And back them up with my own cash. Its not always pretty. First time you ever emptied out poop . But this is business. I do it to save jobs, and i do it to make money. This is the profit. La dogworks is an upscale dog boarding facility located in the heart of hollywood, california. Youre stinky dogs. Founded by Andrew Rosenthal in 2004, this 24hour full Service Center with 36 employees has everything from grooming to training. Sit. In a stateoftheart indoor dog park. This business generates 1. 3 million a year, but recently, their numbers have started to tumble. Sloppy business practices. I dont want to waste your time, and please dont waste mine. Together with lax management. Theres inventory missing . Well, you know, its hard to tell, because stuff slips through the cracks. Has driven down sales and piled up 150,000 of debt. You know, i could lose everything. If they dont make changes, this business will be forced to close its doors. Nearly 50 million households have dogs. Even in a bad economy, the pet industry is recessionproof. I want a piece of that. With the right changes, i can make la dogworks profitable and turn this into a multimillion dollar business in no time. So it comes up to 80. Thank you. Well see you next time. See you later, greg. Marcus. How are you, andrew . Very well. You have a nice place here. Thanks. So how many square feet is this whole thing, front to back . 7,500. We have boarding. Grooming. Daycare, training. Sit. Good boy. And we have our boutique. Can i get a tour . Absolutely so this is the retail and reception area. Is any of this stuff private label . You make any of this . No. [murmurs] purchased it. People buy it . Yes. Interesting. This is where we do our grooming. I go into the dog grooming room, and i notice that theres no signs on the outside of the building kind of detailing what goes on inside this facility, and i dont know how a customers supposed to know we do. Heres alyssa. How are you . Nice to meet you. Is that a customers dog . Yeah. How do you know how to price it . We price based on breed. Condition of the coat is always a factor. Depending on what they want us to do, if theres any special, like, requests. So do you kinda make it up . Pretty much. Okay. This is what i call the centerpiece of la dogworks. Its a 2,500square foot indoor dog park. This is for dogs to play. Very cool. And whos that . Jesse, who is director of animal care. How long has he been working here . Seven years. Hi, guys. Hi, george. This is marcus. To go in and see the thought and the creativity that andrew put into this. Its very wellthought out. Im very impressed. Hi, guys. We call it the dog deck. Its a safe haven. If you notice the bunk beds i createdi invented these. Im the first person to ever do this. You invented the bunk bed . For dogsfor use with dogs. [laughs] okay. Okay. Where are the sweets at . You dont have little sweets, individual sweets we dont do sweets. You dont. What we doits a twostory prefabricated kennel system. Hey, buddy. Some people have said that, you know, the chain link, you know, my dog was in a shelter and its gonna bring back bad memories. First of all, dogs dont think that way. It would nevera dog would never think that way. The first thing i thought of when i got my two cocker spaniels from a shelter. It has the same feel as a shelter. So maybe thats why people say it. Well, people. Not dogs. You build these rooms that look like human roomsyou think the dogs care about this . But its the marketing for the customer, not for the dog, right . I mean, its how i leave the dog and how i think about it. Okay. We do it our way, and it works really well. This is where we do training. Emily is our director of training. Are you emily . I am. Hey, im marcus, how are you . Marcus, a pleasure. Really nice to meet you. And zoe. This is zoe. Training is a very, very important part of la dogworks which fell off greatly. Why do you think that is . You know what, la dogworks isnt for everybody. How does a Customer Contact you if they have a complaint . Theres a website out there that people post business reviews, and weve had some negative stuff put up there, and andrew responds to it in his way. [laughs] what does in his way mean . So read it. You can read em. So heres an example of one. Ive been bringing my dog here for six months. One night, i came to pick him up. What i found was my pup wearing a muzzle, tied to a wall. My own dogi was horrified. Then your response was, after questioning the staff, i believe them and not you. You told the customer that. Yeah. Why . Yeah, why . Ii call it like it is. Andrew, stay the [bleep] off the internet, because youre. Hurting your business. I dont think im hurting my business at all, personally. Im a little worried about andrew so far. The vibe in the place isnt great. Ive seen some stuff online, and his interaction with me, quite frankly, isnt that openminded. So before i do a deal, i need to get a good understanding of these financials. Hi. How are you . Nice to meet you. What do you do here . I take care of the money. What do you have that i can look at . How bout a p l . Yes. This is april. Okay. And this is 2012. So in this month, you know how much revenue you did . 