# Did Fat Shack get a deal on Shark Tank? The Complete Story - Canonical: https://33rdsquare.com/did-fat-shack-get-a-deal-on-shark-tank-the-complete-story/ - Published: 2023-10-09 - Author: Lillie Gabler - Categories: [Tips](https://33rdsquare.com/category/home/tips/) --- As a home renovation expert who loves indulging in a good burger, I was thrilled to see Fat Shack on Shark Tank. Their mouthwatering burger creations stacked sky-high with donuts, mac n’ cheese, and other decadent toppings seemed right up my alley! Naturally, I was curious to learn more about their experience on the show and whether they landed an investment from the Sharks. So I decided to dig into the details and put together this comprehensive guide on Fat Shack‘s Shark Tank appearance. Read on to learn all about this burger joint‘s pitch, the Sharks‘ reactions, their post-show success, and the key takeaways. ## Introducing Fat Shack Let‘s start with some background on Fat Shack. This innovative fast-casual restaurant chain opened its first location in Fort Collins, Colorado in 2009. Founders Corey Simpson and Pat Beirne dreamed up the concept of pairing giant burgers with outrageous toppings to satisfy even the heartiest appetites. The menu focuses on their signature stacked burgers layered with indulgent ingredients like donuts, mac n’ cheese, potato chips, and fried eggs. You can also build your own delirious burger creation from scratch. In addition to burgers, Fat Shack serves wings, sides like fried pickles and tator tots, milkshakes, and homemade desserts like deep-fried Twinkies. Their motto is “Burgers and Cravings to Satisfy Your Late Night Needs.” ### Steady Growth Before Shark Tank The first Fat Shack quickly gained a cult following among Colorado State students and locals craving insane comfort food. By 2015, Fat Shack had expanded to 5 locations in Colorado and Texas. Most were company-owned, but they had their first franchise location in Lubbock, TX. Average annual sales for each Fat Shack exceeded $1.2 million. Their indulgent creations and late-night service made them a hit. ## Fat Shack‘s Shark Tank Pitch In October 2017, Fat Shack founder Justin Farmer entered the Shark Tank during season 9. He was seeking a $400,000 investment in exchange for 10% equity in the business. ### Ambitious Growth Goals During his pitch, Farmer shared that Fat Shack had strong sales and profits. But he wanted to ramp up expansion by opening 10 more company-owned locations and improving their franchise program. At the time, there were only 2 franchise locations along with 3 company-owned restaurants. Farmer‘s goal was to scale up quickly to capitalize on the growing popularity of the concept. ### Fun Brand Positioning Farmer did a great job articulating Fat Shack‘s unique value proposition – extreme burgers made with high-quality ingredients presented in a fun, novel way. He called it "comfort food on steroids." Their stacked burgers layered with indulgent toppings gave them a strong differentiation from competitors. Farmer also emphasized that the average customer spend was $12. ### Impressive Financials To validate the business model, Farmer shared that each existing Fat Shack location was generating around $1.2 million in annual revenue with 20% profit margins. Systemwide, the 5 restaurants produced $6 million in sales. Farmer made it clear there was a huge opportunity to scale with more locations. ## The Sharks React to Fat Shack’s Pitch The Sharks were definitely intrigued by Farmer‘s presentation and loved the concept. Here were some of their reactions: ### Mark Cuban Loved the Indulgence Being a burger lover himself, Mark Cuban appreciated Fat Shack’s ridiculously indulgent creations. He called it “comfort food on steroids” and was impressed with their differentiation in the crowded burger market. ### Kevin O’Leary Questioned the Valuation Kevin O’Leary pushed back on Fat Shack’s $4 million valuation for 10% equity. He made the case that the valuation seemed high given the company only had 5 locations at the time. ### Alex Rodriguez Wanted In After Tasting a Burger Guest Shark Alex Rodriguez initially seemed hesitant. But after tasting a burger during the pitch, he was sold! Rodriguez loved the product and saw major franchising potential. ### Lori Greiner Loved the Branding Lori Greiner really responded to Fat Shack’s fun, irreverent branding. She could see customers flocking to the restaurants just to experience the outrageous burgers. ## Deal Discussion – Offers from Cuban and Rodriguez Once the Sharks got past the sticker shock of the valuation, the offers started flowing in! Here is how the deal discussion played out: ### Mark Cuban and Alex Rodriguez Team Up Mark Cuban put the first offer on the table – the full $400,000 for 25% equity. Alex Rodriguez then suggested combining forces and going in for half of the investment each. ### A Counteroffer Emerges Together, Cuban and Rodriguez offered $400,000 for 15% equity, contingent on adding a third franchise location. They saw the potential but wanted to reduce their risk. Farmer countered by asking for $400,000 for 10% equity again. ### The Final Deal Is Struck Ultimately, Cuban and Rodriguez agreed to the original ask of $400,000 for 10% equity in Fat Shack. While more than they had hoped for, the Sharks felt the business could scale successfully with the right franchise strategy. And they loved the indulgent concept. ## Post Shark Tank – Growth, New Locations, and More Getting an investment from two high-profile Sharks like Cuban and Rodriguez helped catalyze major growth for Fat Shack after the show. ### Franchise Expansion Takes Off Within a year of the episode airing, Fat Shack doubled its number of franchise locations to 4. The exposure from Shark Tank boosted interest from prospective franchisees. ### New Locations Open Across the U.S. Over the next few years, new Fat Shack locations popped up across the country – from Texas and Colorado to Florida and California. Today, there are over 25 Fat Shack restaurants in operation with more in development. They‘ve expanded to 10 states and counting. ### Cuban and Rodriguez Provide Expertise True to their word, Mark Cuban and Alex Rodriguez worked closely with Farmer to optimize the franchise model and growth strategy. In 2019, the partners collaborated to open the first Los Angeles Fat Shack location together. Their input and business acumen proved invaluable. ### Partnerships Drive Sales Growth Fat Shack also forged partnerships with third-party delivery services like Postmates, DoorDash, and UberEats. Offering more convenience and exposure to new customers allowed them to boost sales significantly. ### Systemwide Sales Now Exceed $30 Million Thanks to rapid expansion and surging demand, Fat Shack’s systemwide sales now total over $30 million annually. The future looks bright for this ascending indulgent burger chain. ## 3 Key Takeaways from Fat Shack‘s Shark Tank Success Fat Shack’s thriving business today stems back to their game-changing Shark Tank appearance. Here are my key takeaways from their success story: ### 1. Bold Asks Can Pay Off Seeking $400k for only 10% equity was a daring ask. But this bold move landed them two high-profile investors who turbocharged their growth. ### 2. The Right Partners Make All the Difference Mark Cuban and Alex Rodriguez delivered far more than just capital. Their expertise and connections took Fat Shack to the next level. ### 3. Great Products Can Scale Quickly Thanks to crave-worthy indulgent burgers and smart partners, Fat Shack achieved rapid franchise expansion after Shark Tank. ## The Verdict: Well Worth the Equity While giving up more equity than planned was risky, the exposure, expertise, and growth that came from partnering with Mark Cuban and Alex Rodriguez made it well worth it for Fat Shack. Justin Farmer took a bold gamble to accelerate expansion. And it clearly paid off in spades with over 25 locations now open across the U.S. So in the end, securing a deal with two ideal investors on Shark Tank gave this ascendant burger chain a crucial springboard toward long-term success. --- Source: [Did Fat Shack get a deal on Shark Tank? The Complete Story](https://33rdsquare.com/did-fat-shack-get-a-deal-on-shark-tank-the-complete-story/)