Theres no more going back to them for money. Ever. If i cant shake him out of his tailspin, his companys day in the sun will come to an end. Tony the process is a little [voice breaking] overwhelming. I put my whole life into this. Lemonis my name is marcus lemonis, and i risk my own money to save struggling businesses. Were not gonna wake up every morning wondering if we have a job. Were gonna wake up every morning wondering how many jobs we have to do. Its not always pretty. Everythings gonna change. Everything. But i do it to save jobs, and i do it to make money. This. Is the profit. Lets go to work. Tony ladies, we got bars to make. Lemonis in 2012, tony fellows launched hippops, a dessert truck specializing in handcrafted gelato bars. Tony so you choose your flavor and then your dip and then whatever topping youd like. Woman great. Lemonis his goal was to generate some buzz in sunny south florida, then franchise the concept nationwide. Tony thank you. Enjoy. Lemonis tony had been in the frozendesserts business before trying his hand at real estate, only to suffer big losses when the market collapsed. He decided to return to his roots, and that is when hippops was born. Yolanda oreo milk rainbow. Thatll be 6. Lemonis but while the truck itself has been profitable, the franchise effort is a bust, burning tons of money with nothing to show for it, and putting tonys dreams on ice. Freyda its been very slow for the last six months. Tony were in debt now 50,000 . Freyda yes. Lemonis still, i think the concept is fun and easy to replicate, and with my help, im confident tony can put this business on the right track, so im heading to Fort Lauderdale to jump right in. Handcrafted awesomeness. Good morning. Tony holy smokes lemonis how you doing, my man . Im marcus. Tony marcus. Tony. Lemonis nice to meet you. Tony oh, my god. This is unbelievable. Lemonis this is a cool truck. Wow. Can i try one . Tony absolutely. Lemonis okay, so theres how many different toppings . Tony we have about a dozen unique toppings. Lemonis okay. Tony and then three chocolate dips. Lemonis so you take a base, you dip it, and then you can put all the toppings on it. Tony my favorite is definitely the godfather. Lemonis okay. Are you the godfather . Tony i dont know. Lemonis okay. Tony you might you might be the godfather. Lemonis there you go. Tony can i get a traditional size bar, please. Lemonis hey, hey, hey, im ordering. How are you . Im marcus. Jorge hey. How you doing . Im jorge. Lemonis jorge . Do you have coconut . Jorge i do. Sprinkles . Lemonis its breakfast time, so i wanted to have a little fruit. Okay, so lets do dark chocolate with what are the other chocolate options . Jorge chocolate sprinkles. Lemonis lets do that. Tony so we handcraft them in small batches here. Hows your breakfast . Lemonis i think it tastes amazing. I actually think it tastes really amazing. Tony thank you. Its a littler healthier option, because with gelato, youre using skim milk and just a little bit of cream. So the base itself is about 93 fatfree. When you get the bar, it should be nice and creamy. Lemonis how much is this . Jorge thatll be 5. Lemonis i mean, it seems like a heck of a deal for 5 bucks. What does it cost you to make this . Tony the bar itself runs about 50 cents. Lemonis okay. And then the toppings . Tony so 25 cents for the toppings and 25 cents for the dippers. Lemonis stick . Tony so the stick runs 5 cents. Lemonis okay. Tony all in, with the dip and topping, i have about an 80 gross margin. Lemonis how many of these will you sell in a day . Tony we could do anywhere from about 1,000 to as much as 2,500. Lemonis does this truck run every single day . Tony yes, sir. Lemonis when a food truck can do 1,000 to 2,500 a day, 6 to 7 days a week, at 70 plus margins, thats a business that i would be interested in. So, lets go in the truck. I want to see how this whole thing works. Whats all the milk and whipped toppings . Tony you can take any pop and turn it into a popshake. Lemonis what do you sell it for . Tony 8. Lemonis 8. And of a percentage of sales, how many milkshakes do you sell . Tony 5 to 7 . Lemonis is it laborintensive . Tony its laborintensive. Lemonis so why do you do it . Why not just stay simple . Tony you know, we didnt have it initially. Lemonis yeah. Tony but folks came and asked, and we wanted them to be able to have that option. Lemonis yeah. So this is a traditional gelato case. Tony no, this is a special case. Lemonis whats special in. Tony you know, its all glass, and its completely open over here. Theres only one manufacturer in italy that makes a case like this. Lemonis how much does it cost . Tony i paid 25,000 for it. Lemonis for this . what did it cost to set up this whole truck . Tony all in, about 125,000. Lemonis im not sure if tony did any research on what a truck like this should cost, or whether he thought that spending gobs of money would automatically make the business successful, but what i do know is that he overpaid. Its not complicated. Theres not tons of cooking equipment with hoods. Theres a refrigerator, a sink, and an icecream cooler. Maybe 75,000 . Where did the name come from . Tony so actually, my mother came up with the name. Lemonis oh, she did . Okay. Tony she did. Lemonis take me back to why you started it, how long its been around. Tony 2009, i was in real estate, buying properties, and then, you know, realestate market fell apart. I lost money. Lemonis and so who funded the growth of the realestate business . Tony my dad. Lemonis and how much did you lose during that whole thing . Tony we probably lost a couple hundred thousand dollars. Ice creams always been my passion, and so i thought, wow. We could really create a different experience, take the pops to the people. And if the Business Model worked, my dream was to franchise it. Lemonis and do you feel like youve proved the concept . Tony i believe so. I franchised it around a year and a half ago. Lemonis you set up the franchise. Tony i did. Lemonis and how many have you sold . 