Funtime Express on Shark Tank
Instead of walking into the Shark Tank, these entrepreneurs are carted into the Shark Tank in a little train, which is equipped with all the bells and whistles – flashing lights, the infamous deep-toned horn, and of course, a caboose. The passengers of the Funtime Express are a few children, as well as the partners and founders of Funtime Express, Stan Krozel and Kevin Ullery. They are from Chicago, Illinois, and have come to the Shark Tank seeking a $125,000 cash investment in exchange for a 20% investment stake in their business.
The couple starts by giving the Sharks a story; think back to a simpler time, when the Sharks in their childhood would be taken along by mom and dad to the mall. They were dragged from store to store, stuck in an endless loop of rejection and boredom, and the kids would want an activity to go do – typically, the children were given money to go right the merry-go-round of the mall (small amusement parks were popular with public areas such as malls or even auto-malls), and the Sharks would find themselves on a dirty plastic horse, spinning around in cricles on a journey that inevitably led nowhere. The malls offer the same, old attractions, but fortunately, Stan and Kevin have broken through the mould and created the Funtime Express.
The Funtime Express is a trackless train ride for all ages, and the train will actually travel throughout the entire mall; this also gives dads a chance to relax and take a break, and moms a chance to windowshop. The trains are built and equipped to handle any event or environment, such as parks, amusement parks, sports arenas, and even private parties.
Robert asks about the details of the business, and so far, Funtime Express has five operational trains and a sixth was actually ordered online 2 weeks ago, prior to filming this episode. The Funtime Express train that Stan and Kevin actually rode on will serve as the 7th Funtime Express train, whenever an appropriate order comes in and will accept a lower price for the ‘used product’ (even though it was literally just used to demonstrate how the Funtime Express works on Shark Tank).
Kevin puts all of this to the side, and asks how he, as the investor, is going to be making money. From Monday to Thursday, the Funtime Express is like one of the typical more retailed business which makes some profit but most of that is revenue which will be re-invested into the business, but on Friday and Saturday, there is a possibility of making up to $1000 per day. Kevin seems unimpressed by this, but Lori stays focused and asks what the cost to ride is. The cost to ride the train is $3, which can be paid in either cash or through a credit card.
Mark asks about the capital expenditures, which is the largest expenditure of the business, which turns out to be the train models; each train costs around $37,500 to make. 6 to 8 months is actually the projected time to pay off the Funtime Express, which is really an unimpressive overhead for an investment that will easily last 3 to 4 years before needed additional capital to maintain. Robert asks about how the deals with malls work, and Stan starts by saying that the malls are more like individual dealers and are negotiated with on a per-terms basis, meaning each mall can receive a different deal.
Daymond asks about sales figures for the past year, and Stan says that when Funtime Express started in 2011, they sold 31,000 tickets, which ended up equalling out to about $106,000 in gross revenue – money that the business made, not reclaimed. Net profits were about $27,000, but in 2012, those numbers doubled; in 2012, they went up to about $216,000 in gross revenue, and close to $80,000 in net profits – the Funtime Express trains appears to be disgusting profit machines that will pay for themselves quickly and continue to generate their owner more money. The next year, Stan says, with all 7 trains operational, they would be estimating close to $1 million due to the projected number of 300,000 tickets being sold.
Lori says she is curious where the couple got the number $3 for each ticket from, and Stan says that appears to be the sweet-spot for the ticket sales; in November through December, that can be boosted up to 2 tickets for $5, and 3 for $10. They have done this in malls, and Mark interrupts – this is excellent, he says, and the ability to change the prices in order to reach maximum seating is outstanding (remember Roller Coaster Tycoon? That game has an option which allows you to adjust your ticket pricing for “maximum seats filled,” which is a luxury that the Funtime Express has). Variable pricing is the way of the future, Mark says, but the business is not really scale-able and it would be very tough to grow the business.
