tv The Profit CNBC September 13, 2016 7:00pm-8:01pm EDT
lwoman:: ttheir soups are amazing.. lemonis: ...at one small soup chain in milwaukee, wisconsin, the owner is writing a recipe for disaster. no [bleep] you should be very careful about what you're saying. his behavior is alienating employees. kevin: he needs to trust me. lemonis: his menu is alienating customers. it's heavy. and a private feud with one mysterious person... stephanie: her name is grace. mayra: grace. lemonis: ...is threatening to destroy everything. grace: you need to be brought out and be told it's not okay to treat people like that. it's not. how dare you! lemonis: everybody's talking about her except you. if i can't bring this situation down from a boil... dave: this does not interest me anymore. lemonis: dave. ...this lid's gonna blow right off.
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 gonna wake up every morning wondering how many jobs we have to do. it's not always pretty. everything's gonna change -- everything. but i do it to save jobs, and i do it to make money. this... let's go to work. ...is "the profit." milwaukee has some of the best food and drink in the country. something i know well because i went to college there. that's me when i had hair. and one of the newer local favorites is the soup market. stephanie: hi, honey. how are you? lemonis: a quick-service chain started in 2004 by chef dave jurena and his business partner. dave: anything else for you, sir? lemonis: dave did the cooking while his partner ran the business. woman: that's good. lemonis: and before long, the soup market had expanded to five locations,
with plans for many more. then dave's partner and co-owner died suddenly, leaving him struggling to run the company and putting his dreams of expansion on hold. dave: can't do it. lemonis: and that's why he reached out to me. a high-margin, high-volume concept like soup would make for a great franchise opportunity. and with $2 million in revenue, the soup market may just be a few small fixes away from being the next big thing in fast casual dining. i'm meeting dave at the soup market location in hales corners -- a suburb of milwaukee. what i noticed right away when i walked through the doors, about the design, well, there isn't any. it looks more like a hospital cafeteria. stephanie: hello! lemonis: hi. stephanie: how are you today? lemonis: good. how are you? stephanie: good, thank you. lemonis: i'm marcus. stephanie: nice to meet you. stephanie. lemonis: stephanie, nice to meet you.
how are you? dave: hi, marcus. i'm dave. lemonis: hey, dave. how are you? dave: great to meet you. lemonis: nice to meet you. jill: hi, i'm dave's wife -- jill. lemonis: how are you, jill? nice to meet you. so, are you both in the business? jill: no, i work awm in athletics. lemonis: oh, you do? dave: but she has worked farmers markets for us. lemonis: okay. well, i've never been in a place like this, so i wanted to kind of get a feel for it. dave: all right. so, the line where they serve people. lemonis: what's the most number of soups you have in one day, offered available? dave: we do up to nine. so, we have soup, salad, sandwich. lemonis: what's going on on that board? dave: i bought a new one, but it's too big. so that's gonna be the new look, assuming it's not all faded like that. lemonis: i want to taste what you're known for. dave: okay, well, i would start with the african-peanut and chicken. lemonis: it does have peanuts in it? dave: yes, peanut butter. lemonis: peanut butter? it's heavy. it's thick, you agree? stephanie: yeah. lemonis: typically, when i order soup, i'm looking for a lighter meal. i don't think that's the case here, though. stephanie: this is the hungarian goulash. lemonis: what's in this thing?
dave: that is pork cooked in bacon fat. lemonis: i'm sorry. dave: yeah, you heard me. stephanie: [ laughs ] lemonis: it's delicious, but it is heavy. i had one bite of 10 soups, and i felt like i had eaten for a week. it's too heavy. what's the calories in this one? dave: we don't provide that. lemonis: you don't? what if somebody asks? dave: a lot of people do. lemonis: people ask for lighter options? lemonis: healthier options? stephanie: yes. lemonis: i'd like to see what a customer actually gets. i want the whole presentation. stephanie: the whole presentation. lemonis: that's the bread? that's a big piece. stephanie: yeah. lemonis: what sort of sales data comes out of this system? by store? by soup? dave: no, we don't have it by soup. we actually do different price levels. lemonis: you need some sort of sales data. how many different soup recipes do you have? dave: 200. lemonis: what you need with good data is to understand what sells best, what sells terrible, what to add to the rotation, and what to take away. we might as well go back to an old five-and-dime store with a metal register with those big keys,
because all he's doing is taking money and putting it in the register. what do you think of the presentation of this? stephanie: i like it. lemonis: i hate it. dave: okay. lemonis: i just think it looks -- this tin here, it's all dented, and the tissue paper doesn't have any logos on it. is this bread frozen? dave: no, we bake it here. lemonis: does it smell a little frozen to you, or refrigerated? dave: i'm not sure what refrigerated smells like. lemonis: well, this doesn't smell fresh to me. it doesn't taste good. did you come up with the original recipes? dave: most of them. lemonis: and would you call yourself a chef? dave: yes, because i've gone to school and been trained. i managed a bakery and noticed how much soup they were making. that was actually how i met my late business partner, tim. he passed away a year and a half ago -- sudden, unexpected, very unfortunate. lemonis: oh, man. dave: i was always the food side of the business, and he handled paying the bills and things like that. i am dealing with his attorney and his estate. there's no plan in place for succession or anything like that. lemonis: and how much did you guys own?
