S02.E18: A Progress Report

[Tara Ariano]

Updates on companies that Marcus has visited, including a high-end used-car dealership in Illinois; a trailer business in Tampa; an ice-cream maker in New Jersey; a family-run gym in Chicago; and a candy manufacturer in Jacksonville.

[eddy]

Interesting to watch these updates.  Notice how a$$holes tend to fail in business?  I love how Marcus directly called some people out who were deceitful.

[KHenry14]

I was blown away by the two jerks of Worldwide Trailers, That was one case where I thought Marcus could really make some money, except for those two yelling at each other all the time. Yet they actually reconsidered what they were doing, followed Marcus' recommendations, and suddenly their business works!!  That was a huge surprise.

[attica]

I laughed at the on-screen disclaimer from A.Stein Meats. "Blah, blah, legal-speak, we thought the money was a loan." Um, dudes, it's on camera. Good luck with that.

[Primetimer]

It's the Where Are They Now? ep we've been waiting for -- but is it worth investing in?

Read the story

[sarthaz]

I thought it was interesting how he invested a ton of money into buying/gutting/renovating a massive building for Sweet Pete's and then created a bunch of silly ways to use all the unnecessary space: event space and full-service bar and restaurant?  For a candy company?  I bet Sal at Artistic Stitch -- excuse me, Queens Vibe -- has lots of ideas for how to use that space!  I'm sure there's a good reason for that approach, but since he killed a business owner just a few episodes ago for doing the exact same thing, it would be nice if he'd explain why it's an awesome idea for him and a terrible one for someone else.

[VintageJ]

I'm guessing because all the side business in Sweet Pete's are all somewhat related. They are all food/candy. They can have birthday parties and set up a tour. Even though I don't really see the business culture coming in, but oh well. The ones at Artistic Stitch were not related at all. A basketball court, restaurant, etc. can't remember the rest.

[Josiah Bounderby]

Bunting nailed this one. The ep was both too long and too short. If I hadn't been fast-forwarding through parts of it, I never would have made it through.

[selhars]

I liked the episode....more than the Simple Greek episode and an HELL of a lot more than ASL Signs/Sharla Popcorn redux. I would have loved a conversation with the people where the deal fell apart: Marse, Dog Works, Skulduggery, etc. I should never wish ill for anyone...but of all those mentioned...it's the Skullduggery folks I hate the most... for me because I guess it's the most inexplicable, The Dog Works guy and Marse son guy have issues that's just clear so I right them off. But the Skullduggery deal -- the brothers and dad....it was amazing how that turned out...I still marvel at it.

I was blown away by his 'integration' of his own companies......what do you know ....Athans Motors turned AutoMatch....gets 85 percent of its cars from.....(drum roll please)......1-800- Car Cash. And Shulers biscuits are in Crumbs....and didn't we see that there are now Crumbs Ice Cream flavors made by Mr. Green Tea? You go, Marcus.

Edited December 18, 2014 by selhars

[Lola16]

I was blown away by his 'integration' of his own companies......what do you know ....Athans Motors turned AutoMatch....gets 85 percent of its cars from.....(drum roll please)......1-800- Car Cash. And Shulers biscuits are in Crumbs....and didn't we see that there are now Crumbs Ice Cream flavors made by Mr. Green Tea? You go, Marcus.

I felt differently.  The way the show has been positioned is that Marcus is helping out small business owners with advice and an investment (where warranted).  Now it seems more like he's just filming strategic M&A for his own portfolio.  Nothing wrong with that but it's not true to the pitch.

 

That said, ASL must be kicking themselves in their butts for not being part of the integration.

[eddy]

"Nothing wrong with that but it's not true to the pitch." 

 

Agreed.

 

After three seasons, it's apparent that he's looking for synergistic acquisitions in a limited number of industries. 

 

Those outside his areas of interest tend to get no deal.  Yeah – it’s OK and it’s his money.  

 

But the viewers might get bored if yet another company with an under-sized kitchen gets aired :)

[Sister Havana]

I was blown away by his 'integration' of his own companies......what do you know ....Athans Motors turned AutoMatch....gets 85 percent of its cars from.....(drum roll please)......1-800- Car Cash. And Shulers biscuits are in Crumbs....and didn't we see that there are now Crumbs Ice Cream flavors made by Mr. Green Tea? You go, Marcus.

If I remember correctly, when Marcus bought Crumbs, he said he was going to feature products from Sweet Pete's and Key West Key Lime Pies there too.

Edited December 18, 2014 by Sister Havana

[Amarsir]

$2.3 million on that Sweet Pete's location!  Fortunately there's no debt to service so they're unlikely to lose money, but I'd be shocked if that breaks even within 3 years. Especially if his co-owners get a salary.

