tv The Profit CNBC July 6, 2019 12:00am-1:00am EDT
lemonis: tcan i taste your pesto?.. lisa: it's delicious. lemonis: ...healthy meals, ready to eat and delivered right to your door. erik: we help a lot of people. lemonis: it's a service that's helped clients lose serious weight. -diana: she's lost 150 pounds. -lemonis: check it out! this florida company is on to something big. but their marketing campaign is offensive... erik: everybody come on over, meet the fuel food girls. it always tastes better when it's free. [ horn honks ] lemonis: ...the owner overbearing. erik: put a piece of basil on here. dress this up a little bit. sprinkle a little cinnamon on top. lemonis: if i can get the debt under control... erik: 'cause everybody's popping off with no money here. lemonis: ...as well as the owner... diana: you took us off the system. lemonis: you locked her out of the computer already? erik: i don't trust anything that goes on. lemonis: ...this company's bottom line could be in great shape.
channa: i owe my life to this company. literally. lemonis: that is the reason that i'm here. it's all about sun and perfect weather in west palm beach, florida, a place where locals are obsessed with health and fitness. it's also the home of fuel foods, a health-food delivery service run by its owner, erik leander. erik: very good. thank you. lemonis: erik is a former personal trainer who came up with a great idea. erik: george, the oven was good, boy. look. lemonis: prepare and deliver well-balanced, healthy meals to the local area. -erik: those are really good. -[ woman chuckles ] that's one of my favorite things you make. [ laughs ] lemonis: a lot of people want to eat better, but it's a heck of a lot easier when somebody else does the cooking for you. erik: free snacks. free food. no cost. try it out. you're gonna love it. fuelfood.com. lemonis: before i check out their facility, i came to watch them at a marketing event so i can get an idea how they promote their business. woman: you want to try a sample, too? all fresh, gourmet meals delivered right to your doorstep.
erik: i'm erik. i'm the owner. lemonis: i'm marcus. nice to meet you. erik: nice to meet you. it's kind of a slower event, but it'll work out pretty good. lemonis: small businesses rarely have the budgets to do big marketing campaigns. so taking over a corner where you can pass out samples and brochures and talk to customers about your product, it's a good idea. so, how many customers do you have in total? erik: we have a total of 300 customers we service. we have 3,000 in the system. lemonis: and how long does a typical customer stay? erik: about three months. lemonis: so, your typical customer stays three months? erik: yeah. now, i have customers for life. lemonis: i want to see you do your marketing thing. erik: yeah. 20 new clients this week. lemonis: let me see it. make it happen. erik: [ laughs ] so, chicken and spinach, or do you want gourmet, delivered health food? there's two servings to a snack for $7.50. diana: if there's any type of allergy, we can actually help you with that. erik: hello, dessert samples. key lime pie? lemonis: erik's idea of healthy eating is a great one. but the message he's sending out, not so good. erik: everybody come on over, meet the fuel food girls. lemonis: he's using fitness models in tight clothes to attract the younger guys.
but anybody else, especially the women, i'm not sure they're buying it. erik: we have some amazing egg-white oatmeal-crusted chicken nuggets. it always tastes better when it's free. [ horn honks ] lemonis: maybe it's because you're being assaulted by that air horn, or maybe it's erik. i mean, he's not the most approachable guy. -[ dog barks ] -erik: come here. come. lemonis: we were on a very busy street in west palm beach, but i didn't see them make a single sale. i'm heading over to see erik at fuel foods. i'm really interested to see how they actually make these meals, and how they deliver them to the customers. erik: how's your training going? you getting results? what are you doing? how's it going? lemonis: erik has made some very interesting design choices. erik: ohh, i like it. lemonis: i'm not exactly feeling health and wellness. erik: it's gonna be a fun five days. lemonis: five? it's gonna be more than five. -erik: hey, how you doing? -lemonis: how you doing? erik: i got to run. marcus just got here. lemonis: what i'm feeling is rough and rugged workout facility.
why did you start the business? erik: i started the business training clients. they weren't getting the results they should. so i said, "how can i make this work for them and them get the maximum results?" and i started cooking them food. lemonis: the type of clients that you have, are they professionals...? erik: higher-end clients. higher-end professionals. we do work with a lot of professional athletes. we service a little over 300 clients per week. i'm gonna show you the programs real quick. that'll better explain it. lemonis: okay. erik: well, basically, what you do is you go online. you would select from a program, whatever you'd like. these are the programs. and we deliver gourmet health food right to your door. lemonis: fuel foods offers various meal plans. if you buy 10 meals, the cost is $9.50 a meal. but if you pre-pay for 300 meals, it drops to $7.50 a meal. now, that's a big discount. but incentives like that help cash flow, and they build brand loyalty. erik: so, we don't have any real production going on today. we have packing going on today. we're packing for tomorrow's orders. they'll arrive tomorrow to the clients. lemonis: so, today's thursday. what days do you cook? erik: i'll show you here. lemonis: what do these different colors represent?