dave: 50/50. lemonis: 50/50. what are they asking for? dave: a little under $100,000. lemonis: what do you think that 50% is worth? dave: i think it's worth more. lemonis: well, i wouldn't tell them that. dave: no, certainly not. lemonis: if we could sit over here, that would be great. soup, first, makes up how much percentage of the revenue? dave: about...60%. lemonis: did you make that up, or you know that for sure? dave: it's pretty close. lemonis: soup's one. what would be two? dave: i don't know. lemonis: if you don't know your numbers, you don't know your business. can i see the different sizes? but i need to do business with somebody, not just eat their food. what does it cost to make this? dave: umm... lemonis: what are the margins on soups? dave: i don't know. lemonis: if your ultimate goal is to have more than five of these -- is that the goal? dave: yes. lemonis: how many would you like to have? dave: well, 50 is a number that comes to mind. lemonis: what's odd about this place is it doesn't feel like it's part of a chain. there's no real energy to the place, and there's no clear presentation of food,
and the menu board isn't clear. what's even worse is that the owner can't even tell me what sells and what doesn't sell. if this thing was gonna be nationally franchised, there's a lot of work to do. how are you? ¿todo bien? where are you from? stephanie: mexico city. lemonis: and where are you from? veracruz? oh, wow. so, what do you love about this place? tell me your background. stephanie: my husband and i met dave, and we tried his soups, and we just fell in love with it. lemonis: he works here now? stephanie: yeah. lemonis: so, who do you report to? stephanie: umm...long story. um... lemonis: why don't we go outside? stephanie: sure. lemonis: yeah. so, who do you report to? stephanie: dave. [ laughs ] lemonis: why do you say it like that? stephanie: uh... well... lemonis: is there something more to the story? stephanie: well, there is somebody that works with us. her name is grace, and she's also working along with me with this store. lemonis: oh, she works here?
stephanie: i don't know what's going on with her. lemonis: i definitely sensed that her body language changed when this topic came up, and it prompted me to say, "are you telling me everything?" no? stephanie: no, i-i just -- like i said, i'm not sure, um, what's her position here. lemonis: stephanie seemed reluctant to tell me exactly what's going on, so i'm gonna talk to other employees at other locations. let's jump in the car and get to bay view. dave: okay. you know how to get there? lemonis: yeah. i'm a marquette grad. i know how to get to bay view. [ bell jingles ] whoa! it's a lot bigger. this feels very different. this was the original one? dave: yes, 2004. lemonis: i'm feeling a little bit better as i visit the bay view location because you can tell there's a little bit more thought that went into this. the space is bigger, you see the full kitchen, it looks clean, but i still don't know what the story is. like, what exactly is dave trying to sell here?
is it a concept or is it just a local soup spot? how you doing? i'm marcus. kevin: good. kevin. lemonis: kevin -- oh, hey! i think i just met your wife. kevin: yes. lemonis: she's, like, all energetic and excited. so, what happens here? kevin: this is where we make all our soups and products for sandwiches. lemonis: okay. who's in charge of the kitchen here? dave: mayra. lemonis: are you mayra? mayra: yes, it's me. lemonis: how you doing? i'm marcus. mayra: i'm mayra. nice to meet you. lemonis: so, you're the jefe of the kitchen? mayra: yeah. lemonis: is this bacon? dave: sure is. lemonis: and what is this? dave: these are the dumplings. kevin: secret dumpling, man. lemonis: what's the secret. kevin: well, the secret is very good. i give it a little stir. lemonis: now, how long have you worked here? kevin: i've been here a little over five months. lemonis: what is your role? kevin: it's kind of been changing. i was supposed to be regional -- helping him oversee five locations and get him some structure. lemonis: did he need structure? is it hard saying it with him standing there? kevin: no, it's not. i already told him. lemonis: oh, i know. kevin: i want to create a better people culture throughout the restaurants,
and he needs to let me do that. lemonis: what does that mean? kevin: he needs to trust me. dave: i don't want to just turn him loose to go visit the stores. i want to know what he's up to. lemonis: how do the stores get human contact, and who do they get it from? dave: a lot of phone calls, a lot of texts. there is communication. lemonis: humcontact. who tells them they're doing a good job? who gives them a hug? who does all that? kevin: uh... grace was helping out with that, as well. lemonis: who's that? kevin: grace. lemonis: she works with stephanie? she handles some other stores, as well? kevin: randomly. lemonis: what's that? dave: she'll be leaving, so she's not gonna be a part of this. lemonis: oh. okay. this whole grace thing is weird. it's like, people are talking about it, but they're not allowed to talk about it. dave's shushing everybody and telling everybody to be quiet. what's this grace thing all about? this is low fat? mayra: no, with the cheese.
