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Macaron QueenThe Profit

Macaron Queen: The Profit Updates in 2020

by Molly Morrow
written by Molly Morrow

The Basics

  • Company: Macaron Queen
  • Owners: Nina Chteoui and Finia Jahangard (Co-Founders)
  • Product: High-end macaron cookies
  • Problem: Lack of growth
  • Marcus’s Offer: $500,000 for 50% equity
  • Season/Episode: Season 7, Episode 5

Life Before The Profit

Macaron Queen began as a tiny startup in the dessert space, with a colorful kiosk booth set up in Atlanta’s Perimeter Mall. The founders of this traditional French dessert company are a mother-daughter team with mixed Iranian and European heritage – but not a lick of French between them. This disconnect between the product’s cultural origins and their own ancestry doesn’t necessarily mean trouble, but it certainly doesn’t help their brand authenticity. Nonetheless, as Marcus finds out, their cookies are excellent.

Macarons are often called “the impossible cookie,” notoriously difficult to get right. Macaron Queen founder Finia Jahangard perfected her own macaron recipe over the years through careful study and a couple of cooking classes in old Paris. In 2017, Finia underwent heart surgery and since then she’s been struggling to maintain the business. Her daughter Nina has taken over much of the business in an effort to help her mom and keep the small-but-mighty bakery business from going under.

Marcus can see that Macaroon Queen has a strong business model on a small scale, but he thinks the business’s true untapped potential lies in its scalability as a national, direct-to-consumer product. He thinks the product can be a wholesale success, too, and considers himself the right man for the job, as he’s something of a “Macaron Snob.”

Macaron Queen makes dozens of delectable macaroon flavors, including red velvet, key lime, champagne and french raspberry (to name just a few). 

 First Impressions

Marcus sits down with the Macaron Princess and the Macaron Queen for a taste test. After a few bites of the colorful cookies, he makes a bold assessment: “These are the best macarons I’ve ever had,” he says. (And this coming from a self-professed Macaron Snob.) 

macaron queen the profit marcus - Macaron Queen: The Profit Updates in 2020

Running the Numbers

Since Finia’s heart attack, Nina was forced to make a drastic career change and leave her former life to come help out in the family business. Nina’s background is in fashion design and international fashion distribution. She came into the bakery business to help her mother, essentially, which is sweet – but perhaps ultimately unsustainable. She’s quick to assure her mother that she doesn’t miss her old life too much – that her mother’s passion is her own. But Marcus can see the toll it’s taking on the mother-daughter duo.

He sits down with Nina and Finia to go over the numbers of their business. Most importantly, he wants to show them which retail stream is more profitable for them: retail or wholesale.

  • Retail cost-to-fulfill: $1.39
  • Wholesale cost-to-fulfill: $0.10
  • Distribution: Perimeter Mall in Atlanta, GA; with wholesale distribution to Bubble Tea Retailers and Coffee Shops
  • Total annual sales, 2018: $369,000
  • Total net profit, 2018: $73,000

Marcus is ready and willing to invest, in $100,000 increments. At each level of investment, he wants to see certain production goals achieved, without compromising on quality. He’s willing to invest up to $500,000 – but for each $100k he invests, he wants 10% equity. They’re not obligated in any way to take the money, but it’s available to them if they need it. Ideally, he says, the business will make enough money that they won’t have to lean on his investments up to the full half-million threshold.

Nina and Finia barely need a moment to consider the deal. They are thrilled to accept Marcus’s offer.

macaron queen theprofit cookies 1024x538 - Macaron Queen: The Profit Updates in 2020

Cookies With Intercontinental Style

Joseph Trevino is an Executive Chef at the Intercontinental Hotel, and he’s looking for a macaron master. The Intercontinental Hotel, he explains, doesn’t have an in-house pastry chef or an in-house macaron specialist, so their outsourcing pastry costs are high. They’re looking for someone exactly like Macaron Queen to help them out. Nina and Finia bring samples of their delicious cookies, and Trevino (no surprise) is impressed. He’s open to a deal but wants to stay competitive with pastry pricing. Current costs for the Intercontinental Hotel are between $0.89 and $1.19 per cookie. Nina and Finia are agreeable, and the pair strikes a deal with their new hotel distribution partner.

In the kitchen, Marcus is only minorly alarmed at the fact that Finia keeps having to stop repeatedly and check her resting heart rate on a Fitbit attached to her wrist. If a heart attack is imminent, it surely can’t be more important than making a profit. This is NBC, after all.

They are finally forced to take a break when Finia’s heart rate skyrockets to 166. That’s more than a hundred beats per minute higher than it’s supposed to be.

After the gang is fully recovered, Marcus and Nina head to Manhattan for a meeting with Weight Watchers CEO Mindy Grossman.

A New York Minute

Catching up with Mindy in New York, the gang gets some valuable insight on how up their marketing game and really develop their brand’s unique voice and style. As usual, the macaron samples are a huge hit, and the tasters from Weight Watchers can’t quite believe how delicious the treats are.

On a video call with Finia (resting back home in Atlanta), the Weight Watchers team gushes over the product and tells Finia they’d love to be involved with making Macaron Queen a healthy, delicious option for their global network of clients. “That would be my dream,” says Finia. She’s clearly overjoyed, and the segment ends on a high note.

A Happy Ending for Macaron Queen

With distribution deals in progress at Intercontinental Hotels and Weight Watchers, things are looking up for Macaron Queen. Marcus and Finia let Nina have the stage in the episode’s final segment, asking her what she’d like to do. She gave up her life to help her mother, and they want her to know that that option is still on the table, if she so chooses. Is she ready to go back to her former life in high-fashion? Or is she going to stick it out in the family business? “I’m not a quitter,’ she says, a remark which brings tears to her mother’s eyes. “I’m going to see this through.” 

 

Where Are They Now? Life After The Profit

For Macaron Queen, business seems adequate, although the distribution deals alluded to in this episode of The Profit seem to have fallen through, and the retail sales they were hoping for don’t seem to have materialized.

The Macaron Queen website features a user-friendly shopping interface for online ordering and free overnight shipping on orders over $175.

The full Macaron Queen product line dazzles, even in webpage form, with delectable gluten-free treats such as:

  • French Mix Macarons – $27 – A classic selection of old favorites and French standbys, including Pistachio, French Raspberry, Crème de Lemon, Cappuccino, Coconut, Almond Croissant, Rose Lychee, Passion, Mango White Chocolate, Matcha Green Tea, Vanilla Strawberry, Lemon Raspberry, Raspberry Dark Chocolate, Double Dark Chocolate, Coconut Chocolate, Hazelnut Nutella, and Vanilla Bean.
  • Fruity Lovers Macarons – $27 – A random selection of fruit-filled macarons create a vibrant mix of French Strawberry, Raspberry Dark Chocolate, Strawberry Lemonade, Lemon Raspberry, Crème de Lemon, Mango White Chocolate, Passion Fruit White Chocolate, Raspberry White Chocolate, Vanilla Strawberry, Mix Berry Cheesecake, Key Lime Pie, Blueberry Citrus, Coconut, Love Potion, Raspberry Lemon, Rose Lychee, Strawberry Cheesecake, Strawberry Shortcake and Taro.
  • Chocolate Indulgence Macarons – $42 – A random selection of Double Dark Chocolate, Raspberry White Chocolate, Valentine-Decorated Red Velvet, Limited-Edition Raspberry Chocolate Truffle and Chocolate Grand Marnier.

