Dulce Frida: $7,500 Per-Unit Revenue-Share to Test Marketing for a Mexican Italian-Ice Shop

Italian ice. It’s sugar and water, but is it a good business? What are what are margins look like? $10 retail. What are your cost? — Cost is very low. This is a machine that makes the magic. — How much was this one? — About 25 26,000? — Yes. — 26,000 just for this? — Yes. It’s expensive to open a brick and mortar and uh I found out the hard way. — Mhm. What was total revenue in 2023? — I will say around 130. — When I meet the owner, if I love their vision, I might do a deal on the spot. Look, I came here to make a deal, but I’m not getting necessarily an ask. I don’t see a clear vision of how you would deploy the capital to drive growth. — You’re the investor. I want some ideas from you as well. — Last shot. Do you have an ask for me? I love this logo, by the way. Street FA. And he’s got a great he’s got great branding over here. Our Italian ice is as cold as your ex’s, but delicious like your crush with this nice big old spoon. All right, let’s go in here. — Francisco. — Francisco, good to meet you. — How are you? — Nice to meet you. Okay. And who’s this? — This is uh my daughter, — Fernandanda. Fernanda, — what do you sell here? — So, we have uh what we call Italian ice with a fusion of Mexican ice cream. — Okay. — Uh everything is fruit and water based. — Fruit and water. — Yes. On the vegan side, you know, no dairy. The way we started was with this lemonade stand. — Mhm. — Is that Is that who I think it is? In March of 2020, uh like everybody else, co made me do it. — Yeah. — So I I used to be in marketing and advertising, uh experiential marketing during the big events, but uh all the travel stop. So I come home March 15th and uh she uh she tells me she wants a puppy and I can’t buy it because I have no job. — Hernando, what kind of puppy? — Pomeranian. — Oh, she knew instantly. So I built her that lemonade stand uh and uh around May June uh we started selling lemonades. So we will sell that for a dollar. — Come on Fernanda, you must remember this. How many did you sell? Do you remember that summer? — 1,200. — You said about 1,200. Have you made that kind of money before — at that time? No. — Now you’re rich, huh? — Francisco, what is your bestselling product? I want to order something. — My favorite is the coconut and the passion fruit at the moment. So, these are the the sizes, — okay? — Uh, one scoop, three scoops, four, five, six. You can combine from the small and up. — And these are our prices back here. — Okay. I’ll do a tiny scoop of the passion fruit and the coconut. Fernanda, do you sell anything else besides these cups? Are there any other products? — Uh, we have lemonade and mango. — Do you know which one of these is your best seller? — Probably pomegranate. — Pomegranate. Can I order one of those, too? Where do you buy Do you buy this wholesale or where do you get this from? — Uh, we make it. — Oh, you make it. make it in-house, you know. It’s uh we make it here at the store. All the flavors. — And what is this, Fernando, that you brought up? — That’s the pomegranate almond. — Oh, this is the lemonade. This is huge. — Yeah, — we have a smaller size. — You have no I’ll do this one. This is good. This is your You should always be upselling, right? What does this cost? 10 bucks. — 10 bucks. — Okay. And this is It’s Italian ice. Traditional Italian ice. — Correct. — No secret family ingredients or it’s just Italian ice. — Uh the Mexican touch, you know, that’s it. — This tastes delicious. So, with this one, we use cream of coconut, — uh, water and sugar, of course, but uh, no dairy whatsoever. And you would think there’s dairy because of the softness and the cream in it. — It’s delicious. — Thank you. — You know, one of those tiny ones cost $6, I think, right? — And how what are your total costs there? — I will say 150. — $1.50. Okay. Interesting. — Okay. So, can we see how the sausage is made? Can you walk through the process? That’s fine. This is where we make the lemonades. — Mango, blueberry, watermelon. — Watermelon. Yeah. She makes about 160 lemonades a day by herself. — 160? — Holy mackerel. Does he pay you? Well, — yeah. — Well, — she’s taken care of. — She’s taken care of. That’s great. What are the separate ingredients look like? Is it? So, it’s water, obviously. — Water, lemon, and sugar, and puree. — So, this end product, which retails for $10, is basically a combination of this plus this mango puree plus water. — Okay. What are your costs? — Uh, cost is very low. — I was going to say I’m looking at things. cost is very low, you know. Uh uh we’ll say less than a dollar. — Mhm. Less than a dollar. — What’s the plastic cost? — Uh the plastic uh we pay about 60 70 cents each. — How many of just the lemonades would you estimate you sell in in an average month — total with the brick and mortar and the truck? I will say about 600 700. — 6700. Wow. — Businesses and maybe a little bit more. — And there’s a truck as well, it sounds like. — Yeah, we have two trucks. — Okay. Do the trucks do more volume than this physical location? — Yes, because