lemonis: and so, if you have a problem, who do you call? mayra: grace. lemonis: does grace work for kevin? mayra: i really don't know. lemonis: it's confusing. mayra: yeah. i don't know what happened. [ chuckles ] yes. lemonis: hey, kevin. kevin: yeah. lemonis: what is the grace thing? kevin: i have no idea. maybe it's like a brother-sister thing, where they can't get along, and then they get along. lemonis: do they fight here at work? kevin: i've seen arguments. lemonis: you have? kevin: yeah. it's been dysfunctional since i got here. lemonis: it has been dysfunctional? kevin: yeah. lemonis: it's odd. kevin: yeah. lemonis: anything else i should -- dave: did you get all your information out of kevin? lemonis: i didn't get a lot of information out of kevin that was useful, no. i learned a few other things, but we'll talk about those one-on-one. so, i want to go to the public market. can we head there? dave: sure. lemonis: the public market is a co-op of individual vendors. the soup market makes its soup bases for all five locations here.
so, this is where you make the stock. dave: yes. lemonis: where's the... dave: no, we don't stir it. lemonis: just let it sit? dave: no, if you do, you'll make it cloudy. lemonis: okay. is it me, or is it odd that dave's wife is here again? ma'am, would you like some soup? i know who you are. are any of these your recipes? jill: oh, i don't cook. i work full-time, and we have two kids, so... lemonis: you're plenty busy. jill: yeah. look, i get the fact that dave's wife was at hales corner, they were excited, they wanted to meet their potential new business partner. i got that. "nice to meet you. see you soon." but i didn't think it would be, like, two hours from now. how weird is that? does your wife come to work here every day with you? dave: no. never. lemonis: why is she here today? dave: support for me. lemonis: is that the reason? dave: and to keep grace away. lemonis: what is that about? dave: i'm not gonna talk about it on camera. lemonis: but i gotta understand it. it just seems odd to me that, like, you're skirting this issue, and i think the challenge that i have is if we're -- dave: you know what? i'm not talking about it.
lemonis: what is the big secret? i don't care who she is or what she does. i didn't come here to invest in anybody but you. dave: then why is it becoming an issue? lemonis: because everybody's talking about her, except you, and so it makes me uneasy. dave: i'm not -- i'm not gonna talk any more about her. lemonis: did you see how that even makes it weirder for me? dave: next subject. lemonis: why are you getting so angry at me about it? dave: all i'm gonna say is, i don't want to talk about it. lemonis: why did you call me? dave: 'cause i thought you could help. lemonis: i am gonna help. dave: but if this keeps festering and coming up, i'm not interested in talking about it. lemonis: dave, what is it that keeps festering? dave: marcus, i like you. lemonis: well, you obviously don't. dave: i think you'd be great for this business, but this does not interest me anymore. lemonis: dave, what did they do to you that's making you so upset? dave: you know what? i appreciate your time, thank you. i'm sorry you wasted it. i have no interest in pursuing this now.
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lemonis: dave storms out instead of just telling me who this grace person is, and, quite frankly, i didn't appreciate his level of immaturity. i'm not moving forward with dave until i get some answers. i try his cell, leave him a message. hey, dave. this is marcus. i'm not sure where you went. i'm not sure why you reacted the way you did. i stood around there out of respect to him. and an hour later, he finally calls me back. so, what i'd like to do is put that behind us. let's get back to work. the fact that he's giving me this answer that she's gonna be leaving doesn't mean that i just wiped it off my memory bank. i just put it off to the side. let's dig into the financials, and let's understand the business a little bit. enough about grace, more about business right now.
