Lemonis what just happened . And put an end to the drama. Dede i just thought it was gonna be a great opportunity. Lemonis . This whole company will melt down. Sam i have tried to be honest and i have tried to be forthright lemonis you havent been honest at all. 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. [ applause ] in 2008, awardwinning chef alexa lemley and her wife, samantha aulick, started 240sweet a handcrafted marshmallow business just outside of indianapolis, indiana. Alexa good morning. Have you had our marshmallows before . Lemonis their gourmet marshmallows with artisanal flavors soon earned them a loyal following along with mentions in big publications likemagazine, and as the buzz grew, so did their sales, 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 and inconsistencies in the warehouse. Woman 2 do you think it smells like sauerkraut in here today . Lemonis . Have put 240sweet in a sour situation. Woman 3 this is getting a little ridiculous. Lemonis artisan marshmallows are only growing more popular. Woman 4 awesome. Lemonis and while there are plenty of Small Companies already in the space, nobody has managed to win over the masses yet. As long as 240sweets 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 their product. Alexa hey, look lemonis how are you . Alexa hi, alexa lemley. Lemonis alexa, nice to meet you. Sam oh, hi. Im sam. Marcus, oh, it is wonderful to meet you. Lemonis nice to meet you. Sam [ sighs ] so, great, yeah, this is dede. Dede hi, im dede. Lemonis hey, how are you . Nice to meet you. What is this up front here . Is this a retail store . It is our retail area, shipping and order packing. Lemonis a retail store . Really . I feel like im walking into a high school bake sale. So what are the roles . You guys are partners . Alexa with us . Yes. Lemonis yes. Sam were married. Alexa yes. Lemonis oh, you are married. Sam yeah. Lemonis oh, very cool. Sam thank you. Alexa i do production and sam does marketing and officy stuff with dede and sales. Sam alexa was voted best chef in indiana two years in a row. Lemonis wow. So this is sriracha lime . How many different flavors do you have . Alexa over 200. Lemonis i cant think of any company that has a core product and decides to have 200 different types of them. I think when youre over a certain amount of flavors, it becomes unmanageable. I mean, even baskinrobbins thinks 31 flavors is enough. Alexa have you had our marshmallows before . I hope you like them. Lemonis they taste good. I like the texture, but they had a funny smell to them. Sam oh. Weve gotten emails. Sam weve gotten a couple emails about it. Lemonis these marshmallows are good. They have a nice texture to them and theyre fluffy and they have a sweet start to them, but as i eat more, it has sort of a funny taste to it. Like mustard . It smells like spices in here. How come it doesnt smell sweet . Alexa max. Lemonis whos 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 here first. Lemonis the fact that theyre sharing space with a spice distributor seems like a really poor business decision. I mean, think about it a marshmallow. It sort of absorb everything just like a sponge would. Well, lets take a tour. Sam okay. Lemonis . cause i have a lot more questions, but i want to see what youre talking about. Sam okay. Lemonis so where is your area . Alexa this is our production area. Lemonis what is this right here . Alexa max. From here over is all max. Lemonis youre basically taking up 10 of the building . Lemonis 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, but theyre making marshmallows with onions and garlic in the air . Alexa yes. Max is this marcus . Lemonis how you doing, sir . Max i feel like i know you. Lemonis how are you . Max how are you . Lemonis 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 yeah. Lemonis how much business will you do a year . Max 30,000 cases a month. Lemonis so youre bigger than your daughters business. Max yeah, yeah. Lemonis do you worry that youre running out of space . Max its a little crowded. Lemonis this is all you, too . These are all your bottles . Max yeah. Lemonis and so its how much a month . Sam 2,000 a month. We pay the entire bill and all the utilities, and then max reimburses us what he feels is equitable. Max it cut their cost. Sam it raised our cost. Lemonis it raised your cost. Sam yes. Lemonis how did it raise it . Sam max hasnt been paying his share of the rents and utilities, and hes up to 10,000. Max no. Lemonis 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 told alexa right up front 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. Max yeah. Lemonis . And im just guessing. Max okay. Lemonis . That nobodys hustling you. Your business is growing. You got your stuff everywhere. Max its a nice problem to have. Sam i think its a frustrating problem to have. Lemonis the problem in this situation is that they didnt set up the framework of how the relationship was gonna work and they didnt set the boundaries, and human nature is give them an inch and theyll take a mile. And they gave him an inch and he took the warehouse. Sam hes in control. Max of what . Sam you decide how much room you have. You decide how much rent you pay. Its not an even relationship. Max i am very amenable to conversation, but when one party gets into a hysteric of speech, it turns me off. You know that. Lemonis this tension between this whole family is a bit of a surprise for me. I thought they wouldve worked that out before i came. 