lemonis: yep. i've invested a great deal of money already in amazing grapes, but expanding the kitchen is the right move. with just $75,000, we can buy new equipment and add new stations, allowing geri to create more ambitious dishes and get them out faster. that'll help us increase our check average, feed more customers, and, in the end, nearly double our sales. make the kitchen a little bigger, put the pantry in there, and then you could also have some extra space for you to store wine. dan: this, i believe, needs to become a cold box. lemonis: how do you feel about that? -mike: i agree. -lemonis: okay, so... mike: yeah, it drives margin, and... lemonis: so change number one is... -geri: that's 100%. -lemonis: ...these bathrooms -need to turn into a cold box. -mike: right. lemonis: turning around a business takes time and patience, and i feel like everybody at amazing grapes is really pitching in, and they're coming up with ideas, and they're working together really well. well, almost everyone. w

-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: tonightlori: hey.rofit." lemonis: two years ago, i bought an interest in mr. green tea ice cream. young man: this is actually amazing. lemonis: and while we've been able to increase sales by nearly 100%... -is that your car? -michael: that's my car. lemonis: ...success has spawned a whole new set of challenges. michael: the entire future of the brand is based off of my vision. richard: that's something i'm not so sure of. lemonis: the owner's son is pushing for a piece of the pie. michael: i think 7% to 10% would be more than fair. lemonis: but his cavalier attitude isn't helping his case. michael: who cares about a $10,000 up-front cost? lemonis: i think we all kind of care about the $10,000. and now a family feud is brewing in the business. richard: what's important to me is the most important thing. michael: you're not making any sense. you're making stories up! lemonis: if i can't help this young man mature as a leader... don't be frustrated. michael: i'm very frustrated. lemonis: ...and get both sides back on the same page... richard: if we bought -- if w

lemonis: okay. well, take me inside. i want to see what it is that you do. christina: let me take you on a tour. christina: this is veronica. sasha. katie. -katie: hi! nice to meet you. -allie: and i'm allie. -lemonis: allie. -christina: and this is tati. -lemonis: how many work here? -christina: 30. -lemonis: are they all women? -ian: man coming through. lemonis: man coming through! [ laughter ] ian: ta-da! lemonis: i was like, "holy...i'm in trouble." ♪ christina: so, this is our assembly line. we run it like a manufacturing facility. our lead designer puts the recipe here, so the designers will all know what goes in each one. we have quota systems for the designers, so when they come in, they're given a quota they have to do each day. lemonis: i thought flowers were supposed to be fun. -christina: they are fun. -lemonis: sounds intense. christina: we have a very fun environment. we take a lot of pride in that. lemonis: you started this business, when? christina: november 7, 2010, was our launch

-lemonis: 10 days? -joe t.: more than that. -lemonis: 100? -joe t.: no. -lemonis: 30? -joe t.: more. -lemonis: 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

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! g

-lemonis: $7. lemonis: we want to deliver 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 crea

-lemonis: how are you, sir? -lemonis: i'm marcus. -armik: armik. -lemonis: nice to meet you. -armik: nice to 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 forwar

-lemonis: right. dede: but then the straw that broke the camel's back 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: yea

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: 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: this is a house of cards. lemonis: i know. gina: 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

lemonis: my name is marcus lemonis. yesterday, elizabeth 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 ha

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: 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: 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? i

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: and be open-minded. -giovanni: you've got it. lemonis: richard, i'm marcus lemonis. -how are you, sir? -scott: hey, scott. 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

-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: okay. -scott: awesome. chris: so, what options are important for people that doesn't throw a wrench in the process? -matt: it's definitely paint. -scott: i have ideas about that. i think you go one flat finish, but it's a natural satin stain, 'cause then you're eliminating the cost of the laminate, you're eliminating an extra step when you're doing the baring edges. pat: what about, like, formica? scott: formica's cool. but then again, what is it? 100 bucks a sheet? one sheet covers one kit. your labor, the contact cement, the labor spinning it, drying it, doing the seam, doing the outside edge,

lemonis: and so for the $1.5 million, i would want 45% of the business... full financial control, and i want to be able to have 100% say on his path without any question from you.