and so, when i dig into the numbers, it's clear to me that you've proven that you could generate revenue. $1,850,000 in revenue, and how much debt is in the company today? dave: $85,000. lemonis: what about any money owed to tim? dave: we had come to an agreement on about a $100,000 buyout. lemonis: so, there's $185,000 of liabilities, and the consolidated margins, probably somewhere around 52%, 53%. they should be closer to 70%, 72%. look, i'm a big fan of soup and i love to eat it, but i want to make sure it has really healthy margins. in order to close the gap between 52% and 70% margins, the soup market could use more cost-effective ingredients, without compromising quality, and make sure items are priced properly. right now, dave doesn't even know how much it costs to make a single serving. making those adjustments would give him an extra 18 points of margin. with the current $1.85 million in gross revenue, that would be an additional $333,000 of gross profit.
i'm excited about the opportunity to get in here and work with you but... let the other people that work in the business do their thing. you got to trust people. i want to do business with you, but i'm not easy to do business with. we have a $100,000 problem with the estate, $85,000 problem in terms of your debt. and we probably have a $130,000 problem in terms of, we want to brighten up some of the stores and update them a little bit, rebrand them. i want to put a salespad program where you know everything that's happening at all stores. you press a button -- boom. so, my offer is $315,000, and i want to slide in as your 50/50 partner and just take out the estate. dave: i mean, saying you want to put money into the store -- i'd be interested to see what that looks like. i mean, are we gonna get a concept before we...
lemonis: no. my offer is $315,000 for 50% of the business, and i'm 100% in charge of everything. dave: of course. lemonis: of everything. dave: of course. lemonis: we got a deal? okay. dave: thank you, marcus. lemonis: okay, my man. i'm excited. are you excited? dave: i am. lemonis: oh, okay. stephanie: hi! lemonis: hello. i thought we could get everybody together and have a little chat. dave: all right. oh, everybody, come on out. lemonis: so, yesterday, dave and i made a deal for me to invest $315,000 in the business, and we'll invest in new technology. we want to work on our presentation, we want to change the front of the store so that 5 stores can turn into 50 stores. 'cause i didn't come here to invest in 5 stores.
that's boring for me. and then we're gonna figure out how to make the soups a little healthier. kevin: [ laughs ] lemonis: people, when they see these colors, they know that it's fresh. we don't tell the story that there's an amazing chef that created all these -- that's you. there's no artificial ingredients. you have to tell this story. everybody excited? all: yeah! lemonis: all right, let's go to work! stephanie: i'm ready. dave: thanks, guys. lemonis: before we spend a bunch of time making healthy soup options, we need to find out how unhealthy the ones that he has now are. i wanted to bring you here and test the soups. what's the calorie intake, what's the fat, what the sodium? dave: ouch. lemonis: northland lab is one of the world's leading researchers on food nutrition. good morning! gretchen: hey. gretchen. lemonis: i'm marcus. gretchen: nice to meet you. lemonis: this is my partner, dave. gretchen: hi, dave. nice to meet you. lemonis: this should be and eye -opening experience for dave. so, where's the goulash? dave: didn't bring that one. lemonis: and the bacon cheeseburger? dave: i could've brought that but...
lemonis: you were scared to bring that. dave: yes. lemonis: so, that means you already know it's bad. dave: yes. lemonis: we're gonna test the african-peanut soup. let's do it. your life's work being blended up. gretchen: this is gonna tell us the total protein. we're reading the nitrogen-gas content that comes off of the combusted sample. lemonis: and so the protein here is 6%. gretchen: so, this is how we test calcium, sodium, and iron for your nutrition label. so, this is an automated method for looking at the fiber content. lemonis: so, could you take a soup like ours and then add something to it that could make it have fiber? dave: metamucil. lemonis: i think that's sort of sarcastic and not funny. is there anything that you think you could add to it to just give it a little bit of fiber? dave: i don't know, but we're getting into an area that makes me uncomfortable. messing around too much with existing recipes, that concerns me. lemonis: have you ever tried? dave: no. lemonis: why? dave: because i don't think like that. lemonis: not even willing to compromise, not even thinking this is a good idea -- with him, it's just all bad.
gretchen: this is all of the information that we provide. so, here's your total fat. lemonis: boy, that's high. gretchen: it's alphabetical. lemonis: sodium content's higher than i thought it would be. that's a lot. gretchen: yes. lemonis: it has over 1,700 milligrams of sodium. that's 70% of what you're supposed have in one day. i don't want to be part of a restaurant that puts so much of something in one thing that it could be harmful to people. dave: you know, i still believe it's ultimately their choice. there are people who are gonna want the highest fat. i don't want to limit the things that people have come to expect just because, all of a sudden, we've gone on a health kick. lemonis: we're not on a health kick. we're on a responsible-business kick. dave: people expect it a certain way. i'm not willing to alter that. gretchen: like, the cheeseburger one, could you do a low-fat version of it? not get rid of your original. dave: i would rather just get rid of it at that point. that soup is not meant to appeal to the bikini crowd.
