i don't, because i do feel like taylor is better today than when i met him the first time, and ultimately, that's the satisfaction that i need. ♪ lelemonis:h! tonight on "the profit"... bunch of cheese snobs in here. ...a family-run cheese shop has been a staple in the community for decades. michael: who wants first? let's go. lemonis: unfortunately, the ugly, aging storefront speaks to a lack of passion. look how your windows look. looks like you guys don't respect the business. and what once was a thriving business has now become a burden to both father and son. michael: it felt like i was an indentured servant. lemonis: dad's terrible money management has racked up debt. the company is essentially bankrupt. if you don't solve the debt, the business is closed. that debt has weighed on his son. michael: i said, "you own the business, too. you come and run it." lemonis: and the employees, they've reached their limit.

miguel: for the last 18 years, you have not raised me a penny. you don't know what kind of man i am. lemonis: if i can't help renew their passion... nothing's changed. ...revamp their attitude... miguel: i love it so far. lemonis: ...and most importantly, resolve their family issues... i know it's hard for you. ...this long-standing new york business will be shredded. i think i'm more excited about it than you guys are. ♪ i'm marcus lemonis, and i risk my own money to help businesses. i love investing in american businesses. woman: these people are here because they care. lemonis: it's not always easy, but i do it to create jobs, and i do it to make money. do we have a deal? let's rock and roll. man: yeah! lemonis: this is "the profit." ♪ today, i'm visiting ideal cheese shop, a neighborhood favorite on the upper east side of new york city. michael: you like brie? you'll find out, right? lemonis: and despite their multi-decade success,

they're having trouble making ends meet. michael: we've got panforte, amaretti. lemonis: look, i love working with family businesses, but i never know what sort of relationship dynamic i'm walking into. oh. the minute i walk through the door, i'm stunned by the smell. it didn't smell great. how you doing? i'm marcus. michael: michael. pleasure to meet you. lemonis: michael, nice to meet you. there's an interesting scent in here. michael: yes, it is a pretty heavy aroma. i don't smell it at all. lemonis: it's strong. michael: we're cheese guys. we smell nothing. lemonis: how you doing? i'm marcus. josh: josh. nice to meet you. lemonis: nice to meet you. julius: hi, marcus. julius. lemonis: julius, nice to meet you. julius: this is angela. angela: hi, marcus. lemonis: really nice to meet you. how long has the business been here? julius: in april, it will be 20 years. lemonis: in this location? julius: in this location, yeah. lemonis: but the company has existed for how long? michael: 1954. lemonis: and when did you guys buy it? michael: 16 years ago. we do kind of three businesses in one, so we have the retail shop. second one is online, and then the third one is a wholesale business where we sell to restaurants and hotels. we have 5,000 restaurants in manhattan that we can sell to.

lemonis: how many do you service? michael: probably, like, 65, so 0.1%. lemonis: oh. a little smaller than i thought it would be. michael: yeah, but it still... lemonis: did you lose customers over the years? michael: that's the area that's, you know, spikes and valleys, depending on where we are in the time frames. lemonis: how many types of cheese are there? angela: oh, my god. michael: probably 10,000. france alone, there's over 5,000 cheeses. lemonis: what's your favorite cheese? michael: yeah, don't get scared. julius: you will like it. michael: it's called brebis rousse. lemonis: it's really good. it's your favorite? michael: one of my favorites right now. lemonis: how many total cheeses in the shop? michael: a couple hundred from about 17 different countries. one of the first companies to really go heavily into european cheese. lemonis: i went to school in wisconsin, and i was wondering, like, "where is all the wisconsin cheese?" 'cause every cheese that's here is some sort of fancy cheese. now, i know there's a market for that, but there has to also be a market for, like, regular-people cheese. right here. can you give me a little tour of the store? julius: sure. michael: basic premise is that we work behind here. manchego -- very popular. angela: nice. manchego. michael: sheep's milk cheese from la mancha.

full array of cheeses here and behind. our blue cheese selection back behind here. lemonis: why does it seem inventory-light? michael: i intentionally do it like that, you know, to pay the bills properly. yes. lemonis: it is tight. i thought it was odd that he recognized that there was only a couple hundred cheeses out of 10,000-plus, and he's a specialty cheese shop. that was alarm bell number one. olives back here. michael: our charcuterie section. dried sausages, sopressata, jámon serrano. lemonis: limited beer selection, limited olive oil. michael: so, we have four lines of different pastas. lemonis: a little grocery. michael: right. lemonis: of the total revenue for the store, which is how much? julius: about $1.5 million. michael: right. lemonis: how much comes from dry goods, vs. cheese? michael: 80% cheese. lemonis: when you have a storefront in a city like new york, where rent is extremely high, every square inch of your space matters. in this case, 80% of the store revenue is coming from cheese sales,

while 20% is coming from packaged goods. but unfortunately, more than 50% of the space is dedicated to those dry packaged goods. allocating floor space and the assortment of products is crucial to a business being successful. so, what was your business to be able to do this? julius: i was in the courier service business... lemonis: okay. julius: ...27 years. lemonis: did you work in that business with him? michael: yes. lemonis: and have you guys always worked together? michael: my entire life. lemonis: your dad seems like an easy guy to work with. michael: yeah, okay. [ angela laughs ] julius: wait a minute. did he hesitate? [ laughs ] michael: no, he's not so easy. lemonis: he's not so easy? angela: no. julius: i think that michael would work better without me. i'm ready to kind of take a step back. lemonis: oh. michael: not on-site. so, you know, he lives in florida, so i'm the day-to-day operator. julius: last 2 years. lemonis: why can't he buy you out? michael: yeah, so, we've had some broad-based discussions over the years, but there was no motivation for him to do it as the controlling interest partner. lemonis: so, it's 50-50? michael: 70-30. lemonis: you have 70? michael: no.

