He looks like Mr. Krabs with a blue tomato on his nose and a light green tie with green dots. He pretends to be "all about the children" when really, he just wants their money.
Mr. Krabs tells the kids they can meet him if they hand back their coloring books. The kids were waiting to see him and he only told them to buy Krabby Patties, clearly wanting to claim the money in their pockets. He leaves, letting down the kids who were excited to see him. Krabby the Clown only appears as Mr. Krabs for the rest of the episode.
He is a parody of Ronald McDonald from McDonalds and his name is a parody of Krusty the Clown from The Simpsons.