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. Lemonis 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 can come be the bad guy. Sam no, but to have someone whos an expert. Lemonis im not a consultant. Sam i didnt say you were a consultant. I said you were an expert. Lemonis in what . Sam in business. Lemonis telling her father that hes wrong . While i want to be helpful, sam and alexa are 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. Im gonna actually want to make a batch with you. Alexa sure. Lemonis theres sugar, corn syrup, water. Alexa bring it to 240 degrees. Lemonis thats where you got the name 240sweet from . Alexa yes. So get a nice good glob. Look at that. All right. Lemonis this is cool. Alexa we try to get as much as we can out. Lemonis just spread it around . Alexa we are gonna coat the top. Were gonna use grahamcracker dust. Lemonis can we cut this . Alexa yeah, lets get in. Steven so i always line up the edges and i pretty much, like, benchpress motion down on there and go very slowly. Make sure youre cutting through the nuts on the other side of the marshmallows. Lemonis but 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 currently, it takes them 20 minutes to do a whole sheet of marshmallows, so in a given typical workday, they couldnt produce more than 24 sheets. With this new machinery, they could do one sheet a minute. In a matter of an hour, they could almost triple the whole days production. Lemonis and what does it cost to make a sheet like that . Alexa 80. Lemonis well, 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 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 from the market. Lemonis and so wheres the bulk of the all these marshmallows are getting made. Where are they being sold . Alexa the internet. Lemonis the internet. How are you . Im marcus. Vicki how are you, sir . Lemonis nice to meet you. And so all the online orders come in to you . Vicki yes. Lemonis and you ship them . Vicki yes. Lemonis whats your favorite part of working here . Vicki um. Lemonis whats your leastfavorite part . Vicki the communication. Lemonis tell me about that. Vicki alexa tells it one way and then sam comes in and interjects. Sam vicki came to alexa one day and asked her if she had to continue to wear the uniform or if she could wear jeans. Alexa because she was doing something else. Vicki i was working with bleach and i didnt want to ruin my dress pants. Alexa because of that, i said you can wear other pants. Sam we have a uniform. Its black pants. All right . Vicki i got written up. Sam i didnt write you up. Vicki i dont have anything in my file . Sam you have things in your file. You most certainly do. [ chuckles ] lemonis sam comes off very perky and agreeable, but its starting to feel like a performance to me, and its obvious she has some very sharp edges to her. Well. This is a fun place. Dede isnt it, though . [ laughs ] 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. I think thats why i wear my hair like this, yeah. Lemonis are you cleared of cancer . Are you a survivor . Dede i am a survivor. Its been 16 years. I know. How about that . Lemonis and you would call yourself a survivor. Dede i do call myself a survivor. Lemonis cause youre here kicking ass. Dede right, right. 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. Its probably a lot more remedial than what youre used to, but. Lemonis no, actually, its better than most things i see. I mean, you listed out all your competitors. You listed out your history. This company did 439,000, and it made 80 grand. And 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 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. I can see the pros and cons of getting involved in this business. On the one hand, alexas a fantastic chef and shes got great ideas and fantastic recipes. But on the other hand, her father hes screwing it all up. You have a nice business. Its small, but its nice. The challenge is is that youre being taken advantage of by a family member, and so i know 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, who happens to be in this building, not paying his fair share of rent. Sam its frustrating. Alexa it is frust lemonis its ridiculous. How do i deal with the situation with max . I do believe that you guys kind of called me hoping that i would do your dirty work. I dont know if doing this deal isnt just too sticky. Just like the marshmallows were, because theres land mines everywhere. I just dont know. Moneys leaving their business to take care of a business that is yours. Sam youre coming off like youre saying [bleep] you, alexa, to your daughter, and im gonna lay it out. Max im not saying that. You say whatever you want to. Sam thats the way its sounding. Max go to hell. