tv The Profit CNBC November 26, 2017 3:00am-4:00am EST
lemonis: tonight, on a special episode of "the profit"... who's fired up? after 70 episodes of investing my own money in small businesses, i'm opening my books... i've never seen a check that big before. lemonis: ...revealing what happened after the cameras stopped rolling. i asked for one thing! which deals paid off big time... i'm blown away. ...and which cost me millions? i would run. from the phonies and the frauds i never saw coming... you know, i don't want to be sitting here just... working? ...to the incredible success stories that changed my life and business forever. thank you so much. yeah. this is "the profit," my biggest wins and most heartbreaking losses. my name is marcus lemonis,
and i risk my own money to save struggling businesses. we're not going to wake up every morning wondering if we have a job. we're going to wake up every morning wondering how many jobs we have to do. it's not always pretty. everything's going to change. everything. but i do it to save jobs, and i do it to make money. this... let go to work. ...is "the profit." ♪ it's hard to believe that i've been doing "the profit" for several years now. and i've done a lot of deals with a ton of businesses. we have a deal? we got a deal. partner? i think most people are under the impression that if the deal ends well, then it's, like, "millions for everybody! and it's going to be great." wow. congratulations, guys. thanks again. get your ass to work. it just wasn't true. i'm not sure who to be pissed at -- myself for doing the deal, or you guys for letting this stuff just sit here. in order to understand how i look at wins and losses, i have to probably define for you how i look at them.
a "win" isn't always about money. it can be somebody's personal development, it can be fulfillment. but it's mostly about the money. in the case of the "losses," it's about losing money, right? but, it's also about things that sometimes just piss me off. so, in the case of patrick dilascia, i lost money and he pissed me off. which is why dilascia definitely falls in the "loss" category. dilascia made graphic tees. lemonis: i've seen it at barney's. i've seen it at nordstrom. it's everywhere. this is kind of what made our brand super-famous. i literally drew it on, like, a piece of paper. and, like, we have to make the plane look backwards and do everything in reverse. that is very cool. patrick dilascia owned the business, with the help of his two siblings, kelly and dan. though they had some minor success with really big retailers, they really had no process or strategy and were struggling to stay afloat. he's the little brother. we're always trying to take care of him. why do you help so much? i don't know. just something i've always done.
why? 'cause my mom would have taken care of him. she's not here. patrick, you're a lucky guy. i know i'm lucky. but i would do anything for them, too. my initial deal was to infuse $200,000 into the business to clear some of the payables and to reinvest that money into a broader inventory. i like this as a lightweight hoodie. so it's like a t-shirt. yeah. lemonis: but, throughout the episode, i'm really struggling with patrick's willingness to change -- willingness to listen. how much would this retail for? what would you pay for it? $75? i can't believe you said $75 for that! we're not at forever 21 anymore. and there's one particular moment that i never revealed. i have an artist friend named rolland berry. and one day rolland called me, and rolland said, "there's a history between patrick and i. i actually am the one who started the business.
