-lemonis: how are you, sir? -lemonis: i'm marcus. -armik: armik. -lemonis: nice to meet you. meet you, too. -mark: we've met before. -armik: oh, yeah. mark: yeah, he used to pour candles for me. armik: mm-hmm. mark: but, uh, there were some issues. lemonis: what is mark doing? i just told him two minutes ago not to lead with the disagreement that they had. you know what i think the problem is? he doesn't want to give up control of making candles. he wants to continue to be a one-man band and keep this business in his garage. mark: instead of you doing the two blends -- it was a blend, remember? it was like a 75-25. there was a pom and a soy. you only filled it with the pom. you didn't blend it. armik: this is not the way which we agreed. based on our papers, we did right. and i had asked him, if you want, you know, just send it back. send it back. we are gonna correct it. mark: okay, see, i didn't want to get into it. lemonis: stop for a second. question i have for you is can you accept that there was a difference of opinion? mark: yes. i'd love to move forward. lemonis: but

-lemonis: and you started it? -larry: yes. -lemonis: by yourself? -larry: by myself. lemonis: when? -larry: '96 -- 19 years. -lemonis: wow. -larry: yeah, 19 years. -lemonis: why did you start it? larry: i was a theatrical-lighting guy. i like light. lemonis: so, any place you go in, you're looking right away at the lights. larry: i just thought everyone did it, t i've come recently to understand i got a little unhealthy thing with lighting. -lemonis: get to light therapy. -larry: i need light therapy. lemonis: what's that there? larry: so, this is something i'm actually really fond of. the designer said, "i want something with spikes, little lamps on the end." lemonis: what does something like this sell for? larry: this was about $5,600. lemonis: and what would something like this cost to make? larry: 4 grand. lemonis: they're not great margins. larry: not this particular one, no. lemonis: why? larry: um... lemonis: 'cause it's a custom piece, and so, typically, i would expect it to come with better margins. larry: yes. lemonis: did you miscalculate it? larry: uh, yes. lemonis: i'm

-lemonis: why? -layne: she actually just got so aggressive on buying a bunch of inventory 'cause she was so excited about the product that she created. she just wanted to sell a ton of it. and me, i was wanting to try a little bit of it and then let's see if it sells. she's kind of like that helium balloon. if you don't grab her, she's just gonna keep soaring away. -[ laughs ] -miranda: it's true. this is our production room here. hey, ashley, can you show marcus how you fill lip glosses? she's way better than i am now. lemonis: i think the thing that surprised me the most was their manufacturing process, if you want to call it that, where they basically line up trays of empty bottles, and, with a syringe, they essentially fill them one at a time. i did one. -[ laughter ] -it's terrible. ashley: you did a good job. lemonis: that's, actually -- honestly, that's not easy. -ashley: no, it's not. -lemonis: you do it with this? -ashley: every single one. -lemonis: in big vats. i mean, i guess it's workin

lemonis: okay. i feel like we've put a great collection together, and i'm excited to see how it goes. i'm marcus. how are you? -steven: i'm steven jones. -lemonis: nice to meet you, sir. allison: hi. i'm allison. lemonis: this hotel is one of the best resorts in all of florida. people from all over the country come here. how many total rooms in the entire property? steven: the property consists of 250 rooms. lemonis: i think it's a real opportunity to not only make money, but get the brand out. steven: if you're looking at our colors, is that something you could incorporate into it? allison: yes. absolutely. john: how do i know if this has been in a room for four months? allison: we would co-date. however, once your guests are tasting it, that's not going to be an issue. lemonis: we sell about $1 million a year just in sea salt caramels. john: wow. -steven: a lot here. -john: yeah. a lot of options and a lot of customization, which is nice, as well. allison: yeah, we would love to work with you. ste

-lemonis: 10 days? -joe t.: more than that. -lemonis: 100? -joe t.: no. -lemonis: 30?monis: 60? -joe t.: yeah. -lemonis: 60 days? -joe t.: yeah. lemonis: there was 60-days time between you terminating the person and you stopping your communication with her? which means, joe, that it still happened inside of the window that you and i were partners. this discussion is about you making a decision that put the business in jeopardy. joe t.: i know, that's what you're saying. lemonis: you put your partners in jeopardy, you put me in jeopardy. why did you fire her? joe t.: she was being evaluated over time, and so was everyone else. lemonis: when i first got there, you never said to me, "there's a list of employees. they're problem children. i'm having to coach them." joe t.: i am not the person who's gonna say, "hey, i'm done with that person." i'm going to try to put them through my training program and see what i can do to make them better employees. lemonis: did you do that with the young lady? joe t.: as a group? absolutely. lemonis: i'm not saying as a group. we're not