-erik: it's a packing day. -lemonis: okay. erik: so, we're packing on this day for delivery tomorrow. -lemonis: okay. -erik: same deal here. they're packing here for delivery on friday. lemonis: and when is the food prepared? erik: the menu changes twice a week. this is the food preparation here. lemonis: so, friday, saturday, sunday. erik: that's correct. lemonis: did you develop all these recipes? erik: i developed all the recipes. -lemonis: yourself? -erik: yeah, myself. lemonis: and you bring in chefs to kind of help you? erik: i've had a number of different chefs. i had one chef that tried to put turkey lunch meat in my food. he was lazy. i had chefs that were stealing from me, for getting kickbacks from food companies. lemonis: and how many chefs have you had? erik: i've had about seven. lemonis: i like this business, and i like what it does for people. but i've already seen some red flags. seven chefs in two years? not a good sign. erik: george, mop it up real quick in here. get it clean. ice is going in there. come on, come on. come on, you're making me look bad. lemonis: erik is very aggressive with his employees. and in order to run a successful business, you have to build it with your people. erik: what are you doing? come on. lemonis: you don't want to be barking orders at them. how long are people gonna stay around for that? how many meals do you make a day here? erik: we do about 6,000 meals per week.
like, we're sealing these right now. these are gonna go out right now. this was just cooked yesterday. lemonis: and where are most of your clients located? erik: mostly in the south florida area. you know, this is where we started. lemonis: we're in palm beach, right? erik: that's right. lemonis: how do you deliver to palm beach? erik: fedex. -lemonis: like, five miles away? -erik: that's correct. everything goes fedex. lemonis: i don't think a fresh-cooked meal should come in a box. that sounds more like a care package my mom sent me in college. erik: i pass delivery cost on to the customer. i charge the customer $20. lemonis: so, customer gets two deliveries a week. erik: two menus per week. lemonis: so, on a monthly basis, they're spending $160 on delivery expense. erik: not necessarily. it could be a little more. new york, for example, it's anywhere from $61 to $82. -lemonis: per shipment. -erik: right. lemonis: in order for fuel foods to be successful, they should be focusing on the business in their local market. shipping food thousands of miles away is a terrible idea. what's a typical customer? men? erik: we have more women that are interested in the program. it's about 65/35 women to men. but the men are gonna stay longer than the women. lemonis: why? erik: women are a little more emotional than rational, -as you know. -lemonis: women are what?
erik: more emotional than rational. and, you know, a female client is gonna have a lot more issues. they're gonna sit, they're gonna look at it, they're gonna go, "oh, i don't like the presentation on that one you sent me." lemonis: well, that's good feedback. erik: well, that's how i know that women are a little more finicky, a little pickier clients than the men, and i know we retain the men longer. lemonis: okay. it's not shocking to me that he's losing female clients left and right, from his brand image to the things that actually come out of his mouth. erik: hey, mom! this is my mom. lemonis: how are you? i'm marcus. lisa: nice to meet you. lemonis: what do you love most about being here? lisa: probably the people, their hearts, and the fact that i know i'm making a difference in their lives. erik: we help a lot of people. it feels good to have a business where you can go online and people call you like, "erik, i just dropped 30 pounds. i feel great. thank you so much." i get those calls all the time. lemonis: and so what are you doing today? can i see what you're doing? lisa: sure. come on. this is our ravioli, and it has sweet potatoes in it. i just needed to make some fresh pesto. lemonis: can i taste your pesto? lisa: of course you can.
erik: there you go. -lemonis: pesto's good. -erik: good. lemonis: the raviolis are not good. in any food business, presentation is the most important thing other than taste. and in this business, there is no presentation. there's no color. the food looks gray. it looks terrible. so, who's the rest of the staff up here? erik: this is jordan. lemonis: jordan, nice to meet you. i'm gonna chat with him without you for a little bit. erik: absolutely. yeah. come on, baby. lemonis: i wanted to spend a little time with you and kind of understand. what is your job today here? jordan: i came on in the past couple months to implement new sales strategies. really, whatever i can to bring money in the front door. lemonis: then, so, for every 100 customers that you bring on that are new, what's the retention look like? jordan: from when i've come on, it's about three weeks. lemonis: well, that's not long-term. jordan: exactly. what i've been trying to figure out is why they're not staying. lemonis: there's no mystery here. people aren't staying because the food is subpar. fix the product and improve it, people will sign up for more.
-i'm marcus, by the way. -diana: i'm diana. lemonis: diana, nice to meet you. and what do you do here? diana: sales. lemonis: so, how long have you been here? diana: almost two years now. i started, with erik, managing the company, so i've done it all. i'm usually here monday through sunday. lemonis: monday through sunday? -that's seven days a week. -diana: pretty much. lemonis: why are you so committed to it? diana: i cared for my clients. i just -- i like to be there for them. lemonis: yeah. is there also a call center? diana: the call center's right next door. yeah. -lemonis: in here? -diana: yes. lemonis: hey, ladies. i'm marcus. diana: and ashley... lemonis: ashley, nice to meet you. diana: ...and channa. lemonis: hi, channa. how are you? diana: channa's one of our biggest testimonials. she came in over 400 pounds. -she's lost 150 pounds. -lemonis: check it out! channa: yeah. [ laughs ] -lemonis: that's awesome. -channa: yeah. lemonis: would you say that erik helped you use the weight? channa: diana, i would say. lemonis: you did. diana: i worked with her for about eight months. channa: she's the reason i stayed here. lemonis: why? 'cause it's kind of crazy without her? channa: yeah. she runs the place. lemonis: there are some major fundamental problems with fuel foods. but when i meet someone like channa
and i see the impact that it's had on her life, i see an opportunity to not only make money, but help people. -nice meeting you. -ashley: pleasure meeting you. lemonis: be good. keep up the good work. channa: yeah. erik: here you go. lemonis: and so this is basically an un-audited summary -of the financials? -erik: that's correct. lemonis: okay. your total revenue was $1,449,000 last year. erik: yeah. lemonis: in the month of january, you did $250,000 worth of business. if i looked at last january, how different would last january be in total revenue? erik: we did $50,000. -lemonis: you did $50,000? -erik: yeah. lemonis: year over year, this business has had explosive growth, like 500% for the month of january. things are obviously heading in the right direction. erik: i got the name out. you know, i pushed the product. i had an investment. the investment allowed me to go out and promote the product. lemonis: oh, you had an investment... -erik: that's correct. -lemonis: ...last year? erik: yeah. -lemonis: and what was that? -erik: $1.2 million. -lemonis: how much? -erik: $1.2 million. lemonis: somebody invested $1.2 million? erik: that's correct. lemonis: and, so, last year, you lost $846,000.