angela: he has 70. michael: he put in 100% of the money. lemonis: and you get a wage in addition to your equity? michael: no. and it doesn't change year to year, so it's like i'm an employee. angela: see, that's where he feels it. michael: so i am an employee. lemonis: okay. you can sense from michael that he's frustrated about his financial arrangement with his dad. not a comfortable position for anybody to be in. why haven't you come up with a plan to transition the ownership of the business to your son? julius: i have. i've been looking to see if i can find... lemonis: he says no. julius: no? michael: he's just looking to try to sell it. julius: no, i've been looking to find a partner for the last 2 years. that's the truth. lemonis: but why haven't you sat down with him and said, "okay, i want to sell you the business"? michael: right. julius: because i'm not sure if he would accept that as a possibility. michael: well, maybe 7 or 10 years ago, we would have done that. lemonis: what about now? michael: i don't know. where the business has fluctuated a little bit, it's probably turned me off a little bit than more turned me on, but...

lemonis: interesting. michael: ...i still see positives in what we can do to it. lemonis: is there a lot of debt in the business? angela: yes. michael: yes. lemonis: where'd that come from? angela: the other cheese shop out on long island. lemonis: you had a cheese shop out in long island? angela: yeah, we had a restaurant, cheese, coffee, and takeout. julius: all in one. lemonis: what happened? it closed? angela: oh, yeah. lemonis: how much did you lose? julius: $300,000. lemonis: so, has it accumulated new debt? michael: oh, yeah. lemonis: and how much is the debt now? julius: about $400,000. lemonis: oh, wow. there's a lot of debt on this current business, but the genesis was from another cheese shop that the family decided to open on long island, and when that business failed, the burden came back to the original cheese shop, and it's dramatically hurting its ability to grow. lemonis: hi, sir. welcome. man: hey. the best store in new york. lemonis: best store. man: great for the neighborhood. angela: thank you. michael: we appreciate it. thank you, sir. julius: i paid him to say that. lemonis: yeah. you can go help him. michael: order's complete, i'll box it up.

what else for you? thank you. have a good day. ♪ lemonis: the validation of customers walking in and out of this store all day long is mind-blowing. [ telephone rings ] ♪ michael: this is michael with ideal cheese. how are you today? lemonis: but i thought it was odd that i see michael on his feet working, and julius, who owns 70% of the business -- he's fussing on his phone. can i ask you a question? michael: yeah, of course. lemonis: i love the fact that you're committed to helping your dad. michael: i mean, i work here. i like it here, but i just need it to be different. lemonis: what does "different" mean? michael: it's built-up frustration. 7 days a week. it's 12, 13, 14 hours a day, so it's been a grind. lemonis: and what do you think your dad ultimately wants out of this scenario? michael: i think he feels some pressure right now, too. i've told him that i want to quit. i tell my mom i want to quit. he goes, "well, you own the business."

i said, "okay, you come and run it." lemonis: "oh, by the way, are you thinking about investing? well, that's good. i just want you to know i'm thinking about quitting." can you do me a favor? michael: of course. lemonis: grab the financials and your mom and dad, and let's go around the corner. we'll sit outside and go through it. this is a 50-year-old-plus business in a great neighborhood in new york city with millions of people to serve. you and i will sit together. and at this particular moment, the lack of passion that michael's exuding is almost like a death sentence for the business. alright, so, last year, $1.472 million in revenue, gross profit of $542,000, so just a little over 34%. credit-card interest -- 11 grand. finance charge -- 8 grand. julius: yeah, just keep going. lemonis: line of credit -- 11 grand. total interest expense -- $31,000. your rent is $185,000, and so, on paper, the business only makes 28 grand. michael: correct. julius: right. lemonis: and what is the revenue done over the years? '16, it did $1.7 million. '17, it did $1.7 million. '18, it did $1.4 million.

in the last 12 months, it's down 300 grand. angela: yeah, we lost a big account. lemonis: total cash right now in the bank. julius: about $10,000. lemonis: and what are the total payables? julius: $70,000. lemonis: what about receivables from vendors? julius: $70,000. they're almost equal. lemonis: how much debt is there? julius: about $400,000. lemonis: about $400,000? julius: yeah. lemonis: okay. people could argue that the company is insolvent, which means, essentially, bankrupt. if you don't solve the debt or put money in, the business is closed. the debt is suffocating the business. michael: correct. lemonis: and that debt wasn't really generated from the business' mistakes. michael: i say that every day. i shouldn't be getting phone calls that i owe money to people. lemonis: the problem is that you're in quicksand right now, and unless the business has an infusion in capital, it's going to close. michael: i don't disagree. lemonis: if the gross profit and earnings of the business are the only mechanism to solve the debt in this particular scenario, there's no way out,

so either new money comes in, the debt gets reorganized, or the business closes. and if the business closes, what happens with the debt? julius: i'd probably declare personal bankruptcy. lemonis: your wife is totally freaked out that you said that. angela: yes. lemonis: am i right? lemonis: 'cause he said it very casually. angela: yeah. i -- you know, i... julius: uh-oh. lemonis: well, it's a serious thing. julius: i'm taking it a day at a time. you know, try to find more business through wholesale accounts, basically. michael: see how it keeps coming back to the business is not doing enough, but if you take the debt out, is the business still okay? lemonis: it's not doing as well as it used to. michael: correct. lemonis: and the fact that the business is down, and there's debt is a perfect storm. michael: correct. lemonis: i've seen enough. let me come back with some ideas and see if there's something to do. okay? michael: thank you, sir. angela: it's been a pleasure, marcus.

