Transcripts For CNBC The Profit 20240713

Lemonis and the employees, theyve reached their limit. Miguel for the last 18 years, you have not raised me a penny. You dont know what kind of man i am. Lemonis if i cant help renew their passion. Nothings changed. Revamp their attitude. Miguel i love it so far. Lemonis . And most importantly, resolve their family issues. I know its hard for you. This longstanding new York Business will be shredded. I think im more excited about it than you guys are. Im marcus lemonis, and i risk my own money to help businesses. I love investing in american businesses. Woman these people are here because they care. Lemonis its not always easy, but i do it to create jobs, and i do it to make money. Do we have a deal . Lets rock and roll. Man yeah lemonis this is the profit. Today, im visiting ideal cheese shop, a neighborhood favorite on the Upper East Side of new york city. Michael you like brie . Youll find out, right . Lemonis and despite their multidecade success, theyre having trouble making ends meet. Michael weve got panforte, amaretti. Lemonis look, i love working with family businesses, but i never know what sort of relationship dynamic im walking into. Oh. The minute i walk through the door, im stunned by the smell. It didnt smell great. How you doing . Im marcus. Michael michael. Pleasure to meet you. Lemonis michael, nice to meet you. Theres an interesting scent in here. Michael yes, it is a pretty heavy aroma. I dont smell it at all. Lemonis its strong. Michael were cheese guys. We smell nothing. Lemonis how you doing . Im marcus. Josh josh. Nice to meet you. Lemonis nice to meet you. Julius hi, marcus. Julius. Lemonis julius, nice to meet you. Julius this is angela. Angela hi, marcus. Lemonis really nice to meet you. How long has the business been here . Julius in april, it will be 20 years. Lemonis in this location . Julius in this location, yeah. Lemonis but the company has existed for how long . Michael 1954. Lemonis and when did you guys buy it . Michael 16 years ago. We do kind of three businesses in one, so we have the retail shop. Second one is online, and then the third one is a wholesale business where we sell to restaurants and hotels. We have 5,000 restaurants in manhattan that we can sell to. Lemonis how many do you service . Michael probably, like, 65, so 0. 1 . Lemonis oh. A little smaller than i thought it would be. Michael yeah, but it still. Lemonis did you lose customers over the years . Michael thats the area thats, you know, spikes and valleys, depending on where we are in the time frames. Lemonis how many types of cheese are there . Angela oh, my god. Michael probably 10,000. France alone, theres over 5,000 cheeses. Lemonis whats your favorite cheese . Michael yeah, dont get scared. Julius you will like it. Michael its called brebis rousse. Lemonis its really good. Its your favorite . Michael one of my favorites right now. Lemonis how many total cheeses in the shop . Michael a couple hundred from about 17 different countries. One of the First Companies to really go heavily into european cheese. Lemonis i went to school in wisconsin, and i was wondering, like, where is all the wisconsin cheese . cause every cheese thats here is some sort of fancy cheese. Now, i know theres a market for that, but there has to also be a market for, like, regularpeople cheese. Right here. Can you give me a little tour of the store . Julius sure. Michael basic premise is that we work behind here. Manchego very popular. Angela nice. Manchego. Michael sheeps milk cheese from la mancha. Full array of cheeses here and behind. Our blue cheese selection back behind here. Lemonis why does it seem inventorylight . Michael i intentionally do it like that, you know, to pay the bills properly. Yes. Lemonis it is tight. I thought it was odd that he recognized that there was only a couple hundred cheeses out of 10,000plus, and hes a specialty cheese shop. That was alarm bell number one. Olives back here. Michael our charcuterie section. Dried sausages, sopressata, jamon serrano. Lemonis limited beer selection, limited olive oil. Michael so, we have four lines of different pastas. Lemonis a little grocery. Michael right. Lemonis of the total revenue for the store, which is how much . Julius about 1. 5 million. Michael right. Lemonis how much comes from dry goods, vs. Cheese . Michael 80 cheese. Lemonis when you have a storefront in a city like new york, where rent is extremely high, every square inch of your space matters. In this case, 80 of the store revenue is coming from cheese sales, while 20 is coming from packaged goods. But unfortunately, more than 50 of the space is dedicated to those dry packaged goods. Allocating floor space and the assortment of products is crucial to a business being successful. So, what was your business to be able to do this . Julius i was in the Courier Service business. Lemonis okay. Julius . 27 years. Lemonis did you work in that business with him . Michael yes. Lemonis and have you guys always worked together . Michael my entire life. Lemonis your dad seems like an easy guy to work with. Michael yeah, okay. [ angela laughs ] julius wait a minute. Did he hesitate . [ laughs ] michael no, hes not so easy. Lemonis hes not so easy . Angela no. Julius i think that michael would work better without me. Im ready to kind of take a step back. Lemonis oh. Michael not onsite. So, you know, he lives in florida, so im the daytoday operator. Julius last 2 years. Lemonis why cant he buy you out . Michael yeah, so, weve had some broadbased discussions over the years, but there was no motivation for him to do it as the controlling interest partner. Lemonis so, its 5050 . Michael 7030. Lemonis you have 70 . Michael no. Angela he has 70. Michael he put in 100 of the money. Lemonis and you get a wage in addition to your equity . Michael no. And it doesnt change year to year, so its like im an employee. Angela see, thats where he feels it. Michael so i am an employee. Lemonis okay. You can sense from michael that hes frustrated about his financial arrangement with his dad. Not a comfortable position for anybody to be in. Why havent you come up with