Mr. Tuttle's class assignment is for each group of students to come up with a new business idea, after which he'll give them $100 to start their company. Unfortunately, Zack and the gang have come up empty, and will almost certainly fail the assignment since none of them have been able to come up with an idea. However, Lisa comes in and hands out bracelets that they made in Fashion Club, and it gives Zack an idea. Unexpectedly, he announces that the product they're marketing will be the exact same bracelet, and he's named the product 'Friendship Bracelets'. Mr. Tuttle approves the project, and 'Friendship Bracelets' are soon the hottest selling item around.
Success quickly goes to Zack's head, though, and he names himself president of the company, which they've named 'Friendship Forever'. But everyone already agreed that Jessie was the president, and Zack's coup causes Slater, Jessie, and Kelly to walk out on the company. They decide to start their own company and sell 'Buddy Bands', which are headbands. Zack complains that they are ripping off his company, but Mr. Tuttle approves, saying that there is room for similar products on the market. 'Buddy Bands' now replace 'Friendship Bracelets' as the hottest item around, so Zack decides to give away Screech as a friend to everyone who purchases one of their products. Screech is soon exhausted, so Zack volunteers Lisa to be the new friend, and they both walk away from the company. Without Lisa's Fashion Club to make the bracelets, Zack finds himself out of business.
With all competition gone, Slater and Jessie decide to make a ton more 'Buddy Bands' and really clean up. Unfortunately, Zack has bought a Buddy Band and gave it to Mr. Belding, and seeing the principal wearing it made everyone else turn away from the product.
With both companies out of business, the gang eventually reconciles at The Max, but unfortunately they're most likely going to fail the assignment. They come up with the idea to combine both products and create 'Love Cuffs', which are two 'Friendship Bracelets' connected to a 'Buddy Band'. They tell Mr. Tuttle that they sold enough of them to break even, then gave everything they had left to a company of nerds, who marketed it as book straps. Mr. Tuttle tells them that friendship is more important than business, and that business doesn't have to be cold and heartless, and that they all learned a good lesson from their experiences and therefore have all earned A's.