120 . 109. How much did you make on 109 . I have no idea. 78. Sales fell off greatly, and itand it just hasnt blossomed to where it needs to go. Grooming has been underperforming. Training has been lagging. Our top performer is definitely boarding. This year, boardings off quite a bit. What is your occupancy . What do you mean . Were gonna think about this just like a hotel number of beds, number of nights, the rate per night. Thats how a hotel does a budget. They manage their business on some level of occupancy. If all of the runs and all of the beds were occupied, you would have 1,830,000. What do you think your level of occupancy is as a percentage of your total . Do you know that number . No. You know that number . No. The maximum revenue that the kennel system could generate is about 1. 83 if every kennel was full every night at a state of rate. Last year, the kennels generated about 500,000. So very simply, i just divide 500,000, which is what they generated, into the amount that they should have generated, and i come up with an occupancy rate of 27 . Thats not good. So the way i look at this, andrew, is youre at the absolute worst possible level at 27 . Were off. Whats your biggest challenge in your job. When you wake up in the morning . Putting up with me. Dealing with you . Thats good. Are you not easy to deal with . No. How come . Because im very passionate about what i do, i know what i wanna see, i know how i want this place to run. And sometimes people tend to not follow the path and. Does it make you crazy . Yes. I dont walk around yelling every day. I walk around yelling when i need to. For me, if an employee doesnt work out, thats my failure, not theirs. If andrews telling me himself that hes not good with his employees, i have to imagine that it could be much worse. Hey, im marcus, how are you . Hey, nice to meet you. Rene, jesses brother. Oh, youre jesses brother. What do you do here . Animal care tech. Okay. You like it . Its good. What do you love about this place . Uh, just being with dogs, man. Theres something thats always gonna love you every time you come in whether its a bad day or a good day, you got a happy dog with you. How do you like working with andrew . Uh. It can be a little complicated to explain. Seems like he gets a little. Uh. You gotta work. Yeah. All right, man, well, good meeting you. Ill be seeing you around. Sounds good. All right, buddy. Hey, jesse, can i grab you for a minute, bud . Yeah. Jesses the park manager, and hes a critical staff member. I mean, hes running what i consider 50 of this business, the center of the business. So you and i havent had a chance to talk or anything. Do you wanna be here longterm . Actually, yeah, i love it here. I mean, i been here seven years now. I mean, i been probably the longest one here and worked every shift imaginable here. I mean, i know the place inside and out. How do you like working with andrew . I have to tell you, it seems like you work hard, youre positive. Oh, i mean, i have to be. You have to be. All right, thank you, buddy. Come on, sooks. Neil . Marcus. Marcus. Nice to meet you. Nice to meet you. What would you say would be the single biggest problem in the organization . It starts at the top. Its a really dynamite facility with a wellthought out system. But i dont think andrew is rational. Yeah, erin told me he flies off the handle. [snaps]. In a nanosecond. He has had several explosions in the past few weeks. Why would someone like you put up with stuff like that . I love the animals, but i have my limits. Mantoman. Im planning my exit. Are other people too . Yes. And why do you wanna leave . One of the biggest reasons is i got bit recently. Andrew literally got in my face and yelled at me and blamed me for it. In front of other employees . Yes. And thats the thing. I mean, everybody else responded like normal people would. And if it werent for that, im not a violent guy, but i would have probably left here in handcuffs and andrew in an ambulance. I thought we could maybe just go into the training room and talk. Now . Is that all right . Yeah, sure. I came here to do business, and instead of focusing on business, were focusing on him yelling. Yelling at employees could be the most inexcusable behavior of any kind, and if im gonna make a deal with this guy, theres no way that im gonna let andrew interact with his employees once im here. I looked at 600 businesses, and i like this concept. Im