so most of the money that came in, you lost? erik: that's correct. lemonis: where'd all the cash go? erik: um... it was lost through operations. lemonis: which is $846,000. erik: i bought the truck, which is still an asset. lemonis: and so that's $154,000 on the balance sheet. -erik: that's correct. -lemonis: like a cargo van? erik: nah, the truck out front. the monster truck. for promotion. lemonis: $154,000 for one truck? erik: that's correct. it's a $500,000 truck. i got it under cost. i bought everything in the kitchen. i bought all the ovens. i bought the grill. bought the freezer. lemonis: and so all that was $141,000? erik: that's correct. the kitchen build-up might be in there, also. kitchen was in shambles when i came in. i got the rent -- lemonis: that's leasehold improvements of $109,000. erik: yeah. lemonis: and so all $1.2 million is gone. -erik: there you go. -lemonis: and there it is. erik: yep. lemonis: and then, in addition to that, it looks like there are some loans on the books. erik: that's correct. lemonis: huntley was $20,000. kalaydjian, $10,000. -erik: that's correct. -lemonis: snap advances... erik: basically what it is, is i borrowed $178,000.
lemonis: and where's that money now? erik: spent. lemonis: well, remember the math that we did a minute ago? erik: that's correct. lemonis: $1.2 million came in. -$850,000 lost -- -erik: that was last year. that's this year. this year that those loans are on the books. it went towards salaries that were too high and advertising. our website was 70 grand. i don't do all the numbers. i got the numbers from a c.f.o. which, i paid him to do them, which is where part of this money went. what i do is try to keep the doors open every day, try to keep everybody paid here, and do everything i can do to make the business successful. lemonis: this is a tough one for me, because all i see is a monster truck and not much else. but the business has had incredible growth. it has plenty of opportunity. so, how many shareholders are there? erik: there's six. -lemonis: six shareholders? -erik: yeah, six. lemonis: and, so, where's that on here? erik: maybe you're missing a page. should be there. lemonis: i originally thought erik was the owner. but i'm finding out that he's got a lot of other shareholders, and i can't do a deal until i understand who they are and what their stakes are.
you mind if i study this for a little bit? erik: it's all yours. i think i have a better copy for you. lemonis: okay. let me study these, okay? -how you doing, buddy? -erik: good afternoon. lemonis: good to see you. did you bring a list of shareholders? erik: yeah, i couldn't download all of the individual shareholder agreements. lemonis: so, you don't have the shareholder agreement? erik: not yet. -lemonis: not yet, huh? -erik: not yet. lemonis: i mean, look, there's no doubt that your product has interest in the marketplace. but you struggle to hold onto employees and customers. so that's a concern for me. erik: okay. lemonis: and so the fear that i have is that i don't know how willing you are to change. that's what scares me the most. erik: i'm willing. you know, i'm willing to change. -i'm not set in my ways. -lemonis: okay. i take food seriously, and i take money seriously. erik: yeah. lemonis: just because they both have impacted my life. so, any time i can find a business that is trying to solve a problem for people, and it can employ people and make money at the same time...
erik: it's a beautiful thing. lemonis: it's an interesting opportunity. -i'm willing to make an offer. -erik: all right. lemonis: and the offer that i'm willing to make will solve two problems. it will pay off all of the debt, it's about 200 grand, and it'll put $100,000 of working capital in the business. and so you'll never miss a payroll. and so that working capital really solves employee issues, labor issues, rent issues. so, i'm willing to offer $300,000 for 51% of the business. erik: 51%? you're killing me with the 51%. you want to be in full control. lemonis: i brought you to a focus group. we want to hear from real people. man: the way it's presented, it's a little off-putting. woman #2: it seems less fresh and gourmet. woman #3: total disconnect.
