just feel like we're on the top of everest right now. this is just awesome. lemonis: what? what are we doing? amber: popcorn. lemonis: what about it? amber: it's the episode. if i get started with this, i would eat all of this, like, in one sitting. lemonis: no, you won't eat the sweet one. it's too sweet. amber: okay. yes, i would. lemonis: is this skinnypop? amber: you mean it's planet popcorn? lemonis: no. you know how i know it's not planet popcorn? her popcorn was bigger. amber: oh, really? lemonis: uh-huh. that's one thing that i did learn from sharla is that she used the right kind of corn. in the last 5 years, i visited over 70 businesses. it's delicious. -[ laughs ] i travel the country trying to fix the people... woman: i don't want to be that person that cries on tape. lemonis: ...fix the process... i don't think you guys have any idea what's in your inventory. holy [bleep]. ...and create a few products.

welcome to your new store. man: oh, my god. woman: i owe my life to this company. lemonis: that is the reason that i'm here. i spend hundreds of days a year working on these companies. why didn't you do it? man: i thought that we did. lemonis: holy [bleep]. but we can't always fit everything i'm thinking into the show. so tonight, i'm going to give you an inside look at an episode from season one, "planet popcorn." sharla: how would i screw a billionaire? i've never screwed anybody in my life. amber: [ laughs ] lemonis: that may be one of the best lines from our show. amber: yeah. lemonis: over the next hour, i'm going to take you behind the scenes to share with you what i was actually thinking during filming... sharla: it's my money. sharry: you shook his hand. sharla: so what? lemonis: she was so flippant to her mother that i felt like sharla was starting to panic a little bit. amber: yeah, yeah. lemonis: ...share some secrets... can you find the footage? you know those big swings? amber: i have you on a bull ride in suit and tie. man: yee-haw! you see the look on his face? lemonis: ...and give you an honest assessment of my decisions. i told you that trust and integrity

are everything to me. you blew it. i have a much different perspective about this deal as i sit here right now than i even did back then. my name is marcus lemonis, and this is "an inside look." man#1: all right. here we go, cameras rolling, camera speeds. man #2: audio speeds. man #1: all speed. all right, guys. whenever you're ready. lemonis: you guys have more popcorn? amber: we haven't even started. he's already done with his popcorn. here. okay. cheers. come on. cheers. lemonis: stay over there. amber: [ laughs ] okay. lemonis: sharla mcbride started planet popcorn with a single cart and $250. thirteen years later, they now have 30 employees, three flavors, products ranging from kettle corn to churros to crepes. their popcorn sells at fairs and farmer's markets all over southern california, but the bulk of her money was generated from downtown disney. can you find the footage? you know those big swings? amber: oh, oh, oh, of you on the rides like a kid?

lemonis: well, why do you have to say, "like a kid"? amber: because it has nothing to do with the show or the story. lemonis: it doesn't matter. i went up on the ride so i could study the traffic pattern around the popcorn... amber: i have you on a bull ride in a suit and tie. announcer: yee-haw! you see the look on his face? lemonis: people right now are saying, "amber, show us what he's really like." amber: no, no, no. no, no. people right now are saying, "amber, thank you for showing me what he's really like." lemonis: woo! announcer: learn how to ride a bull in a suit. amber: he finally has personality. he's not the stick in the mud in a tie. announcer: hold on to it. dude, you're all right. you're all right. amber: you're welcome. lemonis: planet popcorn generates $2.5 million in revenue, but it still can't turn a profit. this year, they're about $200,000 in debt. sharla's mother has mortgaged her house and loaned the business almost $200,000 to keep planet popcorn afloat. planet popcorn is an all-cash business, and that leaves way too much room for things like missing money and theft. brittney: there's no charges on that.

sharla: then that means they weren't charging again. idiots. lemonis: they don't pay down their debt and improve their bottom line, this company will be out of business within a year. sharla: i can't do everything, okay? ♪ lemonis: good morning. sharla: hi. lemonis: i'm marcus. sharla: nice to meet you. lemonis: you're sharla? sharla: yes. lemonis: great meeting you. this is a nice setup. sharla: thank you. lemonis: i'd like to taste some of the popcorn. is that possible? sharla: sure. lemonis: what's -- what would you like me to taste? sharla: well, my caramel corn is really good, so we'll give you caramel corn. amber: i like her popcorn. lemonis: it was good. this is amazing. sharla: thank you. lemonis: and you know what? man: and then... lemonis: the popcorn is big. sharla: this is mushroom popcorn, which is made to coat. it's a better coating popcorn. lemonis: tell me about that money. do you just leave it in there like that? sharla: it's petty cash when they run out of quarters or ones. lemonis: do you have a safe? sharla: in here, no. lemonis: there's no cameras in here? sharla: mnh-mnh. lemonis: scary, isn't it? sharla: mm-hmm. amber: are those your glasses? lemonis: those are my glasses. amber: i know. lemonis: you have them. amber: i gave them back to you. they were in your rv.

