavec is not sure of the sales potential and is out. O'Leary is out since Alfonzo wants to use the money for inventory without any sales. Daymon is out as he doesn't golf.
Dorene Humason, "The Chef in Black" a dried Chinese salad dressing; $50K for 10%. Is in 1300 grocery stores. Has $41K in sales in last 12 months which is down from $78K in her first year. Had to change the packaging as she accidentally put the pic of a Japanese prostitute on her packaging and only realized it later. Then she plans to introduce new SKUs such as Mexican dressing etc. Harrington doesn't invest as he feels Dorene is not focused and so is Herjavec. Daymon is afraid of the food category and opts out. O'Leary is out as he doesn't believe in Dorene. Barbara offers $50K for 40% and wants to focus on one SKU. Dorene has invested $300K in her company, and counters $50K for 35%.
Andy Sperry, "Ink Flip" a mail-order printer ink refill service; $150K for 20%. $10K in revenue in 6 months. avg customer uses 7 cartridges a year and ink flip makes $10 per trip. Andy doesn't know his cost of acquiring a customer. He has invested $50K in the business. O'Leary is out since Andy didn't know his CPA. Daymon is out as there is nothing proprietary, Harrington is out as its too risky. Herjavec thinks Andy wants to use his money for testing his CPA and is thus out. Barbara thinks Andy didn't do his homework and is thus out.
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