Nuchas is a company that currently operates food kiosks and stands and wants to expand their wholesale manufacuring of a South American staple: empanadas. The entrepreneur behind Nuchas is an immigrant from Argentina who came to the United States nine years before appearing in the tank and he's passionate about brining better empanadas to Americans.
Nuchas, at the time of airing, was based out of New York, NY. It operated a kiosk in Times Square as well as two other locations in the city. They feature flavors such as beef short rib, shrimp gumbo, and of course, chicken.
Each of the empanadas is made by Nuchas, in an 800 square foot facility rather than utilizing a co-packer. Unfortunately, this facility is described by the entrepreneur as being at capacity.
For the end of the year in which this deal aired, Nuchas was predicting to earn $5,000,000 in sales, $2,000,000 of that earned through retail sales at the company's locations and an additional $3,000,000 from wholesale sales. Each empanada retails for between $4 and $5 while only costing $0.84 per item to produce. Empanadas wholesale for $1.52 per item. The entrepreneur predicts that Nuchas will earn a $750,000 profit by the end of the year.
In the following year, Nuchas expects to book $12,000,000 in sales and make $3,000,000 in profit. However it is revealed that the retail side of the business only breaks even but that he thinks he could increase margins from 44% to 55% with scale. Supposedly, the business has $100,000 in cash reserves in the bank.
Despite these rosey numbers, the entrepreneur says that Nuchas needs more money to expand as demand is high. Nuchas wholesales to Whole Foods and private labels for other retailers. In addition, the company is in talks to provide empanadas to airlines for meals as well. The entrepreneur would like to expand the current production rate from 100,000 units produced per week to 300,000.
Daymond makes the first offer, giving the entrepreneur the $2,000,000 but in exchange for 25% equity instead of the 8% that was originally offered. The entrepreneur declines the offer, saying that it's too much equity and Daymond responds that he thinks buyers can easily go elsewhere.
Barbara comes out with an interesting deal, offering $1,000,000 for a buyout of the cart and kiosk business and then the remaining $1,000,000 as debt on the wholesale business. Unfortunately, the entrepreneur doesn't want to lose his trucks and counter's Daymond's offer down to 10% equity but Daymond isn't interested and goes out.
Barbara, really liking her own idea, keeps pushing the entrepreneur to sell his retail business as a means of financing his wholesale business. But when the entrepreneur counters her with an 80%/20% ownership split on the retail business in exchange for $2,000,000, Barbara decides to decline and the entrepreneur is forced to leave the tank without a deal
This deal aired on Episode 10.18.