lemonis: okay. erik: well, basically, what you do is you go online. you would select from a program, whatever you'd like. these are the programs. and we deliver gourmet health food right to your door. lemonis: fuel foods offers various meal plans. if you buy 10 meals, the cost is $9.50 a meal. but if you pre-pay for 300 meals, it drops to $7.50 a meal. now, that's a big discount. but incentives like that help cash flow, and they build brand loyalty. erik: so, we don't have any real production going on today. we have packing going on today. we're packing for tomorrow's orders. they'll arrive tomorrow to the clients. lemonis: so, today's thursday. what days do you cook? erik: i'll show you here. lemonis: what do these different colors represent? -erik: it's a packing day. -lemonis: okay. erik: so, we're packing on this day for delivery tomorrow. -lemonis: okay. -erik: same deal here. they're packing here for delivery on friday. lemonis: and when is the food prepared? erik: the menu changes twice a wee

lemonis: okay. at the moment, we're close to $1 million. lemonis: so you'll do 35 this year, roughly? -damion: yeah. -lemonis: $1 million in sales. damion: yeah. lemonis: with 45% gross margins. and, then, what are the operating expenses? damion: about $200,000. lemonis: so you're gonna make $250,000, which is a 25% net margin. that's pretty good. do you owe anything to any of your suppliers? damion: no. lemonis: so it sounds like you guys are doing pretty good. how much cash in the business right now? damion: $100,000. i'm a firm believer of keeping as much money in the business as possible. we took very minimal money for the first year. lemonis: how about now? what are you making? damion: $4,000 at the moment. i have a wife. i have two babies. and there's another mouth to feed coming. simon: i have a pregnant girlfriend back in england. lemonis: how many employees total? damion: so, there's myself and simon, and then we have four guys in the workshop. you'll meet jack, and he's an amazing guy, and

-lemonis: right.was i had already put in like 80 hours and so i told sam that i needed to go home, and she told me to get back now or she was firing me for job abandonment, and i said "it's not job abandonment when i've already put in my time. i've completed my work. i need to go home. i'm just done" well, then they came in and said that they talked and since i couldn't make a financial commitment that they didn't want me to be an owner. lemonis: so after we made the commitment... dede: mm-hmm. lemonis: ...and you were happy about it, and they seemed happy about it and all that sort of huggy and lovey "i love everybody" -- they basically said to you, "if you don't put money in, -you're not getting anything." -dede: right. right. lemonis: what do you think they ultimately wanted from me? -dede: money and publicity? -lemonis: and that's about it. dede: and to get max out without having to actually do it themselves. -lemonis: have me do it. -dede: yeah, because if it was coming from you, he would go. the

-lemonis: okay. lady: i never understood that market. we had mill valley, california. lemonis: [ laughing ] and why didn't it work? please, don't say because you didn't know the market. lady: that is what happened there. lemonis: jeans isn't barbecue. it's not that complicated. whether this is cleveland or the most fascinating city in america, it's jeans. really. so three stores left today. lady: yes -- san francisco, chicago, then dallas. lemonis: what was the worst year? lady: i believe 2013. and we did like $8 million on the top line, -but we had losses. -lemonis: how much was that? lady: $396,000. lemonis: and that was with 13 stores? lady: that was with the whole engine running. lemonis: ah. in 2013, lady did $8 million in sales across 13 stores but lost close to $400,000. that's because only three of the stores were actually making money. and the big problem was they weren't making enough money to keep the other 10 open. and so the only solution was to keep those three and say goodbye to the re

-lemonis: okay.n: every single product you see in here, i've been involved from start to finish in designing the product, sampling the product. lemonis: so when people come in and like the design, that's attributable to you. dan: correct. and when they don't like it, that's also attributed to me. -lemonis: okay. dave: he's the ideas guy, so he comes up with a lot of ideas. i'm in charge of operations. i make sure that everything runs in the office. i keep an eye on inventory. i deal with all the finances. lemonis: what's left for you to do? david: well, i mean, i handle all the manufacturing, all the sourcing. lemonis: you're picking the factory, as well? david: yes, i picked and activated our current manufacturing facilities in mexico. i shipped all the textile from peru to mexico, which is no easy feat. lemonis: and where did you get the experience to do that? -david: dropped in the fire. -lemonis: super-impressive. great job. -david: appreciate that. lemonis: yeah, really great job. what i'd like

