tv The Profit CNBC August 14, 2016 8:00pm-9:01pm EDT
lsammy:: this is where the magic is.... lemonis: ...a burger business in new york city... tranchina: don't be shy with the sauce. lemonis: ...built by four best friends... sammy: we had a dream. we had a [bleep] passion. i don't know where the [bleep] it went. lemonis: ...who now can't get along. sammy: so, why the [bleep] wouldn't you open up the restaurant on time? -that's [bleep] -tranchina: hey! that's enough! lemonis: it's a dire situation... sammy: i build it for my brother, for my family. [ voice breaking ] i feel i failed them. i really do. [ sniffles ] lemonis: ...compounded by lagging sales and mounting debt. how much are you losing? covello: $5,000, $6,000 a month. lemonis: if these guys can't get on the same page, it's just a matter of weeks before this business goes belly up. todd: if we don't fix the problem, we're gonna have to close the doors. lemonis: new york city has a ton of energy, and it's always been a place for dreamers.
but when you get on the ferry, and you land on staten island, it may be less hectic, but there's still a real sense of possibility. it's one reason that i'm excited about today. for two years, sammy lazoja has been bombarding me with e-mails asking for my help. he's been hyping this restaurant and how unique it is... and how it sets the standard. but to be honest with you, it's kind of ordinary. sammy: marcus. it's a pleasure to meet you. lemonis: are you sammy? how you doing? nice to meet you. sammy: it's a pleasure. lemonis: we've been e-mailing for -- -what is it, two years now... -sammy: two years. lemonis: ...you've been harassing me? sammy: marcus, this is my dream. this is -- this is it. lemonis: well, come around front. sammy: i originally did the build-out. i put a lot of my funds in here. i put my life savings in here. lemonis: how much have you put in? sammy: around $250,000. covello: sammy! sammy: this is my partner joe covello. -lemonis: joe c. -covello: joe c., yes. -nice to meet you, marcus. -tranchina: joseph tranchina. -lemonis: joe c., joe t. -tranchina: that's right.
-todd: todd baslin. -lemonis: and you're just todd. so, is it you're 25% and they're each -- sammy: no. so, i own a 45% share. tranchina: 22.5%. -covello: 10%. -todd: 22.5%. lemonis: is the restaurant making money? all: no. lemonis: how much are you losing? covello: currently, $5,000, $6,000 a month. todd: when you don't have the money to pay the bills, and you have to fight with your partners to pay the bills, it becomes an issue. lemonis: who acts as the owner/operator, the person that unlocks the door and locks the door? covello: nobody. lemonis: do you have weekly meetings, where you're sitting here going over what we sold for the week? -todd: no. -lemonis: how -- [ chuckles ] tranchina: keep in mind, none of us have had any restaurant ownership experience at all. lemonis: oh, i don't have to keep it in mind. i picked up on it pretty quick. look, these guys all have full-time jobs, but in a business like this, you want to have at least one guy that's responsible for the business, one who opens it and closes it and manages it on a daily basis. to me, it feels like these guys are doing this as more of a hobby than a business. how often are these guys, these owners, around?
antoinette: todd comes in and night, randomly checks up on us, and so does sammy. lemonis: but if, like, the place was burning down, who would you call? antoinette: it's whoever's available, really. lemonis: even the manager of the place doesn't know who's in charge. she doesn't have anybody to lean on. what's the first place you look if you're gonna go eat at a restaurant? -tranchina: oh, the bathroom. -lemonis: let's check it out. tranchina: i just had them scrub this place the other night. lemonis: look at the toilet. -it's disgusting. -tranchina: yeah, it is. that's a hot dog machine. lemonis: why do you keep it here? todd: we don't have much storage. lemonis: and how about this back here? this looks clean to you? tranchina: no. lemonis: the cleanliness of this restaurant -- well, it's not measuring up to any sort of standard. i hope the food at least does. what is this back here? sammy: so, this is where we prep our patties. lemonis: you guys have frozen burgers? sammy: yeah. we re-form them so it looks more handmade. lemonis: so, they're not really handmade? sammy: no. lemonis: huh. -is everything frozen? -sammy: yeah. lemonis: if you're telling me that your burger sets the standard,
you kind of lost me at "frozen." well, what do you normally like here? as i walked around and i talked to some of the customers, you'd think that people would go there for the burger and talk about it, how amazing it was. how was it? and they were telling me about a milkshake and fries. what do you recommend? woman: well, a lot of people get the texan. that's like the most number-one burger. the double standard. omg. lemonis: i'll take one of each. so, who here comes up with all the burgers? tranchina: i did the initial menu. lemonis: you see, you go from $3.99 to $8.99. that's a big jump. so, why is an omg $7.15, and a standard's $7.25? todd: there's no logic on it. lemonis: there's no logic. thank you. tranchina: why are you serving that from right there when you can cook right there and give him a good one? todd: no, no, no. no, no, no. clean that. clean that grill so i don't get any of the burnt stuff on there. lemonis: i've been in businesses where controlled chaos exists.