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lemonis: so, i'm willing to offer $300,000 for 51% of the business. erik: 51%? you're killing me with the 51%. you want to be in full control. lemonis: here's why i want to be in control. because i believe that if i could put my structure and my process with your passion, both of us will make money. the only other thing, there are some other shareholders, right? erik: that's correct. lemonis: and so i want to make sure that we get everybody to consent. i want them to be in favor of it, as well.
erik: all right. sounds good. lemonis: any investor who owns shares in this company is going to have to sign off on a consent because their shares are gonna be diluted with my investment. this means that if there's an investor today that owns 10%, once my deal is finalized, they'll own 4.9%. basically, my investment will dilute everybody in half. so, everybody consents, we're good to go. erik: they'll be happy to consent, yeah. lemonis: and i want to make sure that you understand this. i'm gonna be 100% in charge. -we got a deal? -erik: yeah. lemonis: okay, my man. and, so, you can't cash this check until we get the other shareholders' consents, okay? erik: sure. -cool. thank you. -lemonis: let's go to work. erik: all right. sounds good to me. lemonis: good morning.
how are you? good. we're gonna get everybody together in the kitchen. -good morning. -together: good morning. lemonis: my name is marcus lemonis, and i invest in small businesses. earlier, erik and i made a deal, for me to invest $300,000 for 51% of the business. which means, effective right now, i'm 100% in charge. we're gonna work on logistics. we're gonna determine if shipping fedex actually makes sense. 'cause to me, i'm not eating food out of a box. and we're gonna better understand how we market to acquire new customers, and how we market to retain the ones we have. would you say that diana's the general manager? -man #2: yes. -erik: i'm the general manager. they're gonna "yes" anything you say. mike: somebody is not here and i have a problem with something, -i go to diana. -lemonis: that's the answer. erik: no, but i'm just saying, general manager, right now, general manages everything -- kitchen, front end, back end, everyt-- it's me. period. lemonis: erik talks over everybody, and he says he does everything. but the only thing he really does is dominate everyone.
just to be clear, going forward, when erik isn't here, diana is in charge of everything. we need to be a "change your life" company. it's kind of what i call business with purpose. how much weight did you lose on the program? channa: 150. lemonis: 150 pounds. that's a big deal. i take it very seriously because i had the same struggles. i suffered an eating disorder. and i believe that healthy food can save people's lives. channa: this food right here has just, like, been the best thing that's ever happened to me. i owe my life to this company. literally. man #2: oh, there you go. lemonis: that is the reason that i'm here. channa: really? lemonis: let's go to work. come on. today we're meeting at a focus-group test center. i've asked erik to bring along some of his food and some of his marketing materials. -hello. -diana: hi. lemonis: but i didn't tell him what it was for, because i didn't want him to adjust or leave out anything.
-you know where you're at? -erik: i have no idea. lemonis: i've brought you to a focus group. what we want to do is we want to hear from real people that are really our consumers and let them give us feedback on what they like and what they don't like. and i asked you to bring the bags of food 'cause we're gonna do a tasting, as well. -erik: sounds good to me. -lemonis: any questions? jordan: no. i googled it when we came out. i was thinking that you were gonna do that. lemonis: let's head in. ladies first, please. diana: thank you. lemonis: a focus group is a controlled environment that presents information in a non-biased way. i already know that things could be improved in the customer-acquisition side of fuel foods, but i want erik to see and hear it for himself. kaylor: so, this is introducing fuel food, a unique prepared-meal delivery program. meals are brought to your home or office via fedex, ready for you to heat and eat. woman: all right. man: i think it sounds generic. and you got a gas hose with a big bicep. woman #4: i feel like the arm is appealing to that group of people that are gym rats.
kaylor: how do you feel about fedex versus a local delivery? woman #2: thinking of these fedex, pre-packaged type, frozen tv dinners. seems less fresh and gourmet. kaylor: i'd like to show you some current video clips that are being used for promotion. lemonis: erik has put together a handful of videos that are supposed to drum up business. kaylor: think about, if this company were trying to promote a service, are they trying in the right way to reach you? announcer: reason number 29 to change your lifestyle with fuel food. fuel food gives you the fuel you need to burn fat and build muscle without sacrificing taste. erik: [ laughs ] announcer: choose from over 30 delicious... lemonis: did you see the marketing campaign? this ad is offensive, and it should be nowhere near a healthy-food delivery-service business. woman #3: total disconnect. too sexy. aimed just towards men. and terrible. like, almost pornographic.
woman #5: nothing i saw conveyed reality. erik: i thought they were funny. that's why i put them up there. diana: it's pretty embarrassing. lemonis: do you think they're funny, jordan? jordan: i don't. lemonis: it's offensive, actually. see, if i would've seen that before i came, i wouldn't have come. jordan: that's the first time i saw it, as well. -erik: you never saw it. -jordan: no. erik: so that means you never went on our youtube channel when you went into the company. and you're in charge of our social media and our instagram, but you never saw that. jordan: i have nothing to do with social media. erik: you work for the company. you're in a digital era. this is what you do. and you never saw our youtube? jordan: i didn't know. i've never been on our youtube. erik: you look at everything. you knew where we were coming today. you knew we were coming here to a focus group. you went online, you poked it in. "marcus, we're coming to a focus group." but you didn't think of your job enough at fuel food to look at our youtube and say, "you know what, erik, i don't think this is a good video. maybe we should take this down."