 

Speaking of renovations, I don't recall how much was spent on Pro-Fit's build but if they built those rooms, added new classes, opened extra hours, and sales are only up "over 10%"?  That's not great either.

 

Was anyone else surprised that the Pro-Fit line was bars?  He said they were going to do "bites", right?  Bars are fine and we know they sell, but I'd have liked to hear that change mentioned. (Also I like how the show did the typical spin of "exclusive" as a positive.  The exclusive you want is for GNC to only sell your bars, which is certainly not the case.  This is the bad exclusive where you can't sell to anyone else.)

 

Speaking of followup inconsistencies ... didn't they change the name "Mr. Green Tea" to "Keyport Creamery"?  Pretty sure that was a big deal.  But no mention of that.  Looks like a really good business though.

 

I laughed at the on-screen disclaimer from A.Stein Meats. "Blah, blah, legal-speak, we thought the money was a loan." Um, dudes, it's on camera. Good luck with that.

Technically, we saw Marcus say "I'll buy Brooklyn Burger from you for $200,000" and then a different camera showed an owner saying "We'll do whatever it takes."  Obviously other conversation took place, including the apparent reduction of the amount from $200 to $190.  Now I'm 98% certain that Marcus is telling the truth and the case will be decided in his favor.  But the court will have to review the unedited footage and any documents to confirm. Just hypothetically, it might have been arranged as a loan secured via Brooklyn Burger and then we have to consider how senior Marcus' debt was to others.

 

Again, I almost certainly agree but there's room for some other possibilities.  That said, The Profit has gone out of its way to be fair.  They mentioned that he got his money back from Maarse and the 3d printer back from Skullduggery.  They could have said nothing.

 

I thought it was interesting how he invested a ton of money into buying/gutting/renovating a massive building for Sweet Pete's and then created a bunch of silly ways to use all the unnecessary space: event space and full-service bar and restaurant?  For a candy company?  I bet Sal at Artistic Stitch -- excuse me, Queens Vibe -- has lots of ideas for how to use that space!  I'm sure there's a good reason for that approach, but since he killed a business owner just a few episodes ago for doing the exact same thing, it would be nice if he'd explain why it's an awesome idea for him and a terrible one for someone else.

I had the same thought.  But as @VintageJ said the businesses are more synergistic and we know Marcus loves synergy.  (I think we can guess a couple products the Sweet Pete's Cafe will sell.)  Also Marcus has a lot of similarity with a lot of these owners.  He's just better at it.

 

I would have loved a conversation with the people where the dal fell apart: Marse, Dog Works, Skulduggery, etc. I should never wish ill for anyone...but of all those mentioned...it's the Skullduggery folks I hate the most... for me because I guess it's the most inexplicable, The Dog Works guy and Marse son guy have issues that's just clear so I right them off. But the Skullduggery deal -- the brothers and dad....it was amazing how that turned out...I still marvel at it.

I want to see them interviewed  by a neutral show.  (Same thing I want to see for Shark Tank.)  As long as The Profit has to spin its own myth, we'll never get a complete follow-up.

 

Skullduggery is really weird to me too.  The problem is that the guys were clearly rude jerks - not only in the Nascar meeting but also with the focus group kids.  So I have no interest in defending them.  But I also think there was something else going on with the Nascar angle.  Why would he discuss it with buyers if he didn't already know Marcus had a connection? Why would he say that Toys R Us, Walgreens, and Kmart weren't interested if it wasn't true?  (And from the original show I'll remind you that Marcus' response about Toys R Us was "that's just one buyer, so what?")  Something really didn't line up there.

 

But that wasn't why the deal tanked anyway. They had unrealistic expectations about what Marcus would do and no self-awareness about their willingness to sell.  There's no question in my mind that they 100% made the handshake deal and then chose not to honor it.  Which is lousy.

[rehoboth]

Re Skullduggery,  I think those two brothers acted like they had been continuously handed money to prop up the business by their dad and their dad had finally cut them off causing them to ask Marcus to bail them out.  When the dad finally appeared on camera to tell Marcus to get lost (and to give his boys another bail out), he says that the sticking point with him was that they could not raise the boys' salaries without Marcus' approval.  Maybe he wanted (his 50ish year old) sons to learn a lesson but nothing as drastic as not having six figure salaries.

 

They behaved like spoiled brats.  No one with any business sense would burn bridges the way they did.  Papa should be embarrassed.

[Josiah Bounderby]

"Nothing wrong with that but it's not true to the pitch."

This is very perceptive. The show has sort of turned into the Marcus Grows His Empire Hour.

Why can't some episodes just be about improving a small business? Period. No scaling, no product launches, no integration.