this place is chaos without the control. tranchina: re-cook this thing. i don't want answers. i want results. don't be shy with the sauce. sammy: it's my burger. it's my burger. lemonis: everybody's kind of yelling and complaining and arguing. tranchina: don't tell me why it came this way. just fix it. this is embarrassing. the whole restaurant's embarrassing. lemonis: this business would be best described as a lot of personality and not a lot of process. sammy: so, that's the texan. you have bacon. you have fried onion ring, lettuce, barbecue sauce, american cheese, and cheddar. lemonis: which is -- which is this one? tranchina: that's the double standard. it's basically a double cheeseburger. -lemonis: what's in here? -sammy: that is the omg burger. jalapeños, american cheese, crunchy onions, and you have plantains. lemonis: honestly, i would say the burgers are average. [ chuckling ] i mean, i have to be honest with you. these burgers and the menu concoctions -- they sound like college-campus drunk-burger concoctions. sammy: we'd be painting a wall and talking about, "hey, let's do a brunch burger. let's do a burger with a fried egg on it." lemonis: "all right, great idea. sounds awesome. throw me another beer."
tranchina: kind of, sort of, you know. lemonis: so, most chefs, if they're creating a multitude of burgers, they're understanding how the flavors interact with each other. there's no sort of art and science. i thought this was a higher-end burger establishment that's all fresh ingredients and interesting things about it that make the burgers different or the fries different. what i really walked into was a burger joint. red velvet shake. -you guys make those? -todd: yes. lemonis: so, are shakes a big deal here? -todd: yes. -lemonis: are they good margins? todd: yes. a lot of people love our shakes. lemonis: for every burger that you sell, how many shakes are you attaching? todd: probably out of every three or four orders, there's a shake in there. -lemonis: so, a 25% attachment? -todd: probably. lemonis: and what is the percentage of attachment for fries to an order? sammy: almost 80%. lemonis: look, in a business like this, most people would think that the money is made in the burger. but to be honest with you, it's made in other things. in this type of business, i think there's a lot more money to be made with french fries and ice cream, where the margins are 85%.
the goal is making sure that you attach those things to as many burger orders as you possibly can. that's where the money's gonna get made. do you guys have a -- like, an extra-large black t-shirt or a red t-shirt? i want to put a t-shirt on. sammy: todd, i think they're in the trunk of your car, todd. lemonis: i want to work in the kitchen with you guys. young man: you want red or black? lemonis: uh...where'd you get them from? covello: they were in todd's trunk. todd: well, we have nowhere to store them, so we... lemonis: what do you mean, you have nowhere to store them? what about the office? tranchina: todd believes that they take them and bring them home and give them to their friends. todd: they used to disappear, and they used to walk out the door. sammy: so, at that point, your employees are walking out the door with them. tranchina: we also only give an employee one shirt and expect him to wear it five days a week when he works 40 hours a week. lemonis: these guys can't get along, and what i've seen is a lot of dysfunction. i mean, it's no way to run a business. who came up with the red velvet idea? sammy: so, my brother, fuji, helped me design the design the whole burger place. lemonis: and why isn't he here? sammy: the arguments, marcus. lemonis: between you and him or...
sammy: no. between todd and him. it came to a point where they were watching the cameras 24/7. lemonis: what cameras? sammy: the cameras in the restaurant. they were watching them from home, and he would get a phone call -- "why is the refrigerator door open?" you know? and he couldn't take the pressure anymore. he couldn't. and he walked away. when we lost my brother, marcus, we really lost the sense of a chef here. todd: his brother doesn't work here anymore because we've all had issues with him. lemonis: did he work? did he come in early and stay late? tranchina: he lived here. he was like having you here when you're not here. todd: fuji can get the job done. the problem is, you need to give him that direction. sammy: micromanaging. they will micromanage you till they snap your neck, literally. lemonis: who will? sammy: todd in general. todd: "todd does this. todd does that. todd takes the shirts. todd does anything." -sammy: no, no, no, no, no, no. -covello: there was times where the store wasn't open until 1:00 in the afternoon 'cause he didn't open it. tranchina: fuji was here developing sauces, coming up with ideas, staying till 1:00 in the morning, scrubbing the floor with toothbrushes. lemonis: look, depending on who you listen to,
sammy's brother, fuji, is either the guy who ran this business into the ground or the one who made it run. sammy: he helped me develop most of this restaurant on paper before we even came here. [ voice breaking ] and that's the [bleep] truth, marcus. that's the truth. and he's not here anymore 'cause of that reason. and it's -- and it's [bleep] ridiculous. [ sniffling ] [ crying ] lemonis: um... it sounds like you're more hurt that your brother was kicked out. sammy: yeah, he -- he raised me. my parents are hard-working people, you know, first-generation, worked two jobs, sometimes even three. -lemonis: first-generation what? -sammy: from montenegro. he didn't have the opportunities i had in life, 'cause when he was 18, he was watching me. and this was my opportunity to set him up. lemonis: you really built this for him, didn't you? sammy: i built it for -- for my brother and for my family. [ voice breaking ] i feel i failed them. i really do. lemonis: why do you feel that way?
