Tom Armenti and Kevin Gabauer came to
Shark Tank Fat Shack Update
- Entrepreneurs: Tom Armenti and Kevin Gabauer
- Business: Fast Food / Junk Food
- Ask: $250,000 for 7.5% equity
- Result: $250,000 for 15% equity
- Sharks: Mark Cuban
Fat Shack had eleven locations in three different states at the time of their
Since 2010, Fat Shack has managed to generate more than $22 million in sales. The sharks couldn’t believe it and were stunned when they heard those sales numbers. During the most recent calendar year, they managed to generate about $5 million in revenue.
Mark Cuban wanted to know how much the franchising fee was to open a new Fat Shack restaurant. Tom and Kevin responded and told him that the fee was $18,000. In addition to the franchise fee, Fat Shack’s owners claim a 6% royalty on a weekly basis from the nine franchised locations that currently operate.
As the negotiations began, Tom and Kevin were hoping that their pitch was convincing enough to earn at least one offer from the sharks. It turns out that Kevin O’Leary was interested, but he wanted 25% equity in exchange for his $250,000 investment. Daymond John wanted to make the exact same offer as Kevin.
Robert Herjavec was also interested in making an offer and offered $250,000 for 17% equity. With three offers on the table, Tom and Kevin had to make a decision for their business and ultimately decided to accept a sneaky offer from Mark Cuban, which was $250,000 for 15% equity. In our Fat Shack update we will take a look at how the company has expanded since appearing on
Mark Cuban greatly assisted the company’s growth and has managed to expand to 29 different locations so far. Fat Shack has locations in more than a dozen states across the United States and brings in tons of revenue from each of those locations. Mark Cuban was undoubtedly an influencing factor and has played a huge role in helping Tom and Kevin grow their business. We can only imagine that our next Fat Shack update will be even better!
You can find the other company updates from Season 10 Episode 23 here:
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