Transcripts For CNBC The Profit 20240714

Lemonis . Try some new approaches. Travis, allison, pete, and myself, well be partners in this business. And make some painful decisions. You want me to work a deal out with the landlord so it lets parlour off the hook . Paul yeah. Lemonis great. No. Because if i dont, both farrells and my money will be gone. Forever. 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. Everything is going to change. Everything. But i do it to save jobs, and i do it to make money. This is the profit. Last year, i visited farrells ice cream parlour. Hi. A oncethriving National Chain that closed its doors in the 90s. This place is awesome. And was reopened in 2010 by mike fleming and paul kramer. This is really what you guys are known for, giant ice cream sundaes. Paul it is. Lemonis the new owners wasted no time in opening up new locations. When i arrived, there were five buena park, brea, riverside, sacramento, and rancho cucamonga. Paul farrells is part of families. It was part of mine, and its part of millions. Lemonis but while the restaurants generated more than 17 million a year in revenue, they were starved for cash. Mike and paul were sucking out the cash from the two profitable locations to prop up the three that were losing, and to pay down massive debts. The total amount of debt 1,940,000. Equipment was failing, the food was lackluster, and the key iconic feature of farrells, the candy store, had disappeared. Im not really sure that the theme is clear to me. So i made a 750,000 investment to revive the brand. Part of the money went to me buying 51 of the trademark, with the other 49 held by mike, paul, and other investors. The rest went to remodeling buena park, the most profitable location. With the help of mikes daughter, shauna, who is the marketing director, we revamped the store. Man this place looks great. Lemonis the candy store is over here. With another key team member, travis. Travis im in my dream job. Lemonis . Streamlining the menu. Tell your friends farrells is back. During the process, we closed two of the unprofitable locations, and i left full of excitement for the future of the farrells brand and the three restaurants that were remaining. My deal was to receive 5 of all the revenue from the remaining locations. Travis we appreciate you having the belief in us. Lemonis but heres the problem. I havent received a dime. And right around the time that i was scheduled to come back to talk them about my royalty, i get a call from mike telling me the landlord locked them out of buena park. Mike hey, marcus. Lemonis . So im heading over there now. Mike nice to see you again. Lemonis so whats whats the deal here . Mike were closed. Lemonis i can see that. Mike we have a lot of infighting, and i ended up resigning as ceo. Lemonis mike had already told me that he resigned his position as ceo of the business, but hes the guy that got me into this deal, and hopefully hes the guy with some answers. But this location was the best one. You did 4 million last year. It made 300,000, 400,000. So why didnt you guys pay the rent . Mike there wasnt any money in there. Lemonis but, mike, this place was making good money. Lets take a look inside. Mike you know, it wasnt because there wasnt any money. Its pretty painful, isnt it . Lemonis well, considering that it was all my money, more than painful. It pisses me off. What happened to the booth here . They just ripped furniture out . Mike the landlord was looking for other options. Lemonis i mean, i spent a couple hundred thousand dollars here. Mike im still hoping youre gonna be able to do something. Lemonis do what . What do you want me to do . I invested in the trademark. I did not want to get invested into running these locations. That was what you and paul were supposed to do. It makes absolutely no sense to me that buena park is shutting its doors. This is the location that did over 4 million in revenue, plenty of room to pay its vendors, pay its bills, pay its rent, and pay my royalty. The place is literally destroyed. Look at this booth. Mike we had to close it down immediately and get out. Lemonis whatd he do, just kick you out . Mike yeah. Lemonis did they bring the sheriff here . Mike yes. Lemonis it literally looks like you guys just walked away from this place. Mike i made mistakes. I mean, theres no getting around it. I made mistakes. Lemonis it was a Family Fun Center where people old and young can come and share good times and build memories. Well you know what, my memories arent so good, and i got, basically, a big f you, and i have to decide whether i just want to cut my losses and move on because i dont want to throw good money after a bad situation. Now i got to call the landlord, work out a new lease, deal with all the. Hes going to tell me about that you guys did because, honestly, if i was the landlord, i wouldnt want you back in here. The place looks like absolute. All right. Let me have a few minutes, okay . Let me just. Im going to walk away. Im not an actual owner of the operating restaurants, and so i technically have no obligation to do anything to keep them open, but my investment in the brand. Well, if these restaurants close, that goes to zero. Mike, you guys made ice cream not so fun. Mike dont give up on it yet. Lemonis i normally am the easiest guy to persuade with a good story, but the story here isnt a good one. Negligence and mismanagement of funds. Ill let you know what i want to do. I want to get more information about whats really happening, so im heading over to the brea location to get the real inside scoop from travis and shauna. Where did the money go . Shauna to help pay bills for other stores. Travis buena park