And you do 1 million a year . You should be proud of that. Man but we dont know how to keep any of it. Lemonis . Fix the process. You see . It is flimsy. Dont ever make these again. You dont sell them. And create a few products. Juli it reduces anxiety and depression. Lemonis i kind of like it. I spent countless days working on these companies. How much money did you burn through . Parker 650,000. Lemonis but we cant always fit everything im thinking into the show. So tonight im giving you an inside look at an episode from season 3. Alexa hey lemonis . 240 sweet. Over the next hour, im gonna take you behind the scenes to find out how a sweet Marshmallow Company in indiana. Alexa good morning have you had our marshmallows before . Lemonis you seem friendly now . With headstrong owners. Sam cindy, do you need a job . Lemonis sam, this is a good example of aggressiveness. My radar was already up on sam. Ended on a very sour note. You said it. Everybody is not perfect. Sam i dont want to dig down deep and find that person inside of me that could rage up and just eat you alive. Lemonis i think i already met that person. My name is Marcus Lemonis, and this is an inside look at the profit. Man 2 a rolling. And then look up at that monitor. Done. Lemonis literally whats interesting about this episode is it normally takes us five days to shoot an episode. Amber i remember that it took so long to shoot this one. Lemonis how long did it take . Amber about eight months. It started off sweet, and you like marshmallows. Lemonis no, it didnt. Amber and you like sweet food. Lemonis i like the idea of the novelty sweet business that is small in size and light in weight. Amber why . Lemonis because its the easiest thing to do Online Business with. I thought it was maybe one of the not sweetest episodes to make. Amber it started out sweet. Lemonis alright. Lets watch. In 2008, awardwinning chef alexa lemley and her wife, samantha aulick, started 240 sweet. How many times did alex change her hair color on the show . Amber oh, a lot. Lemonis well do, like, a marshmallow game. Every time she changes her hair color. Amber youre gonna. Okay. Lemonis . A handcrafted marshmallow business just outside of indianapolis, indiana. Alexa good morning have you had our marshmallows before . Lemonis pause. Okay. Hold on. Ive seen one hair change already. Amber its like. Lemonis but ive seen i said every time. Youve got to eat one. Amber im not playing this game with you. Lemonis their gourmet marshmallows with artisanal flavors soon earned them a loyal following, but a questionable rental agreement has affected all aspects of their business, including profitability. Sam jesus christ. What are we gonna do . We have bills to pay. Lemonis artisan marshmallows are only growing more popular. Alexa awesome. Lemonis as long as 240 sweets product lives up to its reputation, im confident i can get the company back on track and roast the competition. When the girls at 240 reached out, i was intrigued because i already have a bunch of other sweet options. This would be a great addition, so im excited to try the product. Alexa hey look lemonis how are you . Alexa hi, alexa lemley. Lemonis alexa, nice to meet you. Alexa nice to meet you. Sam oh, hi. Im sam, marcus. Its wonderful to meet you. Lemonis you seem friendly now amber they seem really sweet. Lemonis dont worry. Were coming. Alexa so this is dede. Dede hi, im dede. Lemonis hey, how are you . Nice to meet you. What is this up front . Alexa it is our retail area, shipping and order packing. Lemonis so what are the roles . You guys are partners . Alexa with us . Sam were married. Lemonis oh, you are married. Sam yes. Lemonis oh, very cool. Sam thank you. Alexa i do production, and sam does marketing and officey stuff with dede. Lemonis so this is sriracha lime . How many different flavors do you have . Alexa over 200. Amber they sent a bunch of flavors to the office. I do remember that. Before we started shooting with them. There was one weird one. Do you remember what it was . Lemonis there was dill pickle. Amber thats right. Lemonis dill pickle is good. Have you ever had dill pickle chips . Amber stop. No. Lemonis theyre good amber ive never seen this. Lemonis who can go get some . Amber how much more could we talk about dill pickles . Lemonis until you get them. I think when youre over a certain amount of flavors, it becomes unmanageable. I mean, even Baskin Robbins thinks 31 flavors is enough. Alexa have you had our marshmallows before . I hope you like them. Lemonis it tastes good. I like the texture, but they had a funny smell to them. Alexa oh. Sam weve gotten emails. Alexa weve gotten a couple emails about it. Lemonis you can tell that they werent totally oblivious to that