i'm telling you this as your friend. walk away now." i was shocked to hear this. so i brought patrick to rolland's warehouse. through my experience with him, i've felt like i didn't always get the whole story. and then, also, i wasn't comfortable with the flow in, flow out of money and how that worked. i personally wouldn't do business with him again -- personally, i wouldn't. i think what pissed me off most about it is, i understand that people have business dealings in the past that don't work out. but, why wouldn't you tell me about those things? the fact that rolland was never mentioned, ever, seems like a really calculated omission from patrick. you never thought to say anything about other people, other businesses, not even for a second? no, honestly, not really. okay. i mean... then that lets me know what your logic is like. right, i mean... and so i'm telling you, that logic doesn't work for me. so, that was one bad thing -- one red flag. but then i found out patrick wasn't honest
and he wasn't transparent about things, especially when it came to money. i ended up being personally sued by one of his vendors that he did not tell me about. i had to write a $36,000 check. so now i have $236,000 invested. in the end, i said i just can't get taken advantage of anymore. so patrick is no longer associated with dilascia. the money that i've invested, i had to take it as a write-off, and... it's gone. it was a really terrible experience for me, one of the worst that i've had in the history of this show. and he didn't even have the courtesy to apologize. oh, my god, you guys! unfortunately, that's not the only time that i made a mistake and misjudged somebody. another disaster for me -- blues jean bar. the blues jean bar was a retail chain of fashion stores that predominantly sold denim, and it was owned by lady fuller. i'm lady. i'm marcus, how are you? nice to meet you. lady had started the business with her
deceased mother's inheritance. and she was determined to create a cool shopping atmosphere to honor her memory. you know, my mother passed away when i was nine, and she took her own life. she left me money and i wanted to do something with her money that paid homage to her. and i think on some much deeper level, prove to myself that my life was going to be different than hers. while her original intentions were right, she definitely got lost along the way. at its height, the blues jean bar had 13 locations. when i walked in, it had three. i walked into a very pleasant staff, but a very confusing business model. all right, the basic premise of the store is that you can't, you know, touch the jeans without us. do they actually say to people, "you can't touch the jeans without us"? yeah. mm-hmm. they can't walk behind the bar. okay. the deal that i made with lady was that i would put $900,000 in the business for 50% of the business. ...to you, the both of us! and don't forget, i'm 100% in charge.
i know you are. and i wanted to really renovate the concept and start over. what i'm looking to do is change the entire store. lady: can we step back for a second? and can i ask you, if we take the bar out, then we're just gap on steroids? we're just a white box. and i feel like the reason why this store is so cool is because we have the bar. but it didn't work for this business. you opened up 13 of them, and they didn't work. through the process, i had to really work through poor inventory choices. this is basically a room full of mistakes and desperate buying without a plan. and more importantly, an owner who was really never visiting the stores. i haven't seen lady in six years. i've never met lady. in the end, i ended up changing the entire concept -- the shopping experience, the look, the feel, and i even changed the name to denim & soul. well, you didn't take the soul out of the business. we unveil it, lady's happy, everybody's hugging, it's super-emotional. oh, my god!
oh, my god! it doesn't even look like the same store. everybody's excited about the relationship. if you haven't met marcus, which many of you have, major thank you to him because without him, you know, a lot of people's dreams, not just mine, wouldn't come true. and, so thank you. and, so this is really where things started to get weird. little by little, we started to uncover these things. what i ended up finding out is that a number of the vendors she had on her books, she never paid them. none of that was disclosed. and what happened was i went back to a number of these vendors and said, "hey, i'd like to grow my business with you." and their comment back to me was "yeah, we'd like to grow our business with you, too, but we're not crazy about lady fuller being involved because her business still owes us money." for a brief minute, i had other vendors questioning me and my integrity was at risk. and i had to work hard to clean that up.
so, after the issues with the vendors, i decided that it was best for lady and i to part ways. i ended up signing a note with lady fuller to buy her interests for $500,000. so i invested about $900,000 to acquire three denim stores, then i invested another $500,000 to buy lady fuller out. and throughout the process, i had to eat different bills that uncovered themselves. so i have probably almost $2 million invested in what i bought from lady, which was three stores. the reason that's a big deal for me is that denim & soul today is one of my most successful retail businesses that i have. it does unbelievably well. it's awesome! i think one of the reasons that i categorize this as one of my biggest losses is, in the end, i realized that i didn't even need to do business with lady fuller to open these stores and then feel taken advantage of.
i have a feeling you and i are going to... [ laughs ] giddy up! but i don't want anybody to feel bad for me because my entrance into the fashion business has turned out to be wildly successful. and that brings me to one of my biggest wins in "profit" history -- courage b. it was a chain of retail stores that predominantly dealt with women's fashion. look, all the detail inside! lemonis: noemi was the chief designer and her kids, stephanie and nicolas, ran the business. did you make the labels for these yet? they did about $5 million or $6 million in sales, but they still were losing money. who designed, like, these two things right here? stephanie: noemi did. well, we probably could pick a hundred things like that. and then produce -- liquidate that. it doesn't matter if it liquidate -- don't try and justify it. it wasn't correct. nicolas was a hothead. you want all of the accolade without doing any of the work. and stephanie -- it was interesting -- maybe the smartest one of the three of them, but she always took a back seat. you're not liable.