willing to write a check. Mmhmm. And fund what i think needs to happen. Mmhmm. Im not willing to do it i will not do itif youre managing the people. You dont really necessarily. Like people. I mean, thats a very broad statement, because i really am good with people, its youre not as good as you should be as a Business Owner with people. Maybe i dont handle my staff well, ifif thats what youre saying. Im saying that you dont handle your staff well or your customers as well as you should. Hes got a great concept here, and i think i can take this concept and really scale it across the country. But im gonna put a very tight leash on him, and im gonna keep him away from the customers and the employees. Why do you want la dogworks . cause i like the brand, and for me, its creating products and services under the la dogworks brand that are scalable and that are sold in mass retail, online, and opening up multiple locations. Were only gonna open up new locations when im confident that this location is functioning the way its supposed to be. Including the morale. Okay. Andrew, im gonna offer you 1 million. For. I want 50 of the business, you and i are gonna be equal partners. Im gonna control the operations of the business, and you will have no authority over the employees, and you will control the brand. But this is a business that i built, that i came up with, and now im gonna share that with somebody who i dont know. I dont know that i wanna sell 50 of my business for 1 million. Well, thats my best offer. You made 78. 17 last month. Mmhmm. Do you wanna take this business to the next level . Absolutely. Do you wanna be relieved of the burden of dealing with your people . Do you wanna open more stores . Mmhmm. Im offering you 1 million to do that. What i care about in this moment is you and a business that i think has a [bleep]load of potential. Mmhmm. Coming up. If youre happy, the customer will be happy. If youre unhappy, this place is out of business. I trusted people to manage. Thats not fair. What are you talking about . Dont even go there. Just do it just do it my mom washes the dishes. Before she puts them in the dishwasher. So what does the dishwasher do . Cascade platinum does the work for you, prewashing and removing stuckon foods, the first time. Wow, thats clean cascade platinum. My bladder leak underwear. Orried someone might see so, i switched. To always discreet boutique. Its shapehugging threads smooth out the back. So it fits better than depend. And no one notices. Always discreet. Sfx upbeat music a lot of clothes you normally take to the cleaners arent dirty dirty. They just need a quick refresh. Try new febreze clothing quick dry mist. It eliminates odors and refreshes lightlyworn clothing. Breathe happy febreze. La la la la la. Somand with the xfinityreen is stream app,reen. Which is free with your service, you can take a spin through on demand shows or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Keep what you watch with you. Download the Xfinity Stream app today. Because Xfinity Stream tv week is here. Watch shows like south park and the walking dead now through october 13th. What i care about in this moment is you and a business that i think has a [bleep]load of potential. Mmhmm. The 1 million offer that i make andrew isnt just to have andrew put a Million Dollars in his pocket. No way. The 1 million offer is very simple. Another 150,000 to put working capital in the business. And then 700,000 for any expansion opportunities. Those expansion opportunities are not gonna happen until this place is right. Im gonna want to have complete control for the next week so that i can get the employees in line, get their process in line, and tell them that you dont make any decisions. I make the decisions. If, at the end of this week, you cant do what i think youre supposed to do and this place doesnt function well, the deals off the table. I dont want ever to have to worry about this business suffering. Or not having enough money to pay my staff or not having enough money to pay rent. I wanna fix the business. I wanna transform parts of it that i think we can transform together. But i need to know that you can transform yourself. You gotta let me help you. [ahem]. Okay. Lets go to work. Were shaking on making this work for both of us. But i wanna be clear. Yes. If you mess with any of these employees, i will fire you. For those of you that have not met me, im marcus. I wanted everybody to know that andrew and i have come to a deal. Over the next week, youre going to see some significant changes, but the most important thing were gonna work on is management. Theres over 30 people working here, and they rely on this business to survive. So in that instance, theyll take abuse. Until somebody steps in and stops it. And im gonna be that person. The days of