a plan to transition the ownership of the business to your son . Julius i have. Ive been looking to see if i can find. Lemonis he says no. Julius no . Michael hes just looking to try to sell it. Julius no, ive been looking to find a partner for the last 2 years. Thats the truth. Lemonis but why havent you sat down with him and said, okay, i want to sell you the business . Michael right. Julius because im not sure if he would accept that as a possibility. Michael well, maybe 7 or 10 years ago, we would have done that. Lemonis what about now . Michael i dont know. Where the business has fluctuated a little bit, its probably turned me off a little bit than more turned me on, but. Lemonis interesting. Michael . I still see positives in what we can do to it. Lemonis is there a lot of debt in the business . Angela yes. Michael yes. Lemonis whered that come from . Angela the other cheese shop out on long island. Lemonis you had a cheese shop out in long island . Angela yeah, we had a restaurant, cheese, coffee, and takeout. Julius all in one. Lemonis what happened . It closed . Angela oh, yeah. Lemonis how much did you lose . Julius 300,000. Lemonis so, has it accumulated new debt . Michael oh, yeah. Lemonis and how much is the debt now . Julius about 400,000. Lemonis oh, wow. Theres a lot of debt on this current business, but the genesis was from another cheese shop that the family decided to open on long island, and when that business failed, the burden came back to the original cheese shop, and its dramatically hurting its ability to grow. Lemonis hi, sir. Welcome. Man hey. The best store in new york. Lemonis best store. Man great for the neighborhood. Angela thank you. Michael we appreciate it. Thank you, sir. Julius i paid him to say that. Lemonis yeah. You can go help him. Michael orders complete, ill box it up. What else for you . Thank you. Have a good day. Lemonis the validation of customers walking in and out of this store all day long is mindblowing. [ telephone rings ] michael this is michael with ideal cheese. How are you today . Lemonis but i thought it was odd that i see michael on his feet working, and julius, who owns 70 of the business hes fussing on his phone. Can i ask you a question . Michael yeah, of course. Lemonis i love the fact that youre committed to helping your dad. Michael i mean, i work here. I like it here, but i just need it to be different. Lemonis what does different mean . Michael its builtup frustration. 7 days a week. Its 12, 13, 14 hours a day, so its been a grind. Lemonis and what do you think your dad ultimately wants out of this scenario . Michael i think he feels some pressure right now, too. Ive told him that i want to quit. I tell my mom i want to quit. He goes, well, you own the business. I said, okay, you come and run it. Lemonis oh, by the way, are you thinking about investing . Well, thats good. I just want you to know im thinking about quitting. Can you do me a favor . Michael of course. Lemonis grab the financials and your mom and dad, and lets go around the corner. Well sit outside and go through it. This is a 50yearoldplus business in a great neighborhood in new york city with millions of people to serve. You and i will sit together. And at this particular moment, the lack of passion that michaels exuding is almost like a death sentence for the business. Alright, so, last year, 1. 472 million in revenue, gross profit of 542,000, so just a little over 34 . Creditcard interest 11 grand. Finance charge 8 grand. Julius yeah, just keep going. Lemonis line of credit 11 grand. Total interest expense 31,000. Your rent is 185,000, and so, on paper, the business only makes 28 grand. Michael correct. Julius right. Lemonis and what is the revenue done over the years . 16, it did 1. 7 million. 17, it did 1. 7 million. 18, it did 1. 4 million. In the last 12 months, its down 300 grand. Angela yeah, we lost a big account. Lemonis total cash right now in the bank. Julius about 10,000. Lemonis and what are the total payables . Julius 70,000. Lemonis what about receivables from vendors . Julius 70,000. Theyre almost equal. Lemonis how much debt is there . Julius about 400,000. Lemonis about 400,000 . Julius yeah. Lemonis okay. People could argue that the company is insolvent, which means, essentially, bankrupt. If you dont solve the debt or put money in, the business is closed. The debt is suffocating the business. Michael correct. Lemonis and that debt wasnt really generated from the business mistakes. Michael i say that every day. I shouldnt be getting phone calls that i owe money to people. Lemonis the problem is that youre in quicksand right now, and unless the business has an infusion in capital, its going to close. Michael i dont disagree. Lemonis if the gross profit and earnings of the business are the only mechanism to solve the debt in this particular scenario, theres no way out, so either new money comes in, the debt gets reorganized, or the business closes. And if the business closes, what happens with the debt . Julius id probably declare personal bankruptcy. Lemonis your wife is totally freaked out that you said that. Angela yes. Lemonis am i right . Lemonis cause he said it very casually. Angela yeah. I you know, i. Julius uhoh. Lemonis well, its a serious thing. Julius im taking it a day at a time. You know, try to find more business through wholesale accounts, basically. Michael see how it keeps coming back to the business is not doing enough, but if you take the debt out, is the business still okay . Lemonis its not doing as well as it used to. Michael correct. Lemonis and the fact that the business is down, and theres debt is a perfect storm. Michael correct. Lemonis ive seen enough. Let me come back with some ideas and see if theres something to do. Okay . Michael thank you, sir. Angela its been a pleasure, marcus. Lemonis youre a good guy. Michael thank you. Lemonis ill see you in the next week or so. Michael thank you, sir. Julius thank you. Michael how are you . Angela well, hello, there. Lemonis how are you . I asked the family to meet me for lunch to really sit down and find out if there is a deal to be made. Now, in this particular case, theres one problem to solve whats gonna happen with the debt . I left concerned. Whats the business worth . Michael maybe a tip over 1 million bucks. Lemonis subject to the debt. That would lead you to 600,000. Michael thats correct. Lemonis i dont think your business is worth 1 million bucks. The challenge that i have is, as an investor, i dont want to fund into your previous problems. Michael sure. Lemonis i want to fund into the growth. I would like to do some business with you guys. Angela well, we would love to have you. Lemonis im willing to invest 100,000. For a 100,000 investment, i would want to own no less than a third of the business. Angela [ laughs ] his face. Julius so hes valuing it at 300 grand. Lemonis does michael care . Miguel hes just burnt out. Theres no motivation. He is a dead piece of meat. Lemonis for a 100,000 investment, to feel exhilaration. It all starts with an invitation. 