kept stores like rancho cucamonga, and sacramento and riverside afloat. Lemonis we told paul he was not permitted to do that anymore because we wanted them to live or die on their own. The whole brand was at buena park. We put all that money in there, we put the candy store in there, and he wasnt communicating to you guys on what he was paying or not paying . Travis no. Lemonis not telling you anything . Travis no. Lemonis just blindsided by it . Shauna right. Lemonis i was very clear with paul and mike that the best locations stand on their own feet, and if the other ones cant survive on their own, they shut down. They did exactly what i told them not to do. Ive gotten some comments from people that the new menu actually never got installed. Travis the new menu never did get installed, so. Lemonis why is that . Travis paul was very resistant to change. As i tried to bring in new product, as i tried to get new things on the menu, it was just line red the line item. Lemonis and who was saying no to it . Travis it was paul. Lemonis i called paul because i think its only fair to give him a chance to tell his side of the story, and i want to see these financial statements. I want to understand what really happened. Paul, i appreciate you coming by. So, wow. Business is way worse than i thought it was going to look. Theres buena park, theres riverside, and theres brea. Buena park, the landlord is threatening eviction, right . Riverside, the landlord is 200,000 past due, and your vendors are 75,000 past due. And brea is hanging by a string. Farrells international is up here, this is where marcus is, and Parlour Enterprises was the manager of these three locations. Parlour enterprises is the Management Company that actually operates and manages the individual location. Along with paul and mike, there are other employees that make up that group, but essentially its the two of them leading it. Well, lets look at the revenue. Buena park, 4 million, did pretty good. Riverside. Paul 2. 77, yeah. Lemonis and brea . Travis 2. 9. Lemonis by the way, these are not small numbers. Buena park makes money, brea makes money, and riverside broke even. Paul correct. Lemonis okay. So why are you past due on all your bills again . Paul its coming into parlour as management fees, and Parlour Enterprises still had to pay the investors. Lemonis when i look at the financials, it looks like buena park makes money, riverside breaks even, brea makes a little bit of money, but then theres no money to pay bills . Were these investors basically scraping off some of the cash so they can take whatever profits the businesses are making and pay themselves back . And so you are pulling money out of buena park, pulling money out of riverside, pulling money out of brea. The way the books were run, buena park was essentially the sacrificial lamb. Now, somebody had to make that decision, and so who would do that ultimately . Paul i would, but updating mike on a monthly basis of what was going on. Lemonis well, technically youre the cfo. Paul yeah. Lemonis so the checks that got released, who made that decision . Paul yeah, me. It was me. Lemonis the bills that got paid, who made that decision . Paul it was me. Lemonis why . Paul there are other shareholders involved that have been with us for a long time. Lemonis yes. Paul . That i wanted to protect. Mike yes. You wanted to keep it together for the sake of parlour and parlour shareholders, but it was evident to me that we were on so opposite sides of the fence on this thing. Thats why i resigned. Im not going to stand around and be part of something when the decisions that were being pushed i was totally in disagreement with. Paul so why not pose those questions and have us make those decisions . Why just step out . Mike because it had more to do about the direction of the company. Everything that i said with regard to Going Forward with marcus, i got pushback. I got pushback, i got fbombs, i got. Yes. Paul, come on. Paul what was i disagreeing with . Mike the whole deal with marcus. And i got fed up there because every time id come in and it would be, well, if we didnt have to do this because of marcus, then blah, blah, blah. Paul ultimately, i was in favor, and i signed through it and went through it. Lemonis just to be clear, mike has a welldocumented history of blaming others, including paul, for everything that goes wrong here. Mike some of the areas that paul was in, he is not good at. That said. Lemonis why are you blaming everybody else . Mike im not blaming everybody else. I said. Lemonis well, you said paul should have done this. What about you . And so as hes telling me things, im taking it all with a grain of salt. The two of you, your relationship is no longer . You guys have no relationship anymore . Paul not really. No. Lemonis how come, paul . Paul all the tension and stress of locations and closing, and that all fell apart. Lemonis it didnt fall apart on my end. My money got spent. I havent gotten one license fee of any kind, not a penny, not a nickel, not a dime. Paul were trying to hold this together. Lemonis what do you want me to do . I need you to give me some direction. Paul work with craig on a temporary lease agreement. Lemonis you want me to work a deal out with the landlord so it lets parlour off the hook . Yes or no . Paul yeah. Lemonis great. No. Paul what you brought up a couple of days ago was not true. I didnt have the proof. And you do this to me time and time again. Mike paul, im not going to go back 6 months and try to remember. I dont know. Paul thats a lie. So, every day, we put our latest technology and unrivaled network to work. The United States Postal Service makes more ecommerce deliveries to homes than anyone else in the country. Ecommerce deliveries to homes Liberty Mutual customizes your car insurance, so you only pay for what you need. I wish i could shake your hand. Granted. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. For big savings on the hunting equipment you need and brands you trust. Like cabelas, redhead in true timber camo, and black out. Your adventure starts here. You wanna see something thatamazing . Ing. Go to hilton instead of a travel site and youll experience a whole new range of emotions like. The relaxing feeling of knowing youre getting the best price. Thesell work. The utter delight of free wifi. Oh man this is the best part. Isnt that you . Yeah. 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No. The licensing fees have not been paid, and theres termination letters that have been sent out, and while im not permitted to lock the door, i am permitted to actually yank the signs and all the trademarks. Your license agreement here is terminated today. I cant do this anymore, and this is, like, making me crazy. The challenge that i have is that i have 750,000 bucks invested in the brand, and if i want to preserve my investment i dont think i have a choice other than to chase buena park and try to reopen it myself. Look. I wish mike and paul a ton of success with brea and riverside because i want my 5 royalty, but buena park, thats mine, and im going to get it right. Heres the good news. Farrells is not going away. I own 51 of the brand. Its going to exist in some form or fashion. Parlour enterprises will no longer run buena park. Im going to solve the buena park thing. Thank you. Hello. Allison hi. Lemonis long time no see. Pete hello. Lemonis thanks for meeting. A few years back, i invested in a small candy shop in florida called sweet petes, and the owners, pete and allison, well, theyve actually killed it. Today, its a multimillion dollar business. Ive flown them out to california because this farrells situation, its a giant mess and i need their help. About a year ago, i invested in farrells. To say that its a disaster is an understatement. I think when i look at our partnership over the last 3 years, i write the check and i have no worries. I wanted to talk to you guys about the idea of us putting farrells inside of sweet petes. Farrells, to me, is a sweet brand, and sweet petes is a sweets brand. So we would take the location in buena park and we would put a sweet petes and a farrells there, but it would really be owned by all of us, and so youd have jacksonville, chicago, atlanta, chattanooga, and buena park. I need the infrastructure that we have, the human resources, the accounting, everything we spent the last 3 years building. Allison mmhmm. Lemonis im not willing to do this without you guys. Allison you know, we dont have any experience in the restaurant industry, so thats a little intimidating, like, making sure that if were going to take this on, were going to figure that out. To work well next to a sweet petes, we have to modernize it a little bit, make it a little cleaner. What do you think . Pete i mean, were kind of in a place where do need to grow. You know, that would help us, as well. Im open to try, absolutely. Lemonis so we want to do it . Pete lets do it. Allison lets do it. Lemonis oh, my gosh. Allison [ laughs ] lemonis what are we doing . Do i have to hand you a check now again . I think we got one last shot, and lets see what happens. All right . Were on . Allison yeah. Were on. Pete lets do it. Lemonis lets try it. Water expenses are huge here. What is our rent now, 27,000 . Sarah its 27,385. Lemonis now that i have pete and allison on board, i think im ready to move forward by bringing buena park back to life. And so if were going to do this, i got to cut a new deal with the landlord, and we have to put money into here. Travis yes. Lemonis all right. Let me go talk to the landlord. Travis okay. Lemonis im gonna call him. In order to get buena park opened up, i had to negotiate separately with the landlord and sign a 5year lease with a personal guarantee for almost 26,000 a month, but i also managed to get a few months of reprieve so we can get all the work done. Lemonis paul, how are you . Paul hey, marcus. Lemonis how are you doing, buddy . Paul good. Doing all right. Lemonis ive been getting some messages from paul, and i decided it was a good idea for us to talk. Mike had been blaming paul for taking all the profits out of these businesses, but paul said he had some information that he wanted to share with me. You know, the last time we talked, we talked really about all of the financials and them being all over the place, and things closing. As you can see, this place closed. I finally got ahold of the landlord, was able to get it reopened, but, you know, mike has said some pretty damaging things about you. Paul i know. Lemonis i got word that the money was taken out of the account, and when i called mike and asked him about it he told me that you, on your own, unilaterally. Paul bull. Lemonis . Decided to take the money out of the account. Paul thats a lie. Paul . And take it to parlour to cover bills. Paul and hes done that so many times, where he creates this thing of false belief that he has. Lemonis yeah. Paul its a lie. Lemonis okay. Paul and i have a letter from the bank of him authorizing me to close that account. Lemonis do you have that letter . Paul i do. The day before he resigned, and i have some email backups, too. What he presented to you a couple of days ago i knew was wrong. Lemonis hello. So, mike, you know, paul came by and brought me a bunch of files and a bunch of paper. Paul and what you brought a couple of days ago was not true. I