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In this deep dive, we explore the meteoric rise of Mr. Beast Burger, the innovative fast-food chain launched by YouTuber James Donaldson, AKA Mr. Beast. From doling out free burgers paired with dollar bills to selling their millionth burger in record time, this chain seemed unstoppable. However, with fame came unexpected challenges, leading to public spats, lawsuits, and a question on the efficacy of influencer marketing. Dive with us into the story of how a potential billion-dollar empire came to face its biggest hurdles. Join us for this roller coaster journey, and let's uncover the story behind the headlines.
0:00 - 2:52 Intro
2:53 - 6:52 Beast Burger
6:53 - 10:24 Countersuit
10:25 Limits to influence
#wallstreetmillennial #beastburger #mrbeast
Check out our second channel Broken Business Models where we discuss unusual or otherwise suspect businesses that may be unviable: https://www.youtube.com/ @BrokenBusinessModels
Email us: Wallstreetmillennial @gmail.com
Check out our new podcast on Spotify: https://open.spotify.com/show/4UZL13dUPYW1s4XtvHcEwt?si=08579cc0424d4999&nd=1
All materials in these videos are used for educational purposes and fall within the guidelines of fair use. No copyright infringement intended. If you are or represent the copyright owner of materials used in this video and have a problem with the use of said material, please send me an email, wallstreetmillennial.com, and we can sort it out.
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Buddha by Kontekst https://soundcloud.com/kontekstmusic
Creative Commons β Attribution-ShareAlike 3.0 Unported β CC BY-SA 3.0
Free Download / Stream: http://bit.ly/2Pe7mBN
Music promoted by Audio Library https://youtu.be/b6jK2t3lcRs
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In this deep dive, we explore the meteoric rise of Mr. Beast Burger, the innovative fast-food chain launched by YouTuber James Donaldson, AKA Mr. Beast. From doling out free burgers paired with dollar bills to selling their millionth burger in record time, this chain seemed unstoppable. However, with fame came unexpected challenges, leading to public spats, lawsuits, and a question on the efficacy of influencer marketing. Dive with us into the story of how a potential billion-dollar empire came to face its biggest hurdles. Join us for this roller coaster journey, and let's uncover the story behind the headlines.
0:00 - 2:52 Intro
2:53 - 6:52 Beast Burger
6:53 - 10:24 Countersuit
10:25 Limits to influence
#wallstreetmillennial #beastburger #mrbeast
Check out our second channel Broken Business Models where we discuss unusual or otherwise suspect businesses that may be unviable: https://www.youtube.com/ @BrokenBusinessModels
Email us: Wallstreetmillennial @gmail.com
Check out our new podcast on Spotify: https://open.spotify.com/show/4UZL13dUPYW1s4XtvHcEwt?si=08579cc0424d4999&nd=1
All materials in these videos are used for educational purposes and fall within the guidelines of fair use. No copyright infringement intended. If you are or represent the copyright owner of materials used in this video and have a problem with the use of said material, please send me an email, wallstreetmillennial.com, and we can sort it out.
ββββββββββββββββββββββββββββββ
Buddha by Kontekst https://soundcloud.com/kontekstmusic
Creative Commons β Attribution-ShareAlike 3.0 Unported β CC BY-SA 3.0
Free Download / Stream: http://bit.ly/2Pe7mBN
Music promoted by Audio Library https://youtu.be/b6jK2t3lcRs
ββββββββββββββββββββββββββββββ
In November of 2020, the YouTuber James Donaldson who goes by the name Mr Beast launched a fast food restaurant called Mr Beast Burger as a marketing gimmick. they gave away the burgers for free and gave the customers stacks of $1 bills and free iPads on the first day. Over the next 2 years, they opened up hundreds of locations across the US due to the popularity of Mr BEAST's YouTube channel sales initially Surge and they sold their 1 millionth Burger within just 3 months. Spending a few hundred th000 on a marketing gimmick is a small price to pay for creating a national fast food brand overnight.