Robert points out that they can just go to more malls, but the more malls that the Funtime Express is located in, more people are going to be needed to manage the trains, and people are going to be needed to manage those managing the trains, and many many more chains which will inevitably cut into the Funtime Express’s profits. Even though in 20 years, the individual operator may receive a nice income that is stable, the reality is that there doesn’t appear to be a whole lot of cashflow into the investor and owner’s hands. This makes the business more difficult to control long-term, and Mark is the first Shark out.
Daymond says that he grew up riding a lot of trains as a child, but it was an “F-train” so it wasn’t really the type of train he grew up with (Daymond grew up in New York City, which isn’t known for having the best metro in the United States) yet he wants to believe in the business. However, Daymond says that he took his children onto a similar ride at a local state fair, but by the time the train ride was finished, his kids had been playing online poker on their smartphones and couldn’t care less about the ride. Daymond says that it isn’t a model for him, and he is the next Shark out.
Kevin says that every Shark is struggling with scaleability and the actual return on their investment; Mark breaks this down into common speak, and says that Kevin is essentially saying that the couple behind Funtime Express came into the markets too early. It’s one of the deals where Kevin is tempted, but the model is too small; there is no “world domination” of the malls, and Kevin tends to be a larger-scale kind of investor. He says that he gets it and it’s interesting, but ultimately, everything about the business is small – the train is small, the deal is small, and the profits are small. When the two begin to ask for any other ideas, Kevin just points out that he likes the idea behind it and agrees that there can be money made in the process, but it is just too small for him to ultimately care; he has a large, padded wallet, and this investment would barely add anything to his portfolio.
Robert speaks up next, saying that he is proud of the business and loves it, but ultimately, he has to advise against finding an investor – he recommends that the couple stay invested in their own business and keep grinding and make it grow through their own work, since the steady stream of income will pay off a dozen times more than if they find an investor.
Kevin is still not out, however, and says that his quick calculations mean that the Funtime Express is making about 20% of its money as gross profit. However, it is just too small for him, he continues to say. In the end, Kevin exits the deal and makes his mind up.
Lori says that she is thinking about the business and that the couple are bringing something different to the malls that are fun for kids, and ultimately it is a nice feel-good business. Stan actually revises their offer and terms; they will offer up 100% of the gross profits in order to repay the investment quickly. Lori says she finds this interesting, and will offer half of what they are asking for, but they need a second Shark. Lori asks Mr Wonderful, Kevin, if he would come in, since he has the connections and he fits. Kevin steeples his fingers, leans back, and has a hard think – Daymond points out that “he’s wrestling with it.”
Kevin gives the offer of $125,000 for a 20% stake with the given condition, and he will go in with Lori. The two accept the offer, finding themselves partnering with Kevin and Lori for the Funtime Express.
Funtime Express Now in 2018- The After Shark Tank Update
All aboard the Fun Time Express! The Fun Time Express has moved on from being just a train into being a full corporation; Fun Time Productions, LLC, “is a trackless train rental company … with two top of the line trains to choose from.” Fun Time Express has focused on the local Appalachian area, serving the states of Kentucky, Indiana, Ohio (which readers want to split a Funtime Express ride with me?), West Virginia and Tennessee. In addition to focusing on only a limited area, Fun Time Productions now also has an additional sister train to the Funtime Express.
The Bella Tori Coastal Express is the more recent model, which is designed to look like the older trains of the 19th into the 20th century. Despite the dated appearance, the Bella Tori Coastal Express is a completely electrical train and has been equipped with more features than the standard Funtime Express, boasting a bell, music, smoke and a PA system.
Fun Time Productions trains must now be booked, rather than purchased. There is a minimum of 2 hours per rental period, with the Fun Time Express costing $250 per hour while the Bella Tori costs $250 per hour. However, these prices do not take into consideration the $1.75 per mile fuel surcharge that will be required in order to transport the train from Brandenburg, Kentucky, to wherever you wish to have a Fun Time Productions train.