didnt have the proof. You do this to me time and time again. Mike well again, youve got documents there. Ive got emails. Lets take a break. Lemonis no. Mike ive got emails. Lemonis just deal with this issue, please. Well, im just saying. All i can tell you, paul, all i can tell you paul first, its not the financial stuff. You brought that up again on monday. Thats a lie. Mike paul, im not gonna go back 6 months and try to remember. There was so much thats happened. I dont know. Lemonis he did not defend himself, as usual. Hes bringing this letter to the table now showing proof, because he kept his records, that you gave him the instruction to move the money. Thats why hes standing here. So the problem that is existing between the two of you is youre saying one thing about him, youre saying one thing about him, and the two of you need to work it out because the 15 years of friendship is now resolved to a piece of paper saying he said, she said. So i need you guys to clean this up right now because i dont know how to move forward. Paul we need to Work Together to get through this. Lemonis okay. I, for some reason, always want to give people a second chance, and it seems like in this case im going to give them a third chance. Paul and mike are owners of Parlour Enterprises, and Parlour Enterprises owns a small percentage of the brand, so technically theyre still my business partners. The history of farrells is built on ice cream, and its built nationwide. So the task that im going to give you guys is for you to help launch farrells ice cream at retail. Mike and paul, you want to prove to me that youre committed . Heres a test for you. And i will allow you to make the first 300,000 to pay your debts off. Mike wow. Paul thank you. Lemonis and then after that, ill earn 75 and youll earn 25. Mike ah, marcus. Put my left hand out. Paul okay. Lemonis are they really committed to what the company is doing, and are they really committed to helping me get my money back . Anna hey, guys. How are you . Lemonis have you met shauna . Anna i havent. Lemonis this is anna. Anna hi, shauna. Nice to meet you. Im anna. Lemonis this is travis. Travis hi, anna. Anna hi, travis. Nice to meet you. Travis nice to meet you. Lemonis i want to change the entire look of the place to create a new concept. Since this is the first time that farrells and sweet petes are going to be combined into one location, i want to give it a brand new look, and i want to make sure that there are different elements from both brands that are combined, so im bringing in anna from Pacific Hospitality. Its a business i invested in in 2016. Shes helped me with designs in the past, and i thought she could really help with this one. Anna you know, i was thinking about the wallpaper, maybe replacing that. More like a chalkboard type of wallpaper that has all the farrells memorabilia sketched in. Obviously new seating, for sure. Definitely the lighting. I love some of these. I think we can still use them again throughout the restaurant. Lemonis so youre intermix . Anna yeah. Lemonis while the team works on design, ive authorized them to start demolition. This will be the first location, a prototype, of having sweet petes and farrells put together. We have about 2 months to get this project done. You know, a lot has changed in the last couple of weeks, but i wanted to make sure that everybody understood whos who, and whats what Going Forward. Now that we have all the parts and pieces moving and the demolition has started, i wanted to get everybody together so people know their lanes, they know what their roles are, and theres no confusion on whos doing what. Were at this very odd crossroad in the business where i had to make a decision to put more money in, and i felt like i couldnt really move forward without an infrastructure in place, so ive asked pete and allison, and their whole organization and their whole infrastructure, to really come in and help. Travis, allison, pete, and myself, well be partners in this business. Mike well, i guess this is a probably a good time, you know, for me to talk to you, marcus. This past year was, you know, its been a tough year. Lemonis yeah. Mike the last week or two has been pretty tough, too. You know, ive been doing a lot of praying about it, and really what thats come to is for my family, for my health, its time for me to move on. You know, to me right now, it doesnt. Lemonis can we go inside . Literally in the middle of it all, mike interrupts me to tell me that, ah, excuse me. I dont think i should be here anymore. Not after, not on the side, while everybody is standing there. Mike at this juncture, marcus, you know, i didnt know where we were going with this, and it just became very evident to me im. Lemonis so this is very similar to you walking away from farrells before when you did, right . Mike at times in peoples lives, sometimes you have to take a different turn. Lemonis im fine with you not wanting to do this anymore. Mike okay. Lemonis i find it interesting the way you got here, and theres a pattern. You start something and you really dont finish it. You walked out on parlour. You quit. You left a lot of people me, paul, the landlords holding your bag. Mike thats not true, but. Lemonis of course its true. Mike no. Its not. Its not. Lemonis you didnt leave paul holding the bag when you walked out . Mike marcus, you know what . Lemonis paul . Paul i was the one responsible for continuing. Lemonis and now im the one responsible for continuing this. Mike i understand that, marcus. I really do. Lemonis no. I dont think you do. How much is all of it going to cost . Travis about 480,000. Lemonis i think were making a mistake by trying to keep this thing alive. Lemonis now im the one responsible for continuing this. With rising stress in the modern world, a good nights sleep is nearly extinct. However, theres hope on the horizon. Every day, ikea is designing sleep sanctuaries to save our sleep. Before she puts them in the dishwasher. So what does the dishwasher do . vo cascade platinum does the work for you. Prewashing and removing stuckon foods, the first time. mom wow thats clean vo cascade platinum. We really pride ourselves on temaking it easy for youass, to get your windshield fixed. Teacher lets turn in your science papers. Tech vo this teacher always puts her students first. Student i did mine on volcanoes. 