The Profit - Hip POPs Update

Tonight on The Profit, Marcus Lemonis is in South Florida with hopes of making a deal with Hip POPs. Hip POPs is a gourmet mobile dessert truck serving handcrafted gelato bars that is owned by Anthony Fellows.  Anthony is looking to expand, but he is also looking for Marcus's help.  When Marcus arrives, he discovers that there are no processes or systems in place that would allow for franchising and that Anthony has borrowed money from family members for the business.

Let's take a look at some information related to Hip POPs as well as what kind of deal was made on the show.

News and Links Related To The Company:

• Here is the Hip POPs website and Facebook Page. 
• Here is the Hip POPs regular menu and catering menu. (Link)
• Their website also has links to all of the press they have received over the years. (Link)
• The main location is a food truck in South Florida, but they also have a franchisee in Dubai. (Link)
• Here are they Yelp reviews for Hip Pops, which are almost all positive and average a 4.5 star out of 5 rating. (Link)
• A court document from August 2013 details a court case where Pop Bars LLC is the Plaintiff and Anthony Fellows is the defendant.  It basically alleges that Anthony Fellows posed as a potential Pop Bar franchisee and then used information obtained in meetings to open Hip POPs.  You can read the whole document from the link above, but the highlights of it are:

• "On April 4, 2011, Fellows, through Hip Pops – then known as Cultured Investments LLC – allegedly submitted a Popbar franchising request to the company. Fellows was interested in taking Popbar’s cool appeal to warmer climates and thus expressed interest in opening a Popbar franchise in Southern Florida. On April 7, 2011, defendants executed a confidential disclosure agreement with plaintiff."
• "On August 22, 2011, Daniel Yaghoubi, a Popbar founder, travelled from New York City to Miami, Florida to meet with Fellows in order to discuss defendants’ interest in opening a Popbar franchise in Southern Florida. From September 8, 2011 through September 11, 2011, Fellows, in turn, travelled to New York City to meet with the principals of Popbar regarding his interest in a potential Popbar franchise in Southern Florida and to learn the workings of the Popbar System. During this visit, the parties entered into a confidential disclosure agreement whereby Popbar shared with defendants the Popbar System, including, Popbar’s recipes and formulas, specially designed equipment, systems and methods of making customized Popbar products, and ideas for Popbar food trucks."
• "After Fellows’ visit, defendants sent Popbar a Letter of Intent, which offered franchising terms that were a fraction of the typical Popbar franchising terms. Popbar rejected the proposal."
• "Defendants thereafter allegedly used the information gained while Fellows was in New York to open their own business in Southern Florida, namely, Hip Pop, LLC"
• "In December of 2011, Popbar’s Brazilian machinery manufacturer informed Popbar that Fellows had inquired about whether the manufacturer supplied Popbar's machinery. Defendants allegedly then purchased certain other machinery from this manufacturer, the same machinery defendants learned about when they visited New York. In May of 2012, defendants launched their business, using the Hip Pop food truck to sell frozen Gelato on a stick in Southern Florida."
• "The complaint alleges that defendants did not have any intention to open a Popbar franchise in Southern Florida, and instead sought only to gain Popbar’s valuable proprietary information to start a competing business."
• I was unable to find any detailed updates on that case, but here is a document from 2016 that says Pop Bar and Anthony Fellows reached a settlement over a trademark.  It states, "Stipulation of Settlement and Order of Dismissal, case terminated."
• A June 2015 article about Hip POPs franchising states, "Franchise candidates should have a minimum net worth of $150,000 and liquid assets of at least $75,000. Franchisees can expect the total cost of investment for one HipPOPs operation to be approximately $245,175 to $351,450. The initial franchise fee is $25,000, but if franchisees elect to purchase multiple franchises at the same time, the fee is reduced"

The Deal From The Episode Plus Post-Show Updates (this will be updated continually):

• The Deal - Initial deal - $100,000 for 50% of the business and Marcus is 100% in charge. Deal was reworked after Marcus found out Tony's ex-wife had equity and the percents were now: Marcus 40%, Niva 20%, Tony 40%.
• Marcus Lemonis ended up walking out on the deal after they agreed they it wasn't working for both sides.
• The Hip POPs website lists the upcoming schedule for the Hip Pops food truck.  For the upcoming weeks it looks like the Food Truck is in operation about 2 nights per week. (Link)
• Hip POPs is still franchising and franchisee information and applications can be found here.
• UPDATE - Hip POPs posted this on Facebook after the show aired - "Big thank you to CNBC, The Profit and especially Marcus Lemonis for choosing HipPOPs to appear on the show. Through this experience, I learned a lot about myself, my business and being an entrepreneur. Even though a partnership with Marcus didn't happen, my team and I are extremely grateful to Marcus for all of the advice. We've already begun to apply many of his suggestions and the business is already responding and growing. 2017 may be our best year yet! #lessonslearned #thePROFIT #marcuslemonis #stillpassionate"

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