lemonis: i don't have them anymore. amber: well, then you lost them. lemonis: then you need to buy me a new pair. amber: i remember them. i like them. i don't know. lemonis: how much money does this fair generate for you? sharla: my projections for this year are about 70. lemonis: so you'll do $70,000 in business in this one fair, but it obviously costs money to come here... sharla: it does. lemonis: ...bring the trailers here... sharla: it does. lemonis: ...and the labor and... and if it rains the whole time, you could lose money. sharla: if it rains, if we break down, if... a lot of things could go wrong. lemonis: so unlike disney that gets predictable traffic all the time... sharla: predictable, doesn't set up and tear down, easy. lemonis: ...this is harder. sharla: this is hard. lemonis: yeah. sharla: this is hard work. lemonis: sharla's popcorn is the real deal, and it's easy for me to see how i can help her build her brand and make both of us a lot of money, but before i do, i need to see the rest of this operation and determine if she's willing to make the kind of changes necessary to take this business to the next level. are you kidding me? this is ridiculous.

amber: it's awful that her cash is on the ground. do you think that's common? lemonis: no, i don't think it's common that businesses are careless with their money. i do think what exaggerated her carelessness was the fact that she was in primarily an all-cash business. amber: right. lemonis: is this planet popcorn? casey: this is planet popcorn. lemonis: how are you doing? casey: good. lemonis: i'm marcus. casey: casey. lemonis: i came by to see you guys. is this the whole place right here? brittney: this is just the office part. back there is where we do, like, cook all the popcorn. lemonis: how do you guys function in this? casey: it's very tight. brittney: we just do. i know. casey: and it's a mess. lemonis: is there, like, another trapdoor that takes me somewhere? brittney: this is my mom's desk. it's actually cleaner than normal. sharla: you know what? lemonis: sharla? sharla: that's the to-be-filed pile. lemonis: walk me through your... sharla: oh, i'm sorry. i just stepped all over your money. lemonis: oh, that's okay. sharla: oops. okay. i am an organized person. i swear to god. lemonis: where's accounting? sharla: she's counting. lemonis: no, where's accounting? sharla: oh, where's accounting? lemonis: that may be one of the best lines from our show. amber: yeah. lemonis: do you guys just leave

the money out? sharla: yeah. lemonis: this would be a cool place to rob. why don't you have a drop safe? sharla: we're very trusting. steve: hi. how are you? sharla: this is steve, my fiancé. lemonis: hi, marcus. steve: nice to meet you, marcus. you know, i want to make sure it's the right deal for her. sharla: he's very protective of me. lemonis: what department would this be called? sharla: i don't know. it's stuff. lemonis: okay. what is this here? sharla: oh, these are my crepes. lemonis: so you're in the popcorn business, the crepe business and the funnel-cake business. sharla: so my staple is really popcorn. that's how i started, and then as i started getting bigger, i've learned, more locations, more money, so... lemonis: more locations, more revenue, not more locations, more money. sharla: more revenue. okay. lemonis: early on, i think her level of defensiveness probably tightened me up a little bit, too. it was the first season, and i remember in maybe the first four or five episodes not knowing you, not knowing the rest of the team and wanting to maintain 100 percent control of the process. amber: you didn't have a lot of trust yet with the producers

because you had never done this before. lemonis: you specifically. amber: you had never been on tv before. lemonis: right. amber: but, sure, i'm sure you didn't trust me. lemonis: i think that some businesses early on when we were making the show thought that because it happens to be on tv that somebody other than me was calling the shots. amber: no, and i never knew anything. i just let you always do... i mean, this is your -- you know, you're the one investing in these companies, so whether i tell you we want to cover certain topics, you're calling all the business shots. lemonis: sometimes more than just the business shots. amber: yeah, the longer we have shot, the more episodes we've done, more businesses you've done. lemonis: yeah. which one has better margins? sharla: popcorn. lemonis: so let me understand this. popcorn does more business and has more profits, but you're in the crepe business? sharla: you're correct. this is the kitchen. this is where we make popcorn. lemonis: when you have a cash business, you better have tight inventory controls. in this kitchen, i see inventory everywhere,

bags of popcorn with no codes on them, no tracking mechanism so i know what we have and what we don't have. amber: you look really young right there. lemonis: i was in my 30s. amber: no, you weren't. lemonis: yes, i was. amber: maybe your face is just rounder. lemonis: no, i was thinner there. amber: no, i think you're thinner now. lemonis: no, i'm more stressed now. amber: hmm. lemonis: yeah. amber: well, makes two of us. sharla: my mother works here, sharry. lemonis: hi, sharry. i'm marcus. sharry: so nice to meet you. lemonis: nice to meet you. how much money has she borrowed from you? sharry: oh, i took a... sharla: no, she took a second out on her house, and the total was about $100,000. sharry: well, i don't know. i owed $125,000 on my home, and now i owe $250 something. lemonis: so that's more than $100,000. sharry: and then she owes me $10,000 from my personal account. lemonis: so let's say that we check the box, sharla. sharla: mm-hmm. lemonis: people process product. your product is fantastic. sharla: mm-hmm. lemonis: but you got to have at least two of the three to survive. sharla: okay. my people are amazing. they work very hard for me. lemonis: i came here because i believe that we can take this business from $2 million to $10 million very quickly.

you have to get a website, and you have to get it up and running, and you have to be able to fulfill orders, and i believe that there's an opportunity to grow the disney business. in order to take your business to a national brand, you have to have a single focus on one product. you should become known as the popcorn lady. sharla: i would agree with you that popcorn is the staple of my company. the crepes, on the other hand, to me, is a pretty significant part of my business. lemonis: how much revenue will you do? casey: probably about $600,000. lemonis: of the $2.5 million? and what's the margin on it? casey: nine percent at most on that. lemonis: netting nine percent? sharla suffers from what i call the 80/20 rule. sharla today generates 80 percent of her revenue from the popcorn business. the crepe and the funnel-cake business makes up 20 percent. the problem is, is she's spending 80 percent of her time and her money on what generates 20 percent of her revenue. you have to have a different game plan. you should sell all these gypsy vans, open a storefront, launch a website and become and iconic brand like mrs. field.

