One day around lunchtime, while working at the Krusty Krab, SpongeBob gets a last minute order to serve a milkshake which he has not made in years. SpongeBob decides to make a simple milkshake in a blender and finishes it off by topping whipped cream and a cherry while walking out of the kitchen door. He serves it to Harold. But, Harold says it tastes horrible (and throws a temper tantrum, demanding a refund while angry). Mr. Krabs comes in and walks Harold out of the restaurant while telling him that SpongeBob will make a proper milkshake for him tomorrow. Mr. Krabs then puts SpongeBob in a boatmobile and says he is taking him back to school.
SpongeBob and Mr. Krabs later arrive at the Milkshake Academy and SpongeBob has to go here to learn how to make a proper milkshake again. Captain Frosty Mug tells the cadets to man their milkshake stations. When SpongeBob mans his station, he realizes that there are more buttons and contraptions than he's used to, but thinks he still can make a milkshake with no problem. But when he tries to mix the milkshake, he repeatedly pushes the wrong button. Frosty Mug comes over and has to inform SpongeBob that the controls are different and he has to push the button on the lower control panel. When SpongeBob manages to finally mix his milkshake, he lets Frosty Mug try it. However, when Frosty Mug tries it, the milkshake is frozen and it ends up in Frosty Mug's eye. Frosty Mug suggests they need to get back to the basics. He tells SpongeBob before he makes a milkshake, he needs to know what it feels like to be a milkshake. He makes him go in the Shake Simulator, which makes cadets who enter it into a milkshake-shaped blob. Frosty Mug sets the Simulator on "Obliterate," which makes the students gasp. A cadet reminds Frosty Mug that no one has ever survived Obliterate, to which he responds that he needs to learn. The simulator shakes, rattles, and rolls SpongeBob. Captain Frosty Mug decides to see how SpongeBob turned out and gets angry when he sees that he both survived and actually found it fun. Angry, Frosty Mug says that he's never had such an "unteachable moron" in 30 years. He asks his students to tell him how he could teach SpongeBob how to make a milkshake (with one student replying, "You'd be better off teaching a piece of coral, sir!" to which the students laugh at). SpongeBob replies that he'll show the students that he can make a milkshake. However, during the courses of making a milkshake, SpongeBob fails doing them all. During graduation, SpongeBob expects to get his milkshake license at this event. However, Captain Frosty Mug gives everyone milkshake licenses except for SpongeBob, because he couldn't even get past Step #1 of making a milkshake. SpongeBob tells Frosty Mug that he will keep trying. Captain Frostymug tells him he needs to put the milkshake up to the spinney thing. Then, he stops, flashing back to 20 years ago.
He was the owner of a milkshake cafe called Milk Shake. Many customers were excited to have Frosty Mug's milkshakes. However, when he tried to make a milkshake for an eager customer, he ended up splattering the milkshake all over the store. A stain of milkshake got on the power lines that connect to the milkshake machine, destroying it. The milkshake machine squirted out milkshake stains onto the customers, frightening them and ruining Frostymug's career. He informs SpongeBob that he has not touched the milkshake machine in 20 years. He gets his hand stuck in the machine. He is about to get his arm and all of him sucked into the machine, but SpongeBob is able to grab and save him just before the machine can suck him in. The machine ends up exploding, but Frosty Mug thanks SpongeBob for saving him. Thanks to the machine incident, Frostymug's arm is hurt. He realizes that he doesn't need a machine to make a milkshake and tells SpongeBob that a milkshake comes from within the heart. The next day, at the Krusty Krab, SpongeBob serves Harold a milkshake, which he replies is the best he's ever had. Everyone now wants to buy SpongeBob's milkshake. Captain Frosty Mug comes in, requesting a milkshake and gives SpongeBob his new milkshake license to which SpongeBob replies, "If only it were this easy to get a boating license" and laughs, ending the episode.
According to the storyboard, while Captain Frostymug was falling, he was going to make a beard out of whipped cream.
This was mostly likely cut to save time. Also, he was originally going to have a red beard instead of a gray beard.
Oddly in SpongeBob's milkshake license, his picture is shown while he is holding his spatula (since SpongeBob usually keeps his spatula at the Krusty Krab).
SpongeBob's milkshake license expired around the time of "Selling Out." This could be a possible explanation as to why his license expired.
In one scene it was shown that SpongeBob made a Krabby Patty instead of a Milkshake. This is similar to "Le Big Switch" and "SpongeBob You're Fired" in which SpongeBob is unable to make anything other than a Krabby Patty.
It is unknown how Frostymug became a milkshake instructor if he does not even know how to use a milkshake machine. He may have forgotten, though, that might be why he didn't know.
It was said in "Yours, Mine and Mine" that SpongeBob has a Milkshake dispenser card and showed it to Patrick, although he does not have a Driver's License card.
The Milkshake Academy is an obvious parody to the Military Academy.
In Germany, the time card was translated incorrectly. On the German one, it says 30 years earlier.
At the end, when SpongeBob says, "If only it were this easy to get a boating license!," the closed captions incorrectly translate, "If only it were this easy to get a voting license!"
When SpongeBob drank the milkshake at the beach, he had a milkshake mustache but when he poured the rest on his head and shook himself, it had disappeared.
It's possible he may have wiped it off his face off-camera.
Captain Frostymug said that SpongeBob couldn't even get past step number one of making a milkshake (filling the glass with ice cream). However, it was shown numerous times that SpongeBob did, in fact, do this.
However, it could just be an exaggeration for "SpongeBob can't make a milkshake."
Captain Frostymug referred to the milkshake academy cadets as "Boys" even though there were 2 females.
When Captain Frostymug got his arm stuck in the blender, he somehow managed to get both of his legs in the blender seconds later.
Harold comments that his shake was disgusting and breaks the table with his solid milkshake. Seconds later, he puts the shake in SpongeBob's hat and smashes it. The shake becomes a viscous liquid within seconds, which should not be possible.