Ive had enough. My name is marcus lemonis, and i risk my own money to save struggling businesses. Were not gonna wake up every morning wondering if we have a job. Were gonna wake up every morning wondering how many jobs we have to do. Its not always pretty. Everythings gonna change. Everything. But i do it to save jobs and i do it to make money. This. Lets go to work. Is the profit. I receive thousands of applications from people looking for my help, but none were more persistent than sammy lazoja from standard burger. So, earlier this year, i headed to Staten Island to meet him and his partners. Sammy its a pleasure to meet you. How are you . Lemonis how you doing . My First Impression was not good. Is the restaurant making money . Todd no. Lemonis how much are you losing . Covello 5,000, 6,000 a month. Lemonis their pricing was all over the place. Todd theres no logic on it. Lemonis theres no logic. Thank you. And the restaurant was a mess. Look at the toilet. Its disgusting. The product was underwhelming. Honestly, i would say the burgers are average. But it didnt take long to find out why. You guys have frozen burger . Sammy yes. Lemonis . The four partners didnt know what they were doing. Joe t. keep in mind, none of us have had any restaurant ownership experience at all. Lemonis oh, i dont have to keep it in mind. I picked up on it. And instead of figuring it out. Sammy we had an idea. It [bleep] went to [bleep] lemonis . They fought bitterly. Sammy thats [bleep] that i dont love this place. Joe t. hey thats enough. Fuji, thats enough. Lemonis sammys brother, fuji, the only one with restaurant experience, had been pushed out of the business. Todd weve all had issues with him. Lemonis after tasting the burgers that he made, i quickly decided that if i was gonna be involved in standard burger, so was fuji. Fuji is in charge of the kitchen. So he is now a partner, as well. I made a deal to invest 130,000 for 30 of the business. We got a deal . Were gonna start over. If were gonna set the standard, its gonna be my standard. We upped the quality of our ingredients, simplified the menu, and overhauled the space. [ laughter and applause ] we needed somebody to run the daytoday operations, so joseph stepped up to be the general manager. But i wasnt just fixing up one restaurant in Staten Island, i saw standard burger as a national opportunity. And this place would be the model wed use to sell franchisees on the concept. To the burger boys. All burger boys. Lemonis six months and about a half a Million Dollars later, were just about ready. Today were at time out magazines battle of the burger, and theres about 50 restaurants here competing for one prize best burger in new york city. Joe t. so lets rock this out. Lets show everybody who we are. [ cheering ] [ whistling ] lemonis the Business Plan is to launch standard burger into other markets through a franchise model. And so, when you can get recognition as the best burger in new york, that bodes very well for getting potential franchisees. Come on down try the standard burger joe t. has everybody got a chance to try the texan from standard burger . Lemonis everybody was out there, fired up, promoting it, getting excited. What do you think . Man oh lemonis you see . Its good. Joe t. best burger here. Come in and give it a try. Lemonis come on down joe t. we got a line going. Lemonis standard burger we were going up against some real competitors. I was nervous. But after being there for five hours and talking to thousands of people. Standard burger was the winner of battle of the burger. And im not gonna lie to you, i was pretty fired up. I always enjoy revisiting businesses. But coming back to an awardwinner . Even better. But im not just here to hang out. Were about to have our first meeting with a potential franchisee, and i want to make sure were ready. So far, so good. The place looks as good as it did when i left the last time a few months ago. Hey, guys. Woman morning. Lemonis some of you missed out on it. It was exciting. Woman we know. Lemonis how you doing, sir . Good to see you. Joe t. good, brother. You, too. Lemonis ill give you one initial compliment i walked the parking lot, i dont see a speck of paper anywhere. Joe t. so thats part of our training that we do here. Every employee knows that before they clock in, theyre to walk the property fully. Lemonis it looks fantastic. Joe t. thank you so much for saying so. Lemonis and you can see it when you walk in. It looks fantastic. Joe t. thank you, marcus. Lemonis and you didnt know i was coming, so that makes a big difference. As youre building a business model, one of the