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No. Lemonis you had a financial stake in the business, yes or no . Mike well. Lemonis yes or no . Mike yeah. I got a small. I agree. Lemonis so you werent here because you were doing charity work. Mike but you have to understand. I could have just walked away completely at that point, marcus. Lemonis you left because you had no control, and you are leaving here today because nobody is paying your bills. Thank you for coming. Mike i wish you the best. Lemonis yeah. Good luck to you. Mike is now gone for good, and so is paul, by the way. He hung around for awhile and tried to work on little things, but in the end, it didnt work out, and candidly, its probably for the best. Now, theyre still technically investors and my partners, but thats in the name only, not the operations. Travis so this is where were standing here. This is gone now. Lemonis in an effort to drive more traffic to farrells, we are redoing the entire floor plan to allow customers that just want to enjoy ice cream without food to come. Were expanding the entire candy store to improve the retail area, and were adding a candymaking space, and were also extending the ice cream bar. If everything goes according to plan, well be open in the next two weeks. Hey, guys. How are you . Shauna hey. Shauna good. How are you . Lemonis good to see you. Travis how are you doing, marcus . Lemonis i wanted to bring you to Pacific Hospitality because anna wanted to present her ideas for redoing the whole space, and so we got to get started. And then how are you guys working together . Travis weve realized the mistakes that weve made in the past, learned from mike and paul and the mistakes that they made, and were designing everything from the uniform to a brandnew menu, to a brandnew look and feel of the restaurant. Shauna where i come with ideas more in terms of the marketing side and how to bring people in, travis helps me really execute those logistically and operationally. Lemonis okay. So what do we have here . Anna okay. So my whole concept with this was keeping the vintage feel that they have. We have to honor that, obviously, in the design. Then we started kind of playing with palettes. Currently, its red, black, white, like thats very prominent, so then i went into, like, the syrups that they have in farrells, the butterscotch, the pineapple syrup, like all those other colors that they have in their food, and so we eliminated the whole blackbooth idea and went with this butterscotchy color. Travis i actually love the color. Shauna its taking a little bit of getting used to because ive also liked the black. I dont know if its going to fit in the restaurant with how the walls are and the wallpaper. All that busyness is going to clash with this color, as well. Anna so these were a couple ideas in working with the furniture. My thought on this was to kind of do a drip effect, like if it was sort of, like, dipped in syrup, and this was kind of dripping. Shauna i actually really like the gold. I just dont want people to walk in and feel like its this clash of kind of random colors, and im terrified that people are going to walk in and say, nothing about this says anything of the farrells that i remember, and because of that i dont want to come back. Lemonis but that nostalgia doesnt pay the bills. I heard all of that when i came to see you guys the first time. I understand why shauna wants to protect the brand. Shes been around it for years, particularly with her dad being involved. And now that her dad is gone, maybe the tension is a little higher for her. But honestly, were moving forward. Travis we have to risk it because we know we failed, and we have a failing business model. The food, the ice cream, the decor, everything about it has proven to be a failure, and im willing to run with this and give it a shot. Lemonis and so how much is all of this renovation going to cost . How much is all the furniture, the renovation, how much is all of it going to cost . Travis so were looking at about 480,000. Lemonis a half a million dollars. I think were making a mistake by trying to keep this thing alive. It doesnt look like you guys are collaborating. Its not farrells and sweet petes, its sweet petes and farrells. Honestly, allison, it looks like [bleep] lemevery breath makes youking feel closer to nature. And every sip makes nature feel closer to you. Michelob ultra pure gold. Beer in its organic form. Number one in Overall Network performance. Full of awards. Highest in Wireless Network Quality Performance. Highest in Wireless Network Quality Performance its hard to know what to think. 