In September of 2022, Donaldson claimed that he was offered $1 billion to buy his YouTube Channel and all the associated business and he turned down the offer. He thinks his businesses will be worth $10 billion in the future, specifically because of the success of the Mr Beast Bger and other similar branded products he's working on. However, over the next few months, Beast Bger starts to receive thousands of customer complaints complaining of undercooked meat, cold fries, missing ingredients, and late delivery. It got so bad that in July of 2023, Donaldson sued his business partner, Virtual Dining Concepts who operated the burger business.
He accused them of negligence and failing to police food quality which negatively affected the Mr Beast brand. In response, Virtual Dining Concepts Counter Su Donaldson claiming that he had breached their contract by making disparaging and untrue comments about the Beast Burgers which have caused the burger chain enormous Financial harm. So what happened? How did a brand that Donaldson once touted as his ticket to billionaire status end up being such a disaster? And what does this tell us about the limits of influencer marketing? One of the major keys to Mr BEAST's success is that he translates his videos into multiple different languages, allowing him to reach fans across the globe. With increasing globalization, it's more important than ever to learn a second language, but this can be a daunting task and it can be difficult to even know where to begin.
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Their lessons are just 15 minutes long and are designed to teach you enough for basic conversations in just 3 weeks. AO Espanol The best thing about Babel is that it doesn't feel like studying. The lessons are so intuitive it feels more like playing a video game. Fall is a season of learning whether you're heading back to school or just want to try something new.
Babel is the all-in-one tool to start having real conversations in a new language. They have a few different options to choose from, including a lifelong subscription, and you can get 60% off any of them by clicking the link in the description below. On top of that, any purchase is risk-free with Babel's 20-day money back guarantee. So sign up for Babel Now and let us know in the comments what language you're planning to learn in September of 20120 James Donaldson's company Beast Investments LLC signed a contract with a company called Virtual Dining Cono Steps. Their plan was to create so-called ghost Kitchens. Existing restaurants would make Beast burgers and sell them on thirdparty food delivery platforms like Door Dash and Uber Eats. This model sounds great in theory. Making Burgers is pretty simple and many existing restaurants already have the necessary equipment.
They just need the Beast branded packaging and they can start selling Beast Burgers The consumers wouldn't even know what restaurant the burgers are coming from, they'll just see the Beast Burger storefront on the app and the burgers will be delivered to their homes under the agreement. James Donson Licensed the rights to his name and brand and agreed to help promote Beast Burgers on YouTube and other social media. Outlets Virtual Dining Concepts would manage the actual operations of Beast Burgers Thus, Donaldson himself had little or no direct control over how the burgers were made and sold. The Ghost Kitchen Arrangement allowed the business to grow rapidly and with minimal Capital expenditures.
Many restaurants were willing to sign on because it added a new Revenue stream at a time when their normal operations were hit hard during. Co. Worst case scenario, they don't sell many Beast burgers, but it cost them very little to start offering it since they already have a kitchen. In 2021, they expanded to 1,000 locations.
By the end of 2022, this had increased to 1,700 This included expansion globally to countries including but not limited to Canada Mexico the United, Kingdom Ireland and Australia all countries where Mr Beast has a substantial following. In early 2022, Beast Investments entered into another contract with Virtual Dining Concepts to open permanent branded brick and mortar locations although they only ended up opening one location at the American Dream Mall in New Jersey as late as July of 2022, it appeared that things were going well. Donaldson Tweeted that their partner restaurants had generated over $100 million of sales from Beast Burgers The majority of the revenue is kept by the restaurants themselves. This makes sense because they're the ones incurring all the costs and making the food at some point, probably in late 2022 or early 2023.
James Donaldson Became aware of poor customer reviews and negative media coverage of Beast Burgers speciic specifically related to poor quality, untimely delivery, and failure to process refunds in addition to anecdotal evidence of poor quality. Donaldson's lawsuit also claims that over half of Beatburger virtual restaurants have less than two stars out of five on Yelp Donaldson repeatedly expressed his concerns about quality control with Virtual Dining. Concepts The lawsuit alleges that not only did virtual Dining Concepts fail to implement any steps to improve quality control, but they continued expanding into new countries using Donaldson's likeness in advertising materials. Around the summer of 2023, Donaldson started disparaging Beast Burgers on social media, saying that he cannot guarantee the quality of the burgers cooked by independent Ghost Kitchens. If he had the ability to shut down the Venture, he would have done so a long time ago. but Virtual Dining Concepts isn't allowing him to do so. Additionally, Donaldson is accusing Virtual Dining Concepts of failing to pay contractual royalties despite making millions of dollars. Donaldson claims that he hasn't received a dime from The Venture One thing that's strange about this claim is that it seems to contradict a tweet that Donaldson posted in March of 2022.