10 . 20 . Tony i sold one large deal. An International Deal in dubai. Lemonis so why not any success in the United States . Tony i dont know. Lemonis the first sale he has is halfway across the world . And he couldnt sell one in the United States . So, where do you make the pops . Tony so the whole creamery is in the back of the warehouse. Lemonis can i see it . Tony absolutely. Sure. Lemonis oh, wow. This is like a real kitchen. Ladies, im marcus. How are you . Annette hi. Im annette. Annette. Lemonis annette. Yolanda yolanda. Lemonis yolanda, nice to meet you. Im marcus. Can we make a batch from scratch . Tony absolutely. Lemonis what do we have prepped . Yolanda we have pistachio prepped and we have lemon. Lemonis lemon . Yolanda lemon with mint. Annette you a lemon guy . Lemonis my last name is lemon. Annette all right. Give it here there you go lemonis lets make lemon yolanda this is the lemon mix. Annette out of fresh lemons. Lemonis fresh lemons. Yolanda we squeeze fresh lemons. Annette go ahead, now there you go, marcus shake what your mama gave you lemonis you got to shake it and stir it. Annette there you go lemonis okay, so thats the mix. Now what we doing . Annette you got to pour this in the gelato machine. Lemonis okay, so this goes in the machine. Annette yeah. Okay, now were gonna mint and zested lemon. Go ahead, there. Go ahead and pour it. Dont lemonis i got it. Okay. Annette and let it come out. We gonna put it in the mold. What we do. Take it. Tony and then it has to go into the blast freezer. Lemonis and these will take how long . Annette two hours. Lemonis two hours. Yolanda and this is our biggest problem. Lemonis whats the problem . Yolanda it it goes on defrost and it shuts down. Lemonis so this doesnt work . Tony so every six hours, it goes onto a defrost. Lemonis so why wouldnt you get another one . Tony so its brandnew. Its about 7,500. Lemonis its odd to me that with everything tony spent money on, that he would only invest in one freezer. Not only does he limit his ability to grow his business, but if the one freezer goes bad, hes out of business. These freezers cost about 7,500. Im not minimizing the amount, but in comparison to what he spent on the truck, its not much at all. So, let me spend some time just with them, okay . Ill see you in a little bit. Tony okay. Lemonis yeah. Get out of here. Tony you got it. All right. Lemonis dont be supervising our conversation. Yolanda [ laughs ] lemonis whats it like working for tony . Annette it has its up and downs. Out of a week, well see him probably, id say about three days for that week. And then hes here a couple hours about. Yolanda sometimes we dont see tony for a whole week. Lemonis theres times you dont see him for a whole week . So tonys really not around that much. Yolanda no. Lemonis oy. Wheres all the inventory . Annette the big white freezer. Lemonis can you show me real quick . Annette okay. Yolanda like, see these freezers . This is where we hold our products. Lemonis why does this look like this . Open like this . I mean, it seems totally disorganized. Yolanda yeah. Lemonis so how do you know whats in here . It it labeled on top . Yolanda no. Lemonis and so you really never know, unless you come out and look, what you have and what you dont. Theres no Inventory System. Yolanda right. No. Lemonis in order for a franchise to sell, there has to be a proof of concept. And that concept includes not only the revenue and the profitability of the idea, but the systems that are in place. A franchisees gonna want to see a detailed Inventory Management system, clear procedures for storing, ordering, and labeling product. Theyre gonna want to see a clean and thoughtfully designed facility with the correct workflow and the right equipment, and theyre gonna want to know that the franchisor has thought through every little detail, and when theres a problem, theyve come up with a solution. But tony hasnt done any of those things and then he wonders why he hasnt struck any deals. Oh, thank you. Okay. Is this hi, maam. How are you . Freyda im good. Im freyda. Lemonis im marcus. Freyda hi, marcus. Nice to meet you. Lemonis are you the bookkeeper here . Freyda im the bookkeeper. And i am the mother. Lemonis oh, youre anthonys mother . Okay. Well, thats awesome. Do you get paid . Freyda yes, with kisses. Tony with pops. Lemonis so you dont get paid . Freyda i work for love. Lemonis is he a good manager . Freyda hes a good manager. Hes a phenomenal boss. Lemonis now, is that his employee talking or his mother talking . Tony [ laughs ] lemonis you know, when you reached out to me, you told me this was a franchise concept. And so how many different potential franchisees have you actually pitched . Tony weve done webinars with at least, um, 300 people. Lemonis im sorry . Why do you think not one person converted . Tony i dont know why. Lemonis maybe they dont think the concepts good. When i look at all of the finished pops in the freezers, theres not really an Inventory System of whats in there, what needs to be made, theres not a schedule. Typically, before you make it a franchise concept, you have to perfect your own business. How much money have you put into this whole concept so far . Tony were somewhere close to around a half a million dollars. My parents invested money. Lemonis how much money have you and your husband invested in this business . Freyda around 200,000. Tony but its closer to 350,000. Lemonis out of your personal savings . Freyda