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Lemonis i think part of the reason that i really love working with travis is that its always about the business. Its never about him. Okay. Lets get to work. Travis all right. Pete i noticed we sell a lot of these in jacksonville. Allison yeah. They sell really well. Lemonis the team is prepping to get the buena park location open, but one of the things that i want to see is travis, allison, and pete working together to prove that these two businesses can create one cohesive location. Travis hey, guys. Allison travis. Travis we just stocking shelves . Allison yeah. Travis i remember that marcus clearly pointed out he really didnt like the sodaflavored licorice and the really heavy bacon theme, like cotton candy and those type of things. Allison those sell really well for us, and they have really good margins. Travis i know that were really trying to pull sweet petes and farrells together, but i feel like we need to be really cautious. Allison i mean, well just have to, kind of, play around with it and rethink how were merchandising it. Lemonis hey, guys. Allison surprise, surprise. Lemonis surprise, surprise. Today, im at buena park. I wanted to check in to see how the remodeling was going. Allison i guess because they were so cash strapped they havent taken care of anything, so the a c is not working, the grease trap was jacked up. Lemonis youre not going to open this week, are you . Allison i mean, right now its so hot we cant even touch anything thats chocolate or it will melt. Lemonis so the a c is not working. Travis were running into all kinds of old maintenance issues that werent taken care of. Lemonis i feel like im living in a real money pit. First it was a couple hundred grand, then it turned into 480,000, and now im standing here and im hearing that im going to have to fix the airconditioning. Like, how much neglect did paul and mike actually put this business in. You guys are not utilizing the space enough yet. It doesnt look as good as i know were capable of. The candy store doesnt look right to me. Allison it doesnt look over the top enough. Lemonis no. It doesnt look. Honestly, allison, it looks like. Allison well, its not all put together. Lemonis maybe its because its in the original package, and i literally feel like im at 7eleven. Allison we can make it a little more upscale looking. We can get, like, oldtimey candy jar type of stuff and put it in there. Lemonis i mean, its not pete and allison work. Im just going to say that lightly. When i first met you guys, i loved, like, the whimsicalness of it. It was all creative, and it looked amazing. This looks like the old farrells. Were better than this. I still cant see that if they come in the sweet petes store, what else can they buy, and if they come in the farrells door, what else can they buy. I dont see that glue yet. Pete is it, like, a functional thing, or is, like, something physical . Lemonis its not a layout issue. Its not a flow issue. Its a product selection, merchandising issue. I would take this floor plan of 2,000 square feet and start moving stuff around. Barrels here. On the walls, tables packed everywhere, every shelf just. Allison mmhmm. Lemonis so when people come in, theyre like, wow. Im trying to maximize the revenue per square foot, and im not going to compromise. The only way that im going to get any return on my investment is if this place is a home run. And then i would actually like a toy store because if you have birthday parties, how many people come in and they forget gifts . Travis it happens. Pete all the time. Lemonis we got to be able to solve that problem. They walk in. Did you forget your gift . Come to the toy store, get a gift and go to the party. In order for me to really get the final cherry on the top with profitability, i feel like the toys are going to give you the margin and the revenue. It doesnt look like you guys are collaborating. It looks like you guys are just, okay. Farrells, check. Sweet petes, check. But its not farrells and sweet petes. Its sweet petes and farrells. The number one brand attribute of sweet petes is the visual. Allison back here, they are making candy, which i think helps increase sales here, and thats not something weve done. Pete ever. Allison . Before, and its, like, right here. Theyre pulling lollipops, fresh apples on the countertop. Those are things that naturally cross over. Like, to me, a freshdipped apple is it makes sense, so i think thats the cohesive thing. Lemonis this has got to be truly an integration of brands, all about the experience, all about the cross promoting of the two brands in the same space. We got one shot to do this. The store is not its not ready. Hey, shauna. Do you want to grab your laptop . Lets go up front. Im back at the brea location because i want to rev up the Marketing Efforts for the launch, and i also want to pick shaunas brain. So what i want to do is. Shauna actually, can i talk to you really quick for a second . Lemonis you can talk to me about anything. Shauna i, actually, im really glad were able to connect, and i wanted to thank you so much for the last several months, and for this opportunity, but im actually going to move in a different direction. So effective immediately, im going to be resigning. Lemonis if your business is in trouble and you need my help, log on to theprofitcasting. Com. gasp singsong budget meeting sweet. If you compare last quarter to this quarter. Various mmm. Its no wonder everything seems a little better with the creamy taste of philly, made with fresh milk and real cream. You wanna see something thatamazing . Ing. Go to hilton instead of a travel site and youll experience a whole new range of emotions like. The relaxing feeling of knowing youre getting the best price. Thesell work. The utter delight of free wifi. Oh man this is the best part. Isnt that you . Yeah. And the magic power of unlocking your room with your phone. I can read minds too. Really . Book at hilton. Com. If you find a lower rate, we match it and give you 25 off that stay. Expect better. Expect