He also said he's never made a penny from Beast Burgers which is consistent with the allegation in the lawsuit, but he said the reason he hadn't received a penny is because they reinvested all the money into advertising. If all the money was reinvested into advertising, how could Virtual Dining Concepts have made? Millions Either way, Beast Investments is now accusing Virtual Dining Concepts of serving inedible food and incompetent service. They further accused the Ghost Kitchen Company of filing trademarks in the EU Canada Mexico and other countries without the consent or knowledge of Donaldson Donaldson demands that the arrangement with Virtual Dining Concepts be immediately terminated. He is also demanding over 10 million dollars of compensation based on the damage to the Mr Beast brand.
Even as the contract has not yet been officially terminated, Donalson has publicly stated that he is turning his attention away from Beast Burgers and is instead focusing on his new brand of chocolate bars called Febles. Within a week of Beast Investments Lawsuit against Virtual Dining Concepts Virtual Dining Concepts Filed a counter suit against Beast Investments and James Donaldson. According to the counter suit, Virtual Dining Concepts Originally planned to open Beast Burger in a small number of locations, but Donaldson instead wanted to expand rapidly to as many locations as possible, so they set up 300 locations across the US prior to launch in November of 2020. There were some complaints, but this is to be expected from any restaurant.
When you serve millions of burgers, not everyone will be perfect. And according to Virtual Dining Concepts the vast majority of customers had a positive experience with the brand. They claimed that in 2022 of the 2 million orders placed on door Dash and Uber Eats alone, almost 70% of customer reviews included five-star ratings. Of course, there will be some instances of customers who have negative experiences, but Febles also had quality control issues and received negative customer reviews. It is thus hypocritical for Donaldson to complain about selective anecdotes of poor quality. Beast Burgers In their original contract signed in 2020, Donaldson was required to actively engage with Virtual Dining Concepts to help make marketing materials for the brand over the next 4 years. The entire idea behind Beast Bergers is to leverage Donaldson's massive social media following. Both parties are also barred from disparaging each other publicly.
The contract between Donaldson and Virtual Dining Concepts has not been made public, so we have no way of judging each party's claims on legal merits. But if there is a non-disparagement clause which seems reasonable, Donaldson's negative tweets do appear like potential violations. As part of the deal, they were supposed to create a new legal entity which would own the Beast Burer business and both parties would own a stake in it. but Donaldson's lawyers refused to create this new entity, leaving Virtual Dining Concepts with no choice but to register the Beast Berger trademarks on their own as part of the deal.
Beast Investments was to receive royalties as well as an equity stake in the Beast Berger business in or around November of 2022 Donaldson or his Representatives allegedly attempted to renegotiate the deal to get a larger Equity stake. Virtual Dining Concepts rejected this. In March of 2023, Donaldson's lawyers sent a letter to Virtual Dining Concepts accusing them of breach of contract. They alleged that negative feedback had materially and irreparably tarnished Hon's reputation.
According to Virtual Dining. Concepts, these allegations were not made in good faith. they were instead a retaliatory action. following Virtual Dining Concept's refusal to renegotiate the contract on more favorable terms.
During the entire relevant period, the Mr Beast YouTube channel and social media channels continueed to grow in popularity, thus negating the allegation that the Beast Berger tarnished the Mr Beast brand. It's almost indisputable that Donaldson's refusal to promote the brand and public disparagement have caused significant financial harm to Virtual Dining. Concepts As sales of Mr Beberg have collapsed, the company is seeking $100 million of compensation from Donaldson, although it's unclear how they came up with this number. It's important to stress again that we have not seen the contract and we don't know what was going on behind the scenes.
