Their love of potatoes and people inspired their business | Shark Tank US | @SharkTankGlobal

Summary

In this Shark Tank pitch, James and Joanna, a couple from Raleigh, North Carolina, present their business, Bueno Papa, which serves Latin-inspired gourmet meals on hand-cut fries. They are seeking $400,000 for 7% equity. The couple shares their journey from humble beginnings with just $18 to becoming a $2 million business, fueled by viral success on TikTok. Despite challenges like startup debt and the struggle with scaling, they have expanded to multiple stores and franchised. The Sharks react to their valuation and financials, with Robert ultimately making a counteroffer to invest at a 19% stake.

Takeaways

• 😀 The founders, James and Joanna, are a couple from Raleigh, North Carolina, seeking $400,000 for 7% equity in their company, Bueno Papa.
• 😀 Bueno Papa offers Latin-inspired meals served on hand-cut, made-to-order gourmet French fries, which provide a unique fusion of comfort food with bold Latin flavors.
• 😀 The company uses over three large potatoes (33 oz) per meal, making the portions quite large, and no one can finish one by themselves.
• 😀 The business idea originated during the pandemic, with inspiration from Latin street foods typically found in vacation spots like Cancun and Puerto Rico.
• 😀 The founders experienced significant early success, with their TikTok going viral, gaining 16 million views after an influencer reviewed their dishes.
• 😀 They started with only $18 in their bank account but grew their business to $2 million in revenue in their second year, with plans for continued growth.
• 😀 The founders met as high school sweethearts and have since built their business together, blending their cultural backgrounds.
• 😀 They’ve never had restaurant experience but have a deep entrepreneurial background, with James having worked in entertainment and Joanna being a teacher.
• 😀 Their food cost averages around $3.50 per plate, selling at approximately $13.50 per dish, leading to food margins of 28%.
• 😀 They have two corporate stores and are expanding with franchises, having sold four franchises in their first month, charging a $295,000 franchise fee.
• 😀 Despite a debt of $70,000, the company is self-funding its growth, although the founders recognize this isn’t the healthiest strategy in the long run.

Q & A

What is the main concept behind Bueno Papa?

Bueno Papa is a business that serves Latin-inspired meals on a bed of hand-cut, made-to-order gourmet French fries. The concept combines the comfort of fries with diverse Latin flavors from cultures like Colombia, Mexico, and Puerto Rico.

What is the significance of the name 'Bueno Papa'?

'Bueno Papa' is a Colombian expression that means both 'good people' and 'good potato,' reflecting the founders' love for potatoes and the idea that they often don't get the attention they deserve.

How much of each dish at Bueno Papa consists of fresh-cut potatoes?

Each signature dish at Bueno Papa starts with 33 ounces of fresh-cut potatoes, which is the equivalent of over three large potatoes.

What is the couple's background in business before starting Bueno Papa?

James has been an entrepreneur all his life, starting out in the entertainment industry with Queen Latifah's Flavor Unit and later focusing on Latin stars. Joanna's background involves teaching, as she worked for 12 years after overcoming language barriers as an immigrant from Colombia.

What was their initial investment in the business?

The couple initially invested their life savings into the business, starting with only $18 in their bank account, which they had saved up over time.

How did the business gain significant attention and growth?

After their first store opened, Bueno Papa went viral on TikTok when an influencer tried their dishes, gaining 16 million views in just two days, which significantly boosted their customer base and sales.

What financials did the founders share with the sharks regarding their food costs and margins?

Each dish costs around $3.50 to make, and they sell for an average of $13.50, resulting in a 28% food margin.

How much debt does the business currently have?

The business currently has $70,000 in debt, but the founders do not consider it to be significant.

What are the founders' plans for expanding the business?

They plan to open one corporate store every year for the next five years, with the goal of reaching $10 million in sales by the end of that period. Additionally, they have begun franchising, selling four franchises in their first month.

Why did some of the sharks choose not to invest in Bueno Papa?

Some sharks were concerned about the dual nature of the business, as it involves both operating restaurants and franchising. They felt that the combination of the two might overwhelm the founders. Additionally, they questioned the business's valuation, which they felt was too high based on the current financials.

What was the outcome of the pitch, and which shark made an offer?

Robert made an offer to invest $400,000 for 20% equity in the business, which the founders negotiated down to 19%. The deal was finalized with Robert, who appreciated the founders' progress and potential for future growth.