Travis, allison, pete, and myself, well be partners in this business. And make some painful decisions. You want me to work a deal out with the landlord so it lets parlour off the hook . Paul yeah. Lemonis great. No. Because if i dont, both farrells and my money will be gone. Forever. My name is marcus lemonis, and i risk my own money to save struggling businesses. Were not going to wake up every morning wondering if we have a job. Were going to wake up every morning wondering how many jobs we have to do. Its not always pretty. Everything is going to change. Everything. But i do it to save jobs, and i do it to make money. This is the profit. Last year, i visited farrells ice cream parlour. Hi. A oncethriving National Chain that closed its doors in the 90s. This place is awesome. And was reopened in 2010 by mike fleming and paul kramer. This is really what you guys are known for, giant ice cream sundaes. Paul it is. Lemonis the new owners wasted no time in opening up new locations. When i arrived, there were five buena park, brea, riverside, sacramento, and rancho cucamonga. Paul farrells is part of families. It was part of mine, and its part of millions. Lemonis but while the restaurants generated more than 17 million a year in revenue, they were starved for cash. Mike and paul were sucking out the cash from the two profitable locations to prop up the three that were losing, and to pay down massive debts. The total amount of debt 1,940,000. Equipment was failing, the food was lackluster, and the key iconic feature of farrells, the candy store, had disappeared. Im not really sure that the theme is clear to me. So i made a 750,000 investment to revive the brand. Part of the money went to me buying 51 of the trademark, with the other 49 held by mike, paul, and other investors. The rest went to remodeling buena park, the most profitable location. With the help of mikes daughter, shauna, who is the marketing director, we revamped the store. Man this place looks great. Lemonis the candy store is over here. With another key team member, travis. Travis im in my dream job. Lemonis . Streamlining the menu. Tell your friends farrells is back. During the process, we closed two of the unprofitable locations, and i left full of excitement for the future of the farrells brand and the three restaurants that were remaining. My deal was to receive 5 of all the revenue from the remaining locations. Travis we appreciate you having the belief in us. Lemonis but heres the problem. I havent received a dime. And right around the time that i was scheduled to come back to talk them about my royalty, i get a call from mike telling me the landlord locked them out of buena park. Mike hey, marcus. Lemonis . So im heading over there now. Mike nice to see you again. Lemonis so whats whats the deal here . Mike were closed. Lemonis i can see that. Mike we have a lot of infighting, and i ended up resigning as ceo. Lemonis mike had already told me that he resigned his position as ceo of the business, but hes the guy that got me into this deal, and hopefully hes the guy with some answers. But this location was the best one. You did 4 million last year. It made 300,000, 400,000. So why didnt you guys pay the rent . Mike there wasnt any money in there. Lemonis but, mike, this place was making good money. Lets take a look inside. Mike you know, it wasnt because there wasnt any money. Its pretty painful, isnt it . Lemonis well, considering that it was all my money, more than painful. It pisses me off. What happened to the booth here . They just ripped furniture out . Mike the landlord was looking for other options. Lemonis i mean, i spent a couple hundred thousand dollars here. Mike im still hoping youre gonna be able to do something. Lemonis do what . What do you want me to do . I invested in the trademark. I did not want to get invested into running these locations. That was what you and paul were supposed to do. It makes absolutely no sense to me that buena park is shutting its doors. This is the location that did over 4 million in revenue, plenty of room to pay its vendors, pay its bills, pay its rent, and pay my royalty. The place is literally destroyed. Look at this booth. Mike we had to close it down immediately and get out. Lemonis whatd he do, just kick you out . Mike yeah. Lemonis did they bring the sheriff here . Mike yes. Lemonis it literally looks like you guys just walked away from this place. Mike i made mistakes. I mean, theres no getting around it. I made mistakes. Lemonis it was a Family Fun Center where people old and young can come and share good times and build memories. Well you know what, my memories arent so good, and i got, basically, a big f you, and i have to decide whether i just want to cut my