out of our personal savings, because we believe in our son. Lemonis where did the rest of the money come from . Tony the rest of the money came from the dubai deal, too. Lemonis no money came from you personally . Tony yeah, about 50,000 from myself. Lemonis so they really do you own do you and your husband own the business . You own none of it . Tony it was a loan. Freyda its a loan. Lemonis you charge him an Interest Rate . Freyda i wouldnt. My husband does. Lemonis and do you pay the interest monthly . Tony we do, but, you know, i she doesnt always pay it. You know, for me, its important to be able to, you know, to get my Parents Money back to them. Theyre not young. Lemonis and if they cant get it back, what does that mean . Tony [ voice breaking ] im scared. Yeah. [ sighs ] cause i want to be able to get my Parents Money out of the business. Lemonis you want to what . Tony get their money out of the business. Freyda hes always had a tough life. He really got into trouble. Lemonis what kind of trouble . Freyda bad trouble. Lemonis what kind of trouble . Freyda drugs. Okay . Lemonis you had a drug problem . Freyda drugs. Tony thank god, you know, october, i celebrated 19 years clean. Lemonis congratulations. Tony thank you. Its important. And i have three little kids and lemonis are you married . Tony im divorced. Lemonis divorced. Okay. Tony yeah. You know, this business is, like, everything i have. Lemonis how do you pay your rent and your car payment and all that . Tony i live at home. Lemonis you live with mom and dad. Tony yeah. It helps financially. Lemonis yeah. Tony you know, for my children and my exwife. My exwife does all the social media. Lemonis shes an employee of company . Tony yes. So theres other people im responsible for here, as well. Lemonis tough. Ive met a lot of people throughout my Business Career that have suffered with different dependencies, and the fact that tony was able to recognize the problem and recover and stay clean is a sign of hard work. What id like to do is, lets gather the fina i want to gather the Financial Data and we could sit down and go over some numbers. Tony sure. Lemonis so in 2015, you did 533,000 in sales. The gross profit was 435,000, which is 81 margin, which is killer. Tony yep. Lemonis your total expenses were 381,000, and the Company Shows a profit of 54,000. Tony correct. Lemonis in 2016 . Tony 492,000. Lemonis okay, gross profits the same at 80 . And right now, the business shows its gonna lose about 8,000 for the year. 7,000 to 8,000. Tony yes. Lemonis so this is the gelato business. This is hippops handcrafted gelato bars. Thats one entity. Now the franchise concept. Tony now, the franchise concept has no lemonis its a separate legal entity . Tony right, so there are no essentially no sales, you know, for the whole year. Lemonis how much has it lost in the last two years . Tony its lost. 250,000. Lemonis so you have, in the last two years, the actual hippop entity is netting to north of 40,000 in profit. The other legal entity, this franchise idea, has lost 250,000. Gone. Do you feel like this is a welloiled machine . Tony no, thats why i called you. If the structure lemonis but, i mean, you essentially called me to come build your business for you. Tony alongside with me. Lemonis uhhuh. Tell me about your watch. Tony so its a rolex. Lemonis how much is that watch worth . Tony 10,000. You know, its the one luxury, you know, that i have. Lemonis its a [bleep] watch. Tony i know. Lemonis and ill tell you that if i was a potential franchisee, i look at stuff like that. And then i find out that theres one freezer in the kitchen, really would be better if there was two, cause you could crank up production. How much does the freezer cost . Tony 7,500. Lemonis how much does the watch cost . Tony i get it. Lemonis i will tell you one thing, i give you a lot of credit for making other sacrifices. Living at home. Youre taking care of your kids. Youve been honest with me about your past. That meant a lot to me. You should feel good about where you stand today. Tony i appreciate that. Lemonis i appreciate the time we spent today. Ill study the numbers, and ill be in touch, okay . Tony okay, great. Lemonis tony, how are you . Tony im great. How are you . Lemonis good seeing you. Edward mr. Lemonis, how are you . Lemonis hi, im marcus. Edward ed fellows. Lemonis ed, nice to meet you. Edward same here. Lemonis wait, i know you. Freyda i know you. Lemonis how are you . Is he behaving . Freyda absolutely. Lemonis okay, well, thats his mother talking. I wonder what his dad has to say. Edward ask his father. Lemonis thats right. Its a little out of the ordinary for me to meet with the parents of the owner. Edward okay. Lemonis but as i learned about the genesis of where the money came from, i thought itd be good for us to talk as a family if im gonna be part of your family. Edward not a problem. Lemonis when it comes to the business, i think the business today, its an icecream truck. It is not today a franchise concept. Edward but is it doable . Lemonis is it doable by somebody who wants to show up every single day and to Pay Attention to the details . Yes. I dont know if tony is that person. cause i will tell you, your staff thinks you dont put a lot of time in. Tony it was a difficult year. You know, i ended up, you know, leaving a 17year relationship [voice breaking] and sharing, you know, with my kids, you know, that our marriage was ending. I kind of felt, you know, like i failed. Lemonis yeah. I want to know that youre gonna be willing to make the sacrifices that are necessary. Tony im committed to my business. Lemonis heres the good news, right . The good news is, is that its a very simple, reasonablypriced dessert that anybody can