hilton. Ahh now thats crisp. Crisp taste. Brewed with no corn syrup. Bud light. Yeah. Yeah, this is nice. Hmm. How did you make the dip so rich and creamy . Oh its a philadelphia family recipe. Can i see it . No. Philadelphia dips. So good, youll take all the credit. So youre with the ups store . Yes. In fact, we printed these right here. Oh, i thought you guys just did shipping. No we do printing, packing, faxing, notarizing, shredding, mailboxing, copying, taping, binding, uh huh. Consulting, designing, returning, storing, and freighting. Oh, and of course, shipping. So youre into shipping . We also do printing, packing, faxing. Come in to the ups store today for every ing your Small Business needs. And of course, shipping. Super emma just about sleeps in her cape. But when we realized she was battling sensitive skin, we switched to tide pods free gentle. Its gentle on her skin, and dermatologist recommended. Tide free and gentle. Safe for skin with psoriasis, and eczema. So effective immediately, im going to be resigning. Lemonis out of nowhere, shaunas telling me that shes quitting. Well, what drove you to that point . Shauna you know, i dont really think theres much to say, so. Lemonis you dont think theres much to say . Shauna yeah. Id like to just leave it at that, and honestly this is. Lemonis well, theres obviously something to say, shauna. Shauna this is my decision, and so im going to just leave it at that. Thats all i have to really say about it. Lemonis yeah. Okay. No explanation. I think that shauna realized that farrells is now a different business, and that it was unfortunate that her dad left, and that was bothering her. Well, thats a bummer. Shauna thank you for everything, and travis is fantastic, so i hope everything works out with him because hes fantastic. Lemonis good luck to you, shauna. Shauna thank you so much. Lemonis take care. So thats mike, paul, shauna. The last man standing is still travis, isnt it . And whats he doing . Working. You had no idea that was coming . Travis no, honest. I asked her to come in and to help me with hr, marketing, and revenuegenerating pieces. Its not what she wanted to do with her life, and that was her general response. I dont see how you could walk away from a business like this, a name like this. She must have a reason in her mind. Lemonis the only reason that i am standing here today and going down this rabbit hole one more time is because of you. Get back to work, okay . Travis all right. Lemonis all right. See you in a bit. How are you, buddy . Travis morning. How are you . Lemonis good seeing you. Allison you, too. Lemonis i asked travis and allison to meet me in atlanta to go to the toy expo. Woman we have all kinds of fun jewelry, puzzles, apparel, anything that you might want to buy. Lemonis really concerned about the margins. Can we find things that are 60 margin . Woman sure. Lemonis this whole setup is great, 3 and you sell it for 6 . The more toys that they can have retail for under 10, the higher the success rate is that they can attach a toy to an order. Oh. Look at the wings move. I love this setup. Woman a nice, small footprint, as well. Lemonis it is. This is 1 square foot. We need to find more stuff like this. For every customer that walks through the door, what is our expectation that one is going to leave with a toy . The lower the price point, the higher the attachment. All right, so youll build us a big assortment of all of this. Woman okay. Lemonis thank you so much for taking the time. Woman i appreciate it. Lemonis travis is finally finishing the menu that we had agreed to do several months back, and guess whos in his way . Nobody. How many items are on here . Travis 21, but. Lemonis compared to what it used to be, which is what . Travis close to 50. Weve been able to really increase the quality of the product. Lemonis yeah. Travis . And lower the food cost by about 1. 5 . Lemonis lets taste some of that. Travis great. Lemonis hes also vastly improved the quality of the food. Whats the weight of this . Travis six ounces. Lemonis is it more expensive per pound than what you used to use . Travis it is 7 cents more expensive per pound, but we increased the quality. Lemonis and while the cost in some cases have gone up, he knows that hes banking on returning customers. Thats what drives revenue. And wheres the french fry process . Travis french fries are over here. These potatoes are farmed strictly for french fries. Lemonis what did you used to use . Travis frozen french fries. Lemonis its, like, perfect. Whats the difference in cost . Travis were saving about 20 cents per order. Lemonis wow. So youre saving roughly 70 . Travis yep. Lemonis and its fresh. Travis yeah. Lemonis today is the day that the new farrells and sweet petes concept opens up. Ive been through a lot with this brand in a short amount of time. Any time you merge two businesses together that have their own history, and their own legacy and their own style, it sometimes takes a while to get them to mesh. In my mind, this is a makeorbreak situation for farrells. Unbelievable. For exclusives, extras and business advice, visit theprofit. Cnbc. Com. Red lobsters endless shrimp is back for just 15. 99. Get all the shrimp you want, any way you want em. Like new srirachahoney shrimp, savory grilled teriyaki shrimp, classic shrimp scampi and more red lobsters endless shrimp is 15. 