things that you have to have in place is fantastic presentation. And for me, theyve gotten an a. Guys, what are all these little chalkboards for . Joe t. uh. Lemonis as a customer, im not happy about that. Fuji thats what im saying. Because i see a lot of people come in and they look at that, they look at that, and we dont simplify it enough for them. Lemonis yeah. Id rather redo the board. Joe t. i was just looking for what it costs. Lemonis no, but cant you just change it to 6 up there . Fuji no, thats a completely different item. Lemonis what is the real difference in the item . Joe t. some toppings. Lemonis one of the things that i wanted to do last time was pare down the menu and simplify it. After spending over 400,000 building a master plan for a business that i want to scale, im now seeing the exact opposite of what i wanted. Okay, can i order, please . Joe t. sure. Welcome to standard burger. How can i help you today . Lemonis ill have a standard burger, please. Actually, you know what . Im gonna save a dollar. Im gonna just get a hamburger. Joe t. hamburger, okay. Lemonis and so whats the size of the patty on that . Joe t. the same three and a half ounces. The bun is the same. Its a 4inch bun. Lemonis okay. Why do i have to pay 1. 00 more for this one . Joe t. cause the hamburger itself has no toppings. Its just meat and bread. The standard burger has lettuce, tomato. Lemonis it has no tomato on it . Can i have a hamburger with lettuce . Joe t. wed offer you the standard burger then, sir. Lemonis so i have to pay 1 for a tomato . Joe t. its not just tomato. Its lettuce and tomato and i think theres some onions on there, also pickle. Sammy but i think we actually lose money like this. Joe t. we lose money like this . Sammy i think so. Joe t. so your suggestion is to leave those burgers or dont leave those burgers . Sammy wipe them out. Joe t. wipe them out . So the highestselling burger in the restaurant, you want to wipe off the menu . Sammy well, its the highest selling cause its the cheapest. Were inventing items on the menu just to make some people happy. Joe t. we didnt invent any items on the menu. And theyve been incorporated now for three months, and this is the first im hearing that nobody likes them. Lemonis the problem is that it wasnt part of our original concept. And so when we depart from it, it could create animosity. Sammy these are the areas where, like, sometimes i feel offended and i dont come to the restaurant, because, like, i walk in and i got joe t. you dont come to the restaurant cause you dont feel like it, sam. Lets not makebelieve. Sammy so i did all this joe t. you did all this . Sammy well, i tried. I put effort in to do all this joe t. you put effort in. Okay, i finished it, though. You start stuff and then i wind up finishing it. Thats how it goes. You dont think so . Sammy no. Joe t. so when you left for your honeymoon without telling anybody what was going on in the middle of all this construction, who finished it . Sammy you did. You joe t. did you tell me what you were doing . Did you tell me where you were . Sammy yeah, i said joe t. did you tell me what stage you were at . Did you tell what vendor was coming . Sammy joe, did the place get built . Joe t. it did, because i slept on the bench. Thats why it got built. Sammy joe, it was my honeymoon. I entrusted you cause youre my friend. Joe t. i know. But youre telling me right now that you feel like i make decisions without you. Sammy you do. Joe t. we didnt even see you, though, sam. Youre welcome to come in this door and join the conversation any time you like. Lemonis listen, ive had enough. We have a franchisee scheduled to come here. Hes expecting to see consistency, and theres chalkboards up here, youve changed the price of things it looks like chaos to me. Why dont we do this . Why dont we take a little kind of cooling off break for a minute . Im gonna go talk to the staff, okay . Joe t. yeah. Lemonis okay. Hows chef fuji doing . Dana i love fuji. Hes great. Hes here every day almost all day. Lemonis working his butt off . Dana he sweats. Its hard. [ laughs ] lemonis how are things different . Dana a lot more organized, more efficient. Lemonis does it always look this clean back here . Dana yeah. Lemonis it really does . No b. S. . Dana no. Lemonis okay. No b. S. Joe, i just did a walk of the kitchen, and its onpoint. No doubt about it. So i want to work in the kitchen with you guys. Man so where was this going . Lemonis i noticed there was some confusion in the kitchen. Things are not running as smoothly as they first appeared. Which burger is this . Man texan toppings with an egg on