Coatchex

Coatchex

Coatchex entrepreneur and founder, Derek Pacque, is a recent graduate of the Kelley School of Business at Indiana University with a degree in Management, Corporate Innovation and Entrepreneurship. He pitched the panel of Sharks, including fellow alumnus Mark Cuban, in episode 402 on his innovative, computerized coat check system. The Coatchex system uses a primitive face recognition system to match coats to owners. Derek plans to franchise the system so bars and nightclubs who don't offer coat check services can set up the Coatchex system quickly and easily while creating an additional revenue stream for their business. Coatchex ran a test during Super Bowl week in Indianapolis and made tens of thousands of dollars.

Coatchex Checks In

Derek pitched the Sharks on a $200k investment for a 10% share in Coatchex. His concept is to sell franchises to “area developers” who then sell to end users – like the commonly used master franchise model. Cuban calls the plan “HORRIBLE HORRIBLE HORRIBLE!” Kevin thinks the business is too seasonal, which is strange since he's a Canadian and wears a fair share of coats, and goes out. Barbara quickly follows.  Daymond thinks Coatchex is over valued and he goes out.

Robert and Mark hate the franchising plan, but they like the business and the fact that Derek has a patent on the Coatchex technology that can be applied to other service businesses like valet parking and dry cleaning stores. Derek offers to go to 15% but Robert still thinks it's not enough and goes out. Mark offers $200K for 33% and Derek, after calling his professor, counters with $200K for 20%. Mark then goes out.

Coatchex after Checking Out

Derek Pacque will be forever known as “the college kid who turned down Mark Cuban.” That will probably be good for his business in the long run. CoatChex is currently expanding slowly, with locations opening in Chicago this winter. Deals are also in the works for Coatchex in New York City and Washington, D.C.

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