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From smarter atms, to after hours video tellers comcast business is connecting thousands of banks to technology that turns everyday transactions into extraordinary experiences. Hi there. How are you . Do you have any lollipops in there . laughing no, sorry. Were helping all kinds of businesses go beyond customer expectations. How can we help you . Mmmmm. Like a good neighbor, state farm is there. ® in getting key nutrients peopfrom food alone. One a day, covers all of them. In just one serving. One a day, and done. I would want to own no less than a third of the business. Julius so hes valuing it at 300 grand. Lemonis no, im valuing it at 700 grand, which is way more than its worth, and im taking the debt of 400,000 off of it. If you use the 100,000 offer for 33 of the business, you would assume that it has a 300,000 value, but it actually has a 300,000 net value. After i take the earnings and the assets, i put a multiple on them, and then i deduct the amount of debt that it has. I would want that 100,000 to clean up the pastdue payables first, additional inventory second, and refresh the store third. I do not want any of my 100,000 to service any of the debt. Angela okay. Now, we want 150,000 for the same percentages. Lemonis howd you come up with that . Angela i didnt. [ laughs ] i just asked for more money. Julius no, no, no. Lemonis your counters 150,000 for 33 . Thats 50,000 more. That puts the valuation at. Julius 850,000. Lemonis yeah, and i just dont think the business is worth that. Julius how about if we split the difference . Michael 125,000. Lemonis do you know what a preferred investment is . Are you familiar with the concept . Michael not really. Lemonis so, a preferred equity is essentially being a shareholder, but getting a guaranteed return on capital, meaning that if the business doesnt do well, i still get paid. Michael right. Guaranteed rate of return of what . Lemonis i would say 15 . Julius thats fine. Lemonis so, let me clarify. Were gonna settle on 125,000 for 33 . But that 125,000 would come with a preferred return of no less than 15 on my capital, and if the business ever sells, i get my money out before anybody else. Angela correct. Julius thats fine. Lemonis okay . Julius yep. Angela okay. Its a deal. Lemonis okay. So, because i know who really runs the family, ill give it to the person that i know really. It ended up where it belongs. Angela thank you. Lemonis we got a deal . Julius we have a deal. Lemonis we have a deal . Angela we have a deal. Lemonis we have a deal. Okay, thank you. Michael thank you. Lemonis one of the first things that i want to do is work with julius to understand how this business is going to grow its revenue, and youve got to start by making sure that the curb appeal of this business is the most important thing. Do you see how clean their storefront looks . Julius yeah. Lemonis and then you go to the nice flower shop. Look at how beautiful their curb appeal is. Look at how clean their windows are. Julius yes. Lemonis then you come here. Look how [bleep] the windows look. I mean, lookit. The awning started falling down. Theres rust everywhere. The windows are dirty. This store should do double what it does. Somebodys got to be accountable for the way it looks, so is it you . Is it michael . Is it. Julius really didnt take a good, hard look at this. Lemonis michaels gonna work on changing the assortment and doing all these other things, so this kind of stuff has to be yours. Julius okay. Lemonis michael is questioning his dads commitment to the business, so ive asked julius to take care of the front of the store, probably the easiest task of all of them. Miguel miguel. Lemonis miguel. Marcus. Nice to meet you. How many years have you been here . Miguel in this location, 18 years. Lemonis 18 years. And in the previous location . Miguel about a year and a half. Lemonis is this a better location than the previous one . Miguel i will say the other location was better. Lemonis whats the difference . Miguel there is no stuff that people are looking for. Lemonis we dont carry what people want . Miguel there are so many good cheeses out there that we could sell here, but we dont have because he just doesnt want to buy. Lemonis why doesnt he want to buy it . Miguel he doesnt care. Lemonis does julius care . Miguel he does, but hes never here. Lemonis does michael care or less than julius . Miguel used to. Lemonis not anymore . Miguel hes a dead piece of meat. Lemonis and why do you think michael stopped caring . Miguel hes just burnt out. Lemonis ive seen michael work bell to bell with customers, but i do understand what miguels perspective is about them not really caring about the business, and i want to get to the bottom of that with some of the other employees, as well. In business, the question of why is one that i have for everybody. Tell them, why do you have this business . Michael well, its to make a living for me first, actually. Lemonis okay. Julius well, i like the margins, and the business is unique. Lemonis okay, so, the two things that they just said were, i want to make money, and, i like the money. And if you open a business purely to make money, your business more than likely will fail over time. Why are you why do you work here . Be honest. Nicholas because i have a love and passion for good food. Lemonis okay. Josh i love working with cheese. Lemonis okay. Miguel i have the heart for it. Lemonis okay. Why do you have this business . If its to make money, i should leave now. Michael sure. Lemonis okay. Michael my reputation in the business was getting ruined. It felt like i was an indentured servant. Lemonis if youre looking to take your business to the next level, log on to theprofitcasting. Com. Lemonis why do you have this business . Yeah, ill take it. Spring event is over soon. If you give us the 2 years of carefree scheduled maintenance. 