lemonis: okay. so, there's more expansion land. norton: as long as we keep getting business, we can keep adding on. lemonis: how much is lunch? -norton: $8.95. -lemonis: and dinner? norton: $12.70 for an adult. lynn: plus tax. lemonis: all you can eat, $13.95? norton: yeah, that includes drinks and dessert. lemonis: i mean, that's a heck of a deal. $13.95 for an adult price on a buffet with chicken and ribs? that's a great price, but i don't know how they make that work. can we take a look at the kitchen? lynn: yeah, come on. let's show you the kitchen. this is lynn's world. lemonis: what is in lynn's world? lynn: we make the biscuits, the dessert. lemonis: when do you make the biscuits? can we make them together? lynn: yeah, we can make them together. they're a lot of fun. lemonis: how much time a day does this take you to make? lynn: well, 30 minutes a batch. that includes the prep time. but we're doing eight batches. lemonis: four hours a day, almost. lynn: yep. lemonis: who makes the biscuits he

lemonis: for how long? -tamika: like a year. -lemonis: wow.tonnie's basically relying on free labor. and the fact that his sister is willing to help out shows that he has real backing from his family. that's a big advantage when you're struggling. so, who's doing the quality control on this kind of stuff? -tamika: myself and tonnie. -lemonis: yourself? and so do you think this looks right? tamika: no, that one's not going out. lemonis: i don't want to see paper. this wouldn't clear. tamika: and the more we go through, we realize how much is wasted. lemonis: when this happens, two from the same batch at the same time, there's no process. tamika: and let me tell you, i have fought with my brother on this process. lemonis: why are you fighting with him? why aren't you just fixing it? -does he listen to you? -tamika: no. -lemonis: no? -tamika: no. lemonis: that looks nice. are you a professional cake decorator? marcus: yeah, i am. lemonis: it's a small space to work, no? and is tonnie easy to work with? marcus: yeah. lemonis: and how about her? is

lemonis: okay. franchising is an incredibly attractive business model because it allows you to get paid once you perfect a concept. my big fat greek gyro only gets about $10,000 when they sign up a new franchise. in success, that fee could grow much higher. better still, each of your franchisees pay the owner a royalty on a monthly basis. that could be anywhere between 4% and 12% of your monthly sales. mike: right now we're making about $60,000, $65,000 annually on royalties. lemonis: they pay an up-front fee. mike: correct. lemonis: you control the branding. mike: correct. lemonis: who picks the locations? who goes out and vets it 'cause it's your brand? mike: i do. lemonis: who developed the menu? kathleen: we did. lemonis: i was gonna take a trip to greece this summer, and i'm looking for tater tots... cheese sticks, cheddar balls, mushrooms. -hummus isn't greek. -andreas: lebanese. lemonis: what do you actually make yourself? mike: we have the traditional gyro. we have steak. we have fresh chick

lemonis: okay.we had a handshake, and we had agreed to the terms of the deal, and i had spent time and money. but they were no longer interested in honoring our deal. pete: i can tell you right now, we are not gonna iron out those deal points -- no way. lemonis: you're asking me to throw a million dollars in and be subjected to whatever fate you decide. "go stand in the corner, and shut the [bleep] up." that's essentially what you're telling me to do. steve: we don't like the fact that you can say no. lemonis: i don't see it working. steve: then, we can just [exhales sharply] if you want. lemonis: yeah. steve, honestly, you kind of [bleep] me all along the way. you just did. i walked away, and while i was out the $105,000 i spent, i managed to get the 3-d printer returned. people ask me all the time how it feels when people take my money or the deal falls apart. look, it stinks. i work hard for my money. and i didn't always have money. and so the money that i do have, i take very seriously. -hey! go

-lemonis: six to seven months? -mike: yeah. lemonis: it's ridiculous. you could build a yacht in six months. you could build a brand-new plane in six months. mike: we run out of inventory. lemonis: they don't have the parts and pieces. that's no way to run a business. -mike: this is chris. -lemonis: how you doing, chris? chris: very nice to meet you. lemonis: i'm marcus. what do you do? chris: i order all the parts for manufacturing, finance. lemonis: so you're doing manufacturing and you're the accountant? chris: yeah. mike: chris left a corporate company, making six figures, and cut it in half to come work for sjc. he has mbas and an engineering background. lemonis: you a partner in the business? chris: we act like partners, but i have no equity stake in the business. -lemonis: so that's a no? -chris: yes, so... lemonis: so, something beautiful like this... what's your cost to make it -- materials and labor? chris: $680. lemonis: it was $680 to make this? what will you sell this piece for? mike: $795. lemonis: so at, basically, 15% margins. mike: righ