people being yelled at and demoralized and morale being this low are over. If youre happy, the customer will be happy. If youre unhappy, this place is out of business. Youre not gonna be out of business on my watch. We need to raise revenue in order to make money around here. Were gonna get very, very clear about the process. We have to increase occupancy in the kennels. We have to create a Loyalty Program that allows customers to be rewarded for using our different products and services. My other goal is i wanna open up more locations, but we cannot do that. We cannot do that unless this one is right. We have to expand the retail Product Selection by developing private label products. All of the staffing, morale, all of that is my job. Oh, sorry. You guys are gonna be reporting in to me. All right, lets get back to work. Okay . [energetic music] hey, im marcus. Stefano. Stefano, nice to meet you. Youre here to talk about the painting . Yeah. Im looking just to accent stuff. Right. That wall right there and this wall right here could be your accent wall, as well as that one right there. In order for me to move forward with my marketing plan, i wanna see any and everything that andrew has. So andrew wanted to take me back into the garage to show me his delivery vehicle. Oh, this is cool. This is the fetchmobile. They wrapped and the whole deal . Uhhuh. And look. And look, and look. Well, i mean no. Wait a minute. There is no well. Its a scratch. So a team member did that . Yeah. Carelessness. Its called an accident. I mean, andrew, you do understand that things happen, right . Oh, i understand, but not constantly. The question is do you have enough patience and tolerance to educate them, to train them, to forgive them . [scoffs] i have seen my employees whittle away at the integrity of la dogworks. By stupidity, by laziness. By notnot coming to work. You hire people. And thats where your problem starts. The personalities, the laziness, the bad work ethic all these variables drive me crazy. How many times do i have to ask you to do something . How many times do i have to ask you . Its like the water torture boom, boom, boom. Were working together here, were a team, were a hierarchy. Were just like the dogs. Whos the top dog, whos the alpha male . Me. You gotta do what i say when i say it. I mean, if i could fire the entire staff and start from scratch, i would do that too. So who wrecked the van . Well, neil. What do you do, just yell at him . I dont talk to neil, as a matter of fact. Why . You dont like him . I hate him. Hes a [bleep]. Hes aill give you 8. 50 or 9 worth of work and not a [bleep] penny more and not any more effort. Okay . Thats neil. When he got bit by the dog and was bleeding, were you concerned about him or the dog . Ha ha ha ha ha ha ha ha okay andrew, i gotta tell you your laugh scares the [bleep] out of me. Because its a farce. What neil did was reach down and push the dog back, at which point, the dog bit him. It sounds like he was just trying to stop the dog from running in the street. I was horrified. Whywhy would you do that . As andrews ranting and raving, neil walks in. Instead of andrew using some sort of decorum or discretion or shutting his mouth, he continues. He actually gets even more amped up. And then he comes up to my office yelling and screaming at me that i should have shown more compassion. But i think when that happens, i think what people are looking for is some level of sympathy. Thats notagain, my staff has to function a right way. I know. When neil started working here, and i told him to this to his facei had big hopes for him. When you say that to somebody, i had high hopes for you. Neil did not hear that from me until we had a huge argument in the kitchen when he got in my face with his wide eyes ii got in your face . You dont remember that . I dont remember it that way. Well, my back was to the door and you were standing here staring me down and i said, who the [bleep] do you think you are staring me down . [inhales] dont remember that . I remember it differently. Okay, well. In that instance where he pulled the dogdid you think neil was out of line . No, not out of line, just doing a stupid thing. He just did the wrong thing. A thing that nobody else would do. Have a good night. Okayno, nois there a problem . [dogs barking] hes gonna get fired anyway. Whys that . Because i [bleep] cant stand him. Hes insubordinate, hes obnoxious. Dont let him manipulate you, because im telling you, he is just worthless. Absolutely worthless. Coming up. You dont know the history of whats gone on here. The history is that the people that work here dont [bleep] want to do it anymore andrew, this is dr. Rivera. Shes worked with me in other companies in trying to help bring people together. 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