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How do you gaveeno® happy 24 7 . With prebiotic oat. It hydrates and softens skin. So it looks like this. And you feel like this. Aveeno® daily moisturizer get skin healthy™ if its to make money, i should leave now. Michael sure. Lemonis okay. The only reason that im here is cause i think this is a really cool, interesting concept. I think im more excited about it than you guys are. This feels like youre running a cheese stand at a farmers market. I never like it when the passion doesnt exist with the owners, and the fact that your employees are more excited about being in the cheese business should alarm you. How long have you worked here . Nicholas 10 months. Man two years. Lemonis two years. Josh a little over a month. Lemonis a month. Miguel 18 years. Lemonis and why have you stayed . Miguel they pay me enough not to quit myself, and i just do enough not to get fired. Julius thats an interesting observation. Lemonis you should be embarrassed. Julius are you unhappy with us or your fellow workers . Miguel with you. For the last 18 years, you have not raised me a penny. Michael thats correct. Julius right, but. Miguel for the last 18 years, everything has gone up. My rent has gone up nine times. I know i have the potential and the knowledge to do much, much more here. You dont know what kind of man i am. Julius theres no one here thats ever been paid more than you except one guy. Everyone else doesnt meet your salary right now. Lemonis lets try it a different way. Lets try this a different way. Julius well, theres a margin. Lemonis if you think you could do more, im gonna take you up on your offer. And if you do more, youll make more. Miguel yeah. Lemonis if you want an opportunity to grow. Miguel just give me an opportunity. Lemonis i will. Miguel i know i can do it. Lemonis and i will put you to the test. You succeed, ill reward you. Miguel thats fine. Lemonis its america. Thats how it works. cause if these two guys dont want to be here, youre out of business, and im not gonna lose my money. Im gonna make sure of that. The assets in this building arent the cheese or the fixtures. Its the people that work there. And julius has failed my numberone test, which is recognizing that people are the most important thing. So, were going to go find new cheese. Were gonna change the way the store feels. Were gonna get the right kind of products in here, and were gonna fix the process and our attitude. One of the most important things in changing the mindset of a business is starting immediately and leading by example. And when i tell the team, were gonna make progress, that means now. Everybody grab a garbage bag. Anything you think needs to go, this is the moment. Miguel alright. I hold the bag. Michael sorry. Lemonis julius. Julius yeah, i saw that. Lemonis well, is that not a big deal to you . cause i would lose my [bleep] if i saw that. Julius i see. Lemonis that shouldnt be there. Now, look, i cant blame mice for coming into a cheese shop, but theyre actually not welcomed guests, so dont make it easy for them to be there by leaving crap all over the floor. Now, how awesome is this . Miguel i love it so far. Lemonis todo bien. Miguel todo bien so far. Julius its organized and open, and i think it looks fantastic. Lemonis how much money did we spend to do it . Michael zero. Julius zero. Lemonis what did it take . Michael effort. Julius just an effort. Lemonis okay. Michael alright. Julius and thatll continue. Lemonis i dont believe you. Julius were gonna prove to you that youre wrong. Lemonis so, the next time were together. Julius yeah. Lemonis . We want to get this removed. The floor should get pressurewashed. The awning has to get replaced. That condenser has to get removed. Im gonna leave you with a creditcard number. Michael sure. Lemonis . To get all this done. Julius were good. Lemonis okay. Julius thank you. Lemonis thank you, guys. So, ill see you soon. Okay, guys. Julius thank you, marcus. Lemonis welcome to wisconsin. Michael thank you very much. Lemonis how are you . Michael very well, thank you. Lemonis i thought itd be a good idea to take michael to mars cheese castle. They are the premier cheese retailer in america. And i thought it would be good for michael to learn something. Tyson hi, marcus. Im tyson wehrmeister. Lemonis tyson, nice to meet you. Michael tyson, michael binetti, ideal cheese. Tyson nice to meet you. Michael pleasure. Tyson thank you for coming in. Lemonis now, youre thirdgeneration. Tyson i am, yes. My grandfather and grandmother established the store back in 1947. Lemonis how much Square Footage is in this building . Tyson 48,000 square feet. Lemonis how many different types of cheeses do you have . Tyson over 1,000. Lemonis so, can you pick out the five things that you think we should carry . Tyson wisconsin cheeses . Lemonis yes. Tyson okay. The 3year white. Lemonis doesnt taste very sharp. Tyson this is the 7year. Lemonis its got more. Michael more flavor. Lemonis . More bite to it. So, that one i like. Tyson so, this is the 10year. Yep. Lemonis cheese is awesome. Tyson i wouldnt cut it for just anybody. Lemonis dont cut the cheese for me. The thing that i wanted michael to experience is that its okay to have fun at work. Like, lighten up, smile, laugh. What . Michael there he is. Theres the cheesehead. Lemonis im sorry. What . I have to keep my cheesehead on. Its just cheese. So, you know, when i first met you, you seemed really