enjoy, no matter what age they are or where they come from. Edward correct. Lemonis and we know that the margins in this business are spectacular. Im willing to make an offer. So i want to make an offer of 100,000 for 50 of the business. Franchising is a good idea when you have a model that you can show somebody thats whats called a proof of concept. None of thats been done yet. And i understand process and what its gonna take, and i think it takes 100,000 to get it right. Of course, ill be 100 in charge. Tony and so what happens to my salary . Lemonis what do you make today . Tony about 100,000. Lemonis [ chuckling ] okay. I mean, i dont mean to be funny about it, but that is shocking to me. You are not gonna live the life of luxury, at least while im around. Tony im not living the life of luxury now. Lemonis give me your watch. Tony i mean, this is a 10yearold watch. Lemonis give me your watch. You want to know what its gonna go towards . Buying a new freezer. Youll hold onto that for me. And do not. Freyda i will not give it to him. Lemonis . Give it back to him. Freyda i promise. Lemonis when the business makes money, you can take half of the profits and ill take the other half. Its not about me, its about the business. Tony what do you guys think . Lemonis no, no, no. Be an adult. Edward this is your decision. Lemonis dont put the pressure on them. Because theyre not gonna bail you out anymore. If your business is in trouble and you need my help, log on to. Tony what do you guys think . I put everything into my business. And i had all these points from my chase ink card. So i bought ingredients, utensils, even made custom doughnut cutters. Wow all with points. Thats how i created the ripple. The doughnut, in a doughnut, in a doughnut. Suddenly, its everywhere. I mean, it really took off. What will you create with your points . Chase for business. Make more of whats yours. Resolution 1 binge more. Join the uncarrier, and get four unlimited lines for only forty bucks each. Plus, netflix for the whole family. On us. So, they get their shows. Lets go, girl youre gonna love this bit and you get yours. Watch however you want. On your phone, tablet, or tv. For just forty bucks per line. With no extra charges. Lets rock this joint all on americas best unlimited network, tmobile. Wifiso if you cant live without it. T it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. Be an adult. Edward this is your decision. Lemonis dont put the pressure on them. Because theyre not gonna bail you out anymore. Theres no more going back to them for money. Ever, while were partners. So do we have a deal . Tony we have a deal. Its scary, but i believe in you, and i believe in myself. And i know well build a business. Lemonis youre gonna do the work. Im gonna do with you, but im not gonna do for you. Tony i will. Lemonis ill see you guys. Edward okay, take care. Lemonis good morning. Freyda good morning. Lemonis so yesterday, i agreed to put in 100,000 into the business and to have 100 control of what happens. Can you guys do me a a favor and ask tony what time it is . Annette what time is it, tony . Tony my my watch is gone. Lemonis you want a new blast freezer . Annette yes. Lemonis were gonna get one. Were gonna sell his watch. Yolanda [ laughs ] annette yeah, right. You serious . Lemonis im very serious. Were gonna get our priorities right. Were gonna get new equipment. Were gonna put a new system in place. Were gonna work to develop new flavors. Were gonna find new customers. We cant just stay doing what were doing. It wont work. Are you ready to go to work . Thank you. Ill take an apron, and i want to be im on your team. Im working for you today. Jorge [ chuckles ] all right, so teach me what were doing here. In order for me to better understand how to improve the business, i want to see the food truck live in action. And i want to see what tonys commitment is to this process. Is tony normally at these events . Jorge no. Lemonis he doesnt come hang out with you guys . Jorge unless i need him to, he wont come. Lemonis you dont neme here. Im gonna screw things up for you today. Jorge yeah. Lemonis how are you, maam . Step on up. How are you . Woman can i have a vanilla bean, please . With the semisweet chocolate dip . Lemonis is that dark semisweet . Yolanda yeah. Thank you, and you enjoy. Woman wow. That looks great. Thanks. Lemonis enjoy. Thank you. Woman thank you. Lemonis i need to be taught, cause im gonna be in the line with you. Yolanda oh, okay, then. Jorge you dip it in. Pull it out. Then you put that lemonis okay. Yolanda this is gonna be fun. Lemonis hey. Lemonis im running [bleep] here. [ laughter ] you know why . Tony already . Lemonis cause youre not on time. What time is it . Tony its 5 47. Lemonis so youre late. Tony im late. Lemonis okay, cant be late with me. Whens the last time you worked the truck . Tony i dont work in the truck. Lemonis ever . Tony nope. Lemonis okay. Its important for any business that i invest in, for the owner to be there, so that he could protect my investment and his investment. I dont invest in businesses, i invest in people who operate businesses. And if he wants to be an absentee owner, then hes got the wrong guy. Tony hey, folks, how are you . Woman hi. Tony what can i get for you guys tonight . Woman can i get a milkshake, please . Tony milkshake. Sure. Woman a mango milkshake. Tony mango . Sure. Absolutely. Lemonis how long does it take to make a milkshake . Tony five minutes. Lemonis five minutes . lemonis anything for you, sir . Man mango popsicle. Lemonis okay, do you want it dipped in chocolate . Man sure, yeah. Woman thank you. Woman hazelnut ice cream in milk chocolate. Lemonis you said milk . So its gelato on monday, karate on fridays. What can i