so there's absolutely... stephanie: stop. lemonis: there were a lot of issues and a lot of personalities and a lot of things to fix. but there was way more to like. my initial investment was $800,000 for 30% of the business. in the first year, it was really about changing the product, renovating the stores, and understanding how the family dynamics would work. you guys are a dangerous trio. i'm just trying to keep up with you guys. and right out of the gates, it was going pretty well. i think you've grown amazingly in the last eight months. and i have to give you a lot of credit. but, as i dug into the business, i essentially realized that the real asset in that deal was the people. nicolas ended up really becoming a trusted partner, and he's grown a lot as an individual. and stephanie -- she's blossomed like no other person i've seen. there you go, enjoy everything. thank you. so, here's how things have transformed. courage b doesn't exist anymore in name. i converted all five stores into other brands.
what does exist is a fashion holding company called ml fashion, which consists of all the other fashion brands i've invested in throughout "the profit," like susana monaco, siloett, flex watches, inkkas. we have seven brands and 29 stores. most have done pretty well. only one hasn't worked out -- siloett. but overall, business is doing fantastic. and you know who runs it? stephanie. i'm proud of you. thank you. and nicolas is actually now helping run gander outdoors, which is a business i acquired out of bankruptcy. and he still has equity in ml fashion. what's ironic about all of this is that what started out as an $800,000 investment in five women's fashion stores, has turned into an $18 million venture into the fashion business. and i'm not going to stop anytime soon. ...the true definition of a raw deal.
but in every case where a deal went bad, i ultimately have to look back at myself. did i pick the wrong partners? did i enable them too much? did i make a business calculation that was just wrong? i mean, i really feel like i have to own all of them. are there people that took advantage of me and screwed me? you bet. but did i let them? yeah, i did. one of the most surprising examples of that... nice to meet you. pleasure to meet you. lemonis: ...is brooklyn burger and stein meats. this one definitely goes in the "loss" category. this is how i would have started my infomercial for brooklyn burger. i would have started by telling you about the weight of the burgers and the quality of the beef, this beautiful brooklyn bridge. problem is, this isn't my business. i thought it was, but it's not. you see, i started by going to this "business" in brooklyn called stein meats. wow. a legendary meat house in new york,
they would supply people like peter lugers and wolfgang's -- some of the best steakhouses in america. walk me through the process of how it works. howard: this is the receiving area. we get all out fresh meat through here. owners alan buxbaum and howard mora had taken over "a. stein" from their fathers who founded the company. and their hamburger, the brooklyn burger, was the staple at new york's three biggest sporting venues. good burger. it's the best. it was a $50 million business, but something didn't smell right. so the money that the customers owe us -- those are the receivables. correct. how much is our total receivables right now? couple hundred thousand? almost $4 million on the street. are you kidding me? so, based on that information, the offer i made was to put $1 million in and own 50% of the business. and the way i arrived at the $1 million offer was the receivables and liabilities -- the assets and the liabilities were off by about $1 million. and that my million dollars would essentially fill that hole,
i would tighten the expenses, keep the revenue going, and over time for a million bucks, i would own a $50 million business. seemed like a good idea, right? about 3/4 of the way through the episode, i brought in an accountant to really dig into the numbers. so, does this break out how much you're paying in payroll? no. does it interface into your system? no. do you have an aging of your payrolls? no. and in the end, what i learned is that it was a much worse picture than they had painted. their payables are about $3.8 million. that's several million more than i thought it was. they're almost bankrupt. wow. i would run. hey, guys, we got to talk. we got a problem. there's a $3 million hole that you can't explain, and you have $30,000 in the bank. guys, this is bad. this business is two weeks away from closing. ♪ howard: i know it doesn't look good.