losses and move on because i dont want to throw good money after a bad situation. Now i got to call the landlord, work out a new lease, deal with all the. Hes going to tell me about that you guys did because, honestly, if i was the landlord, i wouldnt want you back in here. The place looks like absolute. All right. Let me have a few minutes, okay . Let me just. Im going to walk away. Im not an actual owner of the operating restaurants, and so i technically have no obligation to do anything to keep them open, but my investment in the brand. Well, if these restaurants close, that goes to zero. Mike, you guys made ice cream not so fun. Mike dont give up on it yet. Lemonis i normally am the easiest guy to persuade with a good story, but the story here isnt a good one. Negligence and mismanagement of funds. Ill let you know what i want to do. I want to get more information about whats really happening, so im heading over to the brea location to get the real inside scoop from travis and shauna. Where did the money go . Shauna to help pay bills for other stores. Travis buena park kept stores like rancho cucamonga, and sacramento and riverside afloat. Lemonis we told paul he was not permitted to do that anymore because we wanted them to live or die on their own. The whole brand was at buena park. We put all that money in there, we put the candy store in there, and he wasnt communicating to you guys on what he was paying or not paying . Travis no. Lemonis not telling you anything . Travis no. Lemonis just blindsided by it . Shauna right. Lemonis i was very clear with paul and mike that the best locations stand on their own feet, and if the other ones cant survive on their own, they shut down. They did exactly what i told them not to do. Ive gotten some comments from people that the new menu actually never got installed. Travis the new menu never did get installed, so. Lemonis why is that . Travis paul was very resistant to change. As i tried to bring in new product, as i tried to get new things on the menu, it was just line red the line item. Lemonis and who was saying no to it . Travis it was paul. Lemonis i called paul because i think its only fair to give him a chance to tell his side of the story, and i want to see these financial statements. I want to understand what really happened. Paul, i appreciate you coming by. So, wow. Business is way worse than i thought it was going to look. Theres buena park, theres riverside, and theres brea. Buena park, the landlord is threatening eviction, right . Riverside, the landlord is 200,000 past due, and your vendors are 75,000 past due. And brea is hanging by a string. Farrells international is up here, this is where marcus is, and Parlour Enterprises was the manager of these three locations. Parlour enterprises is the Management Company that actually operates and manages the individual location. Along with paul and mike, there are other employees that make up that group, but essentially its the two of them leading it. Well, lets look at the revenue. Buena park, 4 million, did pretty good. Riverside. Paul 2. 77, yeah. Lemonis and brea . Travis 2. 9. Lemonis by the way, these are not small numbers. Buena park makes money, brea makes money, and riverside broke even. Paul correct. Lemonis okay. So why are you past due on all your bills again . Paul its coming into parlour as management fees, and Parlour Enterprises still had to pay the investors. Lemonis when i look at the financials, it looks like buena park makes money, riverside breaks even, brea makes a little bit of money, but then theres no money to pay bills . Were these investors basically scraping off some of the cash so they can take whatever profits the businesses are making and pay themselves back . And so you are pulling money out of buena park, pulling money out of riverside, pulling money out of brea. The way the books were run, buena park was essentially the sacrificial lamb. Now, somebody had to make that decision, and so who would do that ultimately . Paul i would, but updating mike on a monthly basis of what was going on. Lemonis well, technically youre the cfo. Paul yeah. Lemonis so the checks that got released, who made that decision . Paul yeah, me. It was me. Lemonis the bills that got paid, who made that decision . Paul it was me. Lemonis why . Paul there are other shareholders involved that have been with us for a long time. Lemonis yes. Paul . That i wanted to protect. Mike yes. You wanted to keep it together for the sake of parlour and parlour shareholders, but it was evident to me that we were on so opposite sides of the fence on this thing. Thats why i resigned. Im not going to stand around and be part of something when the decisions that were being pushed i was totally in