[Shibori]

Even if Sweet Pete's doesn't take off as expected, they still have a huge (literally) asset in that renovated building in downtown Jacksonville.  So though I initially did a double take at the $2M+ number, a lot of that value he gets for that money is not dependent on the success of the business.

 

I took Marcus's suggestion and googled the Stein Meats/Brooklyn Burger fiasco, and it looks like Stein has been in longstanding litigation with the LA Dodgers over the use of the design of the word "Brooklyn" on the burger promotions and packaging.  The Dodgers are contesting Stein's trademark registration.  The dispute is not about the word itself, but the fact that the font, styling, and swoosh under the word are nearly identical to trademarked logo the Dodgers inherited with the team (and it is).  The case was on hold for a while pending the Dodgers' bankruptcy proceedings, but earlier this week the parties asked that the litigation schedule be pushed back to allow for settlement talks.  Most likely Marcus's (attempted) purchase of the burger brand would also include taking on the litigation.

[VintageJ]

With Skullduggery and Nascar, you've got to be a complete tool to act the way they did in that meeting and with the kids focus group. I have a feeling that Walmart, Kmart and Toys R Us had more of a problem with the brothers and their lack of business Presentation than they did with Nascar. Maybe, maybe not. Maybe there was a conflict that Nascar wanted some exclusivity deal or something. But I have no doubt in my mind that the brothers themselves are what did the deal in. If you are trying to get their business, why are you mentioning Nascar in the meeting anyway? Where did that come in? I see on camera that they don't know how to conduct a decent business meeting. Their attitude stinks and as soon as they felt the least bit of hesitation from the potential buyer, the funk smelled to high heaven in their body language, their face and demeanor. If they acted the way they did in that meeting with Marcus there, imagine how they were on their own. They were still trying to sell plastic or cardboard flying discs or whatnot. In this age of technology. And when multiple people said it was boring and confusing, they still did not want to let it go. Damn!

I too would love to see what happened with their business. Did we get any updates? I read all the posts but don't remember.

I love this show. And yeah, Marcus knows how to integrate his businesses, making sure they support each other in making profits. Like when Tabitha (love me some Tabitha) has a saloon go to the wedding shop down the street to strike a deal.

Edited December 18, 2014 by VintageJ

[sskrill]

My favorite line, regarding Art Rosenthal of LA Dogworks: 'I hate that guy.'  Marcus said it with such a resigned contempt, it just struck me as really funny. 

 

The most surprising to me was Worldwide Trailers. I'm glad they took some good things away from that disastrous ending they had and changed things for the better. I hope they can keep it up and are successful. 

 

The Dogworks thing made me laugh too.  Marcus is really good with dealing with difficult personalities and I think he really feels a sense of defeat over that one.  Its also unlike him to be just that candid about someones personality.

 

I was surprised about Tom and Nancy too.  I'm glad for them - I hope sitting back and watching their toxicity through other people's eyes really helps them move forward.  If they can stay that way maybe Marcus will make a trip back.  In my mind they deserve more of a chance than popcorn lady ever did.

 

I was curious about the Eco cleaners company.  Wonder if they're still employing that useless sales woman on the East Coast.

[selhars]

The DogWoks guy was a hoot, but the BEST line :):):) was to the Marse man child...when Marcus said: "You better go call your mamma and get my money back."

Now THAT cracked me up.:):) I'm STILL laughing at that one. OMG that was funny......

 

 

I was surprised about Tom and Nancy too.  I'm glad for them - I hope sitting back and watching their toxicity through other people's eyes really helps them move forward.  If they can stay that way maybe Marcus will make a trip back.  In my mind they deserve more of a chance than popcorn lady ever did.

 

 That's the truth. But with Popcorn Lady, he only has one - uh - person -- to deal with. The the Trailer couple he has two., and not matter how well they get a long, the history there could "pop" back up at any time. I dont' know that I'd risk it. 

Edited December 24, 2014 by selhars

[clod]

another view of the trailer company -  they got some very valuable consulting (for free) and acted on it.   

 

 

without giving up any equity or control.

[rainbowlady]

Hi people, I'm new here, but like The Profit  & the way Mr. Lemonis,does business, so I'd like to join in.

Have some answers to some of the recent comments. (Research & seeing replies on Twitter by ML..

1. Eco-Me has been sold to Kittrich Corp., an environmental cleaning product co. Don't know any details or why ML agreed to a sale.  He consistently says he likes to be an active partner and not sell businesses he invests in.??

2. Pro Fit Bars - GNC required bars not bites.  I think the bites are being sold at Mariano's in Chicago as an exclusive, not positive. Anyone in Chicago to find out?? if interested??

