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After starting her first ice cream shop, Chelsea Green quickly realized that she needed to do something to set herself apart from the competition. That’s when Chelsea created The Yard, a milkshake bar that is now franchising in the southern United States. Chelsea, her husband, Logan, and her sister-in-law Ali are coming to the Sharks seeking an investment of $400,000 in exchange for 10% of their company.

At the Yard, consumers can customize their own milkshake or select from a gourmet recipe. These delicious shakes range from 650 calories to 1800 calories and cost the customer between $14 and $50. The Sharks love the taste of the milkshakes and are interested to learn how successful each of their locations are. Year-to-date, all of their locations have made $3.4 million in sales which will net them $400,000 after everyone is paid. They currently own 4 locations and have one franchise open and one franchise sold.

The Sharks are excited about the financial success of The Yard but would like to understand why they need to partner with a Shark. The Greens acknowledge that they can do this on their own, but they feel that it would save them a decade of knowledge if they team up with a Shark who can help them understand how to make their business more efficient while helping it to grow and franchise across the country. To buy into the franchise, it would cost a potential store owner between $140,000 to $315,000. The Greens would then receive $45,000 for a 10 year license, 6% in continuing royalty of net sales and a 2% royalty for marketing.

The Sharks love the taste of the product and the business model. They are very interested in investing in The Yard until they learn that the equity that they will receive from their investment will not be for the established stores, but rather from the expansion of new stores moving forward. Kevin O’Leary makes an offer, but is clear that for a $400,000 investment he would want 15% of the whole company, not just the future franchises. Lori thinks that the product and marketing are great, but also would want an equity share of the entire company. She offers $400,000 for inclusive (not future franchise) equity for 12.5%. Mark Cuban is fine with Chelsea and Logan owning the 4 current stores, he offers $400,000 for 25% of the new units. They counter and accept his offer for 22% equity of The Yard’s future locations.

Do you feel that Mark made a good decision to partner with The Yard? Do you feel that it fits in with the rest of the businesses in his portfolio? Which offer and which Shark would you have accepted if you were Chelsea and Logan? Begin the conversation in the comments below!