disagreement with. Paul so why not pose those questions and have us make those decisions . Why just step out . Mike because it had more to do about the direction of the company. Everything that i said with regard to Going Forward with marcus, i got pushback. I got pushback, i got fbombs, i got. Yes. Paul, come on. Paul what was i disagreeing with . Mike the whole deal with marcus. And i got fed up there because every time id come in and it would be, well, if we didnt have to do this because of marcus, then blah, blah, blah. Paul ultimately, i was in favor, and i signed through it and went through it. Lemonis just to be clear, mike has a welldocumented history of blaming others, including paul, for everything that goes wrong here. Mike some of the areas that paul was in, he is not good at. That said. Lemonis why are you blaming everybody else . Mike im not blaming everybody else. I said. Lemonis well, you said paul should have done this. What about you . And so as hes telling me things, im taking it all with a grain of salt. The two of you, your relationship is no longer . You guys have no relationship anymore . Paul not really. No. Lemonis how come, paul . Paul all the tension and stress of locations and closing, and that all fell apart. Lemonis it didnt fall apart on my end. My money got spent. I havent gotten one license fee of any kind, not a penny, not a nickel, not a dime. Paul were trying to hold this together. Lemonis what do you want me to do . I need you to give me some direction. Paul work with craig on a temporary lease agreement. Lemonis you want me to work a deal out with the landlord so it lets parlour off the hook . Yes or no . Paul yeah. Lemonis great. No. Paul what you brought up a couple of days ago was not true. I didnt have the proof. And you do this to me time and time again. Mike paul, im not going to go back 6 months and try to remember. I dont know. Paul thats a lie. Wethe conference room. Ore. The speaker phone. The missing files. Not in the room . Then youre not in the know. Well, this has been nice, but can we not . Microsoft teams invites everyone you work with to Work Together. Be seen, be heard, be there when youre not. Share your files, and your opinion. And maybe even a happy little fruit guy. When youre ready to unleash the power of your team, open teams. That little vent that wont stay its no big dopen. Really. Its not like the engine doesnt work. Just position the other vents so theyre aimed at you. Its no big deal. Except it is. That little vent that wont stay open. Is like a little window of your automotive happiness boarded shut. Thats why the vent is one more thing we check before a car can be a certified carmax car. Because thats the way it should be. Carmax. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] what do you want me to do . I need you to give me some direction. Paul work with craig on a temporary lease agreement. Lemonis you want me to work a deal out with the landlord so it lets parlour off the hook . Yes or no . Paul yeah. Lemonis great. No. The licensing fees have not been paid, and theres termination letters that have been sent out, and while im not permitted to lock the door, i am permitted to actually yank the signs and all the trademarks. Your license agreement here is terminated today. I cant do this anymore, and this is, like, making me crazy. The challenge that i have is that i have 750,000 bucks invested in the brand, and if i want to preserve my investment i dont think i have a choice other than to chase buena park and try to reopen it myself. Look. I wish mike and paul a ton of success with brea and riverside because i want my 5 royalty, but buena park, thats mine, and im going to get it right. Heres the good news. Farrells is not going away. I own 51 of the brand. Its going to exist in some form or fashion. Parlour enterprises will no longer run buena park. Im going to solve the buena park thing. Thank you. Hello. Allison hi. Lemonis long time no see. Pete hello. Lemonis thanks for meeting. A few years back, i invested in a small candy shop in florida called sweet petes, and the owners, pete and allison, well, theyve actually killed it. Today, its a multimillion dollar business. Ive flown them out to california because this farrells situation, its a giant mess and i need their help. About a year ago, i invested in farrells. To say that its a disaster is an understatement. I think when i look at our partnership over the last 3 years, i write the check and i have no worries. I wanted to talk to you guys about the idea of us putting farrells inside of sweet petes. Farrells, to me, is a sweet brand, and sweet petes is a sweets brand. So we would take the location in buena park and we would put a sweet petes and a farrells