it. Lemonis did somebody order a texan with an egg . Anybody order it with an egg . Youre still waiting for it . Is this it . Joe t. ill get you a burger in sec. Lemonis you got yours and you didnt get yours. That will be on us, by the way. Joe t. are you working on 41 over there . Man im on 45. Joe t. theres no 41 there . Lemonis were waiting for a burger with an egg. Joe t. i need that firing, okay . Lemonis who ordered this one . Man we had to remake this burger. Lemonis is this a refire . Man yes. Well, we dropped it. Lemonis so this is a no bueno . Not only have they messed up two orders, theyre completely disorganized. We had another issue. Different table, totally the wrong burger. When he went out there, somebody said they didnt order it. Woman that was number eight. That was the one that you wrote down. Man no, it wasnt. Lemonis were not busy. So what happened . Joe t. sticking knives in your friends backs, and you say bull[bleep] to other people, and expect it to go under the rug. Sammy hold up. Joe t. im the rug sweep it under me at ally bank, no branches equals great rates. Its a fact. Kind of like grandkids equals free tech support. Oh, look at you, so great to see you none of this works. Come on in. Four score and seven years ago, our [train horn blares]th. To the continent. [claps]. A new nation. Announcer why not celebrate president s day with a better nights sleep . Through president s day at sleep train get up to four years interestfree financing on tempurpedic, and save up to 300 on beautyrest and posturepedic, plus sameday delivery, and sleep trains love your mattress guarantee. Hurry this special financing offer ends president s day at sleep train. Lemonis we had another issue. Different table, totally the wrong burger. So what happened . Man youre pulling us out of working our station. Lemonis whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa. These orders got placed before i even walked in the door. Man yeah, yeah. Lemonis so dont be putting that on me. Man im sorry. Im sorry. Lemonis how often does that happen . Joe t. not very often. Lemonis so its totally coincidental that all three orders that i pick up are jacked up . Man yes. Lemonis in the Restaurant Business, there are going to be mistakes that happen in the kitchen, but when i see it happen over and over again, im starting to worry about how much this is affecting our food costs. Can we sit down and have a financial discussion . Joe t. sure. Sure. Lemonis i wanted to go over Topline Revenue for the last 90 days. And then i want to dig into food costs. What were we doing prior to that renovation . 50,000 a month . Todd yes. Lemonis okay. And so in the month of june, right out of the gates, 108,000. The gross profit on that 73,000. Todd right. Lemonis and so food costs, as you know, are a function of the cost of the product and what else . Joe t. labor. Lemonis nope. Todd budget . Lemonis nope. Joe t. price sold . Lemonis thats right. The Restaurant Business is really one in the margins and the smallest of numbers. And the most important factor in the Restaurant Business is food costs. Food costs are calculated by taking all of the costs of the actual ingredients and dividing them by the retail price. And at standard burger, that number cant be greater than 30 . So in the month of june, our food costs were 31. 4 . I want to be under 30 . So were a point and a half away. Then, when i come to july, we jump up to 34 . Nothing changed with the cost of the food. You want to know why we went to 34 . Todd because we dropped the price. Lemonis right. With this economy burger that joes come up with, all hes done is lower the retail price. Taking out lettuce and tomato isnt gonna help our food costs. In fact, our food costs have jumped from 31 to 34 , and those three Percentage Points matter. Thats a recipe for disaster. And so we all agree our concept is gonna have a really good burger, but we cant compromise on ingredients. So we can negotiate with the vendor, we can work on food costs, or we can be careful what we do on discount. Those are things we need to do to get the 1. 5 out of june and the 4. 