Patchy and Potty are working at a restaurant called "Poop Deck," hoping to be just like SpongeBob. Patchy has new ideas which Potty disagrees with, and after an argument with Potty, Patchy ends their friendship and goes home. He compares himself and Potty to Mr. Krabs and Plankton, starting the SpongeBob Plot.
Later, Potty appears to Patchy and tells him that he is now assistant manager. The two get into another argument, and Patchy starts throwing patties at Potty, but they keep missing, and one eventually hits Mr. Pirateson, the Owner of Poop Deck. Patchy then tells the viewers to watch the rest of the SpongeBob episode while he watches Potty get fired.
After the SpongeBob episode is over, Patchy claims he took some time off, but Potty then tells the viewers that Patchy actually got fired, and Patchy gets back at Potty by saying that he got fired too, which is also true (but Potty also got a golden parachute). Patchy then says that they cannot replace him, but Potty tells him that they already did. When Patchy finds out that he's been replaced by a gorilla, he calls it a "smelly, hairy fleabag" which the gorilla responds to by throwing patties at Patchy. The episode then ends.
After yet another attack on the Krusty Krab by Plankton, SpongeBob asks Mr. Krabs why they hate each other so much. Mr. Krabs tells his side of the story, in a series of flashbacks:
Mr. Krabs and Plankton were best friends from birth, and did everything together. Both were outcasts, Plankton being a nerd and Krabs (ironically) being extremely poor. One day Krabs finds a penny at the carnival, his first exposure to money, which he spends on a balloon for Plankton. Later, they get enough money to buy a burger from Stinky's Burgers, which, despite having horrible food and literally being located in a dump, is very popular among the local children due to being the only place in town to get a burger. Mr. Stinky refuses to serve them, saying that freaks like them are bad for business, and tells them to "wait" at the back of the building. There, they witness Stinky retiring, having made millions from the stand. Plankton and Krabs decide to go into the burger business themselves, and create their own burger, but no one wants to try it. When Stinky's is closed by the local health department, the two open "Plabs Burgers" on his former site, which the children are now forced to eat at, despite it being even worse than Stinky's.
Plankton says that they are now ruling the stomachs of the children, and soon will be ruling their brains. Mr. Krabs argues that it should be about satisfying the customers, rather than power. Soon they get into an argument, and Krabs is ejected into a dump pile and tells Plankton that he will one day regret this.
Plankton comes in and disagrees with Mr. Krabs' story and tells SpongeBob his own version. His story is the same as Mr. Krabs', except that their roles during the fight at the end are reversed, with Krabs wanting to rule the money of the children.
Plankton and Mr. Krabs begin arguing about the story, until Karen arrives and tells the real story:
The restaurant initially has no customers, and Old Man Jenkins is the first to try one of their burgers. Upon taking a bite, he smiles, falls to the ground, and a newspaper appears saying he died. Krabs and Plankton become angry and accuse each other of tainting the patty. They begin fighting over the recipe, eventually tearing it in two, with Plankton getting the bottom half, which says "...and a pinch of chum." Their friendship over, Plankton storms out to pursue his own career in food. However, during the struggle, a shelf was knocked down, dumping various ingredients into the patty batter, creating the Krabby Patty recipe, which Krabs is left with. The two go their separate ways, each trying to open their own establishment. Mr. Krabs' "Krabby Patty" is great, while Plankton's Chum Burger is horrible.
After hearing the story, Plankton and Krabs begin to make up and apologize, until Plankton takes the formula from his pocket. SpongeBob and Krabs start chasing Karen and Plankton in circles as the episode ends.
The episode uses the Rashomon Effect, which is the effect of the subjectivity of perception on recollection, by which observers of an event are able to produce substantially different but equally plausible accounts of it.
SpongeBob is surprised when Mr. Krabs tells him that he and Plankton were friends back then, but in "Krabs vs Plankton," SpongeBob asks Plankton why he visited the Krusty Krab, to which he said he was going to visit his old friend, SpongeBob is not surprised. It's possible that this episode takes place before Krabs vs Plankton or SpongeBob thought Plankton was lying.
It is revealed that Plankton and Mr. Krabs were born on the same day. However, in "Grandpappy the Pirate," Mr. Krabs said he was born with his grandfather, it is possible he was at the day care with plankton, when his grandfather was away, and he was to young to go with him.
Mr. Krabs is portrayed as rich when he was young in "Krusty Krab Training Video," but in this episode, he is very poor possibly making it before he sold the sandwiches.
In this episode, Mr. Krabs and Plankton supposedly made the Krabby Patty together, but in "Enemy In-Law," Mr. Krabs says the recipe was passed down from his mother, but to be fair, that episode was aired before this one, Mr. Krabs could have been lying, then again in "Dunces and Dragons," it's revealed that the Krabby Patty recipe was passed on since medieval time, but that was likely just the result of SpongeBob and Patrick causing a time paradox.