As of July 2020, Macaron Queen is sold directly online and through distribution with Cafe Bene and Tiny Bubbles.

The business maintains a lively social media presence on Instagram, which boasts well over 4,000 followers.

This reporter, for one, is one macaron queen fan who hopes the future sweetens up.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Macaroon Queen, The Profit, or any of its subsidiaries.

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Skinny LatinaThe Profit

Skinny Latina: The Profit Updates in 2020

by Molly Morrow
written by Molly Morrow

The Basics

  • Company: Skinny Latina
  • Owner: Ana Quincoces
  • Product: Cuban-inspired sauces, marinades and rubs
  • Problem: Stagnating sales, lack of growth, disorganized marketing
  • Marcus’s Offer: $75,000 for 15% equity (with conditions)
  • Season/Episode: Season 7, Episode 3

Life Before The Profit

Ana Quincoces has lived many lives. In one, long ago, she was a high-powered attorney. In another, she was a mildly famous reality TV star, on Bravo’s The Real Housewives of Miami. In her most recent iteration, she’s an entrepreneur with a struggling business that Marcus Lemonis – star of NBC’s The Profit – wants to save.

Quincoces started Skinny Latina, an artisan sauce and marinade business, in 2013. But six years later, by the time of Marcus Lemonis’s intervention, the business had expanded no farther than the regional market, brand awareness was low, and sales were poor.

The sauce and marinade market is a giant market rife with opportunities, and Skinny Latina’s product is well-made with a small-batch manufacturing process to ensure maximum quality and deliciousness. But Quincoce’s success is hampered by her disorganization, her lack of effective, well-researched marketing – and what are sure to be a number of entertaining, delightfully embarrassing personality flaws that NBC will do their best to exploit and exaggerate over the course of the episode.

Skinny Latina makes four distinct products, all variations on a similar theme:

  • Million-Dollar Marinade (the brand’s flagship recipe)
  • Guava Fig BBQ Sauce
  • Mango Apricot BBQ Sauce
  • Skinny Latina Hot Sauce

Quincoces says she was inspired by traditional Cuban cuisine, particularly a popular condiment called Mojo, which functions as a sort of spicy Cuban ketchup. She started making her own version of the flavorful Cuban sauce, and her friends began asking for the recipe so frequently that she hit upon an idea: “Maybe I should bottle this.”

“Are you a chef?” Marcus asks, in their first meeting.

“I’m as much of a chef as anybody on Food Network.” Not exactly the humble answer we were hoping for. But as it turns out, she has room to talk. She was featured on Season 12 of the network’s hit show, Food Network Star. 

Shortly after her second cookbook was published – she’s written three – the Miami Herald did a glowing writeup on Quincoces and, most importantly, her memorable appearance on Food Network. In May of 2016, the Herald shined helpful spotlight on Quincoces and her business, writing:

“Ana Quincoces has gone from Real Housewives of Miami star to The Next Food Network Star. The Coral Gables lawyer and marinade entrepreneur showed that her time on the Bravo show paid off — she was poised and camera ready. On the Sunday night premiere, Quincoces made a Cuban frita that judge Bobby Flay liked so much that he said he might steal the recipe.”

With so much early promise, it’s sad to see Quincoce’s business struggle. Hopefully, Lemonis and NBC can work a little TV magic to help rescue this delightful artisan sauce and marinade company.

First Impressions

It’s clear from the beginning that Skinny Latin suffers from a serious branding problem. Like many other subjects on this show, Quincoces herself has a highly original backstory and tons of life-material to market her brand – but she’s not using any of it. The product names and labels, Marcus notices right away, leave a lot to be desired. Million Dollar Marinade, for instance, reveals nothing about Quincoces or the product. It’s more of a generic place-holder than a viable product name.

skinnylatinalabelontheprofit - Skinny Latina: The Profit Updates in 2020

The label for Skinny Latina’s Million Dollar Marinade – not exactly a million-dollar idea.

Running the Numbers

“I haven’t grown the company like I should have,” says Quincoces, because she “didn’t want to put the company in debt.” While avoiding debt is a good instinct, Marcus is convinced there are ways to expand while staying fiscally responsible. Marcus digs into the numbers with Ana.

In one of the hugest red flags in Profit history, Ana reveals that she somehow doesn’t have financials for 2015, ’16, ’17 or ’18. She only has financials for 2019. “I didn’t have time,” she tries to explain – but Marcus (and the audience) aren’t buying it.

  • Distribution: Publix, Whole Foods, Milam’s, Fresh Market (South Florida regional market)
  • Cost of Production: $1.63 (Mango BBQ); $1.71 (Guava BBQ); $1.96 (Marinade)
  • Retail Price: $4.99-$5.99
  • Total annual sales: $40,000 (as of July 2019)
  • Total invested so far: $50,000
  • Total revenue streams: 3 (sauce sales, endorsement deals, TV appearances, book sales)

Marcus scolds her for the abysmal lack of financial documents, but is able to dig a little more about profit margins out of her before she breaks down in tears about the sad state of her Skinny Latina empire. She believes in what she’s doing, and she needs Marcus’s help to think big and get to the next level.

The proof of concept is there, but again, there’s no real solid financials to go by. Marcus is willing to put in a portion of an investment, but not by himself.

Ana reveals that she’s asked exactly zero people to invest so far, and that the mere thought of having to put work into acquiring investors makes her want to throw up. “Ugh,” she says, with a thick note of disgust.

“I’m not going to write a check for somebody who doesn’t have their shit together.” 

Marcus is willing to invest – but only after she proves that she can raise money from other investors in an orthodox way.

skinnylatina financials theprofit - Skinny Latina: The Profit Updates in 2020

Room For Improvement

Marcus takes Ana to a nearby friend’s popular BBQ joint – Woodpecker’s Backyard BBQ – where they can road-test the product for themselves. The cast and crew chow down on ribs marinated in Skinny Latina sauce, while Ana and the BBQ owner talk business. Essentially it boils down to this: “skinny” and “ribs” don’t go together.

“But people are buying it, Marcus.”

“Well, they’re not – or else I wouldn’t be here.”

(But also, you didn’t need Marcus to tell you that. Just ask the entire state of Texas if skinny and ribs go together. You won’t be able to hear the resounding shouts of “hell no” over the sound of enraged Dallas Cowboy fans throwing Lonestar cans and bottles of Sweet Baby Ray’s at your food truck.)

Whereas most celebrity products use great branding to sell a lackluster product, Skinny Latina is one of those rare cases where just the opposite is true: it’s a spectacular product that suffers from terrible branding.

