Wine and Design Painting Classes
DEAL
EPISODE SUMMARY
🕓 Air Date: May 12, 2017
Asking For:
$500,000 for 10%
Investor:
Kevin O'Leary
Deal:
$500,000 for 10%
PRODUCT SUMMARY
Wine & Design is an art studio where people can enjoy painting while socializing in a party atmosphere, offering classes for various events like bachelorette parties.
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Background Story
Harriet and Patrick Mills, the dynamic husband-and-wife duo behind Wine & Design, bring a unique blend of creativity and business acumen to their venture. Hailing from Raleigh, North Carolina, the couple embarked on the entrepreneurial journey inspired by a memorable experience in Charleston, South Carolina, six years ago. The spark ignited when they attended a similar art concept and found joy in painting while enjoying a social setting with friends. This lightbulb moment led them to believe they could create something even more exceptional. Patrick, leveraging his entrepreneurial spirit, and Harriet, with a passion for art, decided to turn their vision into reality.
The concept was simple yet ingenious — a fusion of art classes and social gatherings. They envisioned a place where people could escape their daily routines, put down their phones, and immerse themselves in a creative process while savoring a party atmosphere. In just 60 days, Wine & Design was born. The company rapidly evolved from its humble beginnings to an impressive franchise model with 74 locations across 14 states within five years. The Mills couple shared a commitment to making art accessible to everyone, irrespective of their artistic background, emphasizing the therapeutic and enjoyable aspects of the experience.
The success of their venture speaks volumes about their ability to translate a personal passion into a thriving business. Harriet and Patrick’s journey embodies the American Dream, showcasing the transformative power of entrepreneurship. Their story highlights not only their creative vision but also their strategic approach to franchising, creating a community of women-owned businesses that thrive in a flexible and supportive environment. The Wine & Design journey stands as a testament to the couple’s dedication, turning a simple yet innovative idea into a nationwide success.
The Product
Wine & Design offers a unique and immersive experience where participants can unleash their creativity while socializing in a vibrant atmosphere. The core product is art classes, where individuals, guided by a professional instructor, engage in step-by-step painting sessions. These classes cater to various occasions, including bachelorette parties, providing a blend of artistic expression and social enjoyment.
The process begins with participants donning aprons and gathering around canvases, creating a lively and communal setting. The painting sessions typically last two hours and are accompanied by music, drinks, and a party ambiance. The product’s versatility shines through, appealing to both seasoned artists and those without any prior artistic background.
Wine & Design stands out by offering an accessible and enjoyable art experience at an affordable price of $35 per person. The classes are structured to be inclusive, encouraging participants to have fun and unwind while creating their own masterpieces. The founders emphasize the therapeutic and stress-relieving benefits of the experience, positioning it as a unique form of entertainment that goes beyond traditional social activities.
How It Went
The company’s position before Shark Tank
Wine & Design has demonstrated robust and impressive performance since its inception, establishing itself as a major player in the art and entertainment industry. The company’s health and position in the market are marked by rapid expansion, boasting 74 franchise locations across 14 states within just five years. This growth not only showcases the popularity of their unique concept but also positions Wine & Design as a key player in the industry.The company’s success is attributed to its franchise model, which has allowed them to create a network of 74 locations, all of which are women-owned.
This unique structure not only contributes to the diversification of business ownership but also aligns with the founders’ vision of providing flexible business opportunities. The franchise fee, set at $25,000, has facilitated this growth, providing a pathway for entrepreneurs to join the Wine & Design family. In terms of funding, Wine & Design primarily relies on the revenue generated through its franchising model. The franchisees contribute through a 6% royalty fee based on gross revenue. The company anticipates around $10 million in gross revenue for the year. This figure translates into approximately $600,000 in cash from royalties alone, underscoring the financial stability of the company.
The company’s customer base is diverse, encompassing individuals seeking a creative outlet, groups celebrating special occasions such as bachelorette parties, and aspiring artists looking for a social and supportive environment. Wine & Design has successfully carved a niche for itself by providing an inclusive and enjoyable art experience accessible to a wide demographic. In terms of profits and losses, Wine & Design has experienced significant profitability, with reported profits ranging from $350,000 to $400,000 annually. This impressive financial performance, combined with the founders’ vision and strategic approach, positions the company for continued success in the competitive art and entertainment market.
The Negotiations:
The negotiations for Wine & Design in the Shark Tank unfolded as a dynamic interplay of offers, considerations, and strategic decisions. The pitch began with Harriet and Patrick Mills seeking a $500,000 investment for a 10% equity stake in their flourishing art and entertainment franchise. Kevin O’Leary was the first to make an offer, proposing $500,000 for the desired 10% equity with an additional $350,000 as a line of credit at 12%. Robert Herjavec, sensing the potential of the business, presented a different approach. He offered the full $500,000 but in exchange for one-third of the business.
Herjavec highlighted the long-term benefits of his structure, particularly emphasizing the challenge of pulling money out of the business and the tax implications associated with it. This created a pivotal moment for the founders, who found themselves torn between O’Leary’s offer, which promised a quicker return on investment, and Herjavec’s offer, which involved a higher equity stake but potentially more significant benefits in the long run. Ultimately, Harriet and Patrick chose to accept Kevin O’Leary’s offer. The decision was influenced by O’Leary’s commitment to leverage his social media presence for marketing and potential synergies with his existing wine business.
The negotiation showcased the delicate balance between immediate returns and long-term strategic partnerships. The founders’ confidence in O’Leary’s ability to propel Wine & Design to new heights through effective marketing and collaboration was a key factor in their decision. The negotiation process encapsulated the challenges of valuing a successful franchise business and the varying perspectives the Sharks brought to the table, ultimately resulting in a deal that aligned with the founders’ vision for the future of Wine & Design.