-it's open. -sammy: he's not here. he's not here. the restaurant is falling apart. he's home for the last seven months. it's tough. it's really tough, marcus. lemonis: so, he doesn't have a job? sammy: he doesn't have a job, no. lemonis: does he live far from here? sammy: he lives in the same house i live in. lemonis: how far is that from here? sammy: right down the block. lemonis: let's call your brother just to -- -sammy: yeah. -lemonis: i'd love to meet him. the fact that sammy is willing to be vulnerable and be honest about why he started the business and how much he loves his brother gives me reason to want to dig in more. sammy: fuji's pulling in right now. lemonis: okay. [ indistinct conversations ] [ light laughter ] sammy: marcus, this is my older brother, fuji. lemonis: how you doing, my man? nice to meet you. you got a good little brother here. fuji: yeah. -lemonis: he's got a big heart. -fuji: definitely. lemonis: how long have you been in the restaurant business? -fuji: since 14. i'm 41 now. -lemonis: since you were 14? fuji: yeah. my father was a chef. lemonis: did you develop a lot of stuff here? fuji: yeah. the sauces, the burgers. lemonis: why did you decide to leave? fuji: too many differences, too many bumping heads.
like, instead of having one boss, i had like four bosses. there was too many cameras on me. it's just like, i would get a phone call. sammy: "why'd you leave the fridge open?" or sometimes, with todd, i'll push back against it, and then i'll just say, "you know what, todd? whatever." todd: marcus [clears throat] it seems to be that the blame that you want to put is all on me. all i do is i try to make sure that it's not costing everybody more money because, if we're gonna talk honest, my partners will just spend, and it don't matter. tranchina: how do you function in a restaurant with someone walking around telling you, "we're not gonna let them get paid training. you have to train them all together as a group while they're working." i don't spend 100% of my time here, but other people do. is this place 100% successful? lemonis: but, actually, none of you are here 100% of the time. -all: no. -lemonis: the only person that was ever here 100% of the time at some point was fuji. -fuji: right. -lemonis: hey, guys, can i just have a moment with them two, please? i asked you guys for the first five hours i was here, "why don't you have anybody with restaurant experience?" and not until five hours later did i even find out that you had a brother,
that you had a brother that created a lot of the products, that your brother has 20, 30 years of restaurant experience. that's kind of, like, the most important detail. fuji's the only guy with restaurant experience. so, when you take a guy out of the equation that had restaurant experience, what did you think was gonna happen? why don't you make me a burger? let me see how different it is. that gives me a reason to at least want to give him a chance. what are you making here? what do you have in there? fuji: italian burger. i was, like, trying to make the "mona lisa" for them, and they were painting a mustache on her. lemonis: right. fuji definitely has a different process than what i saw earlier. not only is he using fresh meat, but he's taking the time to use the right spices and the right blends. that's how a specialty burger is supposed to be made. bring that knife, please. tranchina: wow. it looks good. sammy: what do we got? oh, this thing's bangin'. lemonis: these burgers are way better than what i had earlier. did you try this one? unbelievable. tranchina: which one is that one? let me get some of that. i'm starving.
lemonis: it's got the fresh meat and the herbs and the spices. -covello: i'm loving this. -fuji: that's the italian. lemonis: they're not perfect, but there seems to be real potential. fuji: not bad. [ chuckles ] lemonis: it's time for us to sit down. i want to see the financials. covello: it's fairly accurate. lemonis: i hope it's more than fairly. you're doing about $600,000 a year in sales, and so you definitely have a revenue problem, because in this size of a place, you should be doing well over $630,000 a year. todd: i agree with you. lemonis: in the month of october, you did $47,000. $23,500 alone are food costs. -todd: yes. -lemonis: the reason that todd's having to snip you here and snip you here is 'cause he's looking at these food costs, and they're offensive. todd: that's exactly what the problem is. lemonis: you want to know why the doors are about to close? you can't make money with a food cost at 50%. food costs, on average, should be down in the low 20s.
you're doing $47,000 in revenue. sammy: yes. lemonis: $23,500 are food costs. tranchina: food's in there, yeah. todd: your rent and your taxes come out to like $10,700. lemonis: and labor's $13,000. it's right here. there's another $5,200 between insurance, workers' comp, and utilities. they're only like $64,800 away. so, we're not that far from making money. tranchina: no. todd: and that's what i've always said. lemonis: if we can fix the product, then we can change the process, but these guys have to be able to co-exist when i'm not here. and so i have a lot of reservations about moving forward. if i hadn't come today, what would happen? covello: i don't think the place would be open much longer. lemonis: why? covello: money and then the personality issues. todd: if we don't fix the problem, we're gonna have to close the doors. lemonis: i'm gonna have to do a lot of work here. and i can't do the deal without a manager here. and, so, one of you has to be here all the time. tranchina: all of us keeping our nose in this business, especially my brother-in-law, suffocates the [bleep] out of people.
todd: okay, but i'm willing to step back. -so, who wants to do it? -tranchina: okay. i'll do it. lemonis: so, joe would be here as my manager designee, running the place on a day-to-day basis. we're gonna get our food costs right. we're gonna come up with some very creative ideas that are gonna make us different, and we're not gonna micromanage people. the business needs a manager, but i also think it needs somebody with restaurant experience. i don't do this deal without fuji in the deal for two reasons -- because it's broken his heart that his brother's not here, and his brother is the only one with restaurant experience. i can't do the deal without him.