i'm here to give you the money to do that with the understanding that we're getting out of the carnival business. sharla: i'm not comfortable selling off the concession side of my business. lemonis: sharla, you shouldn't be putting your mom at risk every single day wondering at 70 years old, "am i going to make this? am i going to lose this?" i think that one of the things that i've always wanted to do is have parents understand that you can help your child, but there's a difference between helping them and enabling them and that if you do financially invest or loan in their business, it has to be formalized. there has to be consequences to it, or let's just call it what it is from the beginning, which is a gift. so i don't like doing deals unless i have control for at least a short period of time, at least for a week. sharla: i'm open to positive changes, but i just don't want to lose control of my company. this is my baby. i really don't want him coming in here and doing, like, all these changes to my company. lemonis: how about we do this? i'm in charge for the next week,

and then, at the end of the week, if you had operational control and i had financial control, how would you feel about that? sharla: but you have all the financial controls. lemonis: it's all me. the risk for me in doing this deal is that my money is going to end up the same place as everything else... on the floor. ...on the floor. my offer is $200,000 for 50 percent of the business. i want to have operational control for a week, and i want to have financial control past that week. steve: no. it's ridiculous. i'm going to go. lemonis: then you write the check, brother. steve: you've done really good for a long time. you basically have a living through your mom, your daughter, and you're going to have some guy come in that's going to take control of your finances, and he's going to own 50 percent of your business? so you want to argue with a billionaire about what actually full financial control means? i mean, he might cause lots of havoc. sharla: i can't give full financial control. steve: course not. it's ridiculous. sharla: you're right. i can't do that.

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amber: okay. let's go. amber: let's watch it.

ready? go. [ laughs ] ♪ lemonis: so you're ready to do some business? sharla: i'm not giving up full financial control of my company. lemonis: you don't know anything about cost and materials. you don't know anything about pricing. you don't even own planetpopcorn.com. i own it. i already got it for you, and it's ready to go. i also own popone.com, which is an organic line that we're going to create. amber: how many domain names did you say you own, hundreds? lemonis: i mean, the main one is ambermazolla.com. i bought ambermazolla.com the first week we met. amber: you did that totally to...with me for a power play. lemonis: if you were going to control my content, then i wanted to make sure i controlled your content. [ both laugh ] so if you want to talk to me about moving fast and getting opportunities... sharla: if you were my partner and this thing failed, you would still be a rich man tomorrow, and i would be broke. lemonis: but if you fail by yourself, you're still failing. sharla: true.

lemonis: so what's the difference? sharla: it's, the control thing is hard for me. i've always prided myself on being a woman-owned business, 100 percent. amber: i get it. lemonis: why did it matter that she was a woman? i'm really curious. because for me, i don't see the difference. amber: i mean, i know. you've never seen the difference because you work better with women, you know, than men anyway, but there's still a difference. it's still harder for a woman to own a business. lemonis: what i sympathize with is her, in her mind, losing her freedom, her freedom to come and go, her freedom to manage her cash because she had the luxury of being able to record her cash or deposit her cash at her own leisure. amber: right. right. lemonis: and by the way, a lot of businesses do that. amber: i know. yeah, a lot do. lemonis: if you think that you have the it, the marketing and the publicity resources that i have, then don't do a deal with me. sharla: well, of course i don't think that. lemonis: if you think that i could launch you in a direction to finally start to make real profits, then you should do a deal with me.

do we have a deal? casey: i would do it in a heartbeat. sharla: would you really? casey: not a shadow of a doubt. lemonis: we have a deal? sharla: have a deal. lemonis: thank you. woo-hoo! come on. give me a hug. sharla: don't let me down. i won't let you down. lemonis: all right. now do you remember, sharla, that, for the week, i was in charge? sharla: i'm ready to pass out right now so... lemonis: okay. so go have a drink. sharla: i'm going to need a few. lemonis: okay, everybody? go rest tonight because you know the next week is going to be unbelievably intense. okay. i'll see you guys in the morning. sharla: thank you, marcus. ♪ lemonis: sharla and i made a deal. i know that some of you aren't happy about it, but one of the things that i wanted to do today is make sure that everybody understood that i was now in full control... sharla: yes. lemonis: ...and that we're going to fix some things that we think are broken. my ultimate goal with this investment is to make planet popcorn a national brand. in order to do that, we're going to launch a website

so we have a national presence. we're going to open up a storefront in downtown disney, but before any of that happens, i want to open up a storefront outside of downtown disney so disney knows we know how to run one. the goal is to go from a $2 million company to a $10 million company. i didn't think it would be that hard to get to $10 million. amber: mm-hmm. lemonis: but i knew that disney was an important stepping stone for that. amber: so disney because we weren't, i think, able to mention them as much as we would like to. lemonis: they wouldn't let us come. amber: no, they wouldn't let us come, but they... but just so everyone knows, she had a big stand at disney. lemonis: big, huge, kiosks. amber: big. yeah, huge. lemonis: multiple locations. amber: yep, yep. and when i went to disney, when i took my son to disney, i actually saw. it was, like, a center, a great spot for the kiosk... lemonis: mm-hmm. amber: ...lot of foot traffic. lemonis: a lot of cash. amber: mm-hmm. lemonis: cash, to me, is the most important thing in business, and protecting it is the most important thing. i want to make sure that when we take cash in, we put it away properly. let's get to work. that popcorn business bought her a nice mercedes, didn't it?