unhappy. Michael for sure. Lemonis . Which is the exact opposite of how these people are. Michael you could feel their desire and their love for the business, for sure. Lemonis i know yknow the business. Michael for sure. Lemonis but the difference is, i dont think you like the business. Michael im frustrated with the business. You know, financial issues, and it was becoming more strenuous and stressful. Lemonis well, your dads a very imposing character. Michael for sure. Lemonis do you think your dad, the owner of the business, took advantage of you . Michael oh, yeah. The last 2 years feels like im sitting in a jail cell. Lemonis this is the second [bleep] time that ive been here, and nothings changed. Were gonna lose a business that generates 250,000 over a stupid lease . paul tired of your high wireless bill, bwe understand. Hone . Now at sprint, bring your phone and get an unlimited plan for just 35 a month per line. Plus, get a 300 prepaid mastercard just for switching. Now thats doing things differently. For people with hearing loss, visit sprintrelay. Com. A but i hearsearches fa different calling. The call of a schmear of cream cheese. For i, am a schmelier. I practice my craft at philadelphia. Here, we use only the freshest milk. That one go go and the finest ingredients. What is this . Until perfection is achieved. Shes ready. Schmears philadelphia. Schmear perfection. 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If shes not going to protect all her stuff with state farm, hows she going to protect your heart . Like a good neighbor, state farm is there. ® hows she going to protect your heart . Lemonis do you think your dad took advantage of you . Michael oh, yeah. It felt like i was an indentured servant, and i wanted to quit, but if i leave, whats gonna happen . I feel like my reputation in the business was getting ruined. These vendors are struggling as a result of this, and id love to pay them, but i cant. Lemonis because your dads sucking all the money out. Michael right. Lemonis how much money do you think your dad took out of the business . Michael over 16 years . Lemonis 3 million . Michael yeah. Lemonis and now youre here scraping for a couple hundred grand trying to keep the lights on. Michael correct. Lemonis are there ever days where you think to yourself, like, what am i doing here . Michael yeah, of course. Lemonis what do you think would happen to the business if all of us hadnt gotten together . Michael i think it was gonna fail. Lemonis i truly do understand his passion has been totally watered down by his dad. If this Succession Plan is going to work, everybodys gonna have to love it and be enthusiastic, and the formula that theyre using now, it isnt working. You ready . Michael yeah, of course. Lemonis oh, wow. This place is cool. Holy cow. Corinne hi, guys. Welcome. Lemonis im marcus. Corinne im corinne. Lemonis how are you, corinne . Nice to meet you. Corinne im great. Lemonis in order to improve the profitability of the business, i have to expose them to new products and new ideas, so im taking the guys to an unbelievable vendor called boska. They are the leading manufacturer of cheese accessories and supplies. Michael and julius have a cheese shop, and were trying to reimagine the space. Just like when we felt when we got off the elevator, we were like, wow, this place is cool, i need that wow factor. It doesnt exist today. Miguel we do need a lot of stuff. Corinne okay. Miguel and i think we are in the right place. Lemonis so, what we would like to do is have you guys go through the showroom and pick three or four things that you think you could sell in your store. Michael each of us . Lemonis yep, individually. Michael thank you. Miguel do you have those cutting boards . Theyre called lazy susan. Michael got it. Perfect. Lemonis so, what kind of things did you pick . Miguel a beautiful 16inch cheese board and a beautiful girolle. People always ask. Lemonis and those are things that you know will generate revenue . Miguel 100 . Lemonis okay. I love the fact that miguel is comfortable enough to exude his passion and his knowledge of what the company has and what it needs. Hes already thinking, wheres my opportunity to make more money for me personally . Im gonna go to work. Lemonis what did you pick, julius . Julius i picked this cutter. I think its something that wed sell, and i like that display. We could sample off of it. Miguel i really dont like it. Instead of buying this, lets buy a cheese knife. We dont have any cheese knives at the store right now. Lemonis why would you not have cheese knives . Michael it was a functionality of me buying cheese or buying auxiliary items. Lemonis no, and i understand that. Michael that was it. Lemonis but not having a cheese knife, but having 72 types of olive oil is odd. Miguel, do you feel like you would like to drive the process of the accessories . Miguel okay. Lemonis because these knuckleheads didnt do anything. Michael everybodys not perfect all the time. At some point, if somebody messes up or trips up or has a bad day, you cant write them off for life. Miguel you know exactly whats going on in the store. Michael of course. Miguel right . And i know exactly whats going on in the store. Michael yeah, and we all have different perceptions. Miguel yes, but. Michael we live our lives through different eyes. Miguel you have to understand. The numberone reason that we are here is because of you. Michael okay. Lemonis i literally thought one of them was gonna grab a cheese knife, and something was gonna happen. And in order for this business to survive and for me to be comfortable putting my money here, theyre gonna have to get all their dirty laundry out of the way right now. Theres still some tension. Michael unresolved, sure. Lemonis yeah. Michael okay. Lemonis on the surface, he seems to have more passion and more vigor for the success of the location than you do. Youre very matteroffact. Michael yes. Lemonis theres a balance between your style and his style, and thats why its good. Its yin and yang, and thats the nice balance between having two types of leaders. I want to finalize what the arrangements