lemonis: you're a good guy. michael: thank you. lemonis: i'll see you in the next week or so. michael: thank you, sir. julius: thank you. ♪ ♪ michael: how are you? angela: well, hello, there. lemonis: how are you? i asked the family to meet me for lunch to really sit down and find out if there is a deal to be made. now, in this particular case, there's one problem to solve -- what's gonna happen with the debt? i left concerned. what's the business worth? michael: maybe a tip over 1 million bucks. lemonis: subject to the debt. that would lead you to $600,000. michael: that's correct. lemonis: i don't think your business is worth 1 million bucks. the challenge that i have is, as an investor, i don't want to fund into your previous problems. michael: sure. lemonis: i want to fund into the growth. i would like to do some business with you guys. angela: well, we would love to have you. lemonis: i'm willing to invest $100,000.

for a $100,000 investment, i would want to own no less than a third of the business. angela: [ laughs ] his face. julius: so he's valuing it at 300 grand. lemonis: does michael care? miguel: he's just burnt out. there's no motivation. he is a dead piece of meat. lemonis: for a $100,000 investment, and i like to question your i'm yoevery move.n law. like this left turn. it's the next one. you always drive this slow? how did you make someone i love? that must be why you're always so late.

i do not speed. and that's saving me cash with drivewise. [mayhem] you always drive like an old lady? [tina] you're an old lady. how do you gaveeno® happy 24/7? with prebiotic oat. it hydrates and softens skin. so it looks like this. and you feel like this. aveeno® daily moisturizer get skin healthy™ ♪

♪ ♪ ♪ ♪ i feel good ♪ i feel - i feel good ♪ they say i got the moves. ♪ i feel good. awaken your awesome... with the invigorating coverage of the delta® in2ition ... two-in-one shower. see what delta can do. i need all the breaks, that i can get. two-in-one shower. at liberty butchumal- cut. liberty biberty- cut. we'll dub it. liberty mutual customizes your car insurance so you only pay for what you need. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ neutrogena® rapid wrinkle repair®. we've got the retinol that gives you results in one week. not just any retinol. accelerated retinol sa. one week is all it takes. neutrogena®. has you covered withe fast, reliable internet.finity with advanced security to help keep you secure online.

and with the most tv shows, movies and streaming apps all in one place. with simple digital tools you can get the help you need or even trouble shoot your services on your own. download the xfinity my account app or just say help into your xfinity voice remote. we are working to make things a little easier on everyone. download the xfinity my account app today. i would want to own no less than a third of the business.

julius: so he's valuing it at 300 grand. lemonis: no, i'm valuing it at 700 grand, which is way more than it's worth, and i'm taking the debt of $400,000 off of it. if you use the $100,000 offer for 33% of the business, you would assume that it has a $300,000 value, but it actually has a $300,000 net value. after i take the earnings and the assets, i put a multiple on them, and then i deduct the amount of debt that it has. i would want that $100,000 to clean up the past-due payables first, additional inventory second, and refresh the store third. i do not want any of my $100,000 to service any of the debt. angela: okay. now, we want $150,000 for the same percentages. lemonis: how'd you come up with that? angela: i didn't. [ laughs ] i just asked for more money. julius: no, no, no. lemonis: your counter's $150,000 for 33%.

that's $50,000 more. that puts the valuation at... julius: $850,000. lemonis: yeah, and i just don't think the business is worth that. julius: how about if we split the difference? michael: $125,000. lemonis: do you know what a preferred investment is? are you familiar with the concept? michael: not really. lemonis: so, a preferred equity is essentially being a shareholder, but getting a guaranteed return on capital, meaning that if the business doesn't do well, i still get paid. michael: right. guaranteed rate of return of what? lemonis: i would say 15%. julius: that's fine. lemonis: so, let me clarify. we're gonna settle on $125,000 for 33%. but that $125,000 would come with a preferred return of no less than 15% on my capital, and if the business ever sells, i get my money out before anybody else. angela: correct. julius: that's fine. lemonis: okay? julius: yep. angela: okay. it's a deal. lemonis: okay. so, because i know who really runs the family, i'll give it to the person that i know really...

it ended up where it belongs. angela: thank you. lemonis: we got a deal? julius: we have a deal. lemonis: we have a deal? angela: we have a deal. lemonis: we have a deal. okay, thank you. michael: thank you. ♪ lemonis: one of the first things that i want to do is work with julius to understand how this business is going to grow its revenue, and you've got to start by making sure that the curb appeal of this business is the most important thing. do you see how clean their storefront looks? julius: yeah. lemonis: and then you go to the nice flower shop. look at how beautiful their curb appeal is. look at how clean their windows are. julius: yes. lemonis: then you come here. look how [bleep] the windows look. i mean, lookit. the awning started falling down. there's rust everywhere. the windows are dirty. this store should do double what it does. somebody's got to be accountable for the way it looks, so is it you? is it michael? is it... julius: really didn't take a good, hard look at this. lemonis: michael's gonna work on changing the assortment and doing all these other things,

so this kind of stuff has to be yours. julius: okay. lemonis: michael is questioning his dad's commitment to the business, so i've asked julius to take care of the front of the store, probably the easiest task of all of them. miguel: miguel. lemonis: miguel. marcus. nice to meet you. how many years have you been here? miguel: in this location, 18 years. lemonis: 18 years. and in the previous location? miguel: about a year and a half. lemonis: is this a better location than the previous one? miguel: i will say the other location was better. lemonis: what's the difference? miguel: there is no stuff that people are looking for. lemonis: we don't carry what people want? miguel: there are so many good cheeses out there that we could sell here, but we don't have because he just doesn't want to buy. lemonis: why doesn't he want to buy it? miguel: he doesn't care. lemonis: does julius care? miguel: he does, but he's never here. lemonis: does michael care or less than julius? miguel: used to. lemonis: not anymore? miguel: he's a dead piece of meat. lemonis: and why do you think michael stopped caring? miguel: he's just burnt out. lemonis: i've seen michael work bell to bell with customers, but i do understand what miguel's perspective is about them not really caring about the business,