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erik: you knew we were coming here to a focus group. you went online, you poked it in. "marcus, we're coming to a focus group." but you didn't think of your job enough at fuel food to go on our youtube and say, "you know what, erik, i don't think this is a good video. maybe we should take this down." and i would've said, "you know what, jordan, you're correct. let's take this down." jordan: in hindsight, i should've been accountable to do that. absolutely. erik: all right. that's it. that's all i was wondering. lemonis: while jordan's job is to increase sales, it doesn't look like he's been given the authority to actually make the changes to the marketing materials. it also doesn't give erik the right to talk to him this way, especially in front of all of us. it's totally unacceptable. kaylor: okay. man: the way it's presented, it was a little off-putting. woman #6: i expected it to be herb-y or something. lemonis: we got great feedback on things that are very easy to change, like improving the flavor through herbs and spices, or fixing the presentation. we also have to deal with the delivery service and the marketing plan.
jordan, the homework assignment that i have for you is to take the current database of active users and put them on a map of the united states. i want to see who they are by gender and where they live. once we establish where the bulk of the market is actually coming from, then we'll determine if fedex is the best option. let's go kick ass. jordan: sounds like a plan to me. lemonis: does erik listen to anybody? -no. -diana: no. lemonis: i am very worried about the morale at fuel foods. and i wanted to spend some time with diana so she could give me some insight about what's happening in the company. diana: it's how it is and how he says it, and that's just the way it goes. "why the 'f' is this going on? why the 'f' this and that," you know. lemonis: don't people get pissed off? diana: i think the girls and everybody in the office feels like they can't talk to him directly because aggression. lemonis: well, that's not professional. diana: exactly.
lemonis: hey, guys. so, what i want to do in this exercise is make a meal that we think has flavor, has great presentation. that's the most important thing for me. their food is good. but what we learned in the focus group is that their presentation has a ton of room for improvement. today i'm gonna work with the cooks and see if we can make some easy adjustments. give me a little bit of black pepper. give me a little bit of celery seed. give me a little bit of parsley, a little bit of basil, and a little bit of thyme. what else is gonna be served with that? israel: with broccoli. lemonis: are we steaming this? israel: we don't have a steamer. lemonis: you don't have a steamer? israel: no. lemonis: so you're boiling and taking the nutrients out of it? get me a strainer. -do you have a top for this? -israel: no, we don't. lemonis: seems like we're missing a lot of basic kitchen equipment. mike: oh, yeah, for sure. lemonis: you don't have a rice cooker. -mike: no, man. -lemonis: quinoa cooker. -mike: nope. -lemonis: a regular steamer? mike: we talked about it. but so did the previous chef, you know what i mean? but the money is always the issue, so, you know, why waste our time? -lemonis: well, sell the truck. -[ both laugh ]
it's very odd to me that over $1 million was invested into this business and they're cooking with jerry-rigged equipment. where did the money go? it's clearly not here in the kitchen where we needed it the most. look at how much brighter... -mike: oh, yeah. -lemonis: ...cleaner it looks. presentation's way better. i like the way you're cutting it 'cause i can see the seasoning. -paprika's my friend. -israel: adds color to it. lemonis: put your vegetables in. look at the difference. even though this kitchen doesn't have what it needs to properly function, we were able to use what does have to dramatically improve the product. so, all we're talking about is how to elevate our game from a presentation standpoint. -does that look better? -erik: sure. i say constantly, "put a piece of basil on here. dress this up a little bit. sprinkle a little cinnamon on top." lemonis: but you haven't been doing it. erik: [ stammers ] lemonis: you got to inspect what you expect. erik: absolutely. -lemonis: okay. -erik: good. lemonis: hey, i wanted to go over that heat map -we talked about yesterday. -jordan: yeah, absolutely.
lemonis: jordan's first marketing assignment was to do a heat map, a geographic map that plots where all of our customers are all over the country, and it shows the concentration of where they're coming from. he managed to get it started by telling me where the customers are located, but he didn't have even half the information i was looking for. well, there's 328 people... jordan: yes. lemonis: ...but i don't know if this is 1 or 100 people. if there's 1 here and 300 here, that's gonna change a lot of stuff. do you have the states in there? jordan: i do. lemonis: how many women in colorado? jordan: so, there's two, and they are both male. -lemonis: okay. so zero. -jordan: yeah. lemonis: take me to california. jordan: three. lemonis: three female. jordan: yep. lemonis: how many are in las vegas? -jordan: one. -lemonis: one female. jordan: yeah. -lemonis: what is that, phoenix? -jordan: one. -lemonis: one female? -jordan: yeah. erik: i'll tell you where our orders are is right here. i mean, it's obvious. the south florida area. lemonis: the bulk of fuel food's customers are located right here in south florida, but they're still getting their food via fedex.
i want you to take this office... jordan: okay. lemonis: ...and build a 100-mile radius around it. jordan: okay. lemonis: our marketing campaign is gonna be based on a basic trade area. a basic trade area is a small area where a company does business. a business should always understand and perfect their basic trade area before it goes out and works on somebody else's area of influence. 100 miles is the basic trade area. jordan: no, i agree wholeheartedly. i've been trying to figure out ways to get these data points, you know, since day one. erik: all he's saying is just be specific in your data. and we're wasting money. jordan: i've pulled all of these reports to put into lists to get these calls made. erik: get the right data so we can make the right decisions. we're just stabbing in the dark. jordan: but they shouldn't be stabbing in the dark -- erik: but that's that we're doing 'cause we don't know the data. that's the problem. lemonis: okay. erik continues to lead by intimidation. all right. thanks, guys. and, candidly, it's not gonna work anymore. diana, how you doing? i was surprised when jordan made one comment, and then all of a sudden erik went like that.