3.Marcus answered a tweet and said he bought the Sweet Pete's trailer from WWT, probably after they reached out to him.

4.Artistic Stitch (Queens Vibe) is now back to Artistic Stitch. He has intimated several times that something is really wrong with how they are acting/ or lying/not doing their share of the deal. Says it is a BIG problem and he's very upset, but no particulars. Sounds like they've really screwed him up somehow.

5. Diverse businesses: IMHO  integrating many companies under his several umbrellas is brilliant and very good business practice, but remember there have been many other types on The Profit. Unique Salon & Spa, Coopersburg Sports, L.A. Dogworks (I also hate that guy), Maarse Flowers ,Eco Me, Skullduggery, Artistic Stitch (although could have been used to promote his other businesses).

6.Skullduggery. Those were the worst!!!  IMHO believe they, in advance, knew what they were going to do and messed up everything just to get his input and/or makeover for free or with no responsibility. Maybe they thought he'd cave and let them do what they wanted with the money.  They didn't know him on that part. What toy company, particularly with cars, would turn down NASCAR?  IMHO.

Whew! my first post and I've said a bunch.  Enjoyed this!

 

[caligirl50]

Marcus said in an interview that he had a gut feeling when he made a $600,000 deal that was a bad deal.  He was referring to Artistic Stitch.

Edited January 25, 2015 by caligirl50

[nobodyyoucare]

In regards to Sweet Pete's a lot of places that are for kids have rooms for kids parties and even corporate events. A number of companies will have company parties and get aways at theme parks etc as a reward or for team building. Gordon Ramsay stated that each week or was it every other week that the staff of his restaurants go out to do an event like play cricket or something .

 

Plus a number of companies that make candy have factory tours and even have restaurants/bars to sell food at.

 

So what Marcus has done with the building is industry standard. Plus the building itself is a huge investment that could earn what was put in or make a profit if it was ever sold in the future.

 

 

I have a feeling that Walmart, Kmart and Toys R Us had more of a problem with the brothers and their lack of business Presentation than they did with Nascar.

I just think the brothers were snobs and made up their claim that those companies didn't want anything to do with Nascar. Nascar products are in those places and have been for years. As for why have Nascar they are a name associated with racing cars. Having Nascar on the box next to Hot Wheels makes people notice the toys whereas if they were under whatever the hell name they are under now, no one notices the cars.

So having Nascar on a toy car makes a ton of sense and opens a lot of retail doors to future toys.

 

 

Eco-Me has been sold to Kittrich Corp., an environmental cleaning product co. Don't know any details or why ML agreed to a sale.  He consistently says he likes to be an active partner and not sell businesses he invests in.??

 

Much like the CEO of a large craft beer maker said "I am a businessman and if I was offered 40 million dollars to never drink beer again in my life I would seriously consider taking that 40 million dollars" 

If Marcus got a beneficial deal that would benefit all parties why wouldn't he take it?

 

 

Why can't some episodes just be about improving a small business? Period. No scaling, no product launches, no integration.

He has to think he could make money for his time spent. 

 

 

 

Speaking of renovations, I don't recall how much was spent on Pro-Fit's build but if they built those rooms, added new classes, opened extra hours, and sales are only up "over 10%"?  That's not great either.

Was anyone else surprised that the Pro-Fit line was bars?  He said they were going to do "bites", right?  Bars are fine and we know they sell, but I'd have liked to hear that change mentioned. (Also I like how the show did the typical spin of "exclusive" as a positive.  The exclusive you want is for GNC to only sell your bars, which is certainly not the case.  This is the bad exclusive where you can't sell to anyone else.)

Speaking of followup inconsistencies ... didn't they change the name "Mr. Green Tea" to "Keyport Creamery"?

Memberships not sales. Memberships grow slowly and depending upon the services offered they can offer different membership tiers. 

Also exclusive deals often have a time limit or a certain region lock on them. So a store may have an exclusive but that may be only for a certain country, state, or for a certain time.

 

Mr Green Tea is still there. http://www.mrgreentea.com/#!online-store/cnjc as for Keyport Creamery doesn't seem to exist. Wasn't it a proposed umbrella brand by Marcus? 

 

The way the show has been positioned is that Marcus is helping out small business owners with advice and an investment (where warranted).  Now it seems more like he's just filming strategic M&A for his own portfolio.

He always stated his goal to help these businesses is to make his money back and make more money. He isn't going to invest his time and money in a business that doesn't interest him. No investor does. Investors always have an angle as to why they invest. Often its because they like the product or like the person in the company or there is some fringe benefit. 

[clod]

Why can't some episodes just be about improving a small business? Period. No scaling, no product launches, no integration.

 

 

two words:    The Profit

Edited February 13, 2015 by clod