lemonis: whoa, whoa, whoa, whoa. you mean the non-heart-attack crowd? can you make a lighter version of it? dave: quite honestly, it doesn't really appeal to me. lemonis: there'll be no healthy options. like, you remember the old "seinfeld" episode. dave's like, "no healthy soup for you! no healthy soup! you will eat a fat soup and you will like it!" dave: there's a lot of things that you're good at and you can bring to the table here, but when you start getting into my area -- lemonis: which is your area? dave: food. lemonis: i didn't know that we had defined areas. i didn't know that we had these lines where i'm not allowed to bring things up. and by the way, i cook, too. you're not the only person that cooks in the world. i'm really trying to get you to be better and think differently. ♪ hey, bud. so, i have somebody on the way that i'm partners with in another business. it's gonna help us redo the inside of the store. we're gonna clean up the facade, we're gonna look at the menus. we're gonna do all of that stuff. oh. dean. dave.
dean: nice to mean you. dave: nice to meet you. lemonis: let's come out in here. so, dean is my partner in a business called "precise graphix." what did your business do before we met? dean: $3.4 million. lemonis: what do you think you'll do a year later? dean: close to $11 million. dave: wow. lemonis: my ultimate goal with the soup market is to create a national, scalable-franchise model. essentially, bay view's gonna be our company's prototype. there has to be a consistent look and a consistent feel, and there has to be a wow factor. if i was a potential franchisee and you brought me into this place, i'd turn right back around and head out. i want this space to lighten up. these fresh, natural ingredients that he uses a lot of, i want him and his name to be at the forefront. dean: he looks like he likes that idea. lemonis: do you like the menu board? dean: no, i'm not a big fan of the electronic one. everything right now is just flat and bland. lemonis: you feel a little dizzy from it? dave: i like that design. i know that you think it's busy. lemonis: if i looked up the word "resistant,"
i'd see a picture of dave. it's gonna happen fast -- really fast. so we may have to close for 3, 4 days. dave: yes, and i'm glad we're only doing one. i went to simple greek yesterday. it's very stark. lemonis: the one that sold 56 franchises in four months? dave: it's very white. it's very -- to me it's a little cold. lemonis: like the soup market, the simple greek was a struggling family-run franchise that also had five stores, each with its own design and systems. we created a uniform look that was customer friendly, and, with all due respect to dave, it was relaxing and inviting. that's how you scale a business. everything that we do, you're not gonna have full control of. you got to get your head around that. dave: [ clears throat ] sure, surprise me. lemonis: okay, perfect. thank you. dave: all right. lemonis: trust. ♪ dave's constant resistance is exhausting. so i'm gonna spend some time with kevin
to really dig into these operational issues. where are all the sandwiches at? stephanie: this body's not working good. kevin: that went on the fritz. stephanie: so we just put them in here for now. lemonis: is there any other equipment not working? stephanie: this one right here is, like, old, and we've been having problems with it. we already fixed it, like, three times. kevin: yeah. lemonis: so, kevin, i have to ask you, if you're the operations guy, and you come here and that doesn't work and this is broken, what exactly are you doing when you come here? kevin: so, i bring that to dave's attention, and, i mean, this -- i've never seen it quite like that. i haven't been to this store for a while 'cause i've been stuck at bay view. lemonis: i'm seeing a broken refrigerator. i'm seeing burned-out light bulbs. if kevin's responsible for operations, but he's not in charge of this stuff, then who is? this menu board is broken. kevin: exactly. lemonis: whose responsibility is that? kevin: well, i haven't... lemonis: look, i can't help but feel again that people are not giving me the full picture.