diana: it's normal. -lemonis: is that what happens? -diana: it's normal. lemonis: do you feel like it would be good to get the group together and -- maybe sitting down, or in a more casual setting... diana: i would say. lemonis: ...where they could talk about how they really feel? diana: let everybody express the way it needs to be expressed. i think they hold back a lot. lemonis: let's get everybody together. -diana: okay. -lemonis: okay. hey, guys, let's get everybody together. let's come on up front. it's obvious to me that we need to get everybody in a room together and figure out the people side of this business. so, i don't really feel, today, that you guys feel like you're in a safe and secure environment to give your opinion without recourse. diana: it's tension. israel: that's what i was thinking. same thing. diana: yeah, tension. lemonis: but i think it would be good, as we move forward as a group, for them to be able to talk about the things that they may have on their mind. diana: yeah, because it's always everybody else's fault. the way he says things, it does bother a lot of people that work here. erik: you have something to say to me about me? bring it on. let's go. channa: [ coughs ]
diana: i work endless hours for you. erik: you make more money than anybody in this company. diana: i have to, because i'm sitting here selling for you. i've given you everything. well you can always i thibring it backy it. within seven days for a full refund for any reason. like if i become allergic to yellow? sure. or my turtle hates it? okay. what if i become a professional power walker? seems like a strange reason to return a car, but you can. what if the glove box doesn't fit my gloves? well you could try that before you buy it. what if the car and i just don't get along? whatever the reason, carmax will give you a full refund. that is good to know because reggie is very opinionated. i'm sure he is. has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good,
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erik: sure. alex: and then maybe you can criticize it or not. but, you know, at least hear the idea. erik: what do we got? where's it at? give me one. give me one. alex: what do you mean, give you one? erik: give me one. give me one of your ideas. you've got lots of ideas. give me an idea. alex: well, i don't have a list right now, but i share -- okay. erik: give me something off the top of your head. lemonis: the minute he said that, you were like, "okay, what do you got?" i think all he was saying is we would like you to be more open-minded so that we can approach you with ideas. erik: i love input. i've got no problem with anybody's input. i don't know where you guys come from that i got a problem with anybody's input ever, 'cause i -- -lemonis: well, i mean -- -erik: i have no problem. woman #8: i had two bounced checks. when i need to pay my bills, you know, i'm really looking forward to that check. and i can't pay bills on promises. erik: do you understand that his $300,000 check is not here? so, everybody's popping off with no money here. -lemonis: but i gave you -- -erik: it's not in my pocket. lemonis: well, it's not going in your pocket 'cause you'll buy another $150,000 truck that we don't need. fuel foods is doing plenty of business. in january, it did $250,000. and the fact that erik is trying to deflect the blame on me for him not being able to make payroll, it's really pissing me off.
and it's not in the business why? tell everybody why it's not in the business. what has to happen for me to let you cash that check? i told you. erik: the okay from the board. lemonis: the okay from the other shareholders. erik: correct. lemonis: so, just so everybody's super clear, the reason that i did not let you cash my check is because i want to make sure that the paperwork is legit. 'cause so far, [bleep] isn't legit around here. erik has my check, but i still don't have the signed paperwork back. and i'm here spending a lot of time with no guarantees. the deal you and i have puts me 51% in charge. erik: right. you're in charge. lemonis: if you talk to people the way you're talking to them, you'll be fired. are we totally clear? -erik: sure. -lemonis: okay. it can't always be everybody else's fault. erik: absolutely not. so, if we could go around the room and i could apologize to each person individually, i'd be happy to if you feel there's anything i've ever done that's been inappropriate or not anything you think should've been done. sorry if you feel like you can't approach me. i'm sorry if you feel i've dominated you at a time. i'm sorry if i've ever made you feel bad. you know, i'm sorry. so, i'll try in the future to communicate my will better --
lemonis: can we start right now? erik: absolutely. lemonis: all right, guy. just take it down a notch. erik: i'm gonna meet with each one of you individually, and you can express your concerns to me. -i look forward to it. -lemonis: wow. diana: thank you. lemonis: as part of our new plan to improve customer acquisition and retention, i've brought in new logos for all of us to look at. you like this one? channa: it's pretty. it's not so much with the big, bold colors. it looks simple, actually. lemonis: the right combination of presentation, packaging, and branding is not only gonna help us keep new customers, but attract more. it appeals to women. does that appeal to you? channa: yeah. it looks good. lemonis: good. excellent. -mike. how are you, buddy? -mike: hi. how are you, marcus? lemonis: appreciate you meeting me here. mike: pleasure. lemonis: i want to now improve the process in the kitchen and get them the right tools to be successful. so i've asked chef mike to meet me at the kitchen-supply store.
i know that i want to get a large rice cooker. mike: that's a 55-cup. lemonis: three enough? mike: probably another three, actually. lemonis: so, let's get two of these and the pot that goes with it. if there's one thing i can do to help them in the kitchen, it's getting them the equipment they need. and they need a lot of it. so, what's going on over at fuel? mike: um... lemonis: anything positive happening? mike: no. lemonis: what do you mean? mike: from what i understand, i'm not sure if diana is still there. i'm not sure if alex is still there. lemonis: i'm sorry? why did they leave? mike: money issues, or something like that. -lemonis: oh, no. -mike: so... lemonis: feels very toxic right now. mike: yeah. i mean, that's... lemonis: this company is disintegrating from the inside out. i'm still invested in the success of this business. but i'm not gonna lie, i'm worried about these employee issues. so, how much is the total?
man #3: we're at $12,365.90. lemonis: erik's got to get his head out of his ass. -all right, i'll see you there. -mike: okay. [ ringing ] lemonis: oh, hey, diana. it's marcus. well, i just talked to chef mike, and he told me that you walked out. what happened? he told you he's cutting your pay? jesus. and who else left? oh, my gosh. this is incredibly disappointing. and this is no way to run a business.
i need to talk to erik before he alienates everybody. can you meet me over at fuel? diana: okay. lemonis: all right. keep your head up. if your business is in trouble and you need my help, log on to... -keith used to be great to road-trip with. but since he bought his house... are you going 45? -uh, yes. 55 is a suggestion. -...it's kind of like driving with his dad. -what a sign, huh? terry, can you take a selfie of me?