and i want to get to the bottom of that with some of the other employees, as well. in business, the question of "why" is one that i have for everybody. tell them, why do you have this business? michael: well, it's to make a living for me first, actually. lemonis: okay. julius: well, i like the margins, and the business is unique. lemonis: okay, so, the two things that they just said were, "i want to make money," and, "i like the money." and if you open a business purely to make money, your business more than likely will fail over time. why are you -- why do you work here? be honest. nicholas: because i have a love and passion for good food. lemonis: okay. josh: i love working with cheese. lemonis: okay. miguel: i have the heart for it. lemonis: okay. why do you have this business? if it's to make money, i should leave now. michael: sure. lemonis: okay. ♪ michael: my reputation in the business was getting ruined. it felt like i was an indentured servant.

lemonis: if you're looking to take your business to the next level, log on to theprofitcasting.com. that liberty mutual customizes your insurance,ness? i just love hitting the open road and telling people so you only pay for what you need! [squawks] only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ this is my body of proof. ♪ proof i can fight moderate to severe rheumatoid arthritis.

proof i can fight psoriatic arthritis... ...with humira. proof of less joint pain... ...and clearer skin in psa. humira targets and blocks a source of inflammation that contributes to joint pain and irreversible damage. humira can lower your ability to fight infections. serious and sometimes fatal infections, including tuberculosis, and cancers, including lymphoma, have happened, as have blood, liver, and nervous system problems, serious allergic reactions, and new or worsening heart failure. tell your doctor if you've been to areas where certain fungal infections are common and if you've had tb, hepatitis b, are prone to infections, or have flu-like symptoms or sores. don't start humira if you have an infection. humira is proven to help stop further joint damage, ...and it's the #1-prescribed biologic for psa. want more proof? ask your rheumatologist about humira citrate-free.

amake it feelh impossible to breathe. get relief behind the counter with claritin-d. claritin-d improves nasal airflow 2x more than the leading allergy spray at hour 1. claritin-d. get more airflow. guys! guys! safe drivers save 40%!!! safe drivers save 40%! safe drivers save 40%!!! that's safe drivers save 40%. it is, that's safe drivers save 40%. - he's right there. - it's him! safe drivers do save 40%. click or call for a quote today. they get that no two people are alike and customize your car safe drivers do save 40%. insurance so you only pay for what you need.

what do you think? i don't see it. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ if it's to make money, i should leave now. michael: sure. lemonis: okay. the only reason that i'm here is 'cause i think this is a really cool, interesting concept. i think i'm more excited about it than you guys are. this feels like you're running a cheese stand at a farmers' market. i never like it when the passion doesn't exist with the owners, and the fact that your employees are more excited about being in the cheese business should alarm you. how long have you worked here? nicholas: 10 months. man: two years. lemonis: two years. josh: a little over a month. lemonis: a month. miguel: 18 years. lemonis: and why have you stayed? miguel: they pay me enough not to quit myself, and i just do enough not to get fired. julius: that's an interesting observation.

lemonis: you should be embarrassed. julius: are you unhappy with us or your fellow workers? miguel: with you. for the last 18 years, you have not raised me a penny. michael: that's correct. julius: right, but... miguel: for the last 18 years, everything has gone up. my rent has gone up nine times. i know i have the potential and the knowledge to do much, much more here. you don't know what kind of man i am. julius: there's no one here that's ever been paid more than you except one guy. everyone else doesn't meet your salary right now. lemonis: let's try it a different way. let's try this a different way. julius: well, there's a margin. lemonis: if you think you could do more, i'm gonna take you up on your offer. and if you do more, you'll make more. miguel: yeah. lemonis: if you want an opportunity to grow... miguel: just give me an opportunity. lemonis: i will. miguel: i know i can do it. lemonis: and i will put you to the test. you succeed, i'll reward you. miguel: that's fine. lemonis: it's america. that's how it works. 'cause if these two guys don't want to be here, you're out of business, and i'm not gonna lose my money. i'm gonna make sure of that. the assets in this building aren't the cheese or the fixtures.

it's the people that work there. and julius has failed my number-one test, which is recognizing that people are the most important thing. so, we're going to go find new cheese. we're gonna change the way the store feels. we're gonna get the right kind of products in here, and we're gonna fix the process and our attitude. one of the most important things in changing the mind-set of a business is starting immediately and leading by example. and when i tell the team, "we're gonna make progress," that means now. everybody grab a garbage bag. anything you think needs to go, this is the moment. miguel: alright. i hold the bag. michael: sorry. ♪ ♪ lemonis: julius. julius: yeah, i saw that. lemonis: well, is that not a big deal to you? 'cause i would lose my [bleep] if i saw that. julius: i see. lemonis: that shouldn't be there. now, look, i can't blame mice for coming into a cheese shop,

but they're actually not welcomed guests, so don't make it easy for them to be there by leaving crap all over the floor. now, how awesome is this? miguel: i love it so far. lemonis: todo bien. miguel: todo bien so far. julius: it's organized and open, and i think it looks fantastic. lemonis: how much money did we spend to do it? michael: zero. julius: zero. lemonis: what did it take? michael: effort. julius: just an effort. lemonis: okay. michael: alright. julius: and that'll continue. lemonis: i don't believe you. julius: we're gonna prove to you that you're wrong. lemonis: so, the next time we're together... julius: yeah. lemonis: ...we want to get this removed. the floor should get pressure-washed. the awning has to get replaced. that condenser has to get removed. i'm gonna leave you with a credit-card number... michael: sure. lemonis: ...to get all this done. julius: we're good. lemonis: okay. julius: thank you. lemonis: thank you, guys. so, i'll see you soon. okay, guys. julius: thank you, marcus. ♪

