A burger vending machine caught the attention of “Shark Tank” investors.
RoboBurger is described as the “world’s first burger chef in a vending format,” and it can reportedly prepare a hamburger in less than four minutes, per CNBC. The multi-patented idea was created by Dan Braido, Audley Wilson, and Andy Siegel who presented the idea on “Shark Tank.”
“The RoboBurger provides a restaurant quality experience. The RoboChef grills the patty, toast the buns, adds the condiments, and delivers it all piping hot,” Braido said while pitching to “Shark” judges Kevin O’Leary, Lori Greiner, Barbara Corcoran, and Mark Cuban, along with guest judge Fanatics CEO Michael Rubin.
Wilson added, “The vending machine brought us beverages more conveniently. The ATM, money on the go. And now RoboBurger brings us hot fresh delicious food anytime anywhere.”
The founders were seeking a $1.5 million in exchange for 5% stake in the company, which shocked some of the judges who collectively said “Whoa!” Per CNBC, this asking price implied a $30 million valuation although they had not earned a profit so far.
As it pertains to their current business model, the founders state their machines can be purchased in full, or individuals can lease the machine for $3,000 monthly, according to the outlet. Machine-holders are then responsible for refilling the machine.
Leading up to the appearance on the show, RoboBurger had sold 12,000 burgers and was estimated to earn $1.4 million between Jan. 1 through Dec. 31. However, the company also logged a $700,000 annual loss. Wilson says the additional funding will be helpful “to get these machines out there at a faster rate and continue to grow.”
The “Shark” investors were divided in their interest. Mark Cuban made the decision to pass on the investment, referring to vending machines as “hard capital assets that cost a lot of money,” to make and keep up.
“Because you’re driven by the physical location and the physical leasing, I think that’s a huge mistake,” Cuban said, according to CNBC.
Unlike Cuban, Rubin — who is an investor in Hart House, a vegan fast food chain created by comedian Kevin Hart — believes RoboBurger has promise.
“This is a big idea, and for that, I commend you guys. I just don’t think you have the business model right,” Rubin told the founders. “But I think this could be very successful … If it actually works, it could be massive. It could be a multibillion-dollar business.”
Rubin proceeded to offer a $1.5 million loan with “market rate” interest instead of an equity investment, in exchange for 10% stake in the company.
“I think this is a very high-risk project [with] a very low probability of working. What you heard here was a lot of skepticism,” Rubin commented.
O’Leary viewed Rubin’s offer as “a very Mr. Wonderful structure,” and shared interest in splitting the cost of the loan. Rubin approved, and the RoboBurger founders were able to talk the investors down to a 9% stake in exchange for their conditions.
Since appearing on the show, RoboBurger has expanded its footprint to Hollywood Casino in St. Louis, MO, according to a post by Wilson on LinkedIn.
“We are thrilled to announce the launch of RoboBurger Inc at Hollywood Casino St Louis with PENN Entertainment, Inc. Our goal is to offer 24/7 access to high-quality burgers for poker players and casino guests,” Wilson wrote.