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(danny)'s voice) of course you don'te because you didn't!? your job isn't doing hard work... ...it's making them do hard work... ...and getting paid for it. (vo) snap and sort your expenses to save over $4,600 at tax time. quickbooks. backing you. erik: no, we don't ever leave anything un-plated. go ahead and handle that. nice to see you. thank you for the equipment. appreciate it.
lemonis: you got it. absolutely. i just gave this guy over $10,000 of equipment. i just gave it to him. and he's as appreciative as if i'd just dropped off his dry cleaning. by the way, i talked to diana. erik: yeah. lemonis: is diana still working here? erik: i have no idea. she didn't show up today. lemonis: so, i asked her to come so you guys can work it out. erik: you know, we saw the disdain, we saw the problems the other day in the meeting. i told her that we're gonna have to make some pay cuts until the money comes in. lemonis: everybody took a pay cut? erik: not everybody, no. just the high-paid individuals. lemonis: the fact that erik is cutting the wage of his most valuable employees is ridiculous to me. this business is pulling in $250,000 a month. i need to find out what's going on here because, honestly, is this someone to be in business with? so, what happened there? erik: well, you know, i didn't know if there was an investment coming or not. lemonis: you didn't know if there was an investment coming? erik: yeah, i wasn't sure. yeah. i haven't gotten a check yet. lemonis: well, i told you why you don't have a check. you've go to get all the consents from all the shareholders so that everybody feels good about what we're doing. erik: there was a receiver issue with one of our shareholders.
lemonis: a receiver issue? i don't -- i don't understand. do you have the list of the shareholders? erik: yeah. lemonis: oh, my gosh. that's a very big deal. receivership is the legal process where a person or company's assets are turned over to the court or to a custodian for hold because that person or company cannot meet its financial obligations. those assets are usually liquidated. once they're sold, the money goes to the creditors. erik: all right. i got it right here. lemonis: when you say a receiver issue, that doesn't make any sense. erik: i mean the receiver came and took control of the shares. his assets were taken. lemonis: why were his assets taken? erik: i don't know. i'm not sure. yeah, the "pscs holdings," that's the receiver issue, there. lemonis: so, why is it in receivership? erik: they took the shares. lemonis: so, is this somebody that has 2% or 3% or...? erik: no, this guy's got 46%. lemonis: i'm sorry? erik: 46%. lemonis: but who is the investor? erik: that was paul schumack. lemonis: is he local? erik: no. i don't know where the guy is. i don't talk to him. lemonis: the second largest shareholder of your company... erik: it's not my concern. lemonis: ...you no longer talk to.
you're not wondering what happened? erik: no. i know something happened to him. i don't know the details of the transaction. lemonis: well, it would be public records. can we look it up? erik: absolutely. lemonis: all i typed in was "paul schumack, florida." holy [bleep] this is from the u.s. securities and exchange commission. erik: i see who it's from. lemonis: "criminal authorities halt florida-based ponzi scheme targeting investors through youtube videos"? you didn't tell me that these people -- erik: i don't understand why you're so distraught. lemonis: you never told me that you had a partnership with a guy who is being accused of a ponzi scheme. erik: be careful when you say partnership. this guy bought shares -- lemonis: he gave you 100% of the money. the fact that the securities and exchange commission is involved in controlling 46% of this company's shares... uh, this is a very big deal. i am really relieved that my check didn't get cashed and that the deal isn't finalized. because now the government's involved, and they can decide that they want to liquidate
the entire thing to give back the money to people that were affected by this alleged ponzi scheme. i mean, i don't want any part of this. and the fact that fuel foods and this guy has a connection is a problem. erik: i changed this guy's life. i helped him transform his physique -- lemonis: i thought you didn't know him. erik: what are you talking about? lemonis: you said you didn't know him. erik: what, somebody just comes up and gives you $1.2 million? i said i didn't know what happened to him or what he did. i told you i was not aware of that because i did not care. lemonis: in business, all you have is your reputation. even if you lose all of your money. and for me to have my name and my reputation associated with somebody that's accused of a ponzi scheme, allegedly taking money from hardworking people, well, that's not gonna happen. but what i can't believe is that erik doesn't think this is a big deal. erik: how would i ever know what this guy's doing? i got this guy -- lemonis: well, i'm sure you have google. you have a computer, right? do you have google? erik: let me explain to you very quickly. lemonis: so, the largest shareholder comes to the company... erik: i helped this individual. he wanted to give me money. he wanted to invest in the company. he believed in my idea. i had a full background check. i had him checked out. i had a whole stock plan.