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it's going to help me to have a better future for my children. to learn how you can save energy and money with solar, go to pge.com/solar. together, we're building a better california. lemonis: i don't do this deal without fuji in the deal. i can't. i'm not doing it, not taking the risk. it's too dangerous for me. covello: i don't have a problem with fuji here. todd: listen, if you want to put fuji there and train him, then i think fuji will be great for you. -lemonis: for or for us? -todd: for us. sammy: i think fuji should have some skin the game, get at least 10% -- you know what i mean? -- to make it serious. lemonis: so far, everybody's on board with some pretty big changes, but i have one more commitment that i want from them. i want them to put their money where their mouth is. here's my offer. if each of you whose businesses -- primary businesses -- are doing well are willing to kick in $15,000 apiece, i'll kick in $130,000.
the reason that i want each of you to put $15,000 in is i want you to re-affirm your commitment to me. you guys know that when you take my check, i am 100% in charge. and i get 30% of the business. show me that it's not just a hobby. put your money where your mouth is. todd: i do it every day, so you don't have a problem here. -sammy: i'm good with it. -lemonis: we got a deal? -$15,000? -covello: $15,000. lemonis: $15,000? $15,000? sammy: you got a deal. thank you. lemonis: full-time? tranchina: yeah, full-time. [ laughter ] that's crazy. [ chuckles ] lemonis: look, these guys -- they're like brothers. and if you pair that with their passion -- well, it's hard to come by -- this could be the real recipe to success, and i'm glad to be a part of it. sammy: so, you're back. you're back at standard burger, just to let you know, and you have a 10% equity.
you love this place from the top to the bottom. you were here from day one. i think if anybody deserves this, it's you. fuji: thank you, guys. todd: fuje, congratulations, brother. fuji: thank you. [ smooches ] -covello: congratulations. -fuji: good times, man. lemonis: how's it feel to be back with your brother? fuji: it's good. i love him to death. sammy: [ crying ] marcus, y-you have no idea what you just did for me. you didn't just save my business, but you saved my dream, and -- and you let me repay my brother. lemonis: you five really are -- you're the backbone of this business. tranchina: we're the burger boys. lemonis: five guys from staten island who have a burger place, who literally sent me an e-mail every f'ing day. [ laughter ] all right?
sammy: marcus, thank you so much. thank you. lemonis: let's get everybody together. last night, we made a deal. i made a deal to invest $130,000 in this business. that $130,000 is gonna go into the business to pay all the past-due bills, put money in the bank so that we can buy the right product and not cut corners. in addition to that, i'm getting 30% of the business. but i'm 100% in charge. so, fuji is in charge of the kitchen, and he is now a partner, as well. joseph is now the managing partner. if we're gonna set the standard, it's gonna be my standard, and my standard is way higher than you guys'. when i'm done, there will be something special about our food. there will be something unique and different that nobody else on staten island will have. and we're gonna start over. is that clear? tranchina: i like that very much.
sammy: i'm ready. i'm ready. lemonis: but we got a lot of damn work to do. let's get to work. come on. so, fuji, one of the things that we're gonna do -- we're gonna start over on the menu. now that we've got the chef back, the thing i'm most excited about is getting him into that kitchen to come up with new ideas. i'm looking to kind of see the gold inside of here -come out in here. -fuji: all righty. tranchina: what do you think about doing a mixture, like doing a little pork with a little beef or something? meatballs -- sometimes that meat is so juicy 'cause it's got that fat from the pork in there. maybe, like, some jalapeños with some brown sugar -- like, they balance each other out. you got to play around, try different stuff. lemonis: it's important for me to be very clear with these guys on whose job is what. i wanted to clarify something so we don't keep having these bumpy roads. so, who's in charge of the menu? tranchina: i should be in charge of the menu.