2 out of july. This is a good financial discussion. I feel like were making progress. Im not scared about the numbers. The fact that were breaking even and i know where the opportunity is, is better than losing money. Anytime youre building a concept, you have to invest in the strategy. Im okay breaking even because i feel like im investing for the future, but its a hell of a lot better than losing money like they were before. And then one thing, sammy, when joe says youre not coming around, how many times have you been here in the last 90 days . Sammy probably 30. Lemonis so, once every three days . Sammy yeah. [ laughter ] lemonis what do you think, fuji . You think hes been here once every three days . Fuji not once every three days. Lemonis once every four days . Fuji id give him once a week. Lemonis once a week . Fuji about that. Sammy i had my own reasons why i wasnt coming around. Lemonis what are they . Sammy i was just feeling that, you know, i was being kind of pushed to the side a little bit. Lemonis but youre the largest shareholder. Sammy yeah. Lemonis you shouldnt have to be invited to your business. And so thats on you, right . Or no . Sammy yeah, no. Its on me. Lemonis its not their job to tell you what your role is. Its your job to establish what your role is and say to the guys, guys, heres what i was thinking i could contribute to the group. At this point, i feel like im ready for any question that a potential franchisee may ask, so ive agreed to go see another location that sammys been going on and on about. Sammy hey, marcus. Lemonis do i think we need a second location . No. Look, im focused on franchising, but im always open to new ideas. But i expected there to be a door and, like, a ceiling. What is this . Sammy construction. Lemonis well, what is this . Sammy well, so its a new Shopping Center being built, a movie theaters being built over there, and this is the venue thats available. Lemonis how you doing guys . Marcus. Jack jack hays. Nice to meet you. Lemonis jack, how are you . Jeremy jeremy felt. Jed jed hays. Nice to meet you. Lemonis how are you . Fatherson . Together yes. Lemonis very good. And so, whats the plan here . Maybe you guys could give us a summary and we could walk it . Jed yes. Those buildings there, thats t. J. Maxx. Theyre gonna open inhe next few months. Lemonis lets walk the space. Its a construction site. What are they asking a foot . Jed 777. Lemonis thats pretty strong. How many square feet . Jed 3,000. Lemonis so, over 230,000 a year . Divide that by 12, youre talking about 18 grand a month . A good rule of thumb is that a restaurants rent shouldnt exceed more than 8 of its total revenue. With an 18,000 rent factor, the restaurant would have to do at least 225,000 a month in sales. Standards current restaurant does about 100,000 a month in sales. If we were to open up a new location like this one, we would have to more than double our business. How many people live within 1 mile, 5 mile, 10 mile . Sammy i have the demographics for it. Lemonis what is it . Sammy its. Lemonis you brought me here. Sammy yeah. Lemonis so what is it . Sammy its. I cant remember. Joe t. i think its gonna be more of shopping traffic than it is gonna be lunch business crowd. Lemonis shopping for what . Joe t. shopping for t. J. Maxx. Lemonis t. J. Maxx what is that customer . Jack discount. Lemonis discount. They gonna come here and spend 20 bucks . Joe t. right. Jed they do. Lemonis now i want to be clear with you guys. Im not saying this is a bad idea. Joe t. after this conversation, i dont think its a good idea, though. Lemonis well, but we dont have the data to say whether its good or bad. This space, with the variables that weve talked about, scares me. Let me talk to these guys for just a minute. Jed okay. Lemonis the problem that im having with these guys is they basically just pull [bleep] out of the air. Well just go to a location and we hope the rents gonna work out. Youre not gonna do that with my money. Were in the business of building a box, marketing it, polishing it, perfecting it, and then having somebody say, ill take one. Ill take one. Thats what a franchise is. We are not in the business of leasing space and building [bleep] out. Joe t. and if it happens the way it happened the first time, im gonna be sleeping on the bench over there, too. Sammy come on, lets be honest. I did everything that i was possible able to. I was leaving on my honeymoon. Joe t. you can say honeymoon. I dont care if you went to japan, you shouldve told me before you left what im doing. Sammy i left you with directions and what was happening. Joe t. me . Me . Sammy yeah, i said, hey, joe. This is whats happening. Can you just keep an eye on it . Joe t. holy cow, bro. Sammy and you can ask all the contractors you can. I dealt with every single thing. Joe t. im the one who scheduled the dates, im the one who scheduled the lead times i did all that stuff. I held the bag. Sammy are you kidding me . I killed myself. Im telling you i worked on Everything Possible. Joe t. i hear chinese and bull[bleep] right now. Thats what i hear. 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