Audley Wilson is a co-founder of RoboBurger, which creates vending machines that serve personalized burgers. He launched the business with Dan Braido and Andy Siegel.
RoboBurger generates revenue by leasing out the devices for $3,000 a month or selling them outright. Additionally, it is the responsibility of the purchasers and lessees to keep the machines stocked with supplies.
In April, the founders appeared on Shark Tank to seek investment for their firm. Following their pitch, the investor judges harshly condemned the company’s presentation and business concept.
The founders stated that RoboBurger has been under “beta testing” for 18 months, with over 12,000 burgers sold. In addition, they expected $1.4 million in yearly revenue by the conclusion of the calendar year, but an overall annual loss of $700,000.
According to CNBC Make It, Kevin O’Leary described the presentation as “chaotic” and originally declined to make an offer. Mark Cuban was also concerned about the competitiveness of the robotics business, pointing out that its technology can easily become obsolete.
He reportedly described vending machines as “hard capital assets that cost a lot of money” to create and operate, and said that RoboBurger would be better off making “a licensing play.”
“Because you’re driven by the physical location and the physical leasing, I think that’s a huge mistake,” Cuban said and did not make an offer.
On his part, Fanatics CEO Michael Rubin, a guest judge, expressed worry over whether people would be willing to pay $3,000 per month, plus food costs.
“This is a big idea, and for that, I commend you guys. I just don’t think you have the business model right,” said Rubin. “But I think this could be very successful… If it actually works, it could be massive. It could be a multibillion-dollar business.”
The RoboBurger founders sought a $1.5 million investment in exchange for a 5% share in the company. Rubin recommended a loan rather than an equity investment, citing the project’s high risk and little possibility of success. He made an offer of $1.5 million, conditional on “market rate” interest payments and a 10% share in the company.
O’Leary proposed to split the $1.5 million debt with Rubin. Before agreeing to collaborate with O’Leary and Rubin, the founders negotiated a 9% interest for each.