-lemonis: $7.eliver a high-quality burger with the freshest and finest ingredients. a $7 burger isn't gonna work. we want to average a 25% food cost. if the burger costs us $3.50 to make, then the retail price is gonna have to be around $12. we're gonna operate with the food cost as our basis, not our gut. what is the first thing that somebody will order? fuji: a burger. lemonis: and how are we presenting it? fuji: lettuce, tomato, and ketchup and cheese. that's gonna be the standard. lemonis: we know that, with the margins on fries, right, it probably costs us somewhere around 50 cents with packaging and everything. and we're gonna sell our fries for $5. think about the margins on that. today, 70% of their revenue comes from selling hamburgers. and so we want to drive the product mix to have hamburgers not be more than 50% of all the product that we sell. the other 50% of the products that we sell have to be products with margins of 80% and 85%, like fries, potatoes, ice cream. we're looking for e

lemonis: my name is marcus lemonis.and i made a deal for me to put $75,000 into this business, and i'll own 25% of the business. you can expect the entire process in here to change dramatically. how many of you have seen the recipe book and studied on it and been trained on it? you been trained on the recipe book? that's because there is no recipe book. we're gonna upgrade and improve the process and the equipment so that the same amount of people can make enough pie to not run out at 2:00. on a scale of 1-10 -- "10" being laser-focused, "1" being all over the place, describe her. 1-10. shay: all over the place. lemonis: so that's a 1. -shay: i would say a 3. lemonis: a 3. man: i think 3 sounds pretty accurate. -lemonis: 3? -man #2: 3. -lemonis: 3? -woman: 3. -lemonis: 3? -man #3: 3. lemonis: betty's struggling to manage this place, let alone her second place, which has been a drain on her time and her money. so for now, i want her to focus on this location and this location only. while you guys have done a good job, yo

lemonis: this is a house of cards. lemonis: i know.ina: the one thing i don't like, marcus -- and this is not towards you. the one thing i don't like -- excuse my language -- anybody [bleep] with putting food on my table to feed my kids. anybody -- anybody. there'll be a problem. lemonis: i know. you know i get the family thing. that's why i was here from the beginning. i know things aren't good. but i feel bad that these workers are gonna get hurt because of sal's bad decisions. and i have a terrible feeling that things are only gonna get worse. five days after my first visit, i got a call from sal's landlord, michael. he informed me that he hadn't been given any of the money that i invested specifically to pay him and he was ready to start eviction. i met with him outside in an effort to calm him down. there were still over a dozen employees there, and i didn't want the thing to totally implode. michael: you're caught with your pants down. gina: leave him alone! he can't pay anything. -he can't even defend himself. -michael: there is

lemonis: tonightrob: whoo!rofit," lemonis: ...it's a business unlike any i've ever visited, at a start-up specializing in sleek and stylish longboards... i'm honestly blown away by the quality. ...something is very wrong. as an outsider looking in, it's kind of unsettling. the product is absurdly overpriced. mike: it's $329 retail. rob: do you just want to not do well? lemonis: the owner is often absent. mike: i have obligations that -- lemonis: well, what are they other than your business? and what scares me the most is that the employees are fleeing... where is everybody? ...in droves. josh: nate's no longer here. chris quit. mike: nearly 100% turnover in staff. lemonis: why are these people leaving? -mike: i don't know. -lemonis: bull[bleep] if i can't figure out what's fueling this mass exodus... when they quit, they're basically saying, "you're fired." ...kota longboards will come up short. my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not gonna wake up every morni

-lemonis: okay. so, when i look at the showroom build-out of $100,000, how did you fund that -- cash? steve: yeah. lemonis: ooh. that's a lot of cash. steve: i don't have credit. you know, we lost a condo in the keys. we've got cars repossessed. lemonis: what happened that caused cars to get repossessed? mary: the recession, everything. lemonis: the recession crushed you guys. lemonis: not only does grafton have a million dollars in debt, but it's with three or four different lenders. the problem is, when they have a downturn, they're not just in trouble with one bank. they're in trouble with lots of different lenders. in a downturn in the economy, this is one of the first affected. this business is good when it's good, but it's scary when it's bad. and so a business like this should have no debt, 'cause you can't handle the recession. steve: correct. lemonis: today, grafton operating only with custom furniture is a very dangerous proposition. you're dealing with high-end clients and high-end real es