i don't want you to think that we knew it and were hiding something from you. this is new to us also. things are way worse than you think they are. where do we go from here? i explained to them that i could no longer move forward on my million-dollar deal because it wasn't $1 million, it was going to be, like, $2 million or $3 million. and i just couldn't make the numbers work. from a business standpoint, right now, i don't think this is a good investment for me. i need some time to think about this. ♪ fast forward. i got a call from them. [ cellphone ringing ] hello? and they told me that they were not going to be able to make payroll. alan: we got a little problem. what's the problem? today, we found ourselves a little short in the bank. you know, we don't want to bounce any checks, so i was wondering if there's anything you could do to help us. and i was with my crew that shoots the show. and i was ready to leave, and they all looked at me and said, "those two guys -- they're like our dads.
marcus, you have to save them! you have to help them." look, so i decided to help them out, but it's not charity. i have to protect myself. how much do you need? about $200,000. you know, i can't just give you the money. i can't just write you a check and give you a gift, as much as i like you guys. and so, in order for me to give you that money, i'm going to need to get a return on my money. and the only other thing that i can think of is that i buy brooklyn burger from you. and i'll repackage it and i'll get it back on its feet. we're willing to do whatever it takes. episode ends, right? i'm starting to make plans for brooklyn burger. they said to me, "we've decided we're not going to transfer you the intellectual property. we've thought about it after, and we feel like we were under pressure. we're not giving it to you." i said, "okay, well, then, you at least need to give me my $200,000 back, and the interest associated with it." "we don't have the money." i was, like,
"okay...you don't have the money and you don't want to give me the brand. no problem. i'm going to sue you." and so i filed suit, and the judge said, "sorry, do you have any paperwork to prove it?" i said, "well, i have the footage from the show." his comment was, "it's on a reality television show. i don't know what's real and what's not." so, today, i now sit here $200,000 plus $150,000 in legal fees -- $350,000 out. and the brooklyn burger happens to be sold in grocery stores around the country. that's a problem, right? the reason that i put this in one of my biggest losses isn't because of the dollar amount, it's the lost opportunity. if brooklyn burger is sold in wal-mart, publix, kroger, target, i mean, could it be a $20 million business? yeah. and that's what i was banking on. that's why i put it in as one of my biggest losses.
perfect flavor. another business where people really disappointed me was coopersburg sports. coopersburg was a home-grown, pennsylvania small company that really focused on the licensing of major-league baseball marks onto products that would be sold through sporting-goods stores and the stadiums themselves. this is a 18-inch miniature bat with a full-color, heat-transfer logo going to the mariners. and what i liked about it was that it was truly a family business. this is my daughter, jackie. i'll call you back. hi! that's my wife, wendy. that's benjamin back there. how you doing? i'm marcus. nice to meet you. i think the challenge that existed at coopersburg was over time, larger competitors had come into the space. and, obviously, what that meant was their revenue started to dwindle and so did their morale. i never wanted to quit or give up anything, and i really feel like this is one of the toughest things i've ever gone through in my life.
scott appeared to be someone who was very earnest. lot of stress. i'm tired of it. a good family man, great salesman, great pitchman -- at least i thought he was. so i agreed to put in $630,000 for 30% of the business. started paying off some of the debt. started building new inventory. went out and rented a new warehouse. it's amazing, isn't it? it's gonna be great. it's gonna turn out nice. unfortunately, what happened after the cameras stopped rolling is that scott just continually called me for more money. "we need more inventory." sent him money. "we want to try these new products." more inventory. it was almost like the rope that pulled me in. and then nothing would develop. every time that phone call comes, right, it's, "we got to get an order out. this is burning down. that's burning down." but i'm not sure where the end of the hole is.
so, a year into it, i have $1.4 million invested. the calculator told me that i couldn't just keep spending money. i needed to take my losses and cut them, and i had a couple choices to make -- sell my interest or foreclose as the lender. this is a big dilemma for me. and scott knew that, and he used it against me 'cause he would say to me, "people won't like the fact that you foreclosed on us." it's almost like emotional blackmail. like, if you don't do this, the world's going to know this deal went bad. it's, like, "okay, the deal went bad. i have no problem admitting when i screw up -- none. and i won't get embarrassed." i know you about want to shoot me right now. i do kind of want to shoot you. i do, because i feel like it just never ends. but in the end, was i really willing to foreclose? i wasn't. and i ended up probably being softer in that situation because i didn't like what it was bringing out in me. holy [bleep], scott.