gonna be. Miguel of course. Lemonis so everybodys clear. Michael cool. Lemonis okay, bye, guys. Michael have a good evening. Miguel have a good night. Michael oh. Hey. Zoe hi. How are you . Michael pleasure to meet you. Michael from ideal cheese. Zoe zoe. Nice to meet you. Lemonis several years ago, i invested in a Company Called zoes chocolate. Zoe nice to meet you. Zoe. Lemonis nice to meet you. And zoe and her brothers have not only quadrupled the business, but they work well together because they respect each other. I thought it would be a good idea for them to spend time together. Lemonis i dont think we invented chocolate and cheese pairing. Zoe no. Lemonis but it hadnt been done in your store. Michael correct. Lemonis i love the pairing of chocolate and cheese and think its an additional stream of revenue that ideal cheese could benefit from. Michael oh, yeah. Go for some cheese. So, this is just a rich, creamy doublecream from france, so its superrich. Its 100 goats milk. Pantelis we should do a big tasting one day at the store. Michael oh, absolutely. Lemonis just like you guys know chocolate to the core, he knows his craft, and so the dilemma is, you have an expert in the space whos in a very weird financial predicament, and that financial predicament involves his dad. Pantelis thats tough. Yeah. Petros its important to have the roles differentiated. Angela and you have each other. Hes by himself. Julius im not daytoday. I dont wait on clients or anything like that. Petros so the biggest hurdle is that you feel like youre by yourself. You dont have the help from your dad that you need. Michael yes. Angela he was working 6 days a week, sometimes 7 days a week. Lemonis a lot of resentment. Angela yes. Michael i just felt like an employee. Like, i had no motivation. I felt like i was just there for them. Zoe i mean, its not easy. You dont want to ruin your relationship with your family, but everybody has to put in the same effort. Its got to be fair. Our dad works and has never asked for anything. Angela well, he takes a salary, doesnt he . Zoe yeah, we give him a salary. Angela cause youve got to live. Zoe his perspective is, at some point, hes gonna retire, and this is our life. Angela exactly, exactly. Pantelis one great thing with us, were always fair. Zoe and very supportive of each other, too. Lemonis thats cause your mom and dad also wouldnt have it any other way. Zoe this is very true. Lemonis why dont we head back to the shop . Michael okay. Lemonis and lets see whats been done. [ siren wailing ] its been almost 3 weeks since i visited the shop, and im looking forward to seeing what kind of progress and work theyve actually gotten done. And nothing is done. In fact, it may even look worse. Michael marcus. Lemonis whats happening, buddy . How are you . Michael long day. Lemonis it kind of looks the same, everything. Michael uhhuh. Lemonis how come you didnt do anything . I gave you my card to spend whatever i told you. Michael no, you told me to do renovation. I know. Clear as day. Lemonis whatever you needed to do. The awnings the same. The windows look worse. Theres a party grill in the window. I mean, come on. I gave you money to replace the glass. Michael i wasnt gonna spend that if i dont have a lease. We dont have a place to go potentially in april. Lemonis but thats a choice that your dad is making. Michael well, were gonna try to get funds in. Lemonis your dad has funds. Michael how do we negotiate if were putting money into the store . Landlords around. Lemonis right. Michael if he sees me doing changes, and were coming up on lease, then were screwed. Lemonis so, what we want to do is leave it as crappy as possible, hoping that the owner, what, is more motivated to keep you here . You have money. Put money in it. What would you guys be doing if i had never shown up . cause this is the second [bleep] time that ive been here, and nothings changed. Julius we needed to get funding. Lemonis why . Julius . To pay the landlord. Lemonis so you want to pay the landlord with my money and make the renovations with my money . How much are you past due, julius . Julius 34, not counting this month. Lemonis were gonna lose a business that generates 250,000 over a stupid lease . I dont want to put money in if i think the lease is gonna go away. That would be. Michael asinine. [ chuckles ] lemonis im not sure what julius is expecting from me, but if he thought i was gonna come in here, do all the work, spend all the money, and he was just gonna hang out and enjoy the ride, hes sorely mistaken. [ clears throat ] julius. Julius itd be best that you talk to michael. Lemonis okay. Your dad doesnt want to talk to me. Michael no way thats crazy. Lemonis he just told me. Michael please dont leave. Lemonis ill see you. Michael marcus, please. Lemonis listen, i wish you a ton of luck. Angela if he wants to be bought out, im okay with that, you know . Maybe it will be better for michael. Miguel i wasnt expecting this, so right now, im kind of shocked a little bit. Lemonis for exclusives, extras, and business advice, visit theprofit. Cnbc. Com. Hello, i saw you move in, and i wanted to welcome you to the neighborhood with some homemade biscuits oh, thats so nice and a little tip, geico could help you save on homeowners insurance. Hmm cookies uhh, biscuits. Mmmm, is there a little nutmeg in there . Oh its my mums secret recipe. You can tell me. Its a secret. Is it cinnamon . Its my mums secret recipe. Call geico and see how easy saving on homeowners and condo insurance can be. Ill come back for the plate. Wethe conference room. Ore. Saving on homeowners and condo insurance can be. 