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i don't care what the guy did. it's got nothing to do with me. my lawyer said, "don't talk to him. he's doing whatever he's doing." i said, "good." i don't need to talk to him, i go back to work. i think you see what i do around here. i think you see i don't have time to go research things that don't matter to me. lemonis: well, you should care -- erik: the thing that matters to me is where the shares are now, and what i can do in the future to improve my situation, improve the lives of people around here. and that's all i do. that's where i'm at. lemonis: well, speaking of the people around here, i want to see if diana's here. this business could get shut down for any number of reasons. but what i feel bad about is the staff. especially people like diana, who are getting pushed out of here by erik's kind of hard-nosed, hard-knuckle tactics. diana told me that he cut her pay, and he cut alex's pay, and she feels like it was maybe retaliation for the meeting the other day. channa: that's what everybody feels like. i'm not gonna lie, it scares me a little bit. i mean, maybe they can afford to lose their job, but i can't. -lemonis: hello. -diana: how are you? lemonis: if it wasn't for these employees, i would have walked out of here a while ago. but i'm the one that called diana down here,
so i need to help her confront erik. you know, i talked to you earlier, and, you know, you were disappointed with what happened. and you weren't sure whether you were here or not here, and frustrated. so i thought we could just talk about it, because it smells like retaliation to me. -you cut alex. -erik: right. lemonis: you cut diana. erik: not at all. not at all. diana: i think it is retaliation. i work endless hours for you. erik: diana, you make more money than anybody in this company. diana: erik, it's based on performance. erik: you make over $1,000 every week. diana: why? why? erik: you make over $1,000 every week, do you not? diana: i want you to say why. -erik: do you not? -diana: i do, but why? because it's based on performance, erik. erik: you make more money than anybody else in this company. diana: i have to, because i'm sitting here selling for you, erik, $20,000 a day. i've given you everything. i even take away from my home to spend my time here and give it to you. erik: sure. lemonis: here's the thing. pay is the most important thing to people. erik: that's why we got to work. lemonis: i don't think you respect your employees. diana: no. lemonis: and i don't think you respect money.
do you think this could be worked out, diana, for you to work here? diana: [ sighs ] i mean, i love what i do. and i love my clients. i love the people that i work for. but you took us off the system. you already blocked us from all the passwords. erik: i don't know what intentions you're doing. you no-call, no-show on me. diana: ay, erik. i didn't quit. i didn't give you a letter of resignation. erik: a no-call, no-show, what is that? lemonis: you locked her out of the computer already? erik: i changed my passwords. absolutely. lemonis: oh, erik. diana: you took alex out of godaddy. erik: when people leave, i don't trust anything that goes on. lemonis: erik... erik: people leave, i don't trust anything. i'm gonna lock everything down. every day. every hour of every day, i'm gonna lock it down. lemonis: this is about relationships and trust. if you and i are in business together and we have a disagreement, what i should expect is for you to lock me out. erik: not necessarily. lemonis: you and i can't do business for that reason. erik: if you have the key to everything. you can't just make a handshake deal and then walk out and say you can't do business. -you're going back on your deal? -lemonis: i'm not gonna do -- erik: you're going back on your deal? lemonis: you don't have the ability to honor that deal. erik: you're going back on your handshake deal? lemonis: you don't have the ability -- erik: you're going back on your handshake deal. lemonis: erik, you don't have the a-- erik: i do have the ability.
-i do have the ability. -lemonis: no problem. erik: why would i shake your hand? it means nothing. your handshake means nothing, marcus. lemonis: okay, erik. erik: why would i shake your hand when it means nothing? lemonis: good luck to you. erik: your handshake means nothing. we had a handshake deal. lemonis: listen, you're an intimidating guy. erik: you're telling me your handshake means something? lemonis: you're not going to intimidate me like you're intimidating diana. erik: i'm not trying to intimidate you. i don't intimidate anybody. you're telling me we sat down at that table, we made a handshake deal, and it means nothing? lemonis: it means nothing because you didn't disclose. erik: now i'm gonna walk out on you. now i'm gonna walk out on you. -lemonis: okay. -diana: i'm leaving. too. -erik: i'm gonna pull the marcus lemonis. -lemonis: oh, fantastic. erik: i'm gonna pull the lemonis. -i'm gonna walk out on you. -lemonis: goodbye, erik. erik: i'm gonna walk out on you. lemonis: i feel like i've dodged a bullet. and while i leave here disappointed that i'm not gonna be able to work with some of the folks, this would've turned out to be an absolute disaster. diana: yeah, i'm not staying. not in this place. lemonis: and if erik didn't think that his primary investor being involved in a ponzi scheme was a big deal, i don't know what other surprises he has in store for me. i like the idea of a healthy-food delivery business.
just not this one with this guy. . >> tonight on the profit... >> marcus, nice to meet you. >> i go inside jacob maarse, a high-end florist and gift shop in pasadena, california that hasn't earned a profit since its founder died in 2010. how much money will this business lose this year? >> close to 200,000. >> sloppy business practices... do you have an inventory system? >> no. >> together with lax management has driven down sales and piled up debt. so are we going the right way? >> i believe so. >> we need to know where we're going. if they don't make changes, this 47-year-old family business will be forced to close its doors. this business is a total mess. i'm fighting against time to light a fire under these people... this is the thing that will help us go from the red to the black in one month. before this business crumbles and dozensf