FryAway – Oil Solidifier
DEAL
EPISODE SUMMARY
🕓 Air Date: January 27, 2023
Asking For:
$250,000 for 10%
Investor:
Mark Cuban, Lori Greiner (50/50)
Deal:
$250,000 for 22%
PRODUCT SUMMARY
FryAway is a 100% plant-based powder that transforms used cooking oil into solid organic waste, making it easy and environmentally responsible to dispose of cooking oil.
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Background Story
Laura Lady, the founder of FryAway, hails from New Orleans, Louisiana, and has spent 18 years working in the toy marketing industry for some of the world’s largest toy companies. Her upbringing was marked by a legacy of risk-takers and adventurers, with her father immigrating to the United States from Honduras with just $10 in his pocket and working his way up to a successful career in the diplomatic corps.
Laura’s motivation to create FryAway came from her love of cooking and the need to find a more responsible way to dispose of used cooking oil. She recognized that pouring cooking oil down the drain not only clogs the plumbing but also contributes to fatbergs and environmental contamination. This inspired her to develop a solution that would make it easy for people to turn used cooking oil into solid waste that can be disposed of in an environmentally friendly manner.
The Product
FryAway is a revolutionary solution for disposing of used cooking oil. It is a 100% plant-based powder that is non-toxic and safe for the environment. The product works by turning liquid cooking oil into a solid form, making it easy to dispose of without clogging drains or contributing to fatbergs.
To use FryAway, all you need to do is pour the powder into the hot oil after frying. As the oil cools down, it solidifies, and you can then toss it directly into your household organic waste, eliminating the need for separate containers or hazardous disposal methods.
Using FryAway reduces the environmental impact of cooking oil disposal, as vegetable oil naturally decomposes in about 30 days, while other disposal methods can take hundreds of years to decompose.
FryAway is available in different variants, with prices ranging from $9.99 to $15.99, making it accessible to a wide range of consumers. The product’s landed cost is impressively low, with a margin of up to 34%, making it a profitable and sustainable business.
How It Went
The company’s position before Shark Tank
FryAway achieved remarkable success in its first year of business, with sales totaling just under $700,000. What’s even more impressive is that the company became cash-flow positive within two months of its launch and has been self-sustaining without incurring any debt. The company currently manufactures the product in the founder’s garage, allowing for flexibility and low overhead costs.
The product is primarily sold through online channels, with a strong presence on Amazon, where they have approximately 1,500 monthly subscribers, with a month-on-month growth rate of 10% to 11%. In addition to Amazon, FryAway is set to expand its market presence by launching in 1,100 Kroger stores, marking a significant move into retail distribution.
Despite the impressive sales figures, the company’s net profit margin currently stands at 9% due to substantial investments in marketing and Amazon advertising. However, FryAway is poised for significant growth, especially with the upcoming expansion into retail stores.
The Negotiations:
In the “Shark Tank” episode, Laura Lady initially sought a $250,000 investment in her company FryAway in exchange for a 10% equity stake. After demonstrating the product’s effectiveness and sharing the company’s sales figures, Mark Cuban and Lori Greiner made an offer of $250,000 for a combined 22% equity stake, which the founder accepted.
Laura Lady’s initial valuation of the company at $2.5 million for a 10% stake proved reasonable given the product’s strong sales and potential for growth. However, Mark Cuban and Lori Greiner recognized the opportunity to leverage their expertise and connections to take FryAway to new heights and proposed an equal partnership, each investing $125,000 for a 20% equity stake.
The negotiations concluded with Laura agreeing to the offer of $250,000 for a combined 22% equity stake, which allowed her to secure the valuable partnership of two experienced sharks. While the equity stake was slightly higher than her initial ask, the benefits of having both Mark Cuban and Lori Greiner on board were seen as a worthwhile trade-off.