there, but it would really be owned by all of us, and so youd have jacksonville, chicago, atlanta, chattanooga, and buena park. I need the infrastructure that we have, the human resources, the accounting, everything we spent the last 3 years building. Allison mmhmm. Lemonis im not willing to do this without you guys. Allison you know, we dont have any experience in the restaurant industry, so thats a little intimidating, like, making sure that if were going to take this on, were going to figure that out. To work well next to a sweet petes, we have to modernize it a little bit, make it a little cleaner. What do you think . Pete i mean, were kind of in a place where do need to grow. You know, that would help us, as well. Im open to try, absolutely. Lemonis so we want to do it . Pete lets do it. Allison lets do it. Lemonis oh, my gosh. Allison [ laughs ] lemonis what are we doing . Do i have to hand you a check now again . I think we got one last shot, and lets see what happens. All right . Were on . Allison yeah. Were on. Pete lets do it. Lemonis lets try it. Water expenses are huge here. What is our rent now, 27,000 . Sarah its 27,385. Lemonis now that i have pete and allison on board, i think im ready to move forward by bringing buena park back to life. And so if were going to do this, i got to cut a new deal with the landlord, and we have to put money into here. Travis yes. Lemonis all right. Let me go talk to the landlord. Travis okay. Lemonis im gonna call him. In order to get buena park opened up, i had to negotiate separately with the landlord and sign a 5year lease with a personal guarantee for almost 26,000 a month, but i also managed to get a few months of reprieve so we can get all the work done. Lemonis paul, how are you . Paul hey, marcus. Lemonis how are you doing, buddy . Paul good. Doing all right. Lemonis ive been getting some messages from paul, and i decided it was a good idea for us to talk. Mike had been blaming paul for taking all the profits out of these businesses, but paul said he had some information that he wanted to share with me. You know, the last time we talked, we talked really about all of the financials and them being all over the place, and things closing. As you can see, this place closed. I finally got ahold of the landlord, was able to get it reopened, but, you know, mike has said some pretty damaging things about you. Paul i know. Lemonis i got word that the money was taken out of the account, and when i called mike and asked him about it he told me that you, on your own, unilaterally. Paul bull. Lemonis . Decided to take the money out of the account. Paul thats a lie. Paul . And take it to parlour to cover bills. Paul and hes done that so many times, where he creates this thing of false belief that he has. Lemonis yeah. Paul its a lie. Lemonis okay. Paul and i have a letter from the bank of him authorizing me to close that account. Lemonis do you have that letter . Paul i do. The day before he resigned, and i have some email backups, too. What he presented to you a couple of days ago i knew was wrong. Lemonis hello. So, mike, you know, paul came by and brought me a bunch of files and a bunch of paper. Paul and what you brought a couple of days ago was not true. I didnt have the proof. You do this to me time and time again. Mike well again, youve got documents there. Ive got emails. Lets take a break. Lemonis no. Mike ive got emails. Lemonis just deal with this issue, please. Well, im just saying. All i can tell you, paul, all i can tell you paul first, its not the financial stuff. You brought that up again on monday. Thats a lie. Mike paul, im not gonna go back 6 months and try to remember. There was so much thats happened. I dont know. Lemonis he did not defend himself, as usual. Hes bringing this letter to the table now showing proof, because he kept his records, that you gave him the instruction to move the money. Thats why hes standing here. So the problem that is existing between the two of you is youre saying one thing about him, youre saying one thing about him, and the two of you need to work it out because the 15 years of friendship is now resolved to a piece of paper saying he said, she said. So i need you guys to clean this up right now because i dont know how to move forward. Paul we need to Work Together to get through this. Lemonis okay. I, for some reason, always want to give people a second chance, and it seems like in this case im going to give them a third chance. Paul and mike are owners of Parlour Enterprises, and Parlour Enterprises owns a small percentage of the brand, so technically theyre still my business partners. The history of farrells is built on ice cream, and its built nationwide. So the task that im going to give you g