-lemonis: well... while i appreciate keith recognizing his brother's experience, i'm not quite sure that 50/50 is exactly the right formula. if i asked most of the employees here who is in charge, what would they say? matt? -your name is matt, right? -matt: yes, sir. lemonis: who's in charge between the two of them? if the building is burning down, who do you go ask? matt: i call 911. [ laughter ] lemonis: when you have a situation where there's 50/50 partners, you also have 50/50 leaders with no one clearly in charge. what is the total revenue of the business? keith: last year, our revenues were down a little bit. -we did three and a half. -lemonis: $3.5 million? keith: yeah, just over $3.5 million. the two years prior to that, we were $4.3 million and $4.4 million, respectively. lemonis: so, business is down. keith: one of my bigger customers, they slowed down for a couple months. -lemonis: what's the name? -keith: weis markets. lemonis: weis markets? okay. of the $3.5 million, how much do they do a

-lemonis: and be open-minded. -giovanni: you've got it. lemonis: richard, i'm marcus lemonis.. lemonis: scott, nice to meet you. -scott: hi. -lemonis: this is lisa. -we'd love to get a tour. -giovanni: yeah. scott: we need to get you guys suited up. giovanni: holy [bleep] ♪ lemonis: what we saw when we walked into that place is the most professional, state-of-the-art food-manufacturing facility that i had ever seen in my life. giovanni: wow. scott: this is our q.a. lab. lemonis: so, this is chicken, beef, salmon, and egg. scott: all basically no byproducts, no corn, wheat, soy. lemonis: we saw their attention to detail, and we saw the great pride they have in making sure that pets stay healthy. i could tell this is having a real impact on lisa. man: check it out. lisa: it's awesome to see it in action and how it goes from this to the actual product. it's very impressive. lemonis: what i hope lisa learned from this trip is in order to grow your business, you have to be open-minded and learn and do research. freshpet is an opportunity for them to grow their business. if they had

-lemonis: yep.tephanie: [ sighs ] lemonis: well, you know, i've spent the last couple days asking you guys a lot of questions. while i struggle a lot with the product, you guys have spent a lot of time working really hard, but the business is really in trouble. i mean, you do $5 million of sales. but at the end of the day, last year, you lost money. stephanie: how do you envision the growth of this business? lemonis: it's about changing every single product that you have. you have $900,000 tied up in inventory. half of it should go into the garbage. how long can you survive? nicolas: we're trying to be as lean as possible. i have about three months where i won't be able to pay my rent at home. lemonis: how much money do you think this business needs? nicolas: i believe it needs around $1 million. it's 20% of what we do on an annual basis. lemonis: well, it's 20% of what you sell. my offer is $800,000. i have full control. there's 100% of the stock today. -i'll have 50% of it. -noemi: [ gasps ] steph

-lemonis: don't like it? girl: not necessarily. lemonis: ...and poisoning their relationship.: it's your dad and you love him, but i need you to be on my side. lemonis: if i can't fix their process... man #2: eight [bleep] pounds! it's not a gallon! lemonis: what just happened? ...and put an end to the drama...

lemonis: ...their business will burn out. my name is marcus lemonis,

-lemonis: six to seven months? -mike: yeah. that's created a backlog of unpaid bills and serious cash-flow problems. chris: we don't have enough money to cover payroll for next week. lemonis: i mean, you're kind of closed. chris: yeah. lemonis: the owner and his right-hand man are out of sync. louie: the lack of communication, i think, between chris and mike, it's like -- it's just...exactly. lemonis: and the two brothers who started this business have split up... scott: what did i ever do to you? mike: i really don't want to get into all that. lemonis: ...causing a whole nother layer of crippling issues. if they can't fix their process and their relationship... mike: fixing the business and this [bleep] is hard enough. lemonis: ...they'll be forced to close their doors forever.

lemonis: tonight, on "the profit"... brooklyn shoe company that made a splash with its dazzling designs. dan: the idea of the company is to use global textiles and global inspiration. lemonis: but the c.e.o. can't stop shooting himself in the foot. dan: my financial decisions negatively impacted the company. lemonis: his lack of discipline has cluttered the shelves with products that won't sell. dave: you know, there's 10 new ideas that come out. one of them's great; the other nine are, like, terrible. just awful. like, just suicidal ideas. lemonis: alienating his partners... david: daniel, i told you this, and you did it anyway. lemonis: ...and pushing the business to the brink. how much money's in the bank account today. dan: [ groans ] not a lot. lemonis: if i can't get him to focus his energy... this store's kind of a joke. ...and start following my process...