lemonis: why would you be in charge of the menu? tranchina: i just want to make sure that some stuff stays there that actually supports the restaurant, that's all. lemonis: well, wouldn't he know that, though? wouldn't you give him the data and -- you would train him on the data, right, and say, "here's what's selling, here's what's not." tranchina: if you put it that way, yes. lemonis: look, we don't have time for shenanigans, and i don't have time for the drama. what i have time to do is fix the business. if you want to take something off the menu or put something on the menu, whose decision is that? fuji: mine. lemonis: what's up, guys? sammy: holy [bleep] i came in this morning, and the kitchen's filling up with water. the snow is melting in the back of the restaurant, clogged up all our drains. -lemonis: where is it coming in? -sammy: i'll show you. we have drains underneath here, but they're clogged up. every time we get heavy rain or a little snowmelt, same problem. lemonis: the issue is that you got all this garbage here,
and you got stuff clogged up. it's got nothing to do with the snow. what -- what -- what did i get myself into? this place is a mess. they completely abandoned this place. look at this. i got an empty soda machine. i got trash everywhere. i got milk crates everywhere. i got an old fence. you don't need a plumber. you need a construction crew. you guys got to be out of your minds. this is why your business is in trouble. it isn't 'cause of your broken relationships. are you kidding? sammy: i was telling you -- we need help. lemonis: my job is to work on the numbers and margins and the process, not to come up here and clean trash. you know anybody that's got a dump truck? -we can load this stuff up? -sammy: yeah. lemonis: call them up. get somebody here now. come on, man. seriously. this is a restaurant, not an auto-repair center. when's the last time that you guys took everything out of this place and cleaned it? tranchina: we -- we clean ever day.
lemonis: you're telling me that everything's cleaned every day? tranchina: yeah. lemonis: guys, this isn't clean. i mean, look down here. that's not clean. dude, that's disgusting. i'm frustrated, because what i signed up for wasn't this. joseph, what is this? tranchina: yeah, that's our current filing system for our p.o.s. receipts. lemonis: are you kidding? i mean, this is a [bleep] joke. years of financial data and customer receipts are sitting in a cardboard box in the middle of a flood zone. who runs a business that way? i would rather you had nothing. tranchina: the box is obsolete, though. this is negative steps in the wrong direction. lemonis: i'm just telling you, you are way more f'ed up -than i thought. -tranchina: what would you do with all the tickets at the end of the day? lemonis: i either would file them, or i would shred them. this place is filthy. it's almost like these guys gave up. standard burger feels more like substandard. -i want you to take that off. -sammy: "we set the standard"? lemonis: yeah. you don't set any standard.
get the razor. take that [bleep] off. i don't want that standard. there are a million businesses that i could be working on. i don't need to be wasting my time with a broken burger business with four or five guys that just basically walked away from the place and have left me to clean it up. this may have been a mistake for me. sammy: marcus, i don't want you to feel that way. lemonis: i do feel that way. sammy: we'll make it right, marcus. i-i promise. lemonis: honestly, i think we have to close. sammy: [ sighs ]
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hhis stellar notebooks will last through june. get back to great. this week sharpie twelve-packs just three dollars. office depot officemax. gear up for school. gear up for great. lemonis: honestly, i think we have to close. tranchina: i mean, how long you talking about closing for? lemonis: i don't know. however long it takes. look, three days ago, i thought we could fix the process and improve the food. but honestly, it's gonna take way more than that. if we really want to set the standard -- and i truly believe we can, 'cause these guys have the heart and the passion -- then we're gonna have to tear this place all the way down to the studs and start over. [ jackhammer pounding ] outside, i'm busting up the concrete,
redoing the parking lot, and creating a whole new seating area -- more tables, more chairs, more money. so, you're gonna build a shake bar, and it's a radius counter. tranchina: i like that bar a lot, man. sammy: nobody's doing this. lemonis: one of the things that i want to do with this space is bring attention to the two business segments that we want to drive in terms of revenue and profitability -- a new ice cream station and a new potato station that have amazing margins. take that current dessert area and turn that into the potato station. if you ever ordered a baked potato, it's a baked potato with some toppings. you sell it for somewhere around $5.99. it probably, with the toppings, costs no more than $1.25. and i like baked potatoes. where can you get a healthy baked potato today? nowhere. with the restaurant closed for construction, it is time to make some changes. standard burger is good, but i want to be the best.
woman: welcome, everybody. lemonis: we hit chelsea market to find the best bread. woman: give it a taste. yes. tranchina: it's unique, delicious. lemonis: for me personally, a burger isn't a great burger unless it's got great cheese. fuji, what did you want to look at here? fuji: some cow cheeses, some sheep cheeses. man: this is made in vermont. it's got really high moisture content, so it could be a really good melter. tranchina: that was some good cheese. thank you so much. lemonis: but the most important part of a burger is the meat. pat: this is where it all happens right here. tranchina: the magic happens. pat: we have a million pounds of meat in this building. lemonis: unbelievable. fuji: that's a lot of beef. i'm in heaven. -sammy: [ laughs ] -fuji: i'm hungry! lemonis: ideally, we would have a couple variations of quality of meat. pat: the possibilities are endless. sammy: something with filet in it. fuji: a little bit of age into it -- not too much, 'cause not everybody's a fan of age, but a little bit of aged in it. lemonis: and so we could have fuji design exactly what he wants -and then -- -covello: then take it to test. lemonis: our burgers are gonna be made with the best meat, and they're gonna be topped with the best cheese,
and they're gonna be served on the best bun. that's how you set the standard. thank you, pat. tranchina: thanks for taking the time to see us, man. sammy: so, let's see what we do. -marcus. -lemonis: hi, guys. with some major changes to the burger and the building, i feel like we're making a lot of progress. i just want to make sure that we stay that way. this looks a lot better. as you went through this process of cleaning this place, what did you learn? sammy: i think we had a good start. tranchina: yes. and we need to get back to basics, yeah. sammy: we went off track a bit, 'cause we used to stay two hours past when we were closing to make sure the floors were scrubbed down and things were put back together. -lemonis: what is that? -sammy: that's a camera. lemonis: there's one in here, too? sammy: yeah. todd: you know why? 'cause we're having people that walk out with product. lemonis: who put the cameras in originally?