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lemonis: hello, ma'am. we can't have customers back there. grace: i'm grace. lemonis: i'm sorry? let me introduce myself to her. kevin: okay. lemonis: hi, grace. i'm marcus. grace: pleasure to meet you. lemonis: i'm sorry for stopping you when you came through. i didn't know who you were. grace: well, i'm kind of freaked out, and i'm shaking right now. so, i'm here to drop off keys. our staff doesn't have keys for all the stores. lemonis: okay. what are you freaked out about? grace: umm... our situation that i find myself in right now. lemonis: what is your role with the company? grace: i'm the director of operations.
lemonis: i thought kevin was the d-- grace: no. lemonis: problem. everybody needs to get their story straight. what i don't understand is, how come i haven't met you up until now? grace: because dave requested it... that i be invisible. lemonis: he told me that you weren't even working here anymore. grace: you know, that's hurtful. lemonis: do you still work here? grace: i do. lemonis: do you get a paycheck? grace: i do. lemonis: okay. something really stinks here. grace: i know why, marcus, but you need to ask him! lemonis: why is he keeping you away from me? i have, and he won't tell me. grace: it would be foolish of me, and i think it would be also crossing some lin-- trust -- we're talking about trust. lemonis: with him? grace: all right. the details are this. he's got a wife who does not, for some reason, trust her husband. he and i have never crossed that line, ever. they're making me a problem in their marriage. lemonis: yeah. grace: that's interfering with my livelihood. lemonis: so, wait a minute. grace is a current employee, and dave has kept her away from me for what? because he's having problems at home? whatever it is that's going on,
dave's been dishonest about it, and it's made grace's life miserable, through no fault of her own. do you love this place? grace: i do. i have a really great relationship with all of the employees. lemonis: on a daily basis, who should run the business every day in your mind? grace: myself and kevin. lemonis: you want to work with kevin? grace: oh, kevin's a saint. he does come with a great deal of experience. lemonis: and he reports in to you right now? grace: no. kevin comes in three days a week, helping in the kitchen, helping develop that area. he's a good man. lemonis: yeah. i'm done soft-pedaling on this issue. i'm gonna confront dave, and i don't care if he likes it or not. yeah, that was interesting. oh, hey! kevin: oh, hi. lemonis: how are you? jill: hey. lemonis: as we're leaving, who do you think we ran into? how are you? jill: good. lemonis: yeah, again. isn't that a small world? jill: yes. lemonis: i told you she was lurking. that's ironic that she's here. kevin: yes. you know what? lemonis: she seems to always be lurking, though. kevin: yes. lemonis: maybe she thought grace was here. kevin: [ laughs ] could be.
lemonis: look, the renovations are underway to build the prototype for the soup market in bay view. i gave them instructions to remodel the entire front of the store. but now i'm wondering if i didn't jump in too quickly after what i just learned about the situation with grace. but all i can do now is tackle this thing head-on, and if he isn't straight with me, i'll take my losses from the renovation out front, and he will never see me again. okay. so, i went to hales corner. while i was there, some woman comes barging in, rushes by the counter, and i actually said, "ma'am, you cannot go back there." she said, "yes, i can. i'm grace." so, that's number one. she proceeded to tell me she was the director of operations. you didn't tell me that. she told me she still worked there. you didn't tell me that. dave: what you have to understand, it was really awkward. lemonis: i can't work in an environment
where you and i just can't be straight the whole time. dave: mm. problem. lemonis: you should be very careful about what you're saying. grace: you need to be brought out and be told, "it's not okay to treat people like that." it's not. how dare you! i'm raph. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here, we're here, and we've got your back. legalzoom. legal help is here.
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where you and i just can't be straight the whole time. dave: mm. problem. lemonis: you should be very careful about what you're saying. dave: when tim died, she stepped up, and one thing i will never trash is her work ethic. i can't fault her for that. it's the personal side. lemonis: no [bleep] no games, no gimmicks. did you ever have feelings for her? dave: i did. and i told my wife that, and that's done with. lemonis: and it was over. dave: nothing ever happened. lemonis: yeah. for an employee to suffer just because her boss had feelings for her and he feels awkward about it is just wrong on so many levels. to be honest, i have half a mind to walk away, but for the sake of the business and the other great folks that work here, i'm hoping we can work things out with grace and move on. dave: maybe i'll be more communicative but you have to -- lemonis: or just don't keep stuff from me. i appreciate you being honest with me about it, but let me be super clear.
this nonsense with grace stops right now. ♪ i wasn't gonna move forward with much more until dave came clean, and we addressed his behavior, but now that we have, it's time to get down to business. how are you? i'm marcus. matt: hey, marcus. matt. lemonis: first off, we're gonna stop serving that weird refrigerated bread, and we're gonna serve up something with a twist. so i brought dave to milwaukee pretzel company. katie: right over there, that's our mixing station. after it comes out of the mixer, it goes through our divider/rounder, which cuts it into pieces. then it comes through this machine, here, and turns it into a string, and then we have twisting and shaping. lemonis: you might think homemade bread is cheaper and more profitable, but baking our bread, we're using a ton of labor that we could use somewhere else. by serving these pretzels, we free up our labor, and we're able to add something to the concept that increases the perceived value of the menu, giving us the ability to raise our prices.