i feel like you're hustling me. and so i sold all of my shares back to them for $80,000 in product. they're still open today. i'm happy they're still open. i'm happy their family's all working together. i'm not happy about the fact that i lost $1.4 million, and i have $80,000 worth of crap sitting in a warehouse. but here's the thing. they think some people would have changed their business practice or stopped doing deals on handshakes or stop trusting people. but that's part of my secret sauce. yeah, i know that people take advantage of me. but my single biggest lesson is i'm not going to change who i am or the way i do it because in the overall picture, it works. it really has for me. ...i hand two small businesses the opportunity of a lifetime. find out which on transformed into a $15-million-a-year success story, and which one blew it... [ glass shatters ]
over the years, you've seen me invest nearly $60 million in all kinds of businesses. i think the biggest misconception that some of these business owners have that continues to frustrate me is that people expect me to do the work. you don't look like you want to get in there. -come on. -i-i'm -- so i... let me show you how to clean the toilet. woman: okay. you got to get down... i think in some of the ones that have really worked, they take the bull by the horns, and they clear their own path, and they move forward. a great example of that is precise graphix -- definitely one of my greatest wins. precise graphix is in emmaus, pennsylvania, and what they specialized in is making displays for grocery stores. this is typically what i'd see, a wall graphic. dean: correct. this is something that you designed by yourself? yes. the concept. yes. brothers keith and dean ran the place
and their employees loved them, but were rightfully concerned because the business was on shaky ground. i don't want to go look for a job. i love my job. but i want to feel like i'm gonna have a job for a long time. the opportunity for me was that precise can make designs and signs for all of my businesses, so it's a win-win -- they make money and the businesses get the benefit. we have a deal? we have a deal. my original investment in precise was to invest $270,000 for 33% of the business. and as we went through the episode, i gave them a couple of jobs. i gave them camping world to renovate a store. ♪ i gave them auto match, which was athens motors. as soon as you walk in, you're pretty much grabbed with a collage of color. and, for the most part, the episode ended with them executing on a couple of jobs and them coming up with creative things. i would say it was a decent win. all right. [ laughs ] what happened in the months following
was that after the episode aired it was like a telethon on their phone. every business that i could think of wanted to do business with them. the phone's ringing a lot more. i'll say that much right now. more business. oh, absolutely. my investment there today is still only $270,000. and today what we have is a $15 million business that lays across probably 13 or 14 different industries. they went from being mildly profitable to wildly profitable really quickly. now, it is true that part of their success was because they were able to secure business with some of the businesses that i owned. but i want to be clear -- they still had to pitch it, they still had to execute it, they still had to install it, and they still had to run their business. success story? yeah. keith: 1, 2, 3... all: team, family, pride! and so when i looked at other businesses or other industries that would benefit from my existing businesses, i thought lighting would be a perfect one.
so, vision quest is a lighting company in long island that applied. and i thought to myself, "okay. i own hundreds and hundreds of businesses with tons of locations. they all need lights. this seems like a pretty good idea. how bad could this be?" now that i look back on it... bad -- very bad. vision quest was owned by a guy named larry -- as i called him larry the lighting guy. oh, my god! how you doing? bring it in, man! how you doing? oh, my god! you're here! and it started out like a lot of the companies i go to -- the place was a mess, there was no process, and there wasn't machinery that actually worked. but the one thing that was good is that larry really understood the intricacies of lighting. i was a theatrical- lighting guy. i like light. so, any place you go in, you're looking right away at the lights. i just thought everyone did it, but i've come recently to understand i got a little unhealthy thing with lighting. get to light therapy. i need light therapy. my original deal was to invest -- i think it was $375,000 for 50% of the business.