lemonis: after tasting the burgers that he made, i quickly decided that if i was gonna be involved in standard burger, so was fuji. fuji is in charge of the kitchen. so he is now a partner, as well. i made a deal to invest $130,000 for 30% of the business. we got a deal? we're gonna start over. if we're gonna set the standard, it's gonna be my standard. we upped the quality of our ingredients, simplified the menu, and overhauled the space. [ laughter and applause ] we needed somebody to run the day-to-day operations, so joseph stepped up to be the general manager. but i wasn't just fixing up one restaurant in staten island, i saw standard burger as a national opportunity. and this place would be the model we'd use to sell franchisees on the concept.

-lemonis: don't like it? girl: not necessarily. lemonis: ...and poisoning their relationship. sam: 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: it's a big idea with huge potential. miranda: and the company's grown from on my stove to a little over $3 million this year. lemonis: i'm impressed. but the owners won't stop developing new products. what is this? miranda: those are light-up tweezers. lemonis: products that no one wants. layne: these right here are all the bottles i can't sell. -lemonis: all the way back here? -layne: yes, sir. lemonis: and their branding is completely chaotic. -interesting? -katia: mnh-mnh. -lemonis: interesting? -katia: no, that's weird. it just feels all over the place. lemonis: if i can't get them to follow my plan... i don't feel like you're trusting me. ...and develop a whole new look... miranda: i see l's. lemonis: i see something that looks like a swastika.

lemonis: for this business to survive,

lemonis: tonight on "the profit." lori: hey. lemonis: two years ago, i bought an interest in mr. green tea ice cream. young man: this is actually amazing. lemonis: and while we've been able to increase sales by nearly 100%... -is that your car? -michael: that's my car. lemonis: ...success has spawned a whole new set of challenges. michael: the entire future of the brand is based off of my vision. richard: that's something i'm not so sure of. lemonis: the owner's son is pushing for a piece of the pie. michael: i think 7% to 10% would be more than fair. lemonis: but his cavalier attitude isn't helping his case. michael: who cares about a $10,000 up-front cost? lemonis: i think we all kind of care about the $10,000. and now a family feud is brewing in the business. richard: what's important to me is the most important thing. michael: you're not making any sense. you're making stories up! lemonis: if i can't help this young man mature as a leader...

lemonis: three generations right here. steven: right here. lemonis: a multigenerational custom-furniture business... do you and your dad have blowups here? steven: all the time. lemonis: ...struggles to stay up with the times... [ screeching noise ] steve: some of the machinery here are 50 years old. lemonis: ...and a father who won't give up control... steve: do you have a packing list? steven: are you really gonna micro me again right now? steve: please. lemonis: ...leaves a son struggling to make his mark. steven: oh, my god. lemonis: if i can't bring these two together... steven: when it's done, it has a sticker. if this doesn't have a sticker, is it done? -steve: no, it's not done. -steven: okay. lemonis: if he can't do the job, you fire him. ...there may not be a next generation of grafton furniture. your grandfather was here. now your father is here.

-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: its rivals are catching up. christina: to not be able to raise capital and then to see competitors come in and raise $10, $12, $15 million -- that does affect me. lemonis: its technology is falling short. it's not a great website. and it's frustrated founder is letting her bitterness get the best of her. why haven't you been able to raise money? christina: because i'm a woman. lemonis: this proud entrepreneur needs to let go of her hang-ups... christina: i'm not a weak woman. lemonis: i don't think you're a weak woman. ...and gain some perspective. you just made it about money. that's how it makes me feel. you just made it about money.

lemonis: it's money that kept them from closing. jess: you don't know if you're gonna have a job in another couple weeks. lemonis: it's money that helped them grow. what do you think of when you see that symbol? ashley: dollar signs coming in -- plus, money. [ laughter ] lemonis: but at the end of an episode, that's when the real hard work begins. all: shuler's! lemonis: let's go to work. tonight, i'm back at a southern california wine bar, amazing grapes. i gave the place a massive facelift. -looks great. -man: unbelievable.