To its credit, Skinny Latina has a more feminine packaging and branding identity than other, typically hyper-masculine sauce products. It’s the only female product logo, in fact, in the entire market – except for Chalula, which also happens to be the world’s best-selling hot sauce. But as market experts are quick to remind her, you can’t tell from Skinny Latina’s label anything about the actual product.

skinnylatina theprofit grocerystoreshelf - Skinny Latina: The Profit Updates in 2020

Why is great branding so important? Because the industry that Skinny Latina wants to dominate is one of the biggest and most competitive grocery industries on earth. A few quick numbers so you can see what we mean:

  • U.S. Sauce and Condiment Market: $42.7 billion
  • Global Hot Sauce Market: $2.29 billion
  • Global Specialty Sauce and Condiment Market: $30.09 billion
  • Dominating Brands With Market Majority: Hellmann’s, Heinz, Tostito’s, Best Foods, Kraft, Newman’s Own, Frank’s

To make things more complicated, Marcus compares the calories in a tablespoon of Skinny Latina to a competitor picked off a shelf at Milam’s and is amused to find that the so-called health-conscious Skinny Latina has nearly three times the calories of the competitor. “Nobody counts calories anymore,” says Ana. To which her friend standing directly beside her replies, “I count calories.”

False advertising, much?

Since Ana’s way of justifying her subpar business decisions seems to be refuting everyone else’s feedback, Marcus decides it’s time to teach Ana a valuable lesson in constructive criticism. They head off for a Skinny Latina focus group in Miami.

Focus Pocus, Miami Style

Back in Miami, the focus group is asked to examine each label for Skinny Latina’s products, and jot down a few words on each – essentially, their first impressions of the brand and what the product makes them think about. The results are equal parts hilarious and harrowing.

Here’s a sample platter of negative focus group responses to the Skinny Latina brand:

  • “Skanky” (noted by multiple participants, including a vampiric young man with long hair who looked like he had just come from sleeping under a bridge)
  • “She takes over the whole image”
  • “Cliche”
  • “All-Natural doesn’t mean anything”
  • “Feels like a rip-off of Skinny Girl – both the name and the logo design”

And here, a few positive responses:

  • “Gluten-free”
  • “Skinny” and “All-Natural” (whatever that means)
  • Tastes delicious
  • Definitely features authentic Latin flavors
  • Versatile; can be boiled and used as a sauce

Much of the feedback Ana rejects outright. “Ana can’t help herself but to react negatively to feedback, no matter what it is.” More feedback reveals that customers want to see the sodium and calorie counts on the front of the packaging, a critique which blows Marcus’s mind out the back of his face. “I’m sorry – did she want to know what the calories are? How weird! Do you think she counts them?”

Marcus gets an A+ and several gold stars for his liberal and expert use of sarcasm throughout this episode.

skinnylatina focusgroupmiami 1024x570 - Skinny Latina: The Profit Updates in 2020

The Skinny Latina focus group, free-associating words like “skanky,” “cliche,” and “delicious.”

Now it’s up to Ana to take this feedback and figure out how to tell her story – and the story of Skinny Latina – in an engaging and profitable way.

In a heartfelt talk with Marcus, Ana reveals that part of the reason she has trouble taking feedback constructively is because of her strict upbringing. Her mother was hard on her and constantly compared her to the daughters of her friends, making her feel bad and enforcing a strict perfectionism – along with a deep hostility toward criticism of any kind.

A Skinny Latina Makeover

A visit to BlackDog Advertising is next – one of the best branding agencies in Miami. Their visit yields a wealth of fresh, new, fantastic branding ideas to help revive the Skinny Latina brand. New colors are bright and bold, calling to mind fresh and flavorful recipes. New logos are original and eye-catching, and they’ve removed the Skinny Latina figurehead completely. The mockups are great and the bottles look spectacular – so naturally, Ana hates them.

“It’s just so different,” she says, through her tears. Sadly, one of the built-in features of human nature is that we hate change, and we resist change at all costs – even when it’s good for us. Just because you’re on a TV show – or even several TV shows – that doesn’t mean you’re immune to these feelings. In fact, being on TV tends to amplify and distort those feelings, making them even harder to handle.

“It’s what I’ve made. It might be s***, but it’s my s***. It’s me.” She wipes away tears and tries to smile.

Ana’s reaction is human and genuine, and it proves to Marcus – finally – that this business really does mean the world to her.

After a final presentation in Miami (a hotel pitch to investors that is both disastrous and weirdly successful), Ana is able to show proof of concept and investment potential.  Her second meeting with a small table of investors goes much better, and she’s able for the first time to handle her numbers confidently, run a beautiful presentation including the new branding, and make Marucs wonder out loud if it’s really her. “I thought it was an Ana impersonator.” The small group says yes to investment. And that’s great news for Marcus.

“I’m wiling to do a deal with her. She’s done every single thing I asked. She made the changes. She deserves a shot.”

Final Deal: Marcus offers to invest $75,000 for 15% equity, with the option to invest up to $125,000 for 25% equity.*

*A joint investor struck a deal containing exactly the same terms as Marcus’s offer – meaning Ana was able to acquire two major investors while retaining a minimum of 50% equity in her company.

 

skinnylatina theprofit ana - Skinny Latina: The Profit Updates in 2020

Where Are They Now? Life After The Profit

For Skinny Latina, business has never been better. Ana Quincoce’s star has continued to rise, and sales have risen right alongside her personal brand’s rapid expansion.

The company’s website has been fully updated and streamlined, featuring the bold new branding designs and fun, vibrant aesthetic created by BlackDog advertising during the episode. Her full product line is front and center, showing several new flavors and products. The full Skinny Latina catalog now includes:

  • 4-Pack variety set of Marinade, Guava Fig, Mango and Hot Sauce – $30.00
  • 4-Pack Marinade – $32.00
  • 4-Pack Mango-Apricot BBQ Sauce – $32.00
  • 4-Pack Guava-Fig BBQ Sauce – $32.00
  • 4-Pack Tropical Habanero Hot Sauce – $28.00
  • 4-Pack BBQ Combo – $32.00
  • 4-Pack Marinade/BBQ Combo – $32.00

As of June 2020, Skinny Latina is sold directly online and through distribution with Whole Foods.

The business maintains lively official pages on Facebook and Instagram, both of which boast thousands of followers and a flurry of fresh, engaging content from recent weeks (June of 2020).

Ana Quincoces herself now has a staggering 114,000 followers on Instagram.

As for the brand makeover, her website speaks for itself:

“Influenced by her latin roots, Ana Quincoces makes all her Skinny Latina Sauces & Marinades with TLC. You can taste the goodness in every bite. ¡Muy deliciosas!” 

It’s clear that Ana took her experience on The Profit to heart. In the end, she was able to turn valuable – and sometimes painful – feedback into powerful, profitable action – without taking anything too personally. Her brand voice is vibrant, descriptive, and engaging. It tells a story that, before, was unclear or absent. You can tell from just a few seconds of browsing the Skinny Latina site who she is, where she’s been, and how she’s doing now.

But only time will tell where Skinny Latina is headed.

(Adios para ahora, amigas!)

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Skinny Latina, The Profit, or any of its subsidiaries.