i ended up spending close to another half a million dollars on equipment and another 150 grand after the episode to pay off debt that larry forgot to tell me about. but still, i assumed that i could do what i did with precise -- put money in their business, fix their equipment and their process, and then line them up with businesses that i was affiliated with, and then everything would be fine. we're ready to get to work? so i got him involved in the sweet pete's business and then said, "redo the lighting." and i want you to be honest about what's here, what's not working, what you like, don't like. you're not gonna hurt my feelings. i know it's a disaster. that's okay. i'll give you some candy at the end. okay. [ laughs ] look, it was a bumpy road, but eventually the job got done. you're looking at 3,500 gummy bears. little gummy bears. is the light changing on top there? yeah. you did a great job with this light. visually, the guy makes amazing stuff. i was blown away by what i saw. what i wasn't happy about is how much time it took and how expensive it was. larry? yeah. you realize that people are coming at 7:00?
i made the assumption in that moment that there was inefficiencies in that execution because he was nervous, because the timeline was short. but there were some red flags there that should have told me that i was going to have a problem with the process. [ glass shatters ] [ bleep ] unlike precise, vision quest never rebounded. they never got their act together. they never figured out how to integrate with all my other companies and capitalize on that relationship. every business i brought there could not do business with them. no follow-up, no execution, never hitting a deadline. it's our number-one problem, is deliveries. but why, though? because we started constraining. i broke the company. you were right. i ordered a light for my house and i didn't even get it. i just couldn't continue. so about nine months into the deal, i said "larry, you're on your own." i sympathize with you, but i kind of don't give a [bleep] anymore. in the end, i lost over $1 million on my bet on larry. he's not a liar, he's not a thief, he doesn't lack integrity --
i knew that it was going to be a great source of deals. we have a deal. i'm good. lemonis: but i knew that along the way i was going to have to be ready for some bumps and bruises for sure. you stepped way the [bleep] out of bounds. shut up! for a minute, shut up! i'm done. believe it or not, one of my most painful processes that i've gone through on "the profit" has turned out to be one of my biggest financial wins -- my big fat greek gyro. now, there's this terrible misnomer in the marketplace that i'm greek. my last name is greek. i was adopted by a greek man, and so everybody assumes that everything i do is greek. i'm actually lebanese. but i decided to go into this business called my big fat greek gyro. what can i get for you? the gyro, fries. i really went there because i liked the concept of "fast casual." chipotle has done it really well, and a number of other businesses have done it well. i thought my big fat greek gyro was going to be "fast, casual greek." what i walked into... ♪
was an old-fashioned euro stand -- you got the meat, the fries coming out of the freezer. you buy it frozen? kathleen: yes. you had mozzarella sticks... i was gonna take a trip to greece this summer, and i'm looking for tater tots, cheese sticks, cheddar balls, mushrooms. hummus isn't greek. but what baffled me even more is that the owners, mike and kathleen, were able to convince five other people to buy into this concept. and all these franchises were really struggling. we have yet to make money. the only help we ever got from them was on the first of the month, they came and picked up their royalty check. i'm a single mom. i can't support my family. the original deal was for me to invest $350,000 and own 55% of the business. and so the goal was to help out the franchisees and come up with a whole new concept. now, let me be brutally honest about it. i really didn't use anything from their business. we started over completely,
and we created a fast-casual, quick-service concept, and i changed the name to the simple greek. i can one day come and have a pita sandwich, another day come and have a rice bowl, another day come and have a salad. and so the goal would be to increase the frequency of visit. for sure. do you guys -- starting to get the idea of what i'm looking for? absolutely. absolutely. lemonis: when the episode aired, we had taken one of the locations, the one in mount lebanon, and we had come up with the skeleton of a concept. lemonis: when i walk in the door, it feels like a different place. mike: i think that this change is gonna be well, well worth it. here's to mr. lemonis, and here's to the simple greek. [ cheers and applause ] andreas: opa! today, there's almost three dozen open with many more coming. my original investment was about $350,000, but to date, it's about $4 million and growing as we continue to expand. and it's well worth it for me financially because the simple greek is doing great.