sharla and i are in newport beach looking for locations for our first store. i've chosen a location, and so has she. this ought to be interesting. when i had the realtor find me places... sharla: yeah? lemonis: ...i knew i was looking for medium income. sharla: right. lemonis: i knew i was looking for traffic. sharla: yes. lemonis: and i knew that i wanted to make sure there was a coffee place, a gas station... sharla: yeah. lemonis: ...and a ice-cream place. sharla: interesting. lemonis: the ice-cream store will get traffic at night, coffees morning and night. sharla: yes. lemonis: and the gas is repetitive traffic. i didn't really ever think we'd actually get a brick-and-mortar location. what i wanted to start to do was understand how sharla thought. how does she think about locations, and was her ego driving it? amber: mm-hmm. lemonis: i don't know. i kind of like the spot though because it's right on the entrance. you agree? sharla: my gut says no. first of all, nobody buys popcorn in the morning. lemonis: but it's packed. sharla: no, but i don't want to be in a boring spot. lemonis: all right. let's just go check this place you want to look at, and we'll compare it. sharla: okay.

lemonis: sharla didn't like the storefront that i chose. maybe she thought there was too much traffic or too many customers walking around. over here? sharla: yes. it's a great corner. it's the busiest corner in our neighborhood. people walk every day. lemonis: sharla, can i just show you something? sharla: yes. sure. lemonis: i want you to look this way. what do you see... nothing. ...down that block? sharla: lots of cars. lemonis: what do you see on the sidewalk? sharla: no one. lemonis: okay, and what do you see on this sidewalk going this way? sharla: a man with a flag? lemonis: no one. there's nobody, so i hope this isn't your spot. sharla: it's around the corner. lemonis: not even on the street? sharla: no. i come here every day. i live here. i know what traffic goes through here. lemonis: there's a possibility that this is busy. sharla: mm-hmm. lemonis: but i'm not going to make the turn, come back down here. sharla: everybody walks. this is a walking neighborhood. i mean, i walk it every day. i know. lemonis: yeah. this would be a terrible popcorn place. sorry. sharla: when i brought you here today, it wasn't really about popcorn. this is my vision for a creperie.

lemonis: i told you i wasn't interested in the crepe business, and you agreed to those terms. when we made this deal, i was very clear with her that we were out of any business other than popcorn. i don't think she's confused. i just think she's unwilling to follow my lead, and that's not acceptable by me. once we make a deal, there's no changing the plan. i do business deals on people's character, their integrity, their honesty. sharla: but i have integrity. i don't think that's a question between me and you. you can trust me. amber: i don't think she genuinely disagreed with you. i felt like she maybe felt, like, a little out of control. lemonis: no, i think that sharla likes sparring... amber: oh, yeah. lemonis: ...kind of like you do. amber: i don't think i'm like sharla, but... lemonis: no, no, no, in the sense that you are not afraid of a good old healthy debate, and sometimes, you like to argue just to argue... amber: well... lemonis: ...with me, and it's not bad. sharla -- amber: yeah, because i like the challenge of... i like the challenge. lemonis: that's right. amber: yeah. lemonis: and i think

that the way that sharla wanted to make herself feel was that she could spar with me. she's not combative. she just -- she likes the back and forth. amber: mm-hmm. lemonis: so, sharla, i need to be clear about something. sharla: yeah? lemonis: what insurance do i have that you won't screw me? sharla: how could i screw you? lemonis: you could take money out of the company without telling me or maybe turn what i think is a popcorn store into a creperie. sharla: well, you know, i guess there's a risk factor on both ends because you don't really know me, and i don't really know you. lemonis: mm-hmm. sharla: all i can say to you is, you're going to have to trust me on this one. lemonis: do i have to wonder if you're going to steal? sharla: no. lemonis: do i have to wonder if you're going to undermine me? sharla: no. lemonis: do i have to wonder if you're going to go around my back and try to do something to hurt me? sharla: no. you have nothing to worry about me as far as integrity or undermining you. lemonis: you can say that without any reservations? sharla: one hundred percent. lemonis: okay. integrity is one of the pillars in business, and based on what i've seen at the storefront, i'm starting to lose trust. ♪

so if this business makes $300,000, where's the money? sharry: marcus, any number talking, mnh-mnh. amber: she had a huge problem with you looking through the finances. sharla: it's more like a marriage. lemonis: yeah, i'm getting close to wanting to get counseling. sharla: a divorce. lemonis: guys, here is what i need hel pah! thano, no, no, nah.k. a bulb of light?!? aha ha ha! a flying machine? impossible! a personal' computer?! ha!