lemonis: welcome to wisconsin. michael: thank you very much. lemonis: how are you? michael: very well, thank you. lemonis: i thought it'd be a good idea to take michael to mars cheese castle. they are the premier cheese retailer in america. and i thought it would be good for michael to learn something. tyson: hi, marcus. i'm tyson wehrmeister. lemonis: tyson, nice to meet you. michael: tyson, michael binetti, ideal cheese. tyson: nice to meet you. michael: pleasure. tyson: thank you for coming in. lemonis: now, you're third-generation. tyson: i am, yes. my grandfather and grandmother established the store back in 1947. lemonis: how much square footage is in this building? tyson: 48,000 square feet. lemonis: how many different types of cheeses do you have? tyson: over 1,000. lemonis: so, can you pick out the five things that you think we should carry? tyson: wisconsin cheeses? lemonis: yes. tyson: okay. the 3-year white. lemonis: doesn't taste very sharp. tyson: this is the 7-year. lemonis: it's got more... michael: more flavor. lemonis: ...more bite to it. so, that one i like. tyson: so, this is the 10-year. yep. lemonis: cheese is awesome. tyson: i wouldn't cut it for just anybody. lemonis: don't cut the cheese for me. the thing that i wanted michael to experience

is that it's okay to have fun at work. like, lighten up, smile, laugh. what? michael: there he is. there's the cheesehead. lemonis: i'm sorry. what? i have to keep my cheesehead on. it's just cheese. so, you know, when i first met you, you seemed really unhappy... michael: for sure. lemonis: ...which is the exact opposite of how these people are. michael: you could feel their desire and their love for the business, for sure. lemonis: i know yknow the business. michael: for sure. lemonis: but the difference is, i don't think you like the business. michael: i'm frustrated with the business. you know, financial issues, and it was becoming more strenuous and stressful. lemonis: well, your dad's a very imposing character. michael: for sure. lemonis: do you think your dad, the owner of the business, took advantage of you? michael: oh, yeah. the last 2 years feels like i'm sitting in a jail cell. ♪ lemonis: this is the second [bleep] time that i've been here, and nothing's changed. we're gonna lose a business that generates $250,000

over a stupid lease? if you are currently facing we'rfinancial burdens,w normal"" call your state farm agent because we're here to help make this "new" normal, feel just a little more...normal. like a good neighbor, state farm is there.®

for adults with moderately to severely active crohn's disease, stelara® works differently. studies showed relief and remission, with dosing every 8 weeks. stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. some serious infections require hospitalization. before treatment, get tested for tb. tell your doctor if you have an infection or flu-like symptoms or sores, have had cancer, or develop new skin growths,

or if anyone in your house needs or recently had a vaccine. alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. these may be signs of a rare, potentially fatal brain condition. some serious allergic reactions and lung inflammation can occur. talk to your doctor today, and learn how janssen can help you explore cost support options. remission can start with stelara®. explore cost support options. finding the right words can be tough.n it comes to autism, finding understanding doesn't have to be. together, we can create a kinder, more inclusive world for the millions of people on the autism spectrum. go to autismspeaks.org did you know liberty mutual customizes your car insurance ta-da! so you only pay for what you need? i should get a quote. do it.

only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

lemonis: do you think your dad took advantage of you? michael: oh, yeah. it felt like i was an indentured servant, and i wanted to quit, but if i leave, what's gonna happen? i feel like my reputation in the business was getting ruined. these vendors are struggling as a result of this, and i'd love to pay them, but i can't. lemonis: because your dad's sucking all the money out. michael: right. lemonis: how much money do you think your dad took out of the business? michael: over 16 years? lemonis: $3 million? michael: yeah. lemonis: and now you're here scraping for a couple hundred grand trying to keep the lights on. michael: correct. lemonis: are there ever days where you think to yourself, like, "what am i doing here?" michael: yeah, of course. lemonis: what do you think would happen to the business if all of us hadn't gotten together? michael: i think it was gonna fail. lemonis: i truly do understand his passion has been totally watered down by his dad. if this succession plan is going to work, everybody's gonna have to love it and be enthusiastic, and the formula that they're using now, it isn't working.

you ready? michael: yeah, of course. ♪ ♪ lemonis: oh, wow. this place is cool. holy cow. corinne: hi, guys. welcome. lemonis: i'm marcus. corinne: i'm corinne. lemonis: how are you, corinne? nice to meet you. corinne: i'm great. lemonis: in order to improve the profitability of the business, i have to expose them to new products and new ideas, so i'm taking the guys to an unbelievable vendor called boska. they are the leading manufacturer of cheese accessories and supplies. michael and julius have a cheese shop, and we're trying to re-imagine the space. just like when we felt -- when we got off the elevator, we were like, "wow, this place is cool," i need that "wow" factor. it doesn't exist today. miguel: we do need a lot of stuff. corinne: okay. miguel: and i think we are in the right place. lemonis: so, what we would like to do is have you guys go through the showroom and pick three or four things

that you think you could sell in your store. michael: each of us? lemonis: yep, individually. michael: thank you. miguel: do you have those cutting boards? they're called lazy susan. michael: got it. perfect. lemonis: so, what kind of things did you pick? miguel: a beautiful 16-inch cheese board and a beautiful girolle. people always ask. lemonis: and those are things that you know will generate revenue? miguel: 100%. lemonis: okay. i love the fact that miguel is comfortable enough to exude his passion and his knowledge of what the company has and what it needs. he's already thinking, "where's my opportunity to make more money for me personally? i'm gonna go to work." lemonis: what did you pick, julius? julius: i picked this cutter. i think it's something that we'd sell, and i like that display. we could sample off of it. miguel: i really don't like it. instead of buying this, let's buy a cheese knife. we don't have any cheese knives at the store right now. lemonis: why would you not have cheese knives? michael: it was a functionality of me