idea. Amber right, no. Lemonis that there was a smell because when i said it if i told you, oh, these smell bad, youd be like, what . Amber right. Lemonis what do you mean . They smell fine. Amber right. Lemonis they were like, yeah. Oh, you found out. It smells like spices in here. How come it doesnt smell sweet . Alexa max. Lemonis who is max . Alexa my father. Lemonis your father. Alexa m d marketing. Yes. Lemonis how many different businesses are functioning in this building . Sam the marshmallows, and then theres m d marketing, which is maxs spice company. Lemonis who was here first . Alexa we were. Lemonis the fact that theyre sharing space with a spice distributor seems like a really poor business decision. I mean, think about a marshmallow. Itd sort of absorb everything just like a sponge would. Well, lets take a tour because i have a lot more questions, but i want to see what youre talking about. Amber how did you know that marshmallows would make money . Lemonis well, think about the product itself. What are the ingredients that go into marshmallows . They cost nothing. Amber right. Lemonis and remember that its an easy product to ship. Amber why is it easy . Lemonis because its light, and its small, so the shipping costs arent prohibitive. Amber cheap to make. Cheap to send. Lemonis cheap to make. Cheap to send, and not cheap to buy. Its, like, a 5. 95, 6. 95 retail, and i think were probably making, net of shipping, 60 margins. Amber wow. Lemonis so where is your area . Alexa this is our production area. From here over is all max. Lemonis youre basically taking up 10 of the building . Alexa yes. Sam yeah. Lemonis and so he pays more than half the rent . Alexa no. Lemonis what is this . Alexa mustard. Lemonis mustard seed . Alexa yes. Lemonis i mean, honestly, the smell is really strong in here of spices. Max is this marcus . Lemonis how are you doing, sir . Max i feel like i know you lemonis i liked him. Are you max . Max im max. Lemonis what do you make here besides mustard . Max barbecue sauces. Lemonis okay. Max hot sauces. Lemonis when i walked in the building, i smelled the spices. Max yep. Lemonis how much business will you do a year . Max 30,000 cases. Lemonis so youre bigger than your daughters business . Max yeah. Yeah. Lemonis the problem was that i dont think max understood that a marshmallow is very porous, and so if i just pour a bunch of cayenne in the air, its gonna get in there. Amber i get it. Lemonis no, smell it. Amber oh, god. Lemonis [ sneezes ] amber bless you. Lemonis excuse me. Play. Max is strangling this business from several different angles. Hes taken over most of their space, which ultimately slows down production. Also, hes using more lights, more water, and hes also affected their sales with his spices and his sauces seeping into the porous marshmallow. When you have quality problems, you get more returns, and you get less repeat sales, which is a recipe for disaster. Max i told alexa right up front we would split the rent. The girls got a little aggressive, especially sam, about that i was trying to hustle them, and i thought, theyre trying to hustle me. Lemonis i have a feeling, and im just guessing, that nobody is hustling you. Your business is growing. Youve got your stuff everywhere. Max its a nice problem to have. Sam i think its a frustrating problem to have. You decide how much room you have. You decide how much rent you pay. Its not an even relationship. Lemonis this tension between this whole family is a bit of a surprise for me. I thought they would have worked that out before i came. Sam please help us. Lemonis how much does this frustrate you . Sam alexa and i, we dont even want to come to work a lot. Lemonis has it created stress between you two . Alexa oh, yeah. It creates friction, of course. Amber and that must be frustrating to you, too, when you come in there for business and it ends up being the wife doesnt get along with the father, and then the father and the daughter have issues. Lemonis what makes it frustrating is, please help us. Its like, please kick him out, and let me have you, not me, run him out of dodge so that my wife doesnt get upset with me. Its like, im not doing that. Amber well, they should tell him that if they want. Lemonis she should tell him. Watch what happens. The reality of it is, is that someones got to go. Sam i think that if i were the enforcer in the issue, it would ruin my marriage. Lemonis so you called me so that i could come be the bad guy . Sam no, but to have someone who is an expert. Lemonis in what . Sam in business. Lemonis telling her father that hes wrong . While i want to be helpful, sam and alexa, theyre really the ones that have to deal with this situation with max. They should see me as a