todd: the cameras were here from day one. fuji: there were more added cameras... -lemonis: they added more after? -fuji: ...and more and more. lemonis: and who added them? fuji: it was between covello and todd. lemonis: fuji, i have to ask you -- every time this camera thing comes up, you look like you're about to freak out. todd: fuje, you want to answer that? fuji: we were trying to run a business, and the phone would ring every 15 minutes. "why is this this?" every time the phone rang, it was like, "it's todd." todd: who was it that called you? no, it wasn't todd that called you. fuji: and we couldn't run a business. todd: that wasn't todd that called you. fuji: it was just nonsense. todd: yeah, he can tell you anything he wants. tranchina: fuji's had a bad experience, though. todd: fuji wasn't an angel here. lemonis: look, cameras are always important in a business because you want to monitor traffic patterns, and you want to prevent theft, but these cameras -- they seem to have been put in place for one reason, and that was to watch fuji. and that's created a major rift. joe, what do you think? covello: there was a lot of good things fuji did, but towards the end, there was -- there was --
guys, fuji was coming in late, and then the girls were calling. fuji: fuji coming in late? covello: the staff would call us. the staff would call me or todd and say, "we're waiting outside. we can't get in because fuji's not here." tranchina: that's happened a number of times. and i think that started happening once fuji was fighting with todd. covello: and then once he would walk in, he would edit the time clock so that we wouldn't know that the time was [bleep] with. fuji: who told you -- that -- are you kidding me? -sammy: it's not true. -covello: i'm not kidding. fuji: i was not here one day late. -covello: okay. -fuji: that was kristin. covello: and don't say it's not true. you were part of the conversation. -sammy: that's not true. -fuji: that is not true. sammy: i wasn't part of the conversation. fuji: now we're going into [bleep] tranchina: listen, listen, guys... fuji: i was not one day late. i live three blocks away. sammy: what about all the times, "hey, nobody's at the burger place to open up. call fuji." so, what the [bleep] are you talking about? fuji: i was late every day, and i'm switching the time clock? tranchina: all right, listen, guys, guys, guys, that's enough of this. i'm not gonna go in for this. this ain't gonna happen here. hey! hey! fuji: that's the [bleep] that i left this place. tranchina: that's enough. fuji, that's enough. don't let this happen on tv. stop yourself. sammy: after six months of [bleep] doing what i had to do. fuji: i was here every [bleep] single day on time.
lemonis: changing the menu isn't that hard, nor is renovating the place, but getting people to co-exist and work together -- that's the hard part. there are some deep-seated issues here, and quite frankly, we need to rip the band-aid off. sammy: get the [bleep] out of here. i'm done with this conversation, too. covello: okay. okay. sammy: get the [bleep] out of here. lemonis: you know why he doesn't like it? 'cause he doesn't want to argue. but i know there's more issues 'cause i see the reaction. sammy, like that, bud. sammy: this is why i walked away from it. this is why i abandoned this place. -lemonis: all right. -sammy: this is the reason. i'm [bleep] shaking. i can't even deal with it. lemonis: so, come on back in here for a second. here's the reality. the restaurant's closed, so now we have to figure out if we're gonna move forward or not. if your business is in trouble and you need my help, log on to...
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both literally and figuratively, so now we have to figure out if we're gonna move forward or not. the reality of it is, is that you guys have some deeper problems than just the kind of stuff we dealt with the other day. once this argument is finished, we're gonna move forward. todd: okay. lemonis: okay? and i'm a believer that everybody that's standing in this room is committed to this. and so i think from this point forward, there's gonna be six guys, we're gonna own a burger place, -and we're gonna kick ass. -todd: let's go.
covello: and i think the dynamic will work the way you had set it up. lemonis: i know they have the right intentions. they just need somebody to -- to get them in line. but i have to be honest with you. all the cameras are gonna go except for the one over the register. todd: you could probably unscrew it. -sammy: yeah. -todd: [ chuckles ] lemonis: no more discussion about a [bleep] camera. i never want to hear about cameras in here again. fuji: smash it. lemonis: the conversation that we just had just needed to happen. and i feel like now we're ready to really turn the corner. we don't need cameras to trust each other. this is the start of something new. tranchina: the best part about this whole process for me was you fixing this. lemonis: this is just getting fixed. tranchina: right, but i don't want to do that no more. lemonis: you don't want to do what? tranchina: i'm not arguing with my friends no more for tv. it's not gonna happen, so don't do it again. lemonis: first of all, don't talk to me that way. tranchina: don't embarrass my friends and family like that again.