get ya . Woman i want the chocolate with the white chocolate. Lemonis thank you for your business. Man may i have a vanilla bean, shredded coconut . Lemonis thank you. Good seeing you. Woman okay, i would like a pistachio with the dark chocolate. All righty. Lemonis all right. Would you like a little whipped cream on top . It comes with it. Yeah, sure. You got it. Lemonis here you go, guys. That took over five minutes to make that shake. For me, its speed. Certain number of people out here, the longer they wait, they may walk off. The key to the foodtruck business is the velocity in which you can turn customers. What tony needs to really understand, that this is simple math. He may be selling the shake for 8, but it takes him so much more time, that in that same time, he couldve sold 5 pops. Thats 25, not 8. So, what i want to do tomorrow is i want to go through the warehouse. I want to understand inventory. I want to look at the production process. Were gonna simplify everything. Tony heres a complete list of the inventory. Lemonis great. If this concept is ultimately gonna be marketed to potential franchisees, the numberone thing the companys gonna have to show people is process. So were gonna start by digging into the inventory. So wheres the inventory of, like, these freezers, those coolers, that ladder . Where is all that . Tony i dont have an inventory of that. Lemonis why not . Tony just because its just been us. Lemonis you want to have an inventory of things like your dollies and your freezers and your styrofoam freezers. I want you to just go through the warehouse and i want you to write down any fixed asset you see. I want to put it all down and, i want to assign values to it. All right . Tony yep. Lemonis how much of this is garbage . Tony probably a lot of it. Lemonis cant do inventory if i dont know whats here. These dont need to be here. Every single inch of this place is gonna have a purpose. Its gonna have a label. This is for this, this is for that, and if we dont use it, it goes away. Tony we need those shelves for the blast freezer. Lemonis for the blast freezer thats not working well . Tony yes. Lemonis theres so much dust on them. You obviously havent used them in a year. You wanted process, ill give you process. So, tony, this is your job for the next week, is to get this place organized, with shelving, so its got truck supplies, freezer supplies, paper supplies. And what i dont like is this. Lets give them a system where they can see a quantity, how much theyre supposed to have pineapple, mango, chocolate so that it essentially looks like a jewelry store. And remember, were creating a blueprint. If you want to franchise this in the future, we want to be able to say to somebody, you can get a 2,000squarefoot warehouse. Well come in, well help you lay out the plan. Help me build the blueprint. Tony okay. I will. Lemonis cause i dont feel like youre into it right now. Are you into this, or are you frustrated . Tony well, im a little frustrated. Lemonis why . Tony yeah. Just with the equity issue. Youre still hung up on that. Tony i am. Okay, so what would you like to do . Tony id like to discuss it. Lemonis sure. Lets go in the office. So im standing here doing all this and youre focused on that . Okay. Tony so, you know, one of the things that i didnt discuss with you and, you know, that i needed to bring, you know, to your attention is, niva does have some equity. Lemonis your exwife . Tony my exwife. You know, we just recently got divorced. Lemonis whats the reason you didnt tell me yesterday . Tony because i didnt realize i was gonna i was gonna be giving away 50 equity in the business. Lemonis but i asked you if you accepted my offer, you said yes. The fact that your exwife is a partner of mine is a very big problem, considering that i havent met her. Why didnt you tell me about any of that . Youre staying here, and youre gonna tony see a friend. Lemonis is there a catering event tomorrow . Tony is there i have a few Catering Events tomorrow. Lemonis whos gonna run them tomorrow . Tony well, my partner will be there. Lemonis your partner marcus . Coverage,speed, lemonis the fact that your exwife and control. Nooooooo yes all with an xfi gateway. Find your awesome and change the way you wifi. With a great selection of our armost popular models. Like the adventurous rav4, well equipped corolla, sporty new 2018 camry and more. And that means huge year end savings for a very short time. Right now during toyotathon. Get great year end savings on a huge selection of our most popular models. Offer ends january second. For great deals on other toyotas visit toyota. Com this is short too. Toyota lets go places. Prices of the season on the only bed that adjusts on both sides to your ideal comfort your sleep number setting. And snoring . Does your bed do that . Its the lowest prices of the season on the queen c4 mattress with adjustable comfort on both sides. Now only 1199, save 400. Plus, 24 month financing available. Ends monday. Visit sleepnumber. Com for a store near you. But when we brought our daughter home, that was it. Now i have nicoderm cq. The nicoderm cq patch with unique extended release Technology Helps prevent your urge to smoke all day. Its the best thing that ever happened to me. Every great why needs a great how. Is a partner of mine is a very big problem, considering that i havent met her. So you already got an f in the first day of our relationship of not telling me the truth. Why didnt you tell me about any of that . Whats wrong . Talk to me. Talk to me, tony. Tony the process is a little [voice breaking] overwhelming. Lemonis whats overwhelming . Tony i put my whole life into this business for the last four years. Didnt expect to give up 50 equity in