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i love having something that i can hold in my hand. we're proud of this way of life. we're proud of the work we're doing. we're going to start with getting this place cleaned up. are these clean? man: yeah. lemonis: i'm sick now from this popcorn. amber: [ laughs ] lemonis: can't run a business if it's not clean. not only are we getting this office cleaned up, but we're installing security cameras both inside the office and out at the popcorn trailers. so the cameras are going to go inside. sharla: okay. lemonis: and they'll be able to monitor kind of the workflow and everything so that you'll be able to kind of see what people are doing or what they're... sharla: not doing? lemonis: ...not doing. amber: you installed cameras to see if people were stealing? lemonis: i wouldn't say that i thought people were stealing, but i definitely put them in so that people know that we can see the cash

because it's very easy to make popcorn and be like, "a bag for you, $5 for me." there's no other inventory mechanism, and so you just want people to know that you're watching. next, i'm giving sharla a point-of-sale system so we can keep detailed records of her sales and her inventory. at the end of the day, you should have this much inventory and this much cash. ♪ hey, guys, let's sit down and have the meeting about the website. okay. sharla: hi there. salem: hey. sharla: and what would your name be? salem: salem. sharla: salem, nice to meet you. i'm sharla. salem: nice to meet you, too. sharla: you're the internet web designer? salem: that's correct. sharla: okay. lemonis: so this is a typical storefront. this is just for mock-up purposes. sharla: sure. lemonis: these are just ideas. amber: i always think website scenes are boring, right? lemonis: please. amber: i will take full responsibility that i don't want a scene about a website. lemonis: just so you know, when i retire from "the profit," i'm going to have a new show called "whiteboards and websites." amber: ooh, you're going to have a lot of viewers. coming up on "whiteboards and websites"... lemonis: [ laughs ] i'm sorry. amber: marcus is just erasing a board, like, writing,

"people, process, products." lemonis: okay. amber: turn the channel back to "the profit." lemonis: the other person that i brought in helped redesign a lot of packaging. brad: what we did basically is, we took the logo, and we tried to freshen it up, give it a stronger overall, powerful look. we obviously try to tie in the planets, and then this look here is obviously a little less outer space. sharla: okay, so before we go any further, this i'm not changing. i like my brand right there. lemonis: are you okay with the packaging other than the actual icon itself? if this was here...? sharla: i agree on the black background, my brand. lemonis: uh-huh. sharla: as long as it's my brand, i'm good. lemonis: i mean, you've said that 11 times. sharla: yeah, okay. lemonis: we're good. we got it. sharla: 12, my brand. lemonis: we got it. okay, so what we're also going to do today is talk about the mechanism once the package is done for retail-store consumption, so there's a box, and there's a tin. sharla: so just let me ask you, why would i need

to have different packaging? i like my bag. lemonis: what do you sell this for? sharla: that flavor? brittney: seven. lemonis: what would you charge for that tin? amber: does this make you really hungry? sharla: $16.99. lemonis: really? will you do me a favor? sharla: yeah. lemonis: will you fill that? sharla: yeah. it's, like, a bag. lemonis: what does this bag cost you? sharla: 17 cents. lemonis: what would that tin cost? casey: 80 cents. lemonis: where we're going to make more money is that perceived value. amber: i think you could've done a lot with this business, and just look at, like, the garrett's model in chicago. would you ever do another popcorn business? lemonis: no. amber: why? lemonis: i feel like i have too many battle scars from this one. amber: but that's surprising to me because you love candy. popcorn and candy seem to go hand in hand, but i guess you would just then have sweet pete's make popcorn, huh? lemonis: they do. amber: it's caramel corn. lemonis: thanks for the promo. amber: yeah, cut that out. lemonis: and it'd be fun to say to somebody like you do in some of the coffee shops, "buy the tin. come back and get a refill for $4." brittney: people would come back all the time. sharla: think about the margin on that. casey: yeah. brittney: yeah. lemonis: okay. that's done.

♪ sharla: okay, so my appointment is at 3:00. lemonis: before you go, i want to make sure you know that i'm going to go over the books with casey. sharla: that's fine. lemonis: so i' sharla: i'm sure casey will give you information he has to the best of his knowledge. lemonis: all right. thanks. amber: so i remember this. when she walked out, she had a huge problem with you looking through the finances and her not being there. lemonis: why'd she say, "okay," then? amber: but that's coming up. lemonis: right. amber: when she -- i'm just saying -- when she left, she came out to us and the producers, and she did not want you looking at stuff. lemonis: oh, right. amber: she was not happy about it. i think it was just a matter of control, but she was not happy. lemonis: in order for us to understand the profitability of the business, we got to work backwards, so we're going to get all the way down to what you actually make on a single cart on a single day. this particular exercise is something that i think a lot of businesses should do... amber: mm, i agree. lemonis: ...which is to rebuild the financial statement from the simplest place.

people say, "oh, my business is big. i can't follow it everywhere." it's, like, okay, let's take one example, one day, one hour, one transaction, one place, and then you can extrapolate it from there. you're going to get a pretty good idea. three carts at the theme park. casey: correct. lemonis: cart a makes on average? casey: roughly anywhere from $600,000 to $750,000. lemonis: for this $750,000, how many bags did we sell? casey: average sale is about 8 bucks lemonis: what's the total volume on a typical day? casey: about 250. lemonis: times eight. casey: $2,000. lemonis: $2,000. of the $2,000, how much do you have to give away to disney? casey: 35 percent commission would be $700. lemonis: okay. now we have $1,300 to work with. what's 250 times $1.47? that's the... casey: food cost. lemonis: ...raw-material cost of business, right? casey: and packaging. $367. lemonis: how many people does it take to run that cart? casey: 26 working hours. lemonis: okay, and how much are we paying per hour? casey: anywhere from $8.50 to $11.00 lemonis: let's call it $9.50 for average.