lemonis: first of all, don't talk to me that way. i'm not here for television. i'm here for you. -i don't care about television. -tranchina: okay. lemonis: this guy annoyed me for two years because he said he wanted to save his friendship with you. you guys feel like you lost your friendship with each other, right? tranchina: mm-hmm. lemonis: and it was more important for me to come here and fix you guys first, because the business will fail if you guys aren't right. sammy: our relationship -- what it used to be to now night and day. we used to come here because we wanted to be here. it was like we were drawn here. there was a love and commitment here. now it's, "oh, i have to go there." it's a [bleep] chore. we had a dream. we had a [bleep] passion. i don't know where the [bleep] it went and what the [bleep] happened to it, but we had an idea. we had something that nobody had, and nobody could take it away from us. and it [bleep] went to [bleep] it went to [bleep] and that's what i want to [bleep] fix. that's why i bothered him for two years -- 'cause i still [bleep] believe in it, still. i'm willing to do all this 'cause i believe in that [bleep] that opportunity, what we had, that dream we all had together.
tranchina: [ sniffs ] lemonis: i know it's upsetting, but i need you guys to move past it, or this thing's never gonna work. covello: we need to just put this behind us. lemonis: you guys are gonna be friends or family long after this place is gone. todd: marcus, you're gonna get to know me well, and you're gonna get to understand that... [ laughter ] ...money never comes in between my friendships or my family. lemonis: what i'm noticing is that they now are starting to believe that my intent is to have them work together, and they are starting to trust the process. we've taken a step forward. now we have to finish the rest of it. you guys have to trust this process, okay? -are we clear? -sammy: clear. tranchina: can we start making some burgers and some money, please, and get past this crap? [ laughter ] lemonis: what started as a simple renovation has turned into a huge production.
i'm gonna quadruple my investment and totally re-imagine this place. tranchina: i build skyscrapers for a living, bro. lemonis: i decided to create a national concept, something that i can use as a prototype, something that, if it works, i can scale across the country. and so i wanted to do it right. there's gonna be a special section for ice cream and shakes. fuji: what do you think, boys? lemonis: and we're adding a custom potato bar. the addition of the potato and the ice cream bar should add about $10 to an average order for a visiting customer. and on an annual basis, they're gonna see about 100,000 people. 100,000 times $10 -- that's $1 million of revenue. -man #1: success. -man #2: [ laughs ] lemonis: i'm excited.
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lemonis: well, i wanted to bring you guys to umami burger because it really has established itself as kind of a real benchmark in fine dining for burgers. there are a lot of changes that have to happen at standard burger -- the pricing, the look, the presentation. what i wanted to do is bring them to umami burger to see how a good idea actually gets executed. i'll have the -- the umami burger, the signature burger. sammy: give us the menu. todd: give us a little bit of everything. sammy: marcus is paying. [ laughter ] lemonis: i'm not paying. he's paying. todd: i'll pay the bill. [ laughter ] man: i'll get that started for you. -covello: thank you. -man: you're welcome. lemonis: so, when you look at the prices, which are a little more premium -- what's our opening price point?
sammy: i think our opening price point should be around 8 bucks. -i think 7 bucks. -lemonis: $7. lemonis: we want to deliver a high-quality burger with the freshest and finest ingredients. a $7 burger isn't gonna work. we want to average a 25% food cost. if the burger costs us $3.50 to make, then the retail price is gonna have to be around $12. we're gonna operate with the food cost as our basis, not our gut. what is the first thing that somebody will order? fuji: a burger. lemonis: and how are we presenting it? fuji: lettuce, tomato, and ketchup and cheese. that's gonna be the standard. lemonis: we know that, with the margins on fries, right, it probably costs us somewhere around 50 cents with packaging and everything. and we're gonna sell our fries for $5. think about the margins on that. today, 70% of their revenue comes from selling hamburgers. and so we want to drive the product mix to have hamburgers not be more than 50% of all the product that we sell. the other 50% of the products that we sell
have to be products with margins of 80% and 85%, like fries, potatoes, ice cream. we're looking for everybody that we possibly can to order fries with their burger and to get a shake with their burger. that's the way this place makes money. todd: bon appétit, guys. lemonis: this looks great. thank you. this looks amazing. tranchina: this looks great, yeah. lemonis: in order for this relationship to be successful and not have the kind of nonsense that happened yesterday, you can't crash into each other. and you have to respect each other and trust each other. todd: clean slate, like we're opening our doors again as a brand-new restaurant. -sammy: a brand-new us. -fuji: a brand-new us. true. -lemonis: to the burger boys. -fuji: to the burger boys. -tranchina: salud. drink up. -covello: salud. lemonis: after a month of renovation and $400,000, i've seen pictures, i've seen video,
but nothing compares to being there for the first time and seeing it all done. [ indistinct conversations ] sammy: so, marcus, what do you think? lemonis: this patio came out great. [ laughing ] this was big, big, big balls on both of our parts. sammy: i tell you, man. lemonis: even before i go inside, i'm already seeing a huge revenue boost. we have 52 seats outside, double what we had before. so, for eight months a year, that means double the revenue. sammy: the place looks beautiful. i could have never imagined this. lemonis: all right, my man, let's get in there. sammy: yeah. -lemonis: i am blown away. -sammy: blown away, right?