buying cheese or buying auxiliary items. lemonis: no, and i understand that. michael: that was it. lemonis: but not having a cheese knife, but having 72 types of olive oil is odd. miguel, do you feel like you would like to drive the process of the accessories? miguel: okay. lemonis: because these knuckleheads didn't do anything. michael: everybody's not perfect all the time. at some point, if somebody messes up or trips up or has a bad day, you can't write them off for life. miguel: you know exactly what's going on in the store. michael: of course. miguel: right? and i know exactly what's going on in the store. michael: yeah, and we all have different perceptions. miguel: yes, but... michael: we live our lives through different eyes. miguel: you have to understand. the number-one reason that we are here is because of you. michael: okay. lemonis: i literally thought one of them was gonna grab a cheese knife, and something was gonna happen. and in order for this business to survive and for me to be comfortable putting my money here, they're gonna have to get all their dirty laundry out of the way -- right now. there's still some tension. michael: unresolved, sure. lemonis: yeah. michael: okay. lemonis: on the surface, he seems to have more passion and more vigor for the success of the location than you do.

you're very matter-of-fact. michael: yes. lemonis: there's a balance between your style and his style, and that's why it's good. it's yin and yang, and that's the nice balance between having two types of leaders. i want to finalize what the arrangement's gonna be. miguel: of course. lemonis: so everybody's clear. michael: cool. lemonis: okay, bye, guys. michael: have a good evening. miguel: have a good night. ♪ michael: oh. hey. zoe: hi. how are you? michael: pleasure to meet you. michael from ideal cheese. zoe: zoe. nice to meet you. lemonis: several years ago, i invested in a company called zoe's chocolate. zoe: nice to meet you. zoe. lemonis: nice to meet you. and zoe and her brothers have not only quadrupled the business, but they work well together because they respect each other. i thought it would be a good idea for them to spend time together. lemonis: i don't think we invented chocolate and cheese pairing. zoe: no. lemonis: but it hadn't been done in your store. michael: correct. lemonis: i love the pairing of chocolate and cheese and think it's an additional stream of revenue that ideal cheese could benefit from.

michael: oh, yeah. go for some cheese. so, this is just a rich, creamy double-cream from france, so it's super-rich. it's 100% goat's milk. pantelis: we should do a big tasting one day at the store. michael: oh, absolutely. lemonis: just like you guys know chocolate to the core, he knows his craft, and so the dilemma is, you have an expert in the space who's in a very weird financial predicament, and that financial predicament involves his dad. pantelis: that's tough. yeah. petros: it's important to have the roles differentiated. angela: and you have each other. he's by himself. julius: i'm not day-to-day. i don't wait on clients or anything like that. petros: so the biggest hurdle is that you feel like you're by yourself. you don't have the help from your dad that you need. michael: yes. angela: he was working 6 days a week, sometimes 7 days a week. lemonis: a lot of resentment. angela: yes. michael: i just felt like an employee. like, i had no motivation. i felt like i was just there for them. zoe: i mean, it's not easy. you don't want to ruin your relationship with your family, but everybody has to put in the same effort. it's got to be fair. our dad works and has never asked for anything.

angela: well, he takes a salary, doesn't he? zoe: yeah, we give him a salary. angela: 'cause you've got to live. zoe: his perspective is, at some point, he's gonna retire, and this is our life. angela: exactly, exactly. pantelis: one great thing with us, we're always fair. zoe: and very supportive of each other, too. lemonis: that's 'cause your mom and dad also wouldn't have it any other way. zoe: this is very true. lemonis: why don't we head back to the shop? michael: okay. lemonis: and let's see what's been done. [ siren wailing ] ♪ it's been almost 3 weeks since i visited the shop, and i'm looking forward to seeing what kind of progress and work they've actually gotten done. ♪ and nothing is done. in fact, it may even look worse. ♪ michael: marcus. lemonis: what's happening, buddy? how are you? michael: long day. lemonis: it kind of looks the same, everything.

michael: uh-huh. lemonis: how come you didn't do anything? i gave you my card to spend whatever i told you... michael: no, you told me to do renovation. i know. clear as day. lemonis: whatever you needed to do. the awning's the same. the windows look worse. there's a party grill in the window. i mean, come on. i gave you money to replace the glass. michael: i wasn't gonna spend that if i don't have a lease. we don't have a place to go potentially in april. lemonis: but that's a choice that your dad is making. michael: well, we're gonna try to get funds in. lemonis: your dad has funds. michael: how do we negotiate if we're putting money into the store? landlord's around. lemonis: right. michael: if he sees me doing changes, and we're coming up on lease, then we're screwed. lemonis: so, what we want to do is leave it as crappy as possible, hoping that the owner, what, is more motivated to keep you here? you have money. put money in it. what would you guys be doing if i had never shown up? 'cause this is the second [bleep] time that i've been here, and nothing's changed. julius: we needed to get funding... lemonis: why? julius: ...to pay the landlord. lemonis: so you want to pay the landlord with my money and make the renovations with my money? how much are you past due, julius? julius: 34, not counting this month.