99. Hurry in. Great riches will find you when Liberty Mutual customizes your car insurance, so you only pay for what you need. Wow. Thanks, zoltar. How can i ever repay you . Maybe you could free zoltar . Thanks, lady. Taxi only pay for what you need. Liberty. Liberty. Liberty. Liberty. Introducing a razor that works differently. The Gillette Skinguard has a guard between the blades that helps protect skin. The Gillette Skinguard. Lemonis good to see you. Unbelievable. It looks like it should have felt from the beginning. Really well thought out, properly planned, a nice assortment of food, toys, candy, ice cream. It speaks to travis commitment to this business. Look at everybody at the bar. Travis thats our new party area and classroom. This is our retail area, so we have everything from socks, to mugs, to pajamas, to hats. Lemonis how are the toys doing . Travis on the retail side of things, our number one sku is toys. Lemonis it feels the way i wanted it to feel. You come in here and it genuinely comes to life. Travis its a very common sight to see people walk through this door and instantly smile. Lemonis the old farrells was overly loud and terribly lit and kind of halfassed in terms of of its overall presentation. The new space is bright, and its welcoming. It has a great energy about it, and an amazing retail display. Travis i was actually able to take a full freezer and turn it into a chocolate storage facility, temperature controlled, labeled, and dated. Lemonis how is working with pete and allison been . Travis we have a really good, open working relationship. Lemonis for travis, its always about the customer, and its always about the employee. Its always about the company. He was smart enough to recognize the success that allison and pete had and not try to overshadow them or supercede them. He tucked very nicely into the organization, and just wanted to be a contributor. Hi, guys. Woman hi. Lemonis how are you . Boy good. Lemonis how is it . Boy i like it. Man we grew up with farrells, so we remember it growing up. You know, it brings back a lot of memories. I mean, it looks very similar to what i remember growing up. Woman but its less chaotic. Man yeah. Oh, yeah. Lemonis does it still have the nostalgic feel . Man yes. Absolutely. Woman yeah. For sure. Lemonis look. Not every customer is going to love all the changes. There are people that have come here for years that do like the banging drums once a year, and all the horns and the sirens, but were trying to build a business that can allow people to come on a weekly or monthly basis, not an annual basis, and it has a cohesive offering that is fun for families. Okay. So what is this . Travis this is just our beef slider. So its a smaller version of our classic hamburger. Lemonis this is ridiculous. What are your overall food costs . Travis right now we are running at 23. 7. Lemonis that low . Travis yeah. Lemonis how much revenue do you think this location can do . Travis right now i have it forecasted at 4. 2 million. Lemonis really . Travis for the first year. Lemonis and what do you think the net profit will be at 4. 2 million . Travis we should be dropping about 18 of that. Lemonis so like 700 grand . Were sharing in that, buddy. A typical restaurant would be hitting it out of the park if it could net 10 . Travis is a rock star. Thank yous are necessary, but lets be honest, theyre not everything. So i want to give you a bonus. Never have worked without you. Never. This check for 50,000 comes from me, personally, not from the business because the sleepless nights that i didnt have, you had. Travis its not necessary. Lemonis yeah, it is. Travis i wish it wasnt so tight in here so i could give you a hug, but you have no idea how much this will help my family, but the recognition is what means more than anything. I spent 6 years trying to fix this concept and got pushed down and pushed away, and felt like i was nothing, and to have this and to be recognized by you and. Lemonis youre my guy. Travis . By the staff. Lemonis youre my guy. Travis . It means the world to me, marcus. Lemonis you have not only earned my trust, but you have earned my respect. And you dont work for farrells, youre my partner at farrells. You are not an employee. This is your business, your familys business with me, and dont you ever forget that this is your business. Travis thank you. Lemonis now, didnt the stadium used to be on the other side of town . Allison yes. Lemonis now that our concept in california is done and running really well, i want to expand into the southeast. Gary gary lewis. Nice to meet you. Lemonis what would this place look like on a friday night . Gary game day its mobbed. Theres people coming in really from all directions. Lemonis today i brought the team to the Atlanta Braves stadium where were opening up a new sweet petes and farrells concept. Ball games, concerts, public events, friday nights, saturday nights, bars, restaurants, the expectations i have on this location are 8 million to 10 million a year. Allison thats going to be the stairwell. Its a grand staircase. Lemonis i wanted to revive this brand in a way that had staying power for the future. Travis, allison, pete, and were in control of our destiny, but have the right people, the right product, and the right process. I visit swansons fish market, a multigenerational landmark located in fairfield, connecticut. Is it always this busy . Gary yeah. Lemonis but after a tragic fire, these owners are struggling to keep their heads above water. How are you surviving . Gary well take money out of the deposits. Im put against the wall. Lemonis and morale is at an alltime low. Larissa ive just been through a lot trying to help everyone, and i just dont know how much more i can deal with. Lemonis if i cant throw them a line, this historic institution may close forever. Gary its the only hobby i really have. Sue its ridiculous lemonis my name is marcus lemonis, and i fix failing businesses. If you dont like money, dont follow my process