we’ve only been open here 4 months. This is the machine that makes the magic. Okay. — You know, it’s uh one of the small ones. — I cannot afford at the moment to get a big one to make more production. — And how much was this one? — Oh my gosh. That’s like a small It’s a small car. What are you doing uh per month right now? Just in terms of volume of just ignore the lemonades, just the ice. — 300 gallons in a week. I will say about 1,200 a week. — 1,200 a week. — A month. A month. I’m sorry. About 300 a week. Yeah. 1,200 a month. Yeah. Okay. Or less. Like I said, this one is really slow at the moment — and I’m hoping that it picks up fast. — Did you buy the building or you’re renting? — No, I’m renting now. We’re renting. So, it’s a 2-year lease. Again, 4 months into into this building and uh we have a 2-year lease. Hopefully, you know, we pick up and we extend it. — But, you know, time will tell. — You’re in a really good location. Are you comfortable sharing how much you pay for the rent for a month? uh close to six. — Six a month. So when we think about 1,200 of just those cups I tested when I walked in, you said each of those cups was six bucks. — Let’s make the math easy and say it’s a,000 a month times 6. That’s 6,000 in sales, but your rent you said here is just 6,000 there. So are you sort of underwater right now? Are you trying to get back to break even on the physical location? — You know, I’m not I’m at the point where I’m even I’m not worried about finances right now. — Uh yeah, I wish they were better, but it’s okay. You know, I know that better times will come. Can you maybe sum up where the business is today in terms of monthly revenue just all in across all food trucks everything? — Close to 25. — And is that sort of ahead of what you expected or slower than you expected? — It’s lower. I I expected this to be a little bit uh faster. Yeah. But it’s not happening. Like I said, the truck is what what’s bringing — It sounds like it. — So 2023, I I was I was actually looking at a truck. So I uh I went to a friend and I said, “Hey, I need a truck.” Uh they had this is in Wisconsin. — Mhm. I went to Wisconsin together. — What was total revenue in 2023 — or a range? — I will say around 130. — Why do you think you did so well? — Again, you know, I think we have good product. I trust 100% of my product. — What What did 2024 close out revenue-wise? — Uh 175. — So, you’re still growing — both trucks. — This is great. You’re still growing. So, 135 now up to 175 in 2024. This is a big decision on brick and mortar. It’s expensive to open a brick and mortar and uh I found out the hard way. — So, um — Well, you said you have a 2-year lease at 6,000 a month. — At 6,000 a month. Yeah. — What other expenses went into opening the place we’re sitting right now? — I spent about maybe 40 — 40,000 all in. Okay. — All in. — So, why stop doing what’s working? These food trucks are crushing it. What What was the thesis going into the brick and mortar? — So, increase our offerings that we cannot do in the truck like like a mainstream churros, corn, coffee. We have the machine here. We want to do that. Another one is that with the trucks, we closed from uh November to March because of the weather. — It’s just too cold. People don’t buy or — correct. Yeah. — Really? — You have this obviously current brick and mortar. You want to obviously launch additional products. Um sort of what’s the next step and why haven’t you done it already? Is it cash? Is it something else? Is it just timing? — Uh people, you know, staff. Say on a given Saturday, that’s our busiest day, Saturday, Sunday. — And we have one person. It’s really hard to keep people and find hard workers. No one’s going to work as hard as you, right? No one’s going to hustle as hard as the lady on the wall, right? Why don’t we have people in here already on the weekends? What’s preventing you from doing this right now? — Oh, because we we don’t have the the flow of customers at the store. — That’s why. — Well, let’s let’s talk more about that then, right? So, so, um, what have you tested to get people here? What has worked? What are you going to test in the next 6 months to try and get more people here physically? — The only things that I’ve tested is the marketing on social media. So, — what does that mean? Paid paid marketing. Uh, no, just postings for my son and I. Uh, I have the guy that did my website working on our SEO and all that. — Okay. So SEO will be What is Do you know what search term you’re optimizing for for the SEO? So — I think it’s Google. — Uh, Italian ice cream. — It has to do with the dessert. Italian ice cream, Mexican ice cream, neafa, which is a term for Spanish. Uh, desserts. You know, — SEO right now in the age of AI is really difficult. Most people used to find local businesses like this by doing a Google search or Google reviews or they open up their maps and they see the maps. But now what’s happening is a lot of people are using the LLMs, the language learning models. And what that means for you guys, it’s, you know, people are going to chat GPT and saying Mexican