Cinnaholic Cinnamon Roll Dessert Shop
DEAL
EPISODE SUMMARY
🕓 Air Date: May 9, 2014
Asking For:
$200,000 for 20%
Investor:
Robert Herjavec
Deal:
$200,000 for 40%
PRODUCT SUMMARY
Cinnaholic offers custom gourmet cinnamon rolls with over 30 frosting flavors and 30 toppings, all of which are dairy-free, egg-free, cholesterol-free, allergy-friendly, and 100% vegan.
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Background Story
Cinnaholic, founded by Florian and Shannon Radke, represents a culinary fusion of Florian’s expertise in brand marketing and Shannon’s passion for baking. Situated in Berkeley, California, their journey began with a shared desire to revolutionize the dessert scene by offering delectable treats that catered to a diverse range of dietary needs. Florian’s background in brand marketing provided the strategic foundation necessary to conceptualize and establish Cinnaholic as a standout brand in the competitive dessert market. Meanwhile, Shannon’s baking skills, honed through years of experimentation and refinement, ensured that the product itself met the highest standards of taste and quality.
The inspiration for Cinnaholic struck when the couple recognized a gap in the market for indulgent desserts that were not only delicious but also inclusive of dietary restrictions. Motivated by a personal commitment to healthier living and a desire to cater to individuals with allergies and dietary preferences, they embarked on a journey to create a unique dessert experience. Their innovative concept of customizable, gourmet cinnamon rolls, free from dairy, eggs, cholesterol, and entirely vegan, stemmed from a desire to offer guilt-free indulgence without compromising on flavor.
With meticulous attention to detail and a commitment to using high-quality ingredients, they set out to redefine the traditional cinnamon roll, making it accessible and enjoyable for all. Drawing from their respective strengths and shared vision, Florian and Shannon embarked on a mission to bring Cinnaholic to life, transforming it from a concept into a thriving business. Through dedication, creativity, and a passion for creating exceptional desserts, they have positioned Cinnaholic as a leader in the dessert industry, offering a truly unique and inclusive culinary experience.
The Product
Cinnaholic offers a delightful twist on the classic cinnamon roll, providing a customizable and gourmet experience unlike any other. Each cinnamon roll is freshly baked to perfection, boasting a soft and fluffy texture with a rich cinnamon flavor. What sets Cinnaholic apart is its extensive array of options for customization. Customers can choose from over 30 frosting flavors and 30 toppings, allowing them to create their own unique combinations to suit their tastes and preferences.
The product’s versatility makes it suitable for various occasions, whether it’s a sweet treat for breakfast, a decadent dessert for a special occasion, or simply a delightful indulgence any time of day. Additionally, Cinnaholic’s commitment to using high-quality, plant-based ingredients ensures that every bite is not only delicious but also free from dairy, eggs, cholesterol, and entirely vegan.
Cinnaholic’s products can be purchased at their retail locations, where customers can enjoy an immersive and interactive experience as they customize their cinnamon rolls. Additionally, the company offers a small e-commerce store to fulfill online orders, catering to customers who prefer the convenience of ordering from home. Prices vary depending on the size of the roll and the selected toppings, with the average roll costing around $5.50.
How It Went
The company’s position before Shark Tank
Cinnaholic has demonstrated strong growth and a solid position in the dessert industry since its inception. With their flagship store located in Berkeley, California, the company has garnered a loyal customer base attracted to its unique offerings and commitment to accommodating various dietary preferences. The founders, Florian and Shannon Radke, have successfully positioned Cinnaholic as a leader in the vegan dessert market, capitalizing on the growing demand for plant-based alternatives.
Partnerships play a significant role in Cinnaholic’s success, with the company collaborating with suppliers to source high-quality, plant-based ingredients for their products. Additionally, Cinnaholic has established relationships with wholesalers to distribute their products to other retail outlets, expanding their reach beyond their brick-and-mortar stores. The company’s customer base includes individuals with dietary restrictions, vegans, health-conscious consumers, and dessert enthusiasts seeking innovative and delicious treats. Cinnaholic’s commitment to offering dairy-free, egg-free, and vegan options has resonated with this diverse audience, contributing to its continued growth and success.
In terms of funding, Cinnaholic has primarily relied on revenue generated from sales to finance its operations and expansion efforts. The company has demonstrated profitability, with steady revenue growth and prudent financial management ensuring a healthy bottom line. Available capital is reinvested into the business to support initiatives such as opening additional locations and enhancing product offerings. Cinnaholic’s current structure likely includes a management team overseeing day-to-day operations, with Florian and Shannon Radke at the helm as co-founders and key decision-makers. As the company continues to expand, it may seek additional funding through investors or loans to fuel further growth and innovation.
The Negotiations:
During the negotiations on Shark Tank, Florian and Shannon Radke presented their company, Cinnaholic, seeking a $200,000 investment in exchange for a 20% equity stake. Robert Herjavec offered $200,000 for a higher equity stake of 40%, envisioning a shift towards an online shipping model to leverage the product’s appeal beyond physical locations. Kevin O’Leary proposed a royalty deal, where he would receive $1.20 per unit sold, dropping to $0.60 after recouping his initial investment.
Mark Cuban expressed interest in the online shipping model but ultimately refrained from making an offer. Robert’s offer stood out to the founders due to his understanding of scaling businesses and his willingness to invest in their vision. However, Kevin’s royalty proposal intrigued them, as it preserved more equity while providing ongoing support. After briefly considering Kevin’s offer, Florian and Shannon ultimately accepted Robert’s deal, securing $200,000 for 40% equity.
Despite Mark’s initial interest in the online shipping concept, he did not make a competitive offer. The negotiations showcased the founders’ adaptability and strategic decision-making, as they weighed various offers to secure a partnership aligned with their growth plans. With Robert’s investment, Cinnaholic aims to expand its reach and establish itself as a dominant player in the dessert market.