The pictures of Plankton as a baby show that he is normal size, however, in "Goo Goo Gas," Plankton was shrunk to baby size and turned microscopic.
Running Gags: The students and Plankton calls Krabs "rag boy", Plankton being launched by a student, the boys fighting over their recipe and Krabs being teased by Plankton and the students.
The restaurant Mr. Krabs and Plankton built is seen in the game Globs of Doom in the dump level of Bikini Bottom.
The fish who said that they don't like Stinkey and that they respect him is has similar colors and clothes to the chocolate fish from "Chocolate With Nuts." He could even possibly be him as a child. Johnney (the fish who tried Plankton's burger at the end of the episode) also has a similar appearance and clothing.
Plankton could have gotten the ingredients from the security footage but instead, rather steal the recipe for the Krabby Patties; this implies he has a code of honor, or just didn't know about the footage.
When Johnny was trying out the Chum Burger, it only had buns and a chum patty but when he was throwing it out, it had tomatoes, lettuce and pickles. Although the vegetables are in the chum to not be confused.
All this time, despite the recipe calling for only "a pinch of chum", Plankton's been making food entirely out of chum.
In this episode Mr. Krabs reveals one of the ingredients by saying to Plankton, "It was you who put to much seaweed sauce", since the batter was not replaced this is an ingredient in Krabby Patties.
As of this episode, there is no ambient water effect heard in the background.
This is the first episode for Season 5.
This episode reveals Mr. Krabs and Plankton's friendship.
There is numerous evidence that makes the origin of the Krabby Patty Formula, and maybe the entire episode, non-canon.
First, unless Mr. Krabs knew exactly what the containers contained and how much of it there was in each container, their is no way he could duplicate the recipe, unless, he used science to figure out how much of things there were in the patty.
Second, in Enemy In-Law, Mr. Krabs says that it is a family recipe.
Fourth, in Patty Caper, Some agents were supposed to give SpongeBob the secret ingredient for the Krabby Patty. It is very unlikely that a recipe made by a cheapskate would be important enough to get agents involved. It is more likely that King Krabs or another powerful Krabs family member set up this system.
In the trailer for The SpongeBob Movie: Sponge Out of Water, it is highly suggested that the Krabby Patty formula is the missing piece of the book that the pirate finds. If this is true, it is unlikely that an old book could predict something that would happen underwater in the 1940s or 1950s. It is more likely that the book was created in a time of magic by a magician hired by King
If you look in the background when Patchy is with the rat, you can see a barrel that was from the first SpongeBob movie.
Poseidon Elementary is based on the fictional ocean liner, SS Poseidon and the ancient Greek god of the sea.
This episode's title is a pun on the phrase on "friend or foe" which describes a certain character as an ally or an enemy.
When the young Mr. Krabs says, "What in Neptune's name is that?," Sandals was eating popcorn in the background disappears and transports to the end of the screen.
When Plankton says his story the hole in the ceiling is still there even though Mr. Krabs was ejected through the ceiling and Mr. Krabs threw him by the window.
Mr. Krabs is a kid in this episode, but his mother still appears old.
When Mr. Krabs and Plankton finished their burger it had nothing between its buns except for a patty but later they reveal it with two patties and lettuce. While approaching Stinky Burgers, it had a single patty and a slice of cheese.
Mr. Krabs said that his first dollar was from selling his and Plankton's patty, but when Stinky drove off, he took a dollar that flew off of his limo. However, he could have meant it was his first dollar that he earned.
In the scene before Mr. Krabs grabbed the penny on the ground at Glove World, the fish in the background disappeared before the next scene
When Karen enters the Krusty Krab, SpongeBob's hat was on, Karen entered, the hat was gone, Karen rolls up, and the hat is back on SpongeBob's head. This may be because Plankton was on SpongeBob's head.
During the Plankton story, when Plankton flew out the window, there was a hole in the roof. This is a mistake because Mr. Krabs flew out of the roof, which created the hole, in Mr. Krabs' story.
When Mr. Krabs is being lifted by the kids there is a kid who looks like Old Man Jenkins from "My Pretty Seahorse," he is young, but he has grey eyebrows.
The first time Mr. Pirateson appears, he has two hooks but later, he has only one hook.
In the first half, Plankton's mouth is red, but in the second half, it is similar to "New Leaf" and "Best Frenemies."
In the flashbacks, Mr. Krabs' eyelashes disappear a few times in the course of the episode, including when he and Plankton look in the oven when making their burger.
In the part where Patchy The Pirate makes the patty walk the plank and right after the SpongeBob birthday video Potty's assistant manager clothes are gone but right after Patchy and Potty make wried faces at each other Potty's assistant manager clothes are on.
When Old Man Jenkins first appears in the episode, he has green skin with a red hat. But when he tries the new burger, his skin is tan with a blue and white striped hat.