casey: two fifty. lemonis: 933 minus 250. casey: $685. lemonis: $685. now how much skimming goes on? casey: per day? there's probably a good $35. let's call it $35. lemonis: i'm going to exaggerate and say $50. casey: okay. lemonis: okay? amber: so you just asked him, like, how much skimming, and casey didn't even skip a beat. he just told you $35. lemonis: $35 a day in one cart. amber: so something as trivial -- i shouldn't say trivial. something like, okay, you're at a fair, right? you got all this money for popcorn, duh, duh, duh, hundreds of dollars, and it's like, "okay. oh, i'm going to get coffee. i'm just going to grab a couple bucks." can't a business pay for some stuff as well without it be called skimming? lemonis: in order to properly know what your business is doing, you're better off leaving the money in the drawer, letting it all be accounted for properly, buying the coffee on your credit card and then... amber: and then writing down... lemonis: ...turning in an expense reimbursement... amber: ah, i see. lemonis: ...as opposed to just acting like the drawer is like an atm machine. amber: right. lemonis: so that cart makes, on average, $400 a day times 365.

casey: $146,000. lemonis: all right. based on this financial statement, the business makes $319,000. casey: right. lemonis: what's odd about it, casey, is that cash in bank is actually overdrawn. casey: mm-hmm. lemonis: so what i'm trying to figure out is, where's the $319,000 go? you see why something is not...? casey: yeah, and i think that a lot of the questions that i have similar to yours -- sharry: marcus, marcus, no, i'm sorry, but any number talking, mnh-mnh. sharla needs to be here. lemonis: you're asking me to trust you. sharla: marcus, that e-mail... lemonis: "i'm trustworthy. i have integrity. i have all these things." sharla: i absolutely do. lemonis: you did not display it. i could've been less emotional about it. i was upset. i don't think i can trust you.

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you just wish you had hair to fluff. lemonis: i don't think that's it, to be honest with you. amber: to be honest. lemonis: what i'm trying to figure out is, where's the money? casey: lot of the questions here -- sharry: marcus, any number talking, mnh-mnh. sharla needs to be here. lemonis: she knew we were going to do this, though. sharry: but she's texting me. lemonis: no, no, no. she's saying, "i don't want any accounting discussed"? sharry: no, she's here. lemonis: all we're talking about is the balance sheet. want to call her and just tell her? sharry: you talk to her because i'm nobody. i mean -- lemonis: except you're the lender.

sharry: ah. lemonis: just so you know, you've put money in this business. sharry: oh, i know. lemonis: and it says that the business has made money except hundreds of thousands of dollars have disappeared. sharry: okay. lemonis: and the lenders aren't getting paid back. all we're discussing -- sharry: i just think you just ought to... until she's here. lemonis: uh-huh. look, i stopped because i didn't want to put the mom in an uncomfortable situation. amber: right, right, of course. lemonis: and i have respect for the fact that she's saying, "please stop." amber: yeah. sharry: sharla doesn't like for everybody to know her business. lemonis: that's obvious. but you know what the bigger issue is? where's the money going? sharry: i don't know. every nickel comes in. it goes out. it's just gone. lemonis: if this business goes away and if you didn't get your money back, what would happen? sharry: i would have to get somebody in there that can pay me my rent so i can make my house payment. lemonis: that's scary. sharry: yeah. lemonis: i wanted to highlight this for sharla so that she understood the magnitude of what was actually happening. amber: right. lemonis: and i don't think her mother would ever deliver

that message to her about what pressure she was feeling. amber: right. sharry: planet popcorn. i'm sitting here talking to marcus. you're going to go on speaker. hold on. hi, shar. well, they stopped, sharla, when i told them. lemonis: i mean, enough is enough. i mean, sharla, you're uncomfortable with us even understanding your balance sheet? we made a deal, and i have to understand if the balance sheet is right or wrong. all right. well, listen. i don't think we should talk about this on the phone. we'll discuss it whenever you get back. sharla: okay. lemonis: you guys are in trouble. the balance sheet is hundreds of thousands of dollars off. casey knows it. look at his face. amber: yeah. lemonis: ...is going to hit the fan. oh, man, mom crying made me feel so bad. amber: yeah, it's awful. ♪ sharla: look what i brought today, marcus. lemonis: obviously, you used the petty cash

to buy lottery tickets. sharla: i did. lemonis: that's why the balance sheet is off by a couple hundred grand. so what i was sitting down with casey and doing before you so rudely interrupted... sharla: any interruption is not rude when this is my company... lemonis: okay. sharla: ...because i have to understand the books. lemonis: uh-huh. so when i sit down with casey and i want to present to "my partner" a balance sheet that's clean so that she knows from this point forward... sharla: it's more like a marriage. lemonis: yeah, i'm getting close to wanting to get counseling, sharla. sharla: a divorce. lemonis: so take all the revenue, all the expenses. it says you made $319,000 for the year. sharla: 2012? lemonis: that's right. sharla: okay. lemonis: the problem is, there's $319,000 missing. sharla: then i guess it needs to be found. lemonis: why don't you seem alarmed by the fact that money is missing? sharla: i don't think this is all accurate. i'm just saying. lemonis: do you think you had a million, two in gross profit? sharla: i can't say yes or not. lemonis: well, this isn't -- sharla: and you know i'm not a mathematician. lemonis: okay. if someone pointed out to you that you made $319,000 in profit