lemonis: we're gonna lose a business that generates $250,000 over a stupid lease? "i don't want to put money in if i think the lease is gonna go away." that would be... michael: asinine. [ chuckles ] ♪ lemonis: i'm not sure what julius is expecting from me, but if he thought i was gonna come in here, do all the work, spend all the money, and he was just gonna hang out and enjoy the ride, he's sorely mistaken. [ clears throat ] julius. julius: it'd be best that you talk to michael. lemonis: okay. your dad doesn't want to talk to me. michael: no way! that's crazy. lemonis: he just told me. michael: please don't leave. lemonis: i'll see you. michael: marcus, please... lemonis: listen, i wish you a ton of luck. ♪ angela: if he wants to be bought out, i'm okay with that, you know? maybe it will be better for michael. miguel: i wasn't expecting this, so right now, i'm kind of shocked a little bit. lemonis: for exclusives, extras, and business advice,

visit theprofit.cnbc.com. ♪ and i like to question your i'm yoevery move.n law. like this left turn. it's the next one. you always drive this slow? how did you make someone i love? that must be why you're always so late. i do not speed. and that's saving me cash with drivewise. [mayhem] you always drive like an old lady? [tina] you're an old lady. at t-mobile, we know that connection is more important than ever. we've increased network capacity, given more access to unlimited data.

and provided free data for schools and students. visit t-mobile.com to learn more. you can also manage your account, make payments, and find t-mobile stores that are open near you. we've been asking, are you with us? but we want you to know, we're with you.

we've worked to provide you with the financial strength, stability, and online tools you need. and now it's no different. because helping you through this crisis is what we're made for. michael: did you tell him you don't want to talk to him? julius: no, i said it would be best if he talked to you. michael: no, but he wants to talk you. he thinks that you don't want to talk to him, and he was shaking my hand goodbye. lemonis: sometimes, in business, when you're upset, you may say things that you regret, so it's time to just take a breath, collect your thoughts, and come back in. the fact that you didn't solve the lease

and you're concerned about the debt scares me because it looks like you're looking to exit stage left while the place is burning down. and, julius, i know it's hard for you. julius: i have financial obligations, too. unfortunately, that's the situation today. it's changed from 3 years ago. lemonis: yes, sir. julius: so i do the best i can. lemonis: i understand that, and i know right now you want to punch your hand through the glass because you're frustrated that you can't solve it by snapping your fingers like you always did. julius: yep. lemonis: i know that. i think we're at this really pivotal point where in order for this to work, michael has to feel good. in order for this to work, he has to have a business that's set up for the long term. how does that happen? he's got to have a lease. he's got to have inventory. he's got to have help. julius: and i agree. lemonis: okay, come on. julius: alright. we're good. lemonis: okay? i'm glad that julius agreed to get the issue

resolved with the lease so we can actually get down to business. ♪ michael: i'm gonna just do a little setup first. lemonis: okay, great. now that things are under way at the shop, i wanted to really focus on how they were gonna grow their wholesale revenue, so i called my friends at serafina, who own about 15 restaurants just in new york city, thinking, "hey, this could be a very good opportunity." fabio: hello. michael: hello. how are you? michael binetti, ideal cheese. fabio: hi. how you doing? fabio granato. nice to meet you. julius: fabio. fabio: fabio granato. michael: michael binetti. vittorio: vittorio. michael: pleasure to meet you. so, we'd like to introduce ourselves as ideal cheese shop. we obviously have a retail shop. also, a big part of our business is wholesale. we focus heavily on european. we can do, you know, personal deliveries, get you product on an as-needed basis. vittorio: we buy 3,600 wheels per year. michael: so, would you like to take a sample of some of our cheese? fabio: i'm very anxious to try this cheese.

julius: mangia. michael: basically, as an overview, there's a pagliatina. so, it's aging that full flavor, so you're getting more intense flavor. vittorio: buonissimo. this is really good. michael: the second one is going to be the quadrello di bufala. they wash it just like taleggio, but they're using bufala milk instead of cow's milk. fabio: oh, yeah? cool. michael: it's delicious. vittorio: yeah. perfetto. michael: here's another very unique cheese called testun al barolo. it's a blended cow, goat, and sheep, depending on the season. fabio: how long has this been aged? michael: about 3 months. flavorful, and the wine is definitely gonna play a major factor. vittorio: fantastic. they're so good. michael: i can work with your chef on working with the condiments that will work properly with each cheese. fabio: that is excellent. guys, this is amazing. it makes me happy to see your knowledge, and it makes me confident to try one restaurant because you have knowledge and you can teach the kitchen. vittorio: this really can work. fabio: excellent. michael: let's just have a quick toast. fabio: yes. michael: to a new beginning, a new relationship. pleasure, guys. fabio: cheers, cheers. cheers. lemonis: one of the things that i love about michael is his product knowledge, and it's clear to me

that he came in very prepared for the meeting at serafina, and he did a great job. you blew me away. michael: oh, thank you. lemonis: and it was all because of the way you presented yourself, the product knowledge you had, and the confidence in which you did it. and i had not seen that until today at this level. michael: to me, it's just my knowledge, and it doesn't seem special because i do it every day. lemonis: but, michael, is special. michael: i understand. julius: and i'm proud of you, son. michael: thank you. julius: i really am. michael: thank you, i appreciate it. julius: he does a hell of a job. i love my son forever. whether he's my business partner or not, i'll always love him. michael: thank you. i love you, too. julius: i know you do. lemonis: i thought you did great. ♪ oh, it looks good. the sign, i've got to be honest, looked amazing. i thought the artwork was good, and the fact that the windows have been replaced changes the entire presentation

and the curb appeal of the store. i can actually see in now, and it's inviting me to come in. it was clean, fresh, and actually done. nicholas: hi, marcus. how are you? lemonis: hey, guys. miguel, what's happening, buddy? how you doing, my man? miguel: i'm very well, thank you. good to see you. lemonis: everything good? how are you, brother? awning looks good. michael: i kind of kept the ideal and showed big that we all are cheesemongers and showing the expertise. lemonis: i think it looks totally different. and the fact that the glass is clean. michael: glass looks amazing. lemonis: you can now see in. michael: we can see in. people are super-happy with it. lemonis: what are customers saying? miguel: "wow." lemonis: do they notice it? julius: they love it. michael: great reception from customers. lemonis: do you feel like there's more inventory? miguel: yes. michael: much better. lemonis: it is. i like the fact that we finally have a lot of the parts and pieces put together. so, is the boska stuff doing okay? miguel: oh, my god. very well, yeah. lemonis: the boska relationship is established, and there's inventory here. so, you have the wisconsin cheeses. michael: yes, sir. lemonis: oh, this is deer creek. michael: yes, sir. they're selling very good.