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. You can enjoy the seafood you love from the comfort of home. If it ever makes it there. Spend 30 and get free delivery at red lobster dot com. For adults with moderately to severely active crohns disease, stelara® works differently. Studies showed relief and remission, with dosing every 8 weeks. Stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. Some serious infections require hospitalization. Before treatment, get tested for tb. Tell your doctor if you have an infection or flulike symptoms or sores, have had cancer, or develop new skin growths, or if anyone in your house needs or recently had a vaccine. Alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. These may be signs of a rare, potentially fatal brain condition. Some serious allergic reactions and lung inflammation can occur. Talk to your doctor today, and learn how janssen can help you explore cost support options. Remission can start with stelara®. Explore cost support options. When you have nausea, heartburn, indigestion, upset stomach, diarrhea. Try pepto liquicaps for fast relief and ultracoating. Nausea, heartburn, indigestion, upset stomach, diarrhea. Get powerful relief with pepto bismol liquicaps. Michael did you tell him you dont want to talk to him . Julius no, i said it would be best if he talked to you. Michael no, but he wants to talk you. He thinks that you dont want to talk to him, and he was shaking my hand goodbye. Lemonis sometimes, in business, when youre upset, you may say things that you regret, so its time to just take a breath, collect your thoughts, and come back in. The fact that you didnt solve the lease and youre concerned about the debt scares me because it looks like youre looking to exit stage left while the place is burning down. And, julius, i know its hard for you. Julius i have financial obligations, too. Unfortunately, thats the situation today. Its changed from 3 years ago. Lemonis yes, sir. Julius so i do the best i can. Lemonis i understand that, and i know right now you want to punch your hand through the glass because youre frustrated that you cant solve it by snapping your fingers like you always did. Julius yep. Lemonis i know that. I think were at this really Pivotal Point where in order for this to work, michael has to feel good. In order for this to work, he has to have a business thats set up for the long term. How does that happen . Hes got to have a lease. Hes got to have inventory. Hes got to have help. Julius and i agree. Lemonis okay, come on. Julius alright. Were good. Lemonis okay . Im glad that julius agreed to get the issue resolved with the lease so we can actually get down to business. Michael im gonna just do a little setup first. Lemonis okay, great. Now that things are under way at the shop, i wanted to really focus on how they were gonna grow their wholesale revenue, so i called my friends at serafina, who own about 15 restaurants just in new york city, thinking, hey, this could be a very good opportunity. Fabio hello. Michael hello. How are you . Michael binetti, ideal cheese. Fabio hi. How you doing . Fabio granato. Nice to meet you. Julius fabio. Fabio fabio granato. Michael michael binetti. Vittorio vittorio. Michael pleasure to meet you. So, wed like to introduce ourselves as ideal cheese shop. We obviously have a retail shop. Also, a big part of our business is wholesale. We focus heavily on european. We can do, you know, personal deliveries, get you product on an asneeded basis. Vittorio we buy 3,600 wheels per year. Michael so, would you like to take a sample of some of our cheese . Fabio im very anxious to try this cheese. Julius mangia. Michael basically, as an overview, theres a pagliatina. So, its aging that full flavor, so youre getting more intense flavor. Vittorio buonissimo. This is really good. Michael the second one is going to be the quadrello di bufala. They wash it just like taleggio, but theyre using bufala milk instead of cows milk. Fabio oh, yeah . Cool. Michael its delicious. Vittorio yeah. Perfetto. Michael heres another very unique cheese called testun al barolo. Its a blended cow, goat, and sheep, depending on the season. Fabio how long has this been aged . Michael about 3 months. Flavorful, and the wine is definitely gonna play a major factor. Vittorio fantastic. Theyre so good. Michael i can work with your chef on working with the condiments that will work properly with each cheese. Fabio that is excellent. Guys, this is amazing. It makes me happy to see your knowledge, and it makes me confident to try one restaurant because you have knowledge and you can teach the kitchen. Vittorio this really can work. Fabio excellent. Michael lets just have a quick toast. Fabio yes. Michael to a new beginning, a new relationship. Pleasure, guys. Fabio cheers, cheers. Cheers. Lemonis one of the things that i love about michael is his Product Knowledge, and its clear to me that he came in very prepared for the meeting at serafina, and he did a great job. You blew me away. Michael oh, thank you. Lemonis and it was all because of the way you presented yourself, the Product Knowledge you had, and the confidence in which you did it. And i had not seen that until today at this level. Michael to me, its just my knowledge, and it doesnt seem special because i do it every day. Lemonis but, michael, is special. Michael i understand. Julius and im proud of you, son. Michael thank you. Julius i really am. Michael thank you, i appreciate it. Julius he does a hell of a job. I love my son forever. Whether hes my Business Partner or not, ill always love him. Michael thank you. I love you, too. Julius i know you do. Lemonis i thought you did great. Oh, it looks good. The sign, ive got to be honest, looked amazing. I thought the artwork was good, and the fact that the windows have been replaced changes the entire presentation and the curb appeal of the store. I can actually see in now, and its inviting me to come in. It was clean, fresh, and actually done. Nicholas hi, marcus. How are you . Lemonis hey, guys. Miguel, whats happening, buddy . How you doing, my man . Miguel im very well, thank you. Good to see you. Lemonis everything good . How are you, brother . Awning looks good. Michael i kind of kept the ideal and showed big that we all are cheesemongers and showing the expertise. Lemonis i think it looks totally different. And the fact that the glass is clean. Michael glass looks amazing. Lemonis you can now see in. Michael we can see in. People are superhappy with it. Lemonis what are customers saying . Miguel wow. Lemonis do they notice it . Julius they love it. Michael great reception from customers. Lemonis do you