and you had zero cash in the bank, you would think that you would be alarmed. i mean, sharla is acting like it's nothing. if you don't know your numbers, you don't know your business. sharla: you're asking me, "does the number look right?" i don't even know how to get in quickbooks. i mean, i can get in quickbooks, but i don't, like, barely know how to write a check. lemonis: sharla, this isn't quickbooks. this is, like, math 101. sharla: i'm not an accountant, so i don't understand it. lemonis: okay, so how about i bring in an accountant to go over the books with us? would that be okay with you? sharla: absolutely. lemonis: okay. i'll see you tomorrow. sharla: adios. sharry: can i talk to her in private for just -- without a mic or what...? sharla: i don't care if the mic is on. sharry: yeah, you do. sharla: no, i don't. i'm just going to say this. i might not be able to read my balance sheet, but i make two point, whatever they said, million dollars a year, so don't be telling me i'm stupid and don't know what i'm doing. sharry: he didn't say you were stupid. sharla: oh, please don't. it's my money. sharry: but you shook -- i mean... sharla: i did what? excuse me? what did you start to say? sharry: you shook his hand. sharla: so what? still my company.

lemonis: that little scene... amber: yeah. lemonis: ...between her and her mom when i'm out the door, i didn't know that happened until i watched the episode. amber: sure, yeah. lemonis: she was one way when i was there, and she was a different way, and she was so flippant to her mother that i felt like sharla was starting to panic a little bit. amber: yeah. she was starting to get called out on stuff, and she didn't like that. lemonis: and she felt out of control. amber: out of control, 100 percent, and mom telling you something is, like, you don't want to hear your mom kind of telling you. lemonis: she was holding her accountable. amber: yeah, that's right. lemonis: she didn't want to be. amber: no. lemonis: if your business is in trouble and you need my help, log on to theprofitcasting.com.

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amber: somebody get this guy lunch. what is going on here? ♪ greg: hey, thanks a lot. lemonis: come in. sharla? sharla: yes. how are you? lemonis: brought a friend of mine. his name is greg. greg, this is sharla. greg: sharla, good to meet you. sharla: hi, greg. nice to meet you. lemonis: craig has done forensic accounting for me on a number of deals. sharla: obviously, it's a cash business, so i have cash all the time because i have to create tills for all my registers. greg: right. sharla: right, so i will withdraw money out of the account, meaning... lemonis: here is a gift... sharla: ...boxes of quarters. there you go. lemonis: ...in case you want to take a bag of cash. greg: right. see, cash is the most valuable assets because it's the most liquid asset. sharla: sure. greg: so you have to have the most control over the your cash and your cash flow. sharla: okay. greg: and, in fact, if you don't have control over your cash, you may be losing cash. lemonis: so let me show you guys. so this is income statement for 2011, $67,000.

greg: okay, so that's positive. lemonis: okay. sharla: mm-hmm. greg: okay. lemonis: then, in 2012, sharla, you made $319,000. sharla: okay. lemonis: here is what's most alarming. there's the cash balances of december 31st. there's no cash. sharla: mm-hmm. lemonis: it's -- you can see why it's alarming to me. sharla: well, so here is my question. firestone financial is who finances my carts. okay. under liabilities, you don't see that anywhere, and i pay it every month. lemonis: where's the money coming from? sharla: out of the bank account. lemonis: then it would adjust on here. greg: i think it's ending up here because look at this. eighty thousand went here, so you went from $86,000 to $162,000, okay? sharla: okay. greg: here is the problem, though. we actually expect more profit because it was miscoded. lemonis: which means the income would be higher, not lower. greg: exactly. right now, our expenses are overstated, so we expect a lot more cash, so cash is leaving somewhere. lemonis: what the forensic accountant found was that there are entries that were wrong on the books. he actually discovered that the profit is even $80,000 higher than we thought, which means there's $400,000 missing, not $319,000.

what's happens is, there's leakage somewhere. i don't know if somebody else is stealing or you're stealing. sharla: i control all the cash, so if anybody is stealing, it would be me, and i don't steal. greg: okay, so where's the cash? lemonis: where is the cash? sharla: couldn't tell you. lemonis: somebody has to be stealing from this business, and i don't know if it's sharla or one of her employees. when you think back to the cash that was sitting on the floor, be easy to walk away with $5,000, $10,000, $15,000. makes me terribly uneasy about doing this deal. would you make this investment if you were me? greg: no, i would not do this deal. lemonis: in hindsight after getting to know sharla a lot better, i'm fairly confident that she wasn't stealing money. amber: right. lemonis: was she overstating her profit? that could be possible. were other people at the register just scraping money? no, because the revenue wouldn't be there. i still, to this day, don't have an answer. amber: right, and also, you're not... $400,000 is a lot of money. it's a lot.

lemonis: it's over a $1,000 a day. amber: it's several people's salary, like, for a year. lemonis: for whole staff. amber: yeah. ♪ sharla: use my mom's stapler because my stapler doesn't work right. steve: okay. lemonis: can we talk about something? i was planning on having a frank discussion with sharla about the money, but something way more pressing came up. i received a disturbing e-mail from salem. this e-mail came from salem. it's like a trail. he told me that sharla and steve have been communicating with him on trying to buy a website that i already owned. it says, "hey, salem, just left you a voicemail. could you please let me know what you're asking for popone.com?" sharla: right, we did have an e-mail with him. lemonis: but i told you that i already owned it. popone.com is an organic popcorn site that i was creating for sharla and i. she knows that i already own it. she has no business going around me trying to buy it. sharla: we wanted to secure it so we could do the brand.