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The ProfitZoes Chocolate

Zoe’s Chocolate: The Profit Updates in 2020

by Molly Morrow
written by Molly Morrow

THE BASICS

  • Company: Zoe’s Chocolate
  • Product: Handcrafted Artisan Chocolates
  • Problem: Declining sales, disorganization, crippling debt
  • Marcus’s Offer: $200,000 for 40% equity
  • Season/Episode: Season 4, Episode 18

All You Need Is Love…and Chocolate

Chocolate is thicker than blood, and in Waynesboro, PA, nobody knew this more than the Tsoukatos family. When the family patriarch, George Tsoukatos, lost his job as a chocolatier in the mid-aughts, his three adult children wouldn’t let him wallow. They encouraged him to put his baker’s mitts on and go into the chocolate business for himself. To prove a point, they quit their jobs and moved back home from Washington, DC. to help run the family business. The eldest child, Zoe, took particular interest in the project. Her vision? To save her father’s livelihood – and in the process, churn out exquisite, artisan chocolates inspired by the family’s Greek heritage.

In 2007, Zoe’s Chocolate emerged at the top of the chocolate game, quickly earning a prized partnership with Whole Foods and coveted celebrity fans like Martha Stewart and Anthony Bourdain. Their chocolates could be found in upscale boutiques, hotels, professional conferences, and gourmet restaurants across the country. But fast forward a decade, and exhaustion and burnout were running rampant. Their ambition diminished, and their sales declining, the company took on debt in a last-ditch attempt to save the company. It wasn’t enough.

Would Marcus and The Profit be able to save this talented family of chocolatiers? Read on to find out.

Zoe’s Chocolate Company on The Profit – Episode Recap

Zoe gives Marcus a tour of the confection shop and lets Marcus try a few samples. Impressed with the quality and the exquisite taste of the candies, Marcus can see he’s dealing with a truly extraordinary company. His one critique, as he looks around the shop, is that the counters and display cases aren’t full enough. “It looks anemic,” says Marcus.

In the kitchen, Marcus meets Zoe’s father (and master chocolatier) George, Zoe’s brother Petros, and Zoe’s mother Eleni. The family history is evident in the black-and-white photos on the walls and in the recipes on the counter. George has been in the chocolate business forty years, and it shows in his romantic philosophy: “The most important thing is to love each other,” he says, in a charmingly thick Greek accent.

Life Is Like A Box Of Chocolates…Without A Brand

Pennsylvania is the heart of the pretzel business in the United States, and yet Zoe’s isn’t selling any chocolate-covered pretzels. A chocolate company that doesn’t sell chocolate-covered pretzels is borderline criminal, in Marcus’s mind, and reveals quite a bit about the disorganization at the heart of the company’s marketing processes. Any good chocolate company worth its sugar should be offering chocolate-covered pretzels. When he sees that they’re not taking advantage of regional markets to make relatable products, he asks about research and development.

The family falls silent. There is none.

Marcus has a few bones to pick with the company’s packaging, too. They’ve got a fantastic family story, but they’re not telling it. Their packaging is bland and generic, and worse yet, it makes no mention of their proud Greek heritage or their father’s impressive career as a high-end chocolatier. This will all have to change if they are to succeed, Marcus advises.

In a heart-to-heart with Zoe, Marcus digs a little deeper into the sacrifices she’s made and the problems she sees with the business. Things are grimmer than they look. She knows they should be farther along for their age, and she’s disappointed that they’re not stable after so much work and time has been poured into the company. The previous summer, she says, they were forced to take out a line of credit. The company has $170,000 in credit debt – and sometimes the employees go without paychecks.

zoes chocolate marcus the profit - Zoe's Chocolate: The Profit Updates in 2020

Running the Numbers

Marcus digs into the financials with Zoe and the rest of the family. A precipitous drop in revenue between 2015 and 2016 has Marcus worried. Zoe’s lost their distribution deal with Whole Foods that year. When Marcus asks why, he reveals a fundamental flaw in the foundation of their company: crippling inflexibility. They’re not willing to follow the trends or make the products that are top-sellers for Whole Foods, they say, because it’s not in line with their brand or their preferred style of chocolate-making. Marcus is quick to impart some hard-earned wisdom: “There’s a point where protecting the brand becomes counter-productive.”

  • Line of Credit: $90,000
  • 2nd Line of Credit: $30,000
  • Car Loan: $30,000
  • Credit Cards: $12,000
  • Cash In Bank: $60,000
  • Net Worth: $-102,000

Despite the company’s dire financials, Marcus has hope for the company. The product is spectacular and the fact that the children of the family have sacrificed so much to keep the business alive speaks volumes. He makes an offer, and after a bit of persuading, the family accepts – handing over full financial and operational control to Marcus.

Changes & Adjustments

Marcus thinks the business has plenty of room to improve in just about every area of operations. In exchange for his help, he wants to see major changes. Specifically, he wants to see:

  • New Products – the product offering is much too narrow
  • New Storefront – including a new retail experience
  • New Online Presence – including increased order capacity
  • New Strategic Partnerships – including expansion plans
  • New Brand Identity – the business needs to tell their story: their heritage, the incredible sacrifice the children made, their father’s career and credibility, etc.

In order for the business to really turn a profit, Marcus knows the business will need to thrive online and get a serious organization makeover. To put the business to the test, he hosts a Facebook live video, calls for orders, and sees how the team measures up. The video racks up 8,000 views in 15 minutes, and generates 150 orders. More orders, it seems, than the confection shop can actually fill.

Hectic footage reveals cluttered back rooms full of boxes and random assortments of packing materials, no discernible system of organization, and an atmosphere of weirdly casual chaos. The crew scrambles to find basic items and trips over each other trying to get through the work.

Marcus ends the segment by reiterating the importance of organization, cooperation, and innovation – particularly when it comes to developing new flavors, new products, and new systems for filling orders.

Flex Chocolate

With construction and new product development underway, Marcus pairs up the chocolatiers with the makers of Flex Watch. Flex Watch, he says, have proven themselves to be masters of marketing and branding. He suspects they can lend Zoe’s Chocolates a much-needed hand.

The Flex team reveals that the Facebook live event ultimately racked up 150,000 views, two thousand comments and six thousand likes. (Not bad for an old-fashioned chocolate company, right?) One of the most common questions the video raised was, unsurprisingly, what’s the story of Zoe’s Chocolate? Where’s all the info about the company? How did this amazing product come to exist?

Zoe and her brothers tell the story of the company again for the Flex watch team. Nobody can quite believe how special the children are, and how much they were willing to give up to rescue their father’s career. (This reporter does have a moral obligation to point out, however, that the children were all living and working in Washington, DC at the time of their father’s career crisis. Which means there’s a 90% chance they were absolutely miserable in their own careers and looking for any escape they could get their hands on. But I digress.)

“People buy from people they connect with, and stories they can relate to,” says Marcus. (We couldn’t agree more.)

The Flex team has clearly done their homework. Inspiration boards display bright Mediterranean frescos, white church spires, and pretty shades of Grecian blue. But what seems like a fresh, modern take on the chocolate brand feels off-base to Zoe. “I don’t see that for our company. It reminds me of going to church,” she says, and in her laughter there is mockery.

“What’s the story to this? That we’re Greek?” (She has a point.)

Marcus is shocked by her reaction, and discouraged that she saw nothing worth pursuing in the Flex watch pitch.