feel like theres more inventory . Miguel yes. Michael much better. Lemonis it is. I like the fact that we finally have a lot of the parts and pieces put together. So, is the boska stuff doing okay . Miguel oh, my god. Very well, yeah. Lemonis the boska relationship is established, and theres inventory here. So, you have the wisconsin cheeses. Michael yes, sir. Lemonis oh, this is deer creek. Michael yes, sir. Theyre selling very good. Lemonis and their relationship with zoes is in place, and they already started selling chocolate. Michael miguel and i and the guys have helped set up some processes. Lemonis the other thing that im noticing is that michael feels really engaged in the business. Michael created contacts and vendor emails. Lemonis this is like the bible. Michael correct. Lemonis he now has a clear process for the employees to follow, and miguel is the one that implemented it. Is the lease ready to sign . Julius yes. Lemonis you negotiated it . Julius yeah. Lemonis you feel good about it . Julius yes. Lemonis good job. Julius thank you. Michael superimportant. Julius thank you. Lemonis our original deal was for me to invest 125,000 into the business to own a third of it, right . Julius correct. Lemonis and over the period of time, i think ive learned a lot about just how things operate with you guys. From a business standpoint, i dont think the two of you should Work Together anymore. mom [thunder] were you planning on mowing the lawn today . son no. burke seen it. Covered it. At farmers insurance, we know a thing or two because weve seen a thing or two. So call 1800 farmers to get a quote. We are farmers. Bumpadum, bumbumbumbum woman no matter what business you are in, Digital Transformation never stops. Verizon keeps business ready for whats next. man we weave security into their business. second man virtualize their operations. third man and could even build ai into their customer experiences. We also keep them ready for the next big opportunity. Like 5g. woman where machines could talk to each other and expertise could go anywhere. woman when it comes to Digital Transformation, verizon keeps business ready. I know right . Walmart. Com has a lot of great stuff. And now get 5 back on the things you buy there, with the new capital one walmart rewards card. Say what . 5 back. Say that again . 5 back. Yes whats in your wallet . Yup. Nailed it whats in your wallet . Lemonis from a business standpoint, i dont think the two of you should Work Together anymore. Julius and i dont disagree. Lemonis theres unnecessary resentment built up. Not about you on a personal level, but on a professional level. Julius and i understand that. Lemonis so, the business has enough cash flow, it can pay you over time and buy you out. Angela if he wants to be bought out, im okay with that, you know, and gets the stress off of him. And maybe it will be better for michael. Julius correct. Lemonis the business, from the analysis that i did, could probably pay you out 400,000 over 7 years. Julius okay. Angela okay. Michael 400,000 divided by 7. Lemonis clean. Michael 57,000. Lemonis 57,000 a year to him. Whats the right thing for michael . Angela well, he needs help. He needs a partner. Lemonis i think miguel is important in this equation. What id like to do is rather than being a partner in the business, id like to have the money that i put in just be financing so that miguel and michael can own the business. Mike, whats the right percentage . Michael do 15 of profit. Lemonis its more important that michael and miguel own the business, and ill be a lender in this particular equation. In the original deal, michael, julius, and myself each would own 1 3 of the business. I realized that it would be better if julius was bought out and that michael owned those shares. In the new deal, michael would own 85 of the business, and miguel would own 15 . So i talked to them, and what were going to do is, michaels gonna own the business. Youre gonna be his partner. Youre gonna keep your original pay plan. Youre gonna keep your commission plan. And youre gonna have 15 of all the profits because i feel, and they feel, that this place wouldnt be the same without you. Miguel appreciate it. I wasnt expecting this, so right now, im kind of shocked a little bit, but very, very happy about it. Lemonis i felt like in order for this company to succeed into the future and for michael to have the support that he needed to be successful, he needed to have miguel as a partner, not just an employee. Michael thank you, marcus. Lemonis that work . Michael thats fine. Lemonis okay. Are you happy . Angela yeah, im happy. Lemonis i really enjoyed you meeting you by the way. I think youre an amazing guy. Miguel appreciate it. Thank you. Lemonis i know that youre tough on them, but they need it. Look, ideal cheese has been in business since the 1950s, and im hoping that it can make it another 50 years. Lemonis okay, my man. Julius thank you, marcus. Lemonis thank you, buddy. After seeing the renewed attitude that michael has and having miguel as a partner, im confident that this business can reclaim its spot as one of the best cheese shops in all of new york. And the good news is, with julius being bought out of the business, now they can get back to just being a wonderful father and son. Im going to say, this is the coolest fricking thing ive ever seen. An avid fisherman has spent years inventing his own cuttingedge gear. Ethan theres never been one in the world. Like, this is the first one. Lemonis . Garnering attention across the world. Ethan australia wants to do, like, 500 of em. Lemonis . And generating almost halfamillion dollars in sales. Fricking awesome. And i think he can do 10 times as much. Ethan i think we can really sell the pants off of this. Marcos i think its going to be very interesting. Lemonis but only if hed listen to feedback. You dont tend to hear the negatives. Ethan i get defensive. Lemonis ethan smith is rightly proud of what hes created. Ethan were doing it better than other people. Weve had 100 million views on facebook of this. Lemonis but his products, well, they need refinement. Bruce nothing fits right now