potential partner, not some freelance family mediator. Walk me through how a marshmallow is made. So sugar, corn syrup and water. Alexa bring it to 240 degrees. Lemonis thats where you got the name 240 sweet from . Alexa yes. Lemonis just spread it around . Alexa we are going to coat the top. Man 3 then go very slowly. Make sure youre cutting through the nuts on the other side of the marshmallows. Lemonis this is kind of a ridiculously slow process. As production cranked up, you would have a bottleneck right here. Alexa yes. Lemonis now, theres a machine that you can buy that will do it . Alexa 60 seconds. Lemonis how much does the machine cost . Alexa it would be right around 40,000. Lemonis what does it cost to make a sheet like that . Alexa 80. Lemonis how many does that sheet break down into . Alexa roughly 70 bags. Sam it comes to, on average, 1. 43 a bag, including packaging with labor. Lemonis okay. What will you sell that bag for . Sam it comes to 6 a bag. Lemonis so the margins are good. Sam yes. We cant keep up with demands for the market. Lemonis and so where is the bulk of the. All these marshmallows that are getting made, where are they being sold . Alexa the internet. Lemonis the internet. Amber so how should people think about Capital Investment . Lemonis so Capital Investments are basically taking money out of your bank account and spending it on an asset. So for example, in the case of 240, they would buy a piece of equipment that would help them improve the efficiency of cutting marshmallows. So they spend 40,000. It lowers my production cost per bag by 43 cents. Id have to do 86 bags a day over 3 years to get my money back. Amber thats doable. Lemonis yeah. Anytime you buy a piece of equipment, you have to really be realistic about what my return on capital is. So if it takes me 3 years, the return on capital is 33 a year. Amber mmhmm. Lemonis if it takes me 4 years, its 25 a year. If it takes me 5 years, its 20 a year, which is fine, but that return on capital really matters. Well, this is a fun place. Dede isnt it, though . Lemonis how much time do you spend here . Dede 70, 80 hours a week. Lemonis whoa. And do you do a lot of things outside of here, as well . Dede i raise money for the american cancer society. Lemonis oh, wow. Dede i was diagnosed with cancer when i turned 30, and i lost my eye. Thats why i wear my hair like this. Lemonis and are you cleared of cancer . Are you a survivor . Dede i am a survivor. Its been 16 years. Lemonis awesome dede i know. Lemonis do you have financials for this business that i can look at . Dede i do. This is our Business Plan. Lemonis you wrote it . Dede mmhmm. Lemonis this company did 439,000, and it made 80 grand. This loan, 60,000 to saps. What is that . Dede saps buffeteria is owned by max. We pay for a line of credit that he took out. Lemonis and so why do you pay its bills . Dede i dont know. Lemonis and max owes you guys money for rent . Dede right. Lemonis so almost 70,000 has left this business, and the company owes 18,000 for taxes. That 80,000 profit is deceiving because it doesnt take into account the fact that theyre paying maxs bills. Theyre servicing maxs debt. That 80,000 is really more like zero. That seems crazy. Dede was so awesome. Ive stayed in contact with her, and in fact, when we started doing these inside looks, she was one of the first people that reached out to me and said, please, please do one on 240. Amber youre welcome. Lemonis youre welcome, dede. Amber her hairs different. Lemonis . And shes got great ideas and fantastic recipes. But on the other hand, her father, well, hes screwing it all up. You have a nice business. The challenge is, is that youre being taken advantage of by a family member, and so thats not an easy solution. Alexa right. Lemonis and so i think the challenge that im having is why are you spending your money to pay for debt that belongs to somebody else . Sam its frustrating. Alexa it is frustrating. Lemonis its ridiculous. How do i deal with this situation with max . I do believe that you guys kind of called me hoping that i would do your dirty work. I just dont know. Sam perhaps we could consider giving 1 to dede. She is an asset to us. Lemonis i totally agree. That was such a bull[bleep] move, and she knew that i liked to give equity to people that work there. I was already starting to be a little suspect of her. Its a thirteenhour flight, . Tfifteen minutes until we board. Oh yeah, we gotta take off. You downloaded the Td Ameritrade mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. Ah, theyre getting so smart. Choose the app that fits your investing style. Trust us. Us kids are ready to take things into our own hands. Dont think so . Hold my pouch. only tylenol® rapid release