Oat Meals
Oat Meals is a restuarant in New York, NY, that wants to expand so that people will begin to think of oatmeal as an all day kind of food. Oat Meals is a "build your own" oatmeal cafe with thirty "signature" bowls. Additionally, customers can add non-traditional toppings to their oatmeals like truffle oil, bacon, parmesan, dates, and pmegranit. The entrepreneur claims that there is no reason why oatmeal must be sweet or considered strictly a breakfast item and wants to take oatmeal from the "breakfast aisle into the pasta and rice aisle."
Oat Meals currently consists of a single retail location on W 3rd. Street in Manhattan but has expansion plans, including a new store in Midtown.
The oatmeal bowls can be purchased in three sizes: "baby" ($4.25 for eight ounces), "mama" ($5.25 for twelve ounces), and "papa bear" ($6.25 for sixteen ounces). They are also relatively low calorie, starting out at 110, 150, and 180 calories for each size.
In the previous year, the one retail store made $470,000 in gross sales but only netted $45,000 in profit after paying the entrepreneur a $40,000 salary. The entrepreneur supplements her income by acting as a spokesperson for Quaker Oats for an additional $60,000. In the six years that the store has been open, it has grossed $2,500,000 in sales.
The entrepreneur had been working in investment banking in the city as an executive assistant before going to culinary school to gain the credibility to try to do such a venture based on oatmeal.
This deal aired on Episode 10.07.
Making A Deal
Daymond dropped out of the deal almost right away. Looking at the profits of the store, he speculated that even with a growth in sales, it would take him twelve years just to get his money back.
Lori, on the other hand, said that she perhaps saw another Bantam Bagels[1] before her and asked the entrepreneur whether she was willing to changing the business model to selling pre-packaged and frozen food items. The entrepreneur said that of course she would be willing. Lori made her and offer for $500,000 for 33%, contingent on if the entrepreneur can successfully create a pre-packaged and/or frozen product.
Barbara also made an offer on the entrepreneur starting a new business based around food carts that might be placed around Midtown to capture the business market sell oatmeal in the morning and risotto in the afternoons, a bit of a departure from the entrepreneur stating that she wanted to make oatmeal an "all day" food. This deal would not include any interest on the existing store. Barbara cited Cousins Maine Lobster as her example of success, having helped the entrepreneurs behind that move from a single food truck to "over forty."[2]
Mark described the competing offers as being a choice between one based on a new distribution model and the other based on taking the business that exists and replicating it into a new and (possibly) more profitable format.
In the end, and despite the almost $1,000,000 bite Lori took off the valuation, the entrepreneur selected her offer, specifically citing Bantam Bagels as the model she found most appealing.[3]
As the credits began to roll, Barbara complained that she thought that the entrepreneur had chosen the worse of the two options before her and Kevin said that he thought Lori was the one who had made a dumb deal. Lori, on the other hand, appeared content and called Barbara jealous.
Notes
- ↑ Lori stated that Bantam Bagels had now made "over $40,000,000". Whether that was in reference to total sales (probably) or actual profit (probably not) was unclear.
- ↑ Barbara stated that Cousins Maine Lobster had started with a single truck but no had over forty and had made $50,000,000 in sales in four years.
- ↑ The comparisons between the two are apt considering that Bantam Bagels also started in a single storefront in New York's Greenwich Village.