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i'm just a guy who wants to lemonis: all right, my man, let's get in there. -i am blown away. -sammy: blown away, right? lemonis: the space is warmer, friendly than i thought it was gonna be. i've done other, larger projects when we're building from the ground up, but in terms of transformation, this is by far the biggest yet. i spent over $400,000 re-branding and re-concepting standard burger. everything's different inside -- the lighting, the tables, the chairs, the kitchen equipment. honestly, it's a whole new business. sammy: what do you think? you like it? lemonis: i think it looks amazing. the new menu board, the craft sodas and beers. everything is different. this place looks amazing. tranchina: it's so great, right? lemonis: and i have to tell you --
i think we have a real winner. what i can't believe is how many people are here. -tranchina: yeah. -sammy: yeah. lemonis: it's packed. when i first got to staten island, they had 50 seats that turned an average of 3 times per day, at $10 an average order. that's $1,500 a day in revenue. now, with the outside patio and the new inside space, we have 100 seats. if those same 100 seats turn the same 3 times per day, well, that's 300 customers. but our average order is now $15 per customer. that's $4,500 per day, an increase of $3,000 per day. on an annualized basis, that's a little over $1 million a year in increased revenue. boy: i had the standard burger. lemonis: you had the standard burger? we've dramatically changed the menu to not only five signature burgers, but we built an entire business model off of potatoes. throw an order of yucca in. i want to try it. and whether that's different types of fries, like regular fries, sweet potato fries, or yucca,
we added all those things. lemonis: check it out. come on, guys. it came out beautiful. pick your potato, pick your toppings, -oven, go. -sammy: simple. yeah. lemonis: and in addition to that, we built a very high-margin, very popular baked-potato bar. it gives people the chance to buy a baked potato or a sweet potato stuffed with all their favorite toppings. we've also added an ice cream bar. not only is there scoops of ice cream, but what we have now is a cake shake. it is so good. it costs us about $1.78 to build the shake, including all the products that can go in there. we sell that shake for $5. so, we know the margins are spectacular. -woman: ah! -lemonis: you guys are the only ones with red velvet ice cream on the island. lemonis: how many people on the island are serving yucca fries? -sammy: none. -lemonis: if we just sell ice cream and fries, we're good to go. tranchina: the burgers are really just complementing the ice cream and fries. lemonis: and then the baked potatoes -have great margins, as well. -tranchina: also huge. [ indistinct conversations ]
lemonis: is the wi-fi system set up from at&t? tranchina: yes, at&t came in. they set up the free wi-fi, which was great. the customers are gonna love that. lemonis: okay. well, it allows them to communicate. and they can take pictures, put them on instagram. tranchina: yeah, we love that. we encourage them to do it. lemonis: but we should be able to get to the point where we can take orders remotely. like, if this line gets long, we can start to take orders over there or take them outside. tranchina: i'd love that. yeah, that would be great. lemonis: awesome. -what is this, all the orders? -sammy: [ laughing ] yeah. lemonis: let's see how high we can make it. the energy level, the enthusiasm level, the vibe in here -- compared to the first day i met you guys, it's like i'm in a totally different place. are there any cameras here we should be looking for? todd: hidden. [ laughter ] i had them install them. tranchina: you can't take them all away! lemonis: i'm proud of what these guys have done. and in the end, they recognize that being together as friends -- almost like family -- is the only way to be. and now they have a business that's been rebuilt,
and their relationships are being rebuilt. what i wanted to do was do something that really represented the relationship that you guys have and the history that you have and the family that you have, okay? all right, so, let me show you. [ laughter ] [ cheers and applause ] i started with investing in a small place in staten island, and what i've ended up investing in is a national concept that i think is portable. you guys are the faces of the business, and you should have some fun with it. tranchina: i love it. thank you, marcus. thank you very much. sammy: thank you. lemonis: i think my investment was definitely worth it.
lemonis: standard burger, come on down! ...i'm back to check on the progress at standard burger... how you doing, sir? good to see you. joe t.: good, brother. you, too. lemonis: so far, i've invested over $400,000 in this quick-service restaurant to make it a model for a national franchise. but what i've put in place has gone off the rails. sammy: bad burgers, bad fries, bad customer service... for the last 90 days, it's been [bleep] lemonis: and the partners are too busy fighting to fix it. joe t.: i'm the guy that's here every day... sammy: right, what's your problem? joe t.: ...and you're the guy that shows up once a month, that's what it is. that's the problem. lemonis: we have a big opportunity to grow this business. we have a franchisee scheduled to come here, but it looks like chaos to me. but if these guys can't grow up... sammy: i laid out all the kitchen equipment, designed the entire space -- joe t.: i know. if it wasn't for you, we'd all be up the [bleep] creek without a paddle.