i mean, we're partners. i told you 50/50. i'm absolutely telling you the truth. what's -- i don't understand what's wrong. lemonis: let me just tell you how this feels. you guys basically were trying to steal it thinking you were going to swipe it away. sharla: really, honest to god, and you can ask him. lemonis: you were just going to bring it to me and say, "oh, marcus, you said you owned it, but you must have been mistaken. here it is"? i mean, come on, guys. i mean, you're not going to convince me that you didn't know what you were doing. sharla: i didn't think it was a crime. lemonis: but, sharla, we had a nice conversation about honesty and integrity, and you told me you'd never try to undermine me. sharla: how would i screw a billionaire? really, seriously? i've never screwed anybody in my life. well... [ laughs ] lemonis: sharla, is it possible that you and i can just talk without everybody just for a minute? sharla: sure. lemonis: there's a million people that make popcorn. what i care about is doing business with people who i believe have their best interests and my best interests. sharla: right. lemonis: i told you that in the car, that character and integrity is everything for me.

sharla: right. lemonis: okay? i don't care that all these cameras are here. sharla: no. lemonis: please let me finish. sharla: okay. lemonis: i picked your company out of all the -- let me finish. sharla: okay. lemonis: out of all the calls i got, i had plenty of chances to pick companies. sharla: but not everybody has the -- lemonis: and i thought what i found is a bulldog with a lot of character, and i was wrong. sharla: don't make me cry. you're making me look like a stupid liar, and i'm not! lemonis: but you lied to me. sharla: i didn't. when did i lie to you? did you say to me today, "are you trying to buy pop one?" did you ask me that? lemonis: how was i supposed to know? you did it behind my back. sharla: i didn't -- lemonis: how am i supposed to trust you? i mean, i was willing to put in hundreds of thousands of dollars in the business. sharla: marcus -- lemonis: and you're asking me to trust you. "i'm trustworthy. i have integrity. i have all these things." sharla: i absolutely do. lemonis: you did not display it. i could've been less emotional about it. i was upset. amber: well, i think you also -- part of you felt like if you can't trust her in that moment with you and the website, then how can you trust her

with the other things that she's saying is correct? i'm not saying she's lying. lemonis: it puts doubt in your brain. amber: it puts doubt. lemonis: i went from, "i don't know where the money is," to, "now i feel like you're trying to cheat me." amber: right. lemonis: for exclusives, extras and business advice, visit theprofit.cnbc.com. it's absolute confidence in 30,00or it isn't. arts, it's inspected by mercedes-benz factory-trained technicians, or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event, now through august 31st. only at your authorized mercedes-benz dealer.

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lemonis: after thinking about it, i've made my decision. i'm going to go have a talk with sharla. ♪ i feel like i came into this business. i thought i saw something really good, a $2 1/2 million business that could be a $10 million business. sharla: right. lemonis: and between misleading me about the crepes, flip-flopping on the books, you didn't want me to look at your books 20 minutes after you told me it was okay to look at your books. between that, between the cash missing from your balance sheet and the forensic accountant coming in and telling me it's even worse, what really got me was the website stuff. you blew it! i told you that trust and integrity are everything to me. i have to know for sure that the partner that i have has the same goals and the same vision as i do. i'm not going to do business with you. i wish you a lot of luck, but i'm not going to do business with you. ♪

i have a much different perspective about this deal as i sit here right now than i even did back then. i displayed, i think, a lack of patience that i normally have. normally, i'm a lot more patient than i was in this particular scenario. amber: right. you maybe could have had more finesse, but i also think that she didn't want to give up control, and i don't think, even if you were softer or you maybe had come about it a different way, i still don't think she would've given up control. lemonis: it's kind of interesting because, over the last several years, i get random texts from her... amber: yeah. lemonis: ...about how well she's doing, and i even went back. good to see you. and we tried to restart things again. most people will scratch their head wondering why in the hell we're sitting together. sharla: thank you for helping. lemonis: i ended up getting her a machine to help her bagger stuff, and i turned over the planet popcorn website to her. amber: and are you still partners? lemonis: i ended up never really formalizing anything because, in the end, i think sharla wasn't going to change, and i'm not going to change. amber: right. lemonis: why enter into something that's going to be tense?

if anything, this process with her, i think, opened her eyes to be better. amber: right. right. lemonis: and i give her a lot of credit for being resilient. popcorn is still good. amber: popcorn is awesome, and she's a lot of fun. lemonis: she is. lemonis: come on. amber: you know what? lemonis: what? amber: i'm actually 100% in charge. lemonis: no. you can't even deliver with conviction, so, no, you're not. i'm in charge. amber: i am. it's my show. lemonis: it's my show. amber: no, it's not. lemonis: it's my show. amber: i'm the executive producer of the show. lemonis: gee, you're right. amber: [ laughs ] ♪ lemonis: in the last five years, i visited over 70 businesses... it's delicious. woman: ah! lemonis: ...and i've traveled the country trying to fix the people... woman: i don't want to be that person that cries on tape. lemonis: ...fix the process... i don't think you guys have any idea what's in your inventory. holy [bleep] ...and create a few products. welcome to your new store. man: oh, my god. woman #2: i owe my life to this company. lemonis: that is the reason that i'm here. i spend hundreds of days a year working on these companies.