This will have to be litigated in a court of law. As outside observers, it's almost impossible to predict the outcome. But one thing to note is that in January of 2022, more than a year after the launch of the Beast Burger Donaldson agreed to expand his partnership with Virtual Dining Concept as late as September of 2022, Almost 2 years after the launch, Donaldson publicly bragged about the success of Beast Burgers To justify his claim that the Mr Beast brand is worth more than $1 billion. If the quality of Beast Burgers was really so bad and so damaging to his Public Image why did it take him so long to figure this out? regardless of who was at fault. The Beast Bger was clearly a debacle, and this calls into question the value of a social media following even one as massive as Donaldson's Donaldson claims to have turned down a$1 billion offer to buy his YouTube channel in Associated businesses. This claim is impossible to verify. The only evidence is one podcast interview where he refused to disclose the identity of the wouldbe acquirer. A major lynchpin of the $1 billion valuation was his ability to launch branded merchandise such as The Beast Bger.
But even before the controversies, the value of the Beast Bger brand is questionable. and July of 2022 Donaldson claimed that the Beast Bger had generated over $100 million of Revenue. This was more than a year and a half after the launch. The majority of the revenue is kept by the independent Ghost kitchens.
Let's assume that Beast Berger received a 20% royalty. This would be less than $20 million of annual revenue, of which a significant portion would go to Virtual Dining Concepts and whatever Revenue they generated Donaldson claimed that all of it was reinvested into advertising according to Virtual Dining Concepts In April of 2023, Donald or his employees changed the passwords to the Beast Berger social media accounts. This prevented the brand from marketing on social media. sales almost immediately started to decline thanks to Mr BEAST's massive fan base and the elaborate marketing gimmicks they pulled at launch.
Millions of people wanted to give the Beast Burger a try to see what's what, but the product itself is nothing special. It's more expensive and of worse quality compared to established Brands Like McDonald's or Burger King as a standalone product, it does not represent a sufficient value proposition to customers. The only way to to maintain sales was to pump out continuous marketing campaigns leveraging the Mr Beast brand. As soon as this stopped, sales declined.
A brand which generates about $20 million of Revenue of which all of it has to be reinvested into marketing is probably worth very little. This calls into question the claimed $1 billion valuation of the Mr Beast brand. While his YouTube channel receives billions of views, it's likely not worth $1 billion. Take the example of a recently posted video called Lamborghini versus World's Largest Shredder.
It received 12 million views and was sponsored. Assuming the direct YouTube Revenue was $5 per 1,000 views and the sponsor paid $20 per $1,000 views. The video probably generated about $3 million of Revenue in the video. they destroyed one Lamborghini and gave another one away, destroyed an abandoned 7-Eleven store, created and destroyed a fake Minecraft village, destroyed a $100,000 safe using $100,000 of explosives, rented three main battle tanks, bought 20 scrap cars and rented the world's largest Shredder. He has a large crew that he has to pay and likely had to hire explosives experts and obtain required permits, none of which is cheap. He also had to rent the land and transport large quantities of heavy and expensive equipment. And finally, he had to commission numerous large and likely expensive custombuilt props. All told, I would be surprised if the video cost less than $2 million to produce, leaving $1 million of profit.
He posts about 20 videos per year, so he might be able to generate $20 million of profit. If you apply a 10 times multiple on that, you get to about $200 million for the YouTube channel alone. Now he has his Febles brand of chocolate bars because they're made in a factory. He claims they will not have the same quality control issues as the Beast Burgers.
There was a massive volume of sales when he first launched it, as his fans wanted to see what's what, but the value proposition is unclear as the Feasta Bles are more expensive and of inferior quality than established chocolate brands. Even if you're a Mr Beast fan, you might try it once as a novelty and never buy it again. Just because you're good at crafting elaborate stunts that get a lot of attention on YouTube doesn't mean you're good at making hamburgers or chocolate bars. While Donaldson's accomplishments on YouTube are undoubtedly impressive, he has a long way to go if he wants to realize his dream of becoming the First YouTube billionaire.