did you find the ordering process to be kind of easier? very nice. but guess what, there's been a lot of heavy lifting on my part and the franchisees' part, because these so-called "partners" that have equity, they're mia. and if you remember i was very clear with mike and kathleen that they needed to lead this process and to contribute. you know, i can't be here every day. i know. and these people want a leader. and i don't know if you have what it takes. oh, i'm ready. and i'm more than capable of carrying the load. i want to tell you that i'm convinced, but i'm not. here's a news flash -- they didn't really do anything. to be candid, we're in a lawsuit together. i have nothing to hide. it's public information. you can go look at it for yourself. so it's not all roses, but what is good is that there's a viable concept with a real process and a real plan and a number of franchisees around the country who are making real money, who wake up in the morning, they make the food, they take care of the customers, they market their business,
and they do it pride and they do it with great execution. i'm gonna put as much money as i have to to make sure you're successful. those are who the real partners are. all: opa! if all financial returns came with that level of drama, i couldn't withstand it. there also are deals that come with great financial return, they're amazing to work with, and it's a lot of fun, like sweet pete's. sweet pete's is a candy business, and it was in a very quiet neighborhood. and it was made up of two people that, quite frankly, couldn't be any nicer, pete and allison behringer. you look like you're a mad scientist with that lab coat. i guess you could say i am a scientist of sorts. i was a little surprised at where the place is located. it's, like, in a neighborhood. when we started this business, we had maybe a couple hundred dollars in our pocket or something crazy. we were not in a great financial position, and so someone offered us this place, and we're putting everything we have into building this. so, the deal i made was to invest $750,000 for 50% of the business --
new equipment, new distribution, new products. oh, my god! but that was really step one. instead of investing $750,000, i ended up investing $3.5 million within the first 12 months. we bought an old, dilapidated building in downtown jacksonville... it feels like i'm going into a haunted house. ...and today, there's a 22,000-square-foot candy store. what's up, pete? this place looks great. this is kind of like what you see in the movies. lemonis: now this location that they had originally only did about $400,000 a year. in their last 12 months, the primary location in jacksonville would do about $6.5 million. it's a little different. is it going to make $100 million? no. do i have a nice business that's something i'm passionate about that makes money, with partners that truly respect the business and their partner? yeah. and it's hard to find that. [ allison laughs ] how do i look? perfect. lemonis: and if that's not great enough,
i have a key to my own candy store. and it's funny because allison one day said to me, "do you ever go to the store late at night?" and i wasn't sure if she saw the security camera, but the answer is "no" -- but "yes." ...i'll update you on the biggest success in "profit" history and the reason i do this show.
how people handle opportunity and how they handle trust and how to bring back the good, old-fashioned handshake. and there's one business that really sticks for me and that's bentley's -- possibly my biggest win to date. i went into bentley's, which was a four-store pet chain in chicago. it's owned by a married couple, lisa and gio. how are you? i'm marcus. lisa. nice to meet you. hi. giovanni. nice to meet you. and they were all over the place. and the stores all looked different, the product was everywhere, there was no real process to it. but what was there was a heart and a belief in a business idea. trader joe's for pets. we're like the trader joe's or whole foods for pets. we do all-natural food, no byproducts, corn, wheat, or soy in our foods. and they did a pretty good job -- all kidding aside. i mean, they had four stores. they weren't making any money, but the effort was there. never a dull day at the barkery for lisa and i. i call lisa and gio like the boy scouts and girl scouts of america --
they rub two sticks together with very limited resources to make a fire. how many do they need? just one? and in the end, i decided to take a chance on them. now, there was a couple nuggets of things that definitely propelled me through it. they had adopted a young boy -- i was adopted. do you want to say "hey" to marcus? and what is your name? giovanni: sebastian, say "hi." hi, buddy. give me five. there you go. there you go. so they got a little extra nugget for that. and they were in an industry that everybody loves -- pets. and i rarely trust people who don't like animals. and who is this? luke. luke! my original offer to lisa and gio is that i would invest $400,000 for 40% of the equity, and i would loan them an extra $1.3 million to make this one acquisition in chicago. we have a deal. thank you. lemonis: fast forward. when we we made this acquisition, we went from four stores to, like 11 stores. and then gio went on this, like, crazy tear of, like,
signing up every acquisition that -- he's sort of, like, a deal junkie. $37,600,000 later, we have a business that does $100 million of revenue with 82 or 83 locations. and the business will make about $4 million or $5 million in profit. most people don't have the courage to do what you do, you should be very proud of yourself. i don't say this out of disrespect to lisa and gio, but when i met them, they did not have their own home, they were struggling, but they always had a smile on their face, and they always put their son and their business in front of everybody. in seven years, people got bonuses. we didn't get paid. which is probably why i fell in love with them, okay? today, they own their own home, their family's all together, they've adopted another son. how do you not just... i don't know.