lemonis: and their relationship with zoe's is in place, and they already started selling chocolate. michael: miguel and i and the guys have helped set up some processes. lemonis: the other thing that i'm noticing is that michael feels really engaged in the business. michael: created contacts and vendor e-mails. lemonis: this is like the bible. michael: correct. lemonis: he now has a clear process for the employees to follow, and miguel is the one that implemented it. is the lease ready to sign? julius: yes. lemonis: you negotiated it? julius: yeah. lemonis: you feel good about it? julius: yes. lemonis: good job. julius: thank you. michael: super-important. julius: thank you. lemonis: our original deal was for me to invest $125,000 into the business to own a third of it, right? julius: correct. lemonis: and over the period of time, i think i've learned a lot about just how things operate with you guys. from a business standpoint, i don't think the two of you should work together anymore. ♪

♪ killer attitude. nevor hydration.... neutrogena® hydro boost. the #1 hyaluronic acid moisturizer delivers 2x the hydration for supple, bouncy skin. neutrogena®.

trust us. us kids are ready to take things into our own hands. don't think so? hold my pouch. somewhere you'll never find... sike! we put them everywhere. grocery stores and supermarkets, gas stations, and chiropractor's offices, bowling alleys, and grocery stores, which we already mentioned... not sorry, reese's. neutrogena® rapid wrinkle repair®. we've got the retinol that gives you results in one week. not just any retinol. accelerated retinol sa. one week is all it takes. neutrogena®. did you know liberty mutual customizes your car insurance ta-da! so you only pay for what you need? given my unique lifestyle, that'd be perfect! let me grab a pen and some paper. know what? i'm gonna switch now. just need my desk...

my chair... and my phone. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ bewe're bringing the theater home to you with xfinity movie premiere. such news. i know what this is. this is a real thing. our brand new service that lets you watch movies at home, while they're still in the theater. oh, mister elton. ahh! he has figured out a way to be invisible. they picked the wrong woman. just say "xfinity movie premiere" into your voice remote to bring the theater to you.

lemonis: from a business standpoint, i don't think the two of you should work together anymore. julius: and i don't disagree. lemonis: there's unnecessary resentment built up. not about you on a personal level, but on a professional level. julius: and i understand that. lemonis: so, the business has enough cash flow, it can pay you over time and buy you out. angela: if he wants to be bought out, i'm okay with that, you know, and gets the stress off of him. and maybe it will be better for michael. julius: correct. lemonis: the business, from the analysis that i did, could probably pay you out $400,000 over 7 years.

julius: okay. angela: okay. michael: $400,000 divided by 7. lemonis: clean. michael: $57,000. lemonis: $57,000 a year to him. what's the right thing for michael? angela: well, he needs help. he needs a partner. lemonis: i think miguel is important in this equation. what i'd like to do is rather than being a partner in the business, i'd like to have the money that i put in just be financing so that miguel and michael can own the business. mike, what's the right percentage? michael: do 15% of profit. lemonis: it's more important that michael and miguel own the business, and i'll be a lender in this particular equation. in the original deal, michael, julius, and myself each would own 1/3 of the business. i realized that it would be better if julius was bought out and that michael owned those shares. in the new deal, michael would own 85% of the business, and miguel would own 15%. so i talked to them, and what we're going to do is, michael's gonna own the business. you're gonna be his partner. you're gonna keep your original pay plan.

you're gonna keep your commission plan. and you're gonna have 15% of all the profits because i feel, and they feel, that this place wouldn't be the same without you. miguel: appreciate it. i wasn't expecting this, so right now, i'm kind of shocked a little bit, but very, very happy about it. lemonis: i felt like in order for this company to succeed into the future and for michael to have the support that he needed to be successful, he needed to have miguel as a partner, not just an employee. michael: thank you, marcus. lemonis: that work? michael: that's fine. lemonis: okay. are you happy? angela: yeah, i'm happy. lemonis: i really enjoyed you meeting you by the way. i think you're an amazing guy. miguel: appreciate it. thank you. lemonis: i know that you're tough on them, but they need it. look, ideal cheese has been in business since the 1950s, and i'm hoping that it can make it another 50 years. lemonis: okay, my man. julius: thank you, marcus. lemonis: thank you, buddy. after seeing the renewed attitude that michael has and having miguel as a partner, i'm confident that this business can reclaim its spot

as one of the best cheese shops in all of new york. and the good news is, with julius being bought out of the business, now they can get back to just being a wonderful father and son. ♪ ♪ jimmy: we are the best-kept secret in new jersey. lemonis: the food is amazing. ...great food isn't gonna be enough to keep this little new jersey restaurant afloat. you may have lost some business in those months. jimmy: lost half the business. it went back down to the numbers where we started. lemonis: this father-and-son team's complete lack of experience... this does not look like a financial statement. this is how a bookie keeps numbers. ...and motivation... does this sign look nice to you? dante: no. lemonis: all these weeds, all this trash, it feels like you really genuinely don't give a [bleep]. ...has them bleeding money year after year. jimmy: i don't think you know totally what to do. you don't know the laws. you don't know if you can handle this. lemonis: they'll need to learn the basics from the ground up. dante: we buy the pasta by the pound. we pay about $3.50 per -- lemonis: about or exactly?