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Lemonis i dont know if doing this deal isnt just too sticky, because theres land mines everywhere. I just dont know. 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 its 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. Im willing to throw 5 in if youre willing to throw 5 in for her. Sam i can live with that. Lemonis we have a deal . Sam we have a deal. Thank you. Lemonis the other night, sam and alexa and i made a deal for me to invest 100,000 into the business. Woman 5 oh, my god. Woman 4 wonderful. Sam [ laughs ] woman 4 awesome. Lemonis and the purpose of that money is to innovate the product, and then we need to overhaul the process. I will tell you that, going forward, the set up that exists today it doesnt work. Two products cannot coexist in the same space. Somebodys got to leave. 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. Dede [ laughs ] lemonis and so, dede, you will be a 10 partner with all of us. Dede oh, my god. [ applause ] [ sniffles ] i cant believe you guys. Thats awesome. Lemonis this business is well positioned for success really, really well positioned. [ cheers and applause ] lets go to work, okay . See you in a little bit. Alexa all right. Dede i cant believe you. [ both laugh ] lemonis okay, 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. Alexa sure. Lemonis clear this area so that we have production here. We lost our table . We were here yesterday. Does this table not belong . 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 a shortterm . That that machine can somehow get out of this area . Max i could possibly move this whole thing and take that little back section. Yeah. Lemonis but its already packed. Max well, it could be rearranged. Lemonis we need to get this. You guys need to get this cleaned up. This needs to be our table. Ive been an owner of this business for less than 24 hours and i didnt think max was gonna move out tomorrow, but i expected the girls to have a conversation with him, and it was kind of like business as usual. Nobody was talking about it, and now i feel like here we are again. It was ridiculous. I want to go through all of your library and i want to get down to a library of flavors we excel at. Tomorrow, were gonna go to a Farmers Market. Youre having consumers give you feedback, right . Alexa right. Sam yes. Lemonis when they give you feedback, then thats what gives it a chance to get it into the library. Were only gonna have the top 20. Were not gonna end up with 300 different flavors. Let me show you what else i want to do. These marshmallows, we know, are great, but theyre boring. And so i want to have different options for people to consume the exact same marshmallow different ways. One of the ways that ill be able to monetize this investment is to really have them expand the categories not the flavors. And whether thats smore kits or whether thats dipped marshmallows, they have to really expand their variety that they have. Ive always been a fan of cake pops. I want to have a marshmallow pop. I want to see three to four variations, but i want to see them today. Alexa okay. Lemonis okay . Alexa good, good. Lemonis walk me through what this is. Woman 2 thats the marshmallow covered in colored white chocolate. Lemonis its really good. Alexa good. Lemonis but i dont like that its pink. Woman 3 what do you think of the hot chocolate on a stick . Lemonis now this, i think, is a kickass idea. Woman 3 this is the cinnamon. So this is our salty caramel, which is our best seller. Woman 2 you dont like that one . Lemonis im waiting for the salted caramel. Alexa we bumped up the salt and also cooked the caramel a little darker. The marshmallows are so sweet that it does balance out more. Lemonis it tastes like a plain marshmallow. I thought the salted caramel marshmallow, while it may be your best seller, was unimpressive. Alexa its pretty tasty. Lemonis today, were at the Farmers Market in downtown indianapolis and were gonna get feedback from real consumers. Good morning. Alexa good morning. Sam hi, good morning. Lemonis how are you . Now, the purpose of me bringing you here is part of the exercise to pare our flavors down, but rather than us just kind of making it up in our own mind, well let the customers tell us. Now, people will vote with colors. Well go with girls are good and boys are bad. Alexa these are handmade marshmallows. Weve got snickerlicious, turtle. [ indistinct conversations ] sam blue if you dont like it, pink if you do. Young woman i think i like that one. Lemonis which one is that . Young woman the cookies and cream. Sam turtle. What did you think . Woman 6 ooh, i love it. Lemonis cookies and cream. Woman 7 that was my favorite. Woman 8 i like it. Lemonis you do like it . Woman 8 yeah. Man 3 that is awesome. Woman 9 this really brings out lemonis this is sriracha lime. Woman 10 [ clears throat ] whoa. Lemo