Reorganizing, Renovating and Adding Final Touches…Above Deck

Marcus inspects the back office and finds that Zoe’s brother has failed pretty spectacularly at his reorganization tasks. Things aren’t clean, papers are still stacked in messy piles, no real systems have been put in place. The only way to get it done, Marcus realizes, is to start doing it himself and pray that the family picks up no his clues.

Marcus takes Zoe’s brother on a tour of Joe’s Stone Crab so he can see, firsthand, how a first-rate company sets up its shipping department and stays organized through every step of production. As the second-largest restaurant in the United States, it has a phenomenal shipping department and world-class organization — two things Zoe’s Chocolates could use in spades.

New customer seating, brightly lit candy displays, a beautiful dynamic color scheme, a new logo (featuring pretty blue and pink Grecian colors), and family photos on the walls complete the renovation in the retail space.

The finishing touch? A trip to Miami, where Zoe’s Chocolates will pitch themselves as the new gourmet chocolate aboard Norwegian Cruise Lines around the world.

When NCL finds out that Zoe’s largest order is only 7,000 chocolate bars – the equivalent of just two ships’ demand – they grow weary of committing to anything on paper. Still, the chocolatiers walk away with a handshake and a chance to design a program for the cruise line in the future.

Zoes Chocolate The Profit 300x300 - Zoe's Chocolate: The Profit Updates in 2020

Where Are They Now? Life After The Profit

The re-branding done for this episode was one of the most successful in the show’s history. Zoe’s Chocolates was able to recover from the brink of bankruptcy, stabilize revenue, and eventually open a second location in Frederick, Maryland.

In November of 2019 the chocolate company hosted a Women for Shepherd community event in their home town of Waynesboro, where they handed out delicious samples and led attendees through a brief educational presentation on the chocolatier process.

Their website is sleek, fresh and active, with links for corporate and wholesale purchasing. On Instagram, Zoe’s Chocolates boasts more than 4,200 followers and tons of yummy pictures. (The elegant design and artisan craftsmanship of Zoe’s Chocolates lends itself perfectly to food-obsessed Instagram fans.)

For now, it seems, life can sometimes be sweeter than chocolate.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Zoe’s Chocolate, The Profit, or any of its subsidiaries.

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The ProfitTumbleweed Tiny Homes

Tumbleweed Tiny Homes: The Profit Updates in 2020

by Rolando Herrera
written by Rolando Herrera

THE BASICS

  • Company: Tumbleweed Tiny House Company
  • Product: Small Homes (between 65 and 887 sq. ft)
  • Problem: Massive Debt, Slow Production, Mismanagement
  • Marcus’s Offer: $3 million for 75% equity
  • Season/Episode: Season 5, Episode 2

A Tumbling Tumbleweed

In 2012, Steve Weissman took over tumbleweed tiny house company and transformed it into America’s top manufacturer of tiny homes. He had little experience building homes but managed to grow the company from 5 people working out of a garage to 70 people working out of a 20,000 sq ft warehouse in just a few years. By 2017, sales exceeded $6 million per year. As the company has grown, however, so have operating costs. Desperate to keep the lights on and the business expanding, Steve turned to unconventional loans and credit cards.

By the time Marcus Lemonis and The Profit show up, the company has over a million dollars in debt and is on the verge of bankruptcy.

Marcus feels investing in Tumbleweed is a great opportunity, and decides to lend his expertise – as well his extensive connections with the RV and camping industries – to the company.

Will it be enough? Read on to find out.

Humble Beginnings – Episode Recap

Before Tumbleweed, Steve was a restaurateur. “I really don’t have much experience in manufacturing. I can manufacture a burger,” he says. Suffice it to say, his lack of experience is starting to show.

Weissmann shows Marcus the models – basically tiny, mobile log cabins. They retail at $80,000 price per unit, and can be built 8 at a time. There’s up to a 5-month backlog, however, as they can’t keep up with demand.

The work is unparalleled and the quality is absolutely top-shelf. But endless customization and details requested by each customer throws kinks into the pricing plans and delays production.

  • Cost of labor and materials: 60%
  • Profit Margins: 30%

The more Marcus digs, the less it seems Weissmann knows about his own company – to say nothing of his industry at large.

Production Process

Marcus meets the production manager and the builders in charge on the factory floor. The production manager gives Marcus a tour and shows him the two types of trailers they use as a foundational frame for each cabin. They make their own frames from scratch, which is a great selling point – but a double-edged sword that dramatically slows down their production time. Customization adds heavy delays.

Each house is built in four distinct stages:

  • Floor and frame
  • Walls and roof
  • Interior
  • Finishing touches and customizations

Marcus learns that Steve’s restaurant experience and lack of hands-on-manufacturing experience is interfering with his ability to listen and incorporate valuable feedback from his production team. Marcus learns that there are 7 layers of reporting structure between the builder and the boss.

Sales Process

“If the production team says we can do it, I’m not walking away from the sale,” says Tracy, director of sales. She says yes to everyone, especially if they’re paying cash. They get 20% of the money upfront with a cash sale, which keeps the production team well-stocked in supplies and materials. It’s clear to Marcus that there’s a disconnect between sales, design and production.

Marcus takes Stacy and Austin aside and asks them point-blank:
“Does Steve know what he’s doing?” (No.)
“Does he know how to manage people?” (No.)
“Does he know how to design things?” (No.)
“Who’s really running this company?” (Austin runs the outside, and Tracy runs the inside.)

After a tearful confession of how dire the situation really is at Tumbleweed, Marcus commits to throwing everything he can at the business and see if he can save it from tumbling into extinction.

Marcus sits down with Steve and wife Bernadette to have a heart-to-heart about the health of the business. When he asks them what the year’s been like, Bernadette is clearly exhausted and saddened at the state of things. “We worked really hard, and we’re a week away from bankruptcy,” she says. “It’s been incredibly difficult. I’ve taken a huge risk to get here, and I’ve pushed myself to the limit.”

“Do the people that work here know how bad it is?”

“The top managers do…the rest don’t,” Steve says.

“It’s a lot of pressure,” says Bernadette.

“When business doesn’t go well, it’s hard to be a good father and a good husband. To me, that’s the hardest thing. The most important thing in life is my kids..and I haven’t been there for them.”

Steve and Bernadette’s anguish at the decline of their business is palpable.

The Profit Tumbleweed Tiny Homes 1024x538 - Tumbleweed Tiny Homes: The Profit Updates in 2020

Running the Numbers

It’s clear that Tumbleweed is a fantastic product, even if the production process is painfully slow. Marcus sits down with Steve to go over the numbers, including profit & loss statements, annual revenue, and liabilities.

    • Total revenue for last 6 months: $6.9 million
    • Gross profit: $2.5 million
    • Total expenses: $2.6 million
    • Net profit: $-100,000

“Have you ever made money here?” Marcus wants to know. Steve replies that in 2012 they made about $100k, 2013 about the same, and in 2014 about $400,000. It wasn’t until 2015, Steve says, that they started losing money. The expansion was the breaking point. In a disturbing revelation, Steve admits that he took all the money out of the business in 2015, seemingly to pay himself – a confession which draws a look from Marcus that can only be described as “withering.” Perhaps to distract himself from the magnitude of what he’s just heard, Marcus moves ahead with the financials and examines the Tumbleweed balance sheet.