like, i definitely get choked up when i talk about this business -- not because of the money that we're going to make. [ voice breaking ] i think what's crazier for me is... they want to take that money and start an adoption foundation. and for them, they tell me every single day... giovanni: wow. ...every day -- and then this is not an exaggeration -- i get a text from gio. "i just want you to know how grateful." lisa: [ voice breaking ] seriously, thank you. i can't tell how much this has helped our family. [ voice breaking ] you know, that's a big deal for me. it's -- business is always about the money for most people. and for me, it's largely about the money, but it's how business can transform people's lives that i think is more important. i'm willing to take the leap with you. all right? i'm willing to take the leap. for me, business was the great neutralizer. if you haven't had a great life,
you can change your life by starting a business. and i think what i realize today that i didn't know early on is that there are going to be different characters and different things that go bad. does it suck? yeah. should you feel bad for me? no. don't feel bad for me. we've done just fine -- especially with the good ones. thank you. no, are you kidding? thank you. congratulations. ...a sneak peek into this season of "the profit."
the disappointments, the disasters, the triumphs, and the laughters, and the dancing. what about the dancing? this season... thanks a million, detroit! i love investing in american businesses. i'm marcus. i'm marcus. i'm marcus. how are you? how old are you? 13. quality is kick-ass. this is delicious. ahh! i've agreed to invest $3 million and i will be 100% in charge. okay, we're moving stuff! $5 sweatshirts! you have to have a little extra move? oh, yeah, i guess you could move around. marcus, is this your plane? lemonis: yeah. i've only seen this in music videos. what is this? if you need any hangers for any of our businesses, i have some. i'm not a liar. why should i share information with him if he doesn't share information with me? ask him. you weren't here because you were doing charity work. you left because you had no control. you all need to get your [bleep] together. it's part of the reason the business is in trouble.
my biggest fear is that you're going to try to sabotage our situation. me? yeah. probably, i would. do the people who work here know how bad it is? i can't do this. you're unfortunately out of business. [bleep] that! [ voice breaking ] and we love this place so much, and we love those people. there's a lot of emotion coming out today. i'm crying more today than i have on seven seasons of "parenthood." where do we go? you know, what do we do? you have to decide if you want to bust through that wall or not. oh, i do, and i will. you're selling to save your business. this is going to be tough for you. i need you to know. i'm up for the challenge. look how cool this looks! this is everything. this looks unbelievable! all: team! let's go kick ass. you got this. ♪ can you guys cut it out? [ laughter ]
>> tonight on the profit... i go inside sweet pete's, a confectionary shop whose candy-obsessed owner has created a huge variety of sweets. >> that's the caramel. >> that is good. but with a horrible location... part of location is having foot traffic. and i don't see that here. a partnership gone bad... >> i'm calling you out on your integrity. it's crap. >> and an outdated kitchen that won't allow him to keep up with demand... there is a limit to the output, and you're the limit. if i can't turn this business around... >> i don't see how i can go forward. >> sweet pete's will come to a bitter end. >> you guys misrepresent my integrity. >> no, i'm calling you out on-- >> i'm sorry. >> my name is marcus lemonis, and i fix failing businesses. >> we made $10,000 together. >> i make tough decisions... we'll change the recipes.