dave: i like it. lemonis: you're open to that? dave: oh, yeah. lemonis: i also wanted to take dave to maglio's, one of the largest produce suppliers in all of wisconsin. sam: first process that they're doing here is picking out anything that just isn't edible. and we have number twos. lemonis: historically, dave would buy grade-a tomatoes, the kind you would see in a beautiful salad. but when you're making soup, presentation of the tomato doesn't matter. the quality and the taste do. so, in the past, dave would spend around $5,000 a month in tomatoes, but you can buy grade-b tomatoes and save about 20%. over the course of a year, dave would save about $12,000. and that extrapolates across all sorts of vegetables. i'm taking dave to a local kitchen supply store, to improve the presentation of the product. if we invested in some dishware -- let's say we spent $20,000, and so, if you do $1.8 million a year -- we can get an extra 10% on price. it comes back pretty quick.
a small investment in plates will give us the ability to raise prices and help us with our soup margins -- exactly what i'm looking for. and finally, it's time for dave to start working on some healthier soup options. so i'm taking him to metro market for some inspiration. dave: i'm gonna try some for you, 'cause i'm gonna make it a little healthier than i would normally. lemonis: what is that? dave: that's whole milk. lemonis: what would you normally use? dave: half-and-half. lemonis: chef dave soup in the jar, available at metro market. dave: shh! ♪ you want to try my new soup? lemonis: that's it? dave: that's it. lemonis: what's in it? dave: grilled corn, grilled onion, roasted poblanos, grilled chicken, lime juice, cilantro, and yukon gold potato. it doesn't have any dairy. lemonis: whoa. dave: mm-hmm. lemonis: he did go back to work, and he told me he created a brand-new healthy soup for the grand opening. dave: what do you think? lemonis: that's good. maybe he's actually starting to listen. hey, great job, bud. dave: thanks.
lemonis: see you soon. ♪ it's been about two weeks since i've seen dave, and i'm back for the grand opening of the new and improved soup market, and i have a feeling it's gonna look amazing. well! kevin: what's the word, man? lemonis: what do you think? kevin: i love it. lemonis: looks different? kevin: i love it. lemonis: hey, dave! dave: how are you? lemonis: proud of you, my man. dave: good to see you. lemonis: what do you think? dave: incredible. lemonis: i spent over $60,000 renovating the soup market. new floors. an entirely new front counter. a new pos system so we can keep track of what's selling and not selling. new displays. we have fresh ingredients right there for people to see. new wall graphics. "dave's soup forecast"! a new facade. new lighting. the place finally tells a story.
it talks about the chef that created them, it talks about the freshness of the products, and it even tells the story of the pretzels. and we got our pretzels? dave: we do. dessert pretzels, an interesting idea. lemonis: yeah, just gives you one more add-on. we already were bringing the pretzels in-house, so all we're doing is adding a little bit of garnish to them. more items, more revenue. more revenue, more profit. i invited all the people from the local community to come out and try the new soup market. hello! crowd: hey! lemonis: okay. so, this is dave. dave: thanks a lot for coming. this has been a long process, but we're real happy with it, and we hope you are, too. let us know what you think. lemonis: that's it. dave: that's it. that's all i got. lemonis: let's go have some soup. dave: all right. man: i'll have the mexican corn, please. ooh, we get pretzels. lemonis: there's 10 types of soups, and it's on the house tonight. there's a vegan gazpacho, there's a vegan mexican lentil. do you feel like there's enough healthy options? man: absolutely. lemonis: so, what do you think?
jill: this is awesome. lemonis: you proud of your husband? jill: very. lemonis: suddenly, i see grace hovering outside, and i realized that she's not inside, celebrating with the rest of the staff, and i'm pissed. you and i. dave: let's do it. lemonis: dave had better not be excluding her, because we talked about this. okay. it's probably a good idea that, you know, you guys get whatever water's under the bridge behind you. grace: absolutely. you know darn well that i worked really hard to ensure that you would get what is happening today, dave. you did not ask me to come here. why should i be the one that steps aside because you have some personal problems? and it's very hurtful that i get to watch from the outside, everything that's going on inside. i needed to let all this out. you need to be brought out and be told, "it's not okay to treat people like that." it's not. how dare you! lemonis: if your business is in trouble and you need my help, log on to...