  • Liabilities: $2,885,000
  • Assets: $1,239,000
  • Equity: $-1,646,000 (insolvent)

Customers originally financed the business by paying up front. Steve says he put in only $1,500 of his own money. Marcus has a real problem with the fact that Steve took over a half a million dollars out of his business – when it was still growing.

“Are you running a house of cards?”

Steve says he’s running on the edge (whatever that means).

Marcus says Steve isn’t scared enough of debt. He’s reckless with debt and takes on far too much risk. “That freaks me out,” says Marcus. Scared as he is of the debt and the risk, Marcus recognizes the product is exceptional and the people are spectacular. He is willing to make a deal – albeit an exceedingly aggressive one. 

Marcus’s Offer: $3 million to clean up payables, lenders, and all debts. In exchange, Marcus wants to be paid back, and wants a breathtaking 75% equity.

“Right now, you’re a nice man, and a terrible CEO. CEO is not a title. It’s a philosophy,” says Marcus.

Steve agrees to the terms.

Changes and Adjustments

Marcus lays out the fundamental changes that will be taking place going forward:

Production: Streamlining down from endlessly customizable options to 4 standard models; moving production offsite to accommodate standard production. This accelerates the purchase of raw materials, improving margins. An 8% discount for buying in bulk nets them $4,000 per unit, or $800,000 per year, in additional gross profit.

Organization: Reducing down from 7 layers of management to 2 or 3 at most

Design: Houses will incorporate “creature features,” including mobile phone charging stations, storage spaces, integrated pull-out furniture similar to the kind featured in RVs, and other upgrades. For the first time, Tumbleweed actively seeks employee feedback and input in the design process – not for creating their own individual and hyper-customized units, but for creating each of the four standard design models.

Leadership: Steve must address his problems with conflict management, confrontation and personal sacrifice involved in running the business like a real CEO.

He says the team should be proud of the excellent American product they make, and ensures that going forward, he’s going to be one-hundred-percent in charge.

The Sacrificial Lamb

Steve and Austin meet to have an open dialogue and discuss changes in management. Austin is terrified of losing his job, and says he will be “the sacrificial lamb” when management decides to cut fat and streamline the managerial layers. Steve assures Austin he has no need to worry.

A few days later, Austin quits Tumbleweed and storms out in a rage. In a heart-to-heart with Steve at his new job’s construction site, Austin reveals that the reason he quit was not as selfish or impulsive as it first seemed. He quit, he says, because he was in a closed-door meeting with Steve and Lee, during which they revealed that they were going to be firing at least one manager. Austin sacrificed himself to save the others. In effect, he fulfilled his own prophecy, and made himself the sacrificial lamb.

Because Austin was vital to Marcus’s business plans – in large part, he only invested because of Austin – Marcus goes to great lengths to get Austin back into Tumbleweed. He sets up a meeting and sees to it that Austin is given his job back, fully protected, and that the two bickering managers above him will work together peaceably going forward.

Days later, Lee quits.

“This is the most drama-filled manufacturer I’ve ever seen in my life,” says Marcus.

Equity Lifestyle Properties – A Premier Campground Operator

Once the production process has been standardized – replete with creature features – and managers are showing marked signs of improvement, Marcus sets up a meeting for the Tumbleweed team with Equity Lifestyle Properties, a national buyer who could be a potential game-changer. The standard unit now incorporates customer feedback, employee feedback, design creativity and smart production coordination. The team has made massive improvements in a remarkably short window of time. In a final show of growth, Steve rejects a customer’s customization request, saying they have to stick with the standard model to ensure quality and timeliness of delivery. Marcus is seen beaming with pride in a corner of the tiny cabin.

The episode ends with a heartwarming offer of equity extended to Austin and Tracy, the two strongest employees who kept Tumbleweed afloat when times were hard.

Where Are They Now?

If this episode was all you ever saw of Tumbleweed Tiny Homes, you’d be forgiven for thinking everyone lived happily ever after. The episode wraps up the business with a neat little bow and ends on a heartwarming note. However, as is sadly so often the case with the businesses seen on The Profit, the company struggled to stay afloat after the cameras stopped rolling, and ultimately failed to overcome the obstacles that plagued it from the beginning.

In March of 2020 – three years after this episode aired – Tumbleweed Tiny Homes filed for bankruptcy.

As of today, Tumbleweed Tiny Homes owes $2.75 million in loans and $273,500 in material costs to creditors. Their current assets are valued between $500,000 and $1 million, meaning the total value of their assets declined by at least half a million dollars since 2017.

According to the filing paperwork, Tumbleweed still owes Marcus Lemonis a cool $2.7 million.

All we can say is, Marcus should have listened to his instincts when he first sat down with Steve to go over the numbers. When you trust someone, you never have to ask them if they’re running a house of cards.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Tumbleweed Tiny Homes, The Profit, or any of its subsidiaries.

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Los GemelosThe Profit

Los Gemelos: The Profit Updates in 2020

by Rolando Herrera
written by Rolando Herrera

After working multiple jobs and living paycheck to paycheck to save up $40,000, Adelo Ramirez invested in himself. He sank his savings into a small restaurant Los Gemelos where he would make his own tortillas. His investment was paying off while growing in popularity and revenue. After several years of success and growth, Adelo decided to start making tortillas that he would sell in other Mexican restaurants.

At the height of his success, Adelo was generating close to $500,000 in revenue yearly. Then a large American tortilla company, Mission Foods, began soaking up the local marketplace. His sales plummeted rapidly and the business was in trouble.

Adelo looked to The Profit’s Marcus Lemonis, who met Adelo through mutual friend George Lopez. Marcus was anxious to take a close look at the large and growing Hispanic food market.

Los Gemelos on The Profit

The Profit Season 4 Episode 10

Adelo takes great pride in Los Gemelos. Marcus could see it in his face and hear it in his voice as he was shown the wood oven in the kitchen and the articles about the restaurant hung on the wall in the corner. He worked three jobs to save the money to start Los Gemelos. Early success allowed Adelo to buy a tortilla machine leading to working full time on tortilla production.

He opened doors of the Los Gemelos tortilla factory in 2006 and saw great success and potential for the future. Four years later, after success on the West Coast, the large Mission Foods company expanded to the east with a huge marketing budget and a recognizable brand. Annual revenue was slashed nearly in half. Marcus told Adelo that he was not too interested in investing in a restaurant, but was intrigued by the tortilla business, despite the challenges of competing with Mission Foods.

The first thing Marcus noticed when Adelo showed him the tortilla factory operations was that lack of precision and organization. Tortillas were made by guessing the ingredient amounts and mixtures using a machine that was not even legally available in the United States because of safety issues. There was no direct access from the production line to the shipping and receiving areas.

Employees seemed happy with the conditions and liked Adelo’s attitude and demeanor, though one of the team told Marcus that he was still owed money for work done. After digging a little further into the finances of the business, he found Adelo was not only behind on payroll, he had other liabilities, as well. The more he looked, the more Marcus became convinced the business was on borrowed time.  Los Gemelos could only support about $2,400 in gross revenue, leaving under $200 after daily operating costs.