or Italian ice in Austin, Texas. Where should I go? And if you don’t show up one, two, or three, you basically don’t exist. There’s probably other competitors that do Italian ice in Austin, right? — Uh there is, but it’s more more of the dairy based uh ice cream around the area. I have like maybe four or five. Like if someone searches right now on YouTube, they go to open up YouTube, they search in Chat GPT. What are the top three Italian ice shops in Austin, Texas? — Please do so right now. Whoever is watching, — will you will you show up? — Yes. Yeah, I think we’re one and two. — I mean, that should be driving a lot of traffic here. You’re in the number one spot for that search term and that search volume is high. It should be bringing a lot of traffic. — Correct. But it’s not. So, I’m either doing something wrong or something’s going off. — Uhhuh. Yeah. — What do you think’s going on? — I have no idea to be honest with you. If I need to spend more money on marketing and and uh prepaid ads, paid ads, I will do it. You know, — paid media. Have you tried any paid ads on Facebook or Google or anything like that? — No, I was doing it on Next Door. Next door is very limited. — Why I haven’t done certain things is that because I’m I’m doing everything. I’m number one main shop per se. I make the product, I do the schedule, I you know, I’ve been here seven days a week and I’m I’m tired to be honest with you. But — if this was operating and it was busy all the time, what do you think the revenue is you could generate just from this location? — I’m looking at 7 to 10,000 a week. — A week. — Okay, got it. — If not more. — So 40,000 bucks a month, — if not more. I’ve seen it in the truck. — In the truck we uh in a month we do the most we’ve done was 45 in a month. — If you could wave a magic wand and have additional capital and and you felt if you had that capital the business could grow. How what is the capital amount and where would you spend the money? — If we’re talking about a check and doing something to make it work, franchise out. Find find interest parties to to franchise. — But you have to make this location make money in order to franchise first cuz this is the model. I mean, no one’s going to sell it as good as you guys. So, this is going to be the best performing spot — and the trucks. — Yeah. And the Okay. So, you think you’d franchise out the truck, not brick and motor, trucks. — Trucks. — Do you have people interested in franchising a truck for the Hamilton pool? I had one in Khen, but they didn’t have the income. — That was number one. — Well, look, I mean, look, I’m I’m not in the business. I am do want to deploy capital. I’m trying to find some some sort of angle here. I’m not necessarily getting, you know, hey, Nathan, if we put in 10,000 bucks here, here’s the return. — Uh, if we can open another uh brick and mortar. — Why not? — Well, I wouldn’t do that because this one’s not making money yet, right? So, like my only focus would be how do we get more feet coming through that door and selling more of these high margin $10 lemonades? you have really, really good margins on these things. Really good margin. Um, so what I’ll do is I’m going to make you an offer. — I’ll do a $5,000 check uh in exchange for uh 30 cents on these guys on every sale and a dollar on these guys on every sale until I’m paid back my 5K plus an additional 1,500. So until I’m paid back 6,500. The thesis there is that you could take the $5,000. We could spend it together on ads or another growth channel to get more feet coming through the store. If that test works, the fund’s very big. We can write a much larger tech and do more of that strategy. But until we identify the strategy that’s going to drive growth, we don’t want to put too much money in. — Hold on. I’m doing some math. — Talk out loud. Let let me hear what you’re thinking. But if we do 7,500 at that at that percentage, that will work because that will cover at least two years of uh marketing and advertising or going through the different channels. — Mhm. Okay. So, you’re asking for a $7,000 500 check and increase for my 5K offer. But then, as I’m taking sort of as you’re paying 50 cents per sale here and a dollar per sale here until I make back how much money? — Seven. — It’s $7,500 for us to invest deeper into marketing. I’m going to get paid back 30 cents per tiny scoop where the margin’s already pretty good. You’re taking $4 of margin to the bottom line on this one. And a dollar per lemonade sold until I make back my $7,500 plus an additional $1,500 for a total return for me of $9,000. And if that works, Francisco and Fernanda, we can do a much bigger deal together. What do you think? Do you like this deal? — Yeah. Yeah, it sounds sounds good. — All right, so we have a deal. — All right, Francisco. Appreciate you, man. I’m excited about it. Fernanda, congratulations on what you build. This is so cool. — Are you excited? — All right. Very cool. This is great. — If you’re looking for capital, go to founderpath.com and create an account for free. 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