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grace: i needed to let all this out. you need to be brought out and be told, "it's not okay to treat people like that." it's not. how dare you! lemonis: grace, he did tell me you were very helpful to the business, you were an amazing worker -- he's owned all of it. grace: all of it? lemonis: all of it. dave: yeah, i never talked about your work quality.
things that end badly, you know, there's always regret. i am sorry. grace: thank you. i appreciate that. lemonis: your friendship maybe will rebuild over time, and your respect will rebuild over time. grace: it will. we will. everything will be fine, marcus. i think we all needed to, like, vent, and get it out. lemonis: look, i'm glad that dave apologized to grace, but the fact remains, is that he did exactly what i told him not to -- exclude grace to punish her. dave: all right. lemonis: okay. lemonis: grace, thank you so much. right now, this grand opening is in full swing, and the only thing that i can think of is that maybe i made a mistake with this guy. ♪ it's been about 10 days since the grand opening, and i'm back in chicago at work. [ phone rings ] hello? then i get a phone call from somebody in milwaukee. grace: marcus? lemonis: yes. grace: hi, marcus. this is grace. lemonis: oh, hey, grace. how are you? grace: well, i kind of wanted to keep you in the loop of what's going on.
my employment at the soup market has been terminated. he walks in and says, "you are fired for insubordination." he said, "you need to go now. you need to go now." and i refused to accept that. i said, "no, i'm not going to leave." he took out his phone, he dialed 911, and he had the police come and escort me out. lemonis: literally, the police came? grace: literally, the police came. lemonis: after all of this, now he fires her? grace: i want to give you a little bit of a back story because, unfortunately for him, he does have the eeoc hanging over him. two years ago, um, he made an advance. he had some strong feelings for me. i did not accept the advance, and that was part of the eeoc. i did file one because of the situation. lemonis: so you filed a claim with the eeoc. i knew that dave had feelings for grace, and i knew it wasn't a healthy situation, but to find out that she filed a complaint with a federal agency for sexual harassment,
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lemonis: how are you, buddy? what's the good word? kevin: everything good. lemonis: what happened to the menu items? kevin: well, on my end, i've been trying to get that done. lemonis: where's all that stuff? kevin: that, you know, we didn't use enough items. lemonis: how's the new pos system? kevin: um, dave wasn't happy with h-how much work it took to enter the soups every day. lemonis: so what? i mean, it's like we need the data, you know? kevin: i know. lemonis: where's the pretzels at? and what's that? now we're -- what's this thing? kevin: that's his ice cream. lemonis: i never...knew that. is dave here? kevin: yeah, he's in the back. he had to print something up. lemonis: let's just assume that i couldn't have been any more pissed at dave. well, i've broken a new record. i'm more pissed. how you doing? how are you? dave: good, how are you? lemonis: so, where's everything that was put up here? dave: it's down. it was confusing. lemonis: confusing to who? dave: the customers. lemonis: but just to take them off -- and what happened to all that stuff? dave: you know, these are great ideas in theory or in your head. lemonis: in my head? or in reality? dave: no, you came up with the idea. it's not practical. lemonis: what's not practical?
to change a menu board? dave: i look at the expense. i don't want to do that. lemonis: you didn't pay for any of this! i paid for it. you haven't taken a dime out of your pocket. kevin, can you give me a minute with dave? kevin: sure. lemonis: i'm sorry. thanks. this was about building a prototype for a soup concept, and then, after all this stuff is done, you basically just dismantled it all. dave: okay. the problem i have, you just come in and you do things without any kind of consultation -- this just appeared -- and then on the day of -- lemonis: i'm sorry. this beautiful store just appeared? you know what else just appeared, dave? a filing from grace. i was able to get over the fact that you were very secretive about grace because i felt like i got the reason why towards the end. what i can't get over is, she says you made advances to her. this [bleep] pisses me off. dave: i'm working on that. lemonis: what do you mean you're working on that? dave: i have an attorney handling it. lemonis: dave, i gotta tell you, she is gonna light this place on fire. i mean, dave, this is bad. when she calls me and tells me you fired her,
it's like, come on, man. honestly, the biggest issue i have right now is that you have to respect people, and if these claims about you sexually harassing her, like, i don't want to be partners with somebody that does that. dave: you know what? it's fine. i think i came to that conclusion on my own, as well. lemonis: you came to what conclusion? dave: that this is not a good partnership. lemonis: if you came to that conclusion on your own, why didn't you call me? because you don't have respect for me either. nice meeting you, dave. good luck to you. i've spent about $100,000 on this business, but i hato walk away. i don't want to be in business with somebody that won't compromise, and while i don't know exactly what happened between him and grace, a federal agency will determine that. i've seen enough to know one thing -- this guy does not know how to treat people. at the end of the day, i saw his true colors, so i'm out of here.
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