Though disappointed in the financial state of the business, Marcus was quite impressed with how Adelo ran his business and treated his employees. He told Adelo that the Los Gemelos’ tortilla factory was not working and would have to be shut down. Adelo wondered what Marcus’ plan was and what his future held.

To Adelo’s pleasant surprise, Marcus brought in George Lopez. Marcus offered a $150,000 investment to start a new Hispanic food business, with the three of them as equal partners. Adelo would be in charge of the food, George the marketing, and Marcus would handle the financials and business management end of the company. The deal also included an additional $50,000 to pay past wages for Adelo’s staff. Adelo was thrilled and the three agreed to the deal.

Marcus and Adelo went to work researching the latest in Mexican and Hispanic food choices and trends. They went to a major grocery chain to price out some of the ingredients Adelo planned to use and found a number of the items necessary for Adelo’s niche Mexican recipes were expensive or hard to find. A trip to a large Hispanic food distributor kept leading them back to the three staples of the Hispanic food market – tortillas, chips, and salsa.

Though the employees’ back pay was taken care of, Marcus became increasingly concerned about Adelo’s attention to detail and follow-through. The old, unsafe machinery in the old factory had not been sold. Adelo admitted that he needed to get better at communication and would work at it.

When Marcus sat down to taste some of Adelo’s salsa creations, he noticed that again they were not written down or otherwise documented. Adelo was going by memory and experience. Marcus did love the salsa and Adelo realized a system was needed to provide consistently good salsa for the new restaurant. He used more mainstream ingredients like sweeter, less acidic tomatoes.

Marcus and Adelo secured a deal with a local, family-owned tortilla company, La Fortalezza, and a salsa manufacturer. Things were going along smoothly and Adelo was communicating well. However, they still needed to come up with a logo and name.

Adelo presented drafts of a logo and brand name called “Ta Loco,” based one of George’s standup routines. Marcus loved the look and the name and felt it was ready to present to George. The three partners met at a neighborhood restaurant. George was impressed with the food and the logo, as well as the artwork that featured his image.

The last step in the process would be to present their products to retailers. Adelo made an impressive presentation to Sam’s Club to have them pick up the Ta Loco brand for their locations. Focusing on the connection to George Lopez and the authenticity of the product, Adelo was able to finalize the deal.

Where Are They Now? Los Gemelos After The Profit

Los Gemelos the restaurant is no longer in operation and the company is the sole owner of the Ta Loco brand. However, at this writing, the business has not opened and there is no information available on a timeframe for when it might.

Adelo is active on social media and lists his employment at “Ta Loco, 2017-present,” but provides no information on any upcoming movement on the business. The website for Los Gemelos is still active, but the contact information is incorrect or no longer valid.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Los Gemelos, The Profit, or any of its subsidiaries.

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SJC DrumsThe Profit

SJC Drums: The Profit Updates in 2020

by Rolando Herrera
written by Rolando Herrera

Mike and Scott J. Ciprari are two brothers from Massachusetts who created their first drum sets in the basement of their grandmother’s home in 2000. They worked together taking advantage of each other’s crafting and artistic talents to create drums used by some of the most popular and coolest bands of the day. SJC Drums got an early break by supplying drum equipment for Panic! At The Disco and expanded the business by adding big-name musicians and the brothers wound up touring with some bands to handle maintenance needs and promotional opportunities.

SJC Drums expanded to the point where Mike and Scott could no longer handle the management side of their growing business and were being hampered by some family issues. They looked to Marcus Lemonis and The Profit to see if they could get their business in order to manage their extraordinary success.

SJC Drums on The Profit

The Profit Season 3 Episode 1

The two brothers were a long way from home when Marcus Lemonis met them at a music conference in Anaheim, California. Marcus immediately saw a drum set that catches his attention, but was stunned by the $6,000 price tag and further disappointed that due to a lack of inventory, delivery of the set would take upwards of six to seven months.

Marcus met with the financial manager of SJC Drums, Chris, who brings with him an MBA degree and a background in engineering. When Chris, who does not have any equity in the business, reveals to Marcus that the company’s profit margins stands at around 15 percent, Marcus realizes the SJC Drums needed examination and adjustments.

Scott is regarded as the founder of the business and is the source of the company’s name. Mike is passionate about their product and his heart is in the right place. Unfortunately, his efforts to manage costs have put SJC Drums in what Chris called a “death spiral.” A visit to the Southbridge warehouse shows Marcus that SJC Drums is run inefficiently and without much direction. Boxes and cylinders are scattered about and equipment is piles haphazardly throughout the space.

As the crew gets to work, Marcus cannot deny the skilled precision of the handmade production process. However, employees claim there is not an effective work flow or prioritizing of work, leaving workers confused. In speaking with the crew, Marcus discovers that company is as disorganized with their finances as they are in the warehouse.

SJC Drums is housing about $200,000 worth of inventory that needs to be delivered to their customers, with $100,000 of debt from operational expenses. In the last year, the business generated $1 million in sales, $200,000 of which was lost despite solid 20 percent profit margins. Chris tells Marcus that in order to make the company viable and successful, they would need to double their margins.

The major issue with the company at this point seems to be the relationship between the two brothers. Putting his brother and the business ahead of himself, Mike cut a deal to buy himself out of the business so he could make regular payments to his brother. Marcus dedicated himself to fixing this family issue and goes about the business of making SJC Drums a success.

As the discussion regarding the family issues and the state of the business, Chris became emotional and had to step out of the room. Marcus understands that it must be very difficult to witness the demise of a business you believed in and were passionate about for a long time. He tries to let Chris know that he will do everything in his power to bring SJC Drums back and make it a success.

The next day, Marcus makes an offer of $400,000 in exchange for 33 percent of the business, with the condition that Chris would also be brought on board as an equal partner with Marcus and Mike. Marcus, as always, would be in charge.

Marcus’ first mission is to diversify the product line’s price points at SJC Drums to make their high-quality drums accessible to more people. A new system Marcus refers to as “good, better, best” would offer more affordable choices. “Good” drums would cost around $895 and cost $537 to produce. The team is left to figure out a way to balance their manufacturing and component issues and costs.

Marcus meets with Scott to see if they could smooth things over. Scott, the innovator and founder of SJC Drums, tells The Profit host that he feels there was a mutiny in the organization and he felt overwhelmed with the number of orders they could not fill. Marcus tells Scott that Mike feels terrible about it all went down. Scott responds that he deserves it. Marcus still would like to include Scott in the future plans for the business and leaves wanting to address Mike’s side of the situation.

Marcus implements a series of organizational techniques to streamline the production process, which the employees took to immediately. Marcus then brings Scott in and nerves began to fray. Mike apologized to his brother for what happened, but Scott’s comments only serve to escalate the situation. Marcus attempts to mediate between the two, trying to focus on the drums, which initially brought the two together.

Mike is beginning to feel the pressure and tells Chris he may walk away from the business. Marcus pushes Mike to put personal feelings aside and do what’s best for the business. Mike comes completely clean about the work culture he helped to create, offers a more full-throated and sincere apology, telling Scott he wants to be brothers again.

The next day, Scott shows up to help the crew with the base “good” model, providing positive feedback and effective solutions to the challenges they faced. The drums are then produced using Marcus’ 10-step process, significantly reducing manufacturing time.