gels have laser drilled holes. They release medicine fast, for fast pain relief. Tylenol®. Somewhere youll never find. Sike we put them everywhere. Grocery stores and supermarkets, gas stations, and chiropractors offices, bowling alleys, and grocery stores, which we already mentioned. Not sorry, reeses. Theyre in the building. Amber oh, come on. If theyre in the building, they would be up here. Lemonis im telling you, theyre here. See . I knew they were here. Amber the dillpickle chips. It smells tangy. Here you go. Try it together. Thats so gross. These are pretty good. Lemonis whats the business lesson . Amber be more openminded. Lemonis dont knock it till you try it. Amber youll turn anything into a business lesson. Lemonis thats what i do. Sam what if we do sit down with max and tell him to move out . Lemonis it does have to be resolved, and you guys need to take care of it because i do not want to be in between you and your father. Alexa thats understandable. Lemonis i came here because i think that the marshmallow idea is a great one, and so my offer is 100,000 for 51 of the business. And that 100,000 would go towards the right equipment and improve this building. Sam yes. Lemonis do we have a deal . Sam perhaps we could consider giving 1 to dede. She works like shes an owner. She is an asset to us. Lemonis i totally agree. That was such a bull[bleep] move in reflection. Shes seen a lot of episodes, and she knew that i liked to give equity to people that work there, and she went to the playbook. Amber yeah. At this point, you didnt know that. At this point, you thought. Lemonis i was already starting to be a little suspect of her watching how she talked to max. My radar was already up on sam at this point, but when she pulled this, oh, i want to really help somebody out. Play. Im willing to throw 5 in, if youre willing to throw 5 in for her. Sam i can live with that. Lemonis do we have a deal . Sam we have a deal. Thank you. Amber why did you do that . Lemonis it seemed, im sure to most people, a little harsh that my offer was 100,000 for 51 of a business that did a half a Million Dollars in business and made 80 grand. Amber right. Lemonis but i didnt have a lot of confidence in what was gonna happen from this day forward. Whether max was gonna leave or not. Whether the thing was gonna spin out of control, and so sometimes when my offers are big, like in the case of, like, an automatch, where its 3. 5 million, theres all this inventory. I know that i have some sort of liquidation method where i can get my money back. So i needed to make sure that if i was gonna have a big risk, i was gonna have a big reward to go with it. Amber right. Lemonis the other night, sam and alexa and i made a deal for me to invest 100,000 into the business. Look how many people work there dede awesome. Lemonis and the purpose of that money is to innovate the product, and then we need to overhaul the process. The offer that i made to them was for 51 of the business. They didnt agree with my number. They said we really feel like dede has to be a part of our organization. And so, dede, you will be a 10 partner with all of us. Dede oh, my god. Amber how do you determine when and who you give equity to in a business . Lemonis i usually want to think about how viable i think they are to the company. In the case of dede, who put the Business Plan together. Amber right, so impressive. Lemonis the fact that i felt like she had a level of integrity, that mattered. And im giving them a reward for their efforts. Amber right. Lemonis youll see. So what id like to do is get our recipe book, and i want to look through all 200, and i want to figure out how were gonna narrow some of them down, and then i want to try some new ideas. Clear this area so that we have production here. We lost our table . How does this work . Sam it changes a little bit every day, but generally, we only have this amount. Lemonis max, is there a way to reconfigure, shortterm, that that machine can somehow get out of this area . Max i could possibly move this whole thing and take that one back some. Lemonis oh, great. Thanks. Its already packed. Max well, it could be rearranged. Lemonis you guys need to get this cleaned up. This needs to be our table. This is ridiculous. Amber and your issue here was what . That theres just, daytoday, theres inconsistencies . Like, sometimes theres a table to work. Sometimes theres not. Like, things are moving around all the time . Lemonis no. My issue was the crosscontamination of products. Amber right. Lemonis i want to go through all of your library. Amber the birthday cake was good. Lemonis birthday cake, whiskey, bourbon. And i want to get down to a library that we excel at. Tomorrow were gonna go to a Farmers M