the business and have niva have 25 . I know im gaining something, but it just doesnt feel that way. Lemonis i think in life, people get overwhelmed. This is an overwhelming process for you. Im here to help you. I am willing to sit down with you today and we can talk about reworking the deal, but shes got to be at the table. Tony yes. I agree. Lemonis period. End of story. Your facts are sketchy right now. Tony ii understand that. Lemonis and i need her to clean them up, cause i dont feel like im getting the whole story. Tony thats fair enough. Ill call her and get her to. Lemonis okay. Tony . To meet us. Lemonis ill see you in a little bit. Tony okay. Lemonis all right . Hello. Im marcus. Niva hi. Niva. Lemonis nice to meet you. Thank you for coming, by the way. Niva, just so you know, i just learned about an hour ago, that you are a 25 owner in the business. How do you feel about whats happening . Niva financially ignorant, basically, and not kind of knowing whats going on. Tony its difficult to come into a situation and say, okay, heres 50 of your company for 100,000. Niva absolutely. Tony im having a difficulty with that. Lemonis so youre not comfortable with the deal thats on the table today. We need to resolve this issue, or we need to shake hands and i need to move on. So where where are we . Tony i feel good at 35 . Lemonis for me to have 35 . Thats too low for me. I cant go down by 15 cause you had a sleepless night. Im willing to go down to 40 . Tony so youre gonna go to 40 and were gonna hold 60 . Lemonis right. Tony and from the 60 , niva gets 25 . Lemonis you guys work that out. Tony how do you feel about that . So if he has 40 , and theres 60 , so im at 25 , youre at 35 . Tony why would i take less equity and leave you at lemonis stop. You really, honestly, stop. For you to go down a little isnt unreasonable. Do you agree with that . Niva i agree. Lemonis okay. Maybe you go from 25 to 20 . Do you feel its valuable enough for you to give up 5 for me to come in . Niva yes. Lemonis okay. So ill be at 40 , youll be at 40 , and shell be at 20 . And im doing that only because i feel like its not fair for me to be disrespectful to her, okay . Tony yes, sir. Lemonis do we have a deal . Nice to finally meet you. Are we good . Tony were good. Lemonis this is it. Tony were good. Lemonis okay. Thank you for coming by. Niva thank you. Lemonis i dont like the milkshakes, and i dont want them on the truck anymore, because it takes time. So heres what i think about it. 1, 2, 3, make money. So frozen bananas. In order to make this franchise concept more attractive, i want to add more highmargin items that could be made quickly to replace the milkshake. I own a pie company. Tony amazing. Lemonis key lime pie. They can ship em here. Well put them right in the freezer. So go through the process. What i ultimately want to do is expand the Product Offering to increase the number of times you would see a particular customer. If all you have is gelato pops and youre parked at the same place every wednesday, for 52 weeks a year, you may only see a particular customer once, maybe twice a month. But if your Product Offering is wide to include other products, you may see them every wednesday. Going forward, no more milkshakes. And were gonna add other things like banana, key lime pie, but i want to have a process for adding that on. As we generate more products, well increase our repeat business and the more repeat business we have, the more money we make. Obviously, the more money we make, the more viable the concept. [ engine starts ] oh, yeah another way to make this franchise concept more viable is to double the revenue by leveraging the existing kitchen and adding a second truck. So today, im bringing tony to miami trailer. I want to start expanding the fleet right away, but i also want tony to realize that we dont have to spend 120,000 to add a new truck. Its a 60,000 investment. In my mind, youre gonna get a threeyear lifespan out of it. If his current truck does 500,000 and hes only servicing one small part of south florida, then this truck could easily generate the same amount of revenue. And at a 75 margin, well, that would be a gamechanger for his business. So at 60,000 bucks, wed like to get this in a week. Hey, bud. I wanted to make a visit to south florida, cause i wanted to see if tony followed through on completing organizing the warehouse. Walk me through what you did. Lets start up front. Tony we actually finished this wall. Lemonis what happened to the shelving we were gonna put up here . Tony we didnt put up any shelving yet. Lemonis how come . Tony what i decided was to put stuff for the truck on the side. Lemonis and what about this . Remember, wanted to organize we wanted to organize stuff like that. So we really didnt get that done. Tony no. Not yet. Lemonis getting the freezers organized was top priority. Tony all the all the sorbets are here. Lemonis but this isnt organized by anything. And then whats different up here . It looks the same to me. Oh, my god. What is all this . Lemonis but this isnt organized by anything. And then whats different up here . It looks the same to me. Oh, my god. What is all this . Tony so this whole area was filled up with stuff. Lemonis i wouldve expected at least some shelving up here. It looks the same to me. Tony well, we organized it. Lemonis it feels like you put up some drywall, you moved the metal racks over there, you reshuffled around the freezers, and that was it. If you ultimately want to duplicate this model and sell this concept to other people, it needs to be so refined that people come here and they say, holy [bleep] these people are thinking about every last thing. Tony i get it. Lemonis okay . I continue to be frustrated with