All right guys, that wraps it up for this video. What do you think about the Beast Burger debacle? Let us know in the comments section below. As always, thank you so much for watching and we'll see you in the next one! Wall Street Millennial Signing out.
I thought they were good tbh, really juicy
Got it delivered not knowing it was a bulls*hit virtual brand. It was worse than I can even explain. I got my money back, which I know comes from the restaurant.
Hahahaha yes. I love to see it.
Dude slapped his name on a gimmic during Covid and did absolutely no quality control.
He has shown potential future inventors and business partners that he can't be trusted. There's thr old saying about washing your dirty laundry in public.
And i still have no clue who Mr Beast is or what kind of content he is involved in.
I think MR Beast is an overall positive figure. But he is full of shit when he talks about that 1 B $ offer to buy his shit ass channel lmao.
If I did this I would buy a small burger chain and re-brand it there are hundreds of small burger chains in the USA. My favorite is Dick's drive in here in Seattle, great burgers and they are expanding very quickly and long waiting lines.
One of these restaurants popped up in my home town in Ireland (a small town of about 20,000) and I think most people have just been left extremely confused by its existence.
Note to you young kids. At least for the foreseeable future, if someone offers you any amount ending with 'billion dollars', take it.
Who the fuck are the wierd ass looking "famous influencers"
sounds like Mr Beast should have discussed things with CEO of Virtual Dining behind close door without lawyers.
Not sure why he's so hell bent on doing food when it's one of the hardest competitive industries there is and it's finding out the hard really expensive way. That stuff requires you to be hands on all the time making sure everything is running properly. You can't just hire some ghost kitchens and leave it on auto pilot. He could Never give the business the attention it needed especially not while running his youtube channel as well. Attaching his name to it was only ever gonna get it so far. It's just confusing cause someone like him has basically countless options to just keep increase his wealth to infinity basically and much easier ways at that. He should have took the billion if this was gonna be his plan.
Why is he popular in the first place? I find him cringe and boring.
He should just partner with established brands to make limited time mr beast goods like burgers at mcd's or major confectionery companies. Starting a business is never easy. Don't be greedy. Share your wealth with your business partners and you will all be rich. Take all for yourself and be left with nothing.
The HALL of shame
His most recent problems are very Ellen of him. Taking his mask off, just for views subs and relevancy.
Honestly, their burgers, when made correctly, were freaking delicious.
Problem was that out of the 10 times I ordered I got what I actually wanted ONCE.
He shouldnβt be promoting high GHG emissions beef burgers. There is a climate emergency
I was shocked at how bad the Feastables were. How do you mess up candy bars? They were hard like dark chocolate, not really sweet, and the flavor was just meh. They were about $1.66 per bar at Target, so not insanely expensive. But I just thought it would at least be a tasty treat.
I think giving 200 million dollars valuation to his channel may be a bit conservative if you base it on the 1 million per video and 20 videos per year average and a 10x multiple. Don't forget, Mr. Beast has multiple channels and you have to take that into consideration. It's not just the main channel and the chocolate. He also sells merch and has sponsorships. Granted he mentioned before that his main channel loses money per video and these other channels are what keeps him up, so perhaps that is something to consider.
I h8 Mr beast so much bruh
Even the pictures of the burgers look disgusting
He should've taken that $1 billion offer and ran. How much money do you really need anyway?
Ghost kitchens that will not get their name and location traced back to their food, no quality checks and control, but has to bear all the cost and give portion of revenue to this third party branding and marketing company. Who would have thought they would cut corners and increase profit margin at expense of quality.
Every Influencer: "You should make me rich!"
I think to a third-party investor, the value of his channel is $0, because all of the value is in Mr Beast himself, and you can't buy that.
You can buy the YouTube account password, but if you put other stuff on it that doesn't feature Mr Beast, people will quickly unsubscribe.
youtube ads made my feet feel cold
I actually liked Beast Burger at first. Never seen any of his vids, but heard the burgers werent bad and gave them a shot. Was like Five Guys but with buns that didnt just fall apart. Would get them every couple months or so. There was absolutely a point where they just fell apart and stopped being even remotely good
Greed versus Greed…..a story as old as time.