tony, but what i know is that in order for him to actually make progress, he may be the type of individual that needs to visualize things. So what ive decided to do is give him a surprise visit to new jersey. Im taking him to mr. Green tea. Richard emanuele, this is tony. Tony hey, rich. Richard hey, tony. Tony its a pleasure to meet you. Lemonis niva. Niva hi. Niva. Lemonis when i first invested in mr. Green tea, they were doing about 750,000 in sales. Three and a half years later, theyre gonna do north of 10 million. I brought tony so he can come up with a lot of new ideas and see different things. But what i also wanted him to do was to see that if he trusted the process, what could actually happen to his business. So i wanted them to learn about organization and how organized everything has to be, which has been. Richard weve been working on for years, back and forth, but. And i think were getting there. Richard were getting there. Sometimes, you know, you need that person from the outside, because i think sometimes, we get stuck in tunnel vision. And you start to open your eyes and you do a little bit and all of a sudden, you know, people like it and you say, wow. Okay. This is really the way to go. Lemonis so i wanted them to see how a real creamery works. Richard right. Lemonis because i have gotten us a very big job in south beach. Its the grand opening of the new tmobile store. So i want to work on Flavor Development thats customized for them. The quality of this production is very organized. Its the process that, no matter how small or how big, it has to be there. Richard nothing comes in here without it being tagged with exact orders, barcoded, and what the flavor is. There are no mixed pallets. Lemonis do you see how organized everything is . Niva yeah. Richard it all starts with real, regular, natural ingredients, real fruit. So were gonna try guava and cream cheese. So these are these are small, little guavas. Niva so were not peeling it . Richard no. Richard then i have a a supplier that i could get you hooked up with. Niva [ laughs ] richard okay. Niva oh. Tony oh. Niva we go all in . Lemonis all in. Richard all in, baby. Lemonis part of the reason that i want them to develop new flavors, is i want to see tony put a process in place. I want you to develop two different ideas for the tmobile thing. You know their colors. Lets try to do something big, okay . Tony sounds good. Lemonis i havent seen him do it yet. Just trying to understand your schedule for the next couple days. So youre gonna go back, when, tonight . Tony tomorrow. I have some friends that live up this way, so im gonna go see them. Lemonis is there a catering event tomorrow . Tony is there i have a few Catering Events tomorrow. Lemonis so you wont be there for them . Tony well, our business will be there. I personally wont be there. Lemonis whos gonna run them tomorrow . Tony well, my partner will be there. Lemonis your partner marcus . Tony niva. Niva we came up for business, and thats what we came up for. I also want to stay in manhattan for the night and see some friends. Tony why is it an issue that im going back tomorrow, for you . Niva because we came up here for one purpose and its to be here. And its done, its over with, we need to go back, we need to keep on going. Lemonis but i think the point that nivas making is shes going back today and shes gonna cover for the catering event. And youre staying here, and youre gonna. Tony see a friend. I just need the direction. If i wasnt open to change, i would have never called you. Lemonis did you sell your watch yet . I need to determine if i should move forward. Lemonis i think the point that nivas making is shes going back today and shes gonna cover for the catering event. And youre staying here, and youre gonna. Tony see a friend. Niva we came up here for one purpose and its to be here. And its done, its over with, we need to go back, we need to keep on going. Lemonis theres an event tomorrow, so sometimes if you want to see a friend and you just. Tony so are you concerned that the catering job will not be take be done tomorrow . Lemonis im concerned that youre not going home today when the work is done and getting back to work. The reason to come up to new jersey was to come up, meet this family, get some contacts, learn some process, and go back down there and get back to work. Tony i understand what what youre saying. Lemonis were in the middle of this whole business process. Tony right. Lemonis and that includes everybody being 100 in and working hard. And so in the next week, you need to come up with a few options for that tmobile grandopening event. Ready to make some other stuff . Tony lets make it. Lemonis all right, lets go. Okay. What do we have to see . Tony all right. Niva okay. Lemonis its been about a week since ive seen tony and niva, and i wanted to check in on them to see how their new Flavor Development was coming along for the upcoming event. Niva we have a mango chili. Lemonis okay. Niva and a cafe cubano. Tony so niva named the mango tmobile mango. Lemonis colorwise, how will that tie back to their brand . Tony that flavor doesnt relate to the the the brand, its more miami. Lemonis really . Tony it has a little chili in it. Tmobiles very hot. Its on a big upswing. Lemonis the company that theyre making the product for uses magenta, a bright pink color, and im looking at a product thats, like, brownorange . And more importantly, he didnt even take the time to make it into a popsicle, so that i could visualize what it would look like or how it would taste. This [bleep] is not ice cream. Tony ii was a little overwhelmed. You know, you want to try and get everything done at one time and you cant. Lemonis he did a good job of trying to [bleep] me, but im not buying it. I just wanted you to finish one task. I flew you up to new jersey so that you can learn from people that do it really well. And i did that for one reason. See somebody who started as a small business, who now has a huge business, and then i tasked you with what . Tony creating two flavors. Lemonis so you can imagine my frustration, because i dont really know what the point is. Tony the point is, is our process is broken. Lemonis i know, but i but i took you somewhere to see a process. Then you come back here and you do none of it. If you want me to write you a check and, like, go away, i im not gonna do that. Im not the right guy. If its just that you dont want to do it, i would rather you just be a man and just say to me, i dont really want to do that. Tony no, im open to doing it. Lemonis but then why didnt you do it . Tony i thought that we did. Lemonis i. Lemonis if its just that you dont want to do it, the chase mobile app changed the game for us. We had this plan to go to the hottest place on earth, harness the energy from the sun to develop popcorn. We thought we had the right equipment, we quickly realized we needed more. We were able to send a Wire Transfer to a local vendor and get more Solar Cookers delivered, right here in death valley. Manage business expenses from virtually anywhere. The chase mobile app available with business checking. Chase for business. Make more of whats yours. Resolution 1 binge more. Join the uncarrier, and get four unlimited lines for only forty bucks each. Plus, netflix for the whole family. On us. So, they get their shows. Lets go, girl youre gonna love this bit and you get yours. Watch however you want. On your phone, tablet, or tv. For just forty bucks per line. With no extra charges. Lets rock this joint all on americas best unlimited network, tmobile. Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. I would rather you just be a man and just say to me, i dont really want to do that. Tony i thought that we did. Lemonis i. I feel like i havent gotten answers. I dont get the truth out of you all the time. Tony no. I just need the direction. If i wasnt open to change, i would have never called you. Lemonis did you sell your watch yet . Tony no, i gave it to my i gave it to my father against money that i i owed him. Lemonis but you couldve taken it and sold it and. I need to take a minute to determine if i should move forward and really understand if this is a business that can be helped or its a business that can just do its thing. I really have to think about that. Let me take a minute, okay . I just need to cool off. Rather than getting upset, i felt like i needed to step out and just collect my thoughts and really process everything thats happened. I really wanted to see it through for tonys benefit, but i feel like every step of the way, hes either bucked the process, ignored it, or simply not engaged. And i dont know what to do at the point, but being angry isnt gonna solve anything. I thought it would be good to get all of us together and really have a conversation of where my heads at. Its been a tougher process for me than i had originally expected. I feel like your followthrough for stuff just wasnt what i had wanted it to be. Tony no, i mean, ii i think being accountable and, you know, having to answer to a partner, i mean, i think its something that i have to really work on. Lemonis is it fair to say you were never really happy with the original financial arrangement . Tony i just didnt feel 100,000 was reasonable for 40 . Lemonis i do not want to put you in a situation where youre gonna be uncomfortable and regret having a partner, nor do i want to be in the situation. Because i honestly dont believe that you really ever wanted a partner. Tony iii agree. Lemonis i dont feel like we can do business together. I think its better to just, you know, end it in a way where we can respect each other, we can shake hands. I think that tony is not a bad person. Hes just not the kind of person i should be in business with. Normally, i would exit and youd never see me again. Tony right. Lemonis but i im here. And i think you have a ton of potential and you do have a good business. And youre a smart guy, and youre gonna kick ass. With all that tony has been through in his life and the challenges that hes had to overcome, i felt like it was important to leave him with a glimmer of hope, with the idea that it was possible if he put the work in. Okay . Tony absolutely. Lemonis okay, buddy. Tony thanks, man. Lemonis good luck to you. Tony be well. Thank you. Lemonis i thought giving him his dignity and respect may be the thing that he actually needs more than anything. Lemonis tonight, on a special episode of the profit. Whos fired up . After 70 episodes of investing my own money in small businesses, im opening my books. Ive never seen a check that big before. Lemonis . Revealing what happened after the cameras stopped rolling. I asked for one thing which deals paid off big time. Im blown away. And which cost me millions . I would run. From the phonies and the frauds i never saw coming. You know, i dont want to be sitting here just. Working . To the incredible Success Stories that changed my life and business forever. Thank you so much. Yeah. This is the profit, my biggest wins and most heartbreaking losses. My name is marcus lemonis, and i risk my own money to save struggling businesses. Were not going to wake up every morning wondering if we have a job. Were going to wake up every morning wondering how many jobs we have to do. Its not always pretty. Everythings going to change. Everything. But i do it to save jobs, and i do it to make money. This. Let go to work. Is the profit. Its hard to believe that ive been doing