The team took their new drum kit to large music chain Sam Ash, where they rejected SJC Drums outright before Mike told them he could leverage his personal relationships with such music stars as Green Day to help make sales.

SJC Drums After The Profit

After their appearance on The Profit, SJC Drums has become more profitable by becoming more efficient. Contracts with Sam Ash and the School of Rock helped take the business to the next level.

At one point, Scott was all but out of the business operations as his issues with his brother, Mike, continued after the show. The two brothers seem to be continuing their sibling rivalry, though SJC Drums continues to grow and expand.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with SJC Drums, The Profit, or any of its subsidiaries.

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Honest FoodsThe Profit

Honest Foods: The Profit Updates in 2020

by Rolando Herrera
written by Rolando Herrera

Honest Foods has seen good times and downtimes in 20 years as a Chicago catering and food truck business. The company was actually in pretty good shape serving a wide range of customers, from catering weddings to supplying craft services food for locally filmed television shows and movies.

Owner Tad Delvin was not even sure if his business would be picked up by Marcus Lemonis and The Profit, and later admitting he discovered an error in the processes was not detected by show producers. Tad didn’t know this at the time and began preparing a presentation for investment money he would use to make kitchen improvements.

Marcus was put in the unusual position of meeting with a business that appeared to be performing well overall.

Honest Foods on The Profit

The Profit Season 4 Episode 5

Food catering is typically a seasonal business that sees peaks in the summer and valleys in the fall through the winter, which is especially true in the Windy City. The great city of Chicago is still a toddlin’ town full of passionate residents who wear their feelings and intentions on their sleeve. Marcus quickly discovered that Tad was just such a blunt, energetic Chicagoan. Marcus watches as the crew prepares food for a high volume to customers in the neighborhood. The process was dizzying and not organized to maximum efficiency.

Marcus makes impactful suggestions to improve the menu listing and presentation. The quality of the food is great, there is no debate about that. However, the employees do not seem to have a clear sense of what their jobs are and should be. Tad is handling more responsibilities than the owner typically takes on. The long list of his jobs spans from product acquisition to accounting and sales. An Honest Foods baker named Roni tells Marcus that the business is certainly successful, but the feeling among the staff is that Honest Foods may have gone as far as it can go.

In the kitchen, control seems to be a major issue for Tad, who picks on everything including telling Marcus how to chop up onions. The Honest Foods owner then easily loses his temper when an order needed to be bumped up. He raises his voice and gets more aggressive as the staff continues on working barely acknowledging Tad’s outburst.

Temper seems to be a major issue for Tad. His outbursts and anger are affecting the kitchen staff, bringing a sense of chaos. Marcus seeks Tad out to try to determine why he is so angry and aggressive when dealing with his business. Some health issues a few years ago nearly cost Tad his life and his business and he takes it all very seriously. Marcus suggests that being able to control his temper would Tad better able to handle the day to day operations, which would lead to happier employees and bigger profits.

Looking to the Finances

A net profit of 8 percent is not bad, but Marcus said that diversification would help to increase that rate and generate more revenue for the business. Streamlining the preparation and presentation process could add up to 30 percent production time, increasing revenue to around $650,000. With that in mind, Marcus makes Tad an offer of $300,000 in exchange for 33 percent equity in the business. He would handle the bills and make the changes to the operation that he has laid out. Tad still wanted full control of the company, but Marcus explains that is not this works, and Tad agrees.

Marcus meets with the staff to outline the changes ahead and urges them to think outside box and to be creative with their presentations and interactions with their valued customers.

Marcus and Tad discuss the addition of a food truck to the business. They found a model that would cost $55,000 and promises to generate up to a half-million dollars, with a net profit of around $180,000 for the year.

A catering job for a Chevrolet dealership offered the first opportunity for Marcus and Tad to roll out some of the changes. While presenting a dynamic look with a well-planned car-themed event, Tad’s temper and control issues reappear, doling out contradicting instructions and raising his voice when dealing with his staff, with an especially tense exchange with Roni. Overall, the staff does a great job of putting Tad’s issues aside and getting the job done.

The client is thrilled with the event, recommending another 200-person event they would like Honest Foods to cater to. When discussing this positive report and the direction Marcus is taking the business, Tad again gets defensive and aggressive. Eventually, Tad relents and tells the team he will work on his communication and temper.

Camping World is one of Marcus’ largest investments and arranges for a 1,000 person contract for their 50th-anniversary celebration with them for Honest Foods. Marcus advises Tad not to screw it up.

Honest Foods adds a few more food trucks to the business, but underneath the progress is an unhappy employee base that is sick of the way they get treated by Tad. They threaten to walk off the job before Marcus steps in with bonuses to celebrate the expansion of the business.

Tad simply cannot control his temper or his mouth. He and Marcus get into a bitter argument that sprang from a disagreement over truck repairs and costs. The two talk it out and come to a decent understanding on how to communicate and conduct business in a professional manner.

The improvements are dazzling and highly effective at taking Honest Foods to the next level.

Honest Foods After The Profit

Tad and Honest Foods took the improvements and suggestions Marcus made to lift up the business. Online reviews are mostly positive, with customers raving about the staff and the food for both catering events and the new food trucks, Pono Sweet Truck and Meltdown Grilled Cheese.

Marcus continues to be associated with the thriving business, having built up great relationships with the team and their owner.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Honest Foods, The Profit, or any of its subsidiaries.

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Murchison-HumeThe Profit

Murchison-Hume: The Profit Updates in 2020

by Rolando Herrera
written by Rolando Herrera

A successful fashion editor, Max Carter was living in Sydney, Australia, with her family when her son developed allergies to regular commercially sold cleaning products. She came up with a line of cleaning products without using chemicals that would be harmful to her son. She starting selling her non-toxic cleaning product and it began to catch on in Australia, generating nearly $1 million in sales. They decided to see if they could continue the success of Murchison-Hume in the United State, so she moved the business, and her family, to Los Angeles.

Unfortunately, Murchison-Hume did not have the same results as with American consumers than it did for Australians and the business began to lose money. Their high-quality product had a high price point and they were having trouble competing with mass-marketed cleaning products.

Struggling with bills piling up, Max looked to The Profit’s Marcus Lemonis to see if he could help them clean up in this big, competitive industry of household cleaning products.

Murchison-Hume on The Profit

The Profit Season 4 Episode 6

At first, Marcus wasn’t sure he was in the right office. The Los Angeles office for Murchison-Hume was adorned with mood boards, fine chine, and of course, two dogs.

Co-owners Max and Peter met with Marcus and Max explained how Murchison-Hume was started. Max’s son was dealing with a wide range of health problems, including asthma, eczema, and host of allergies. She noticed his respiratory problems were exasperated when she would clean the house with commercial cleaning products. When she concocted her homemade plant-based cleaning products, her son’s symptoms seemed to be in check. The name Murchison-Hume was inspired by her father-in-law to add a touch of elegance to the business, but it was not catching on in the States.

From a marketing standpoint, Marcus felt the name was an issue. Customers should be able to easily pronounce and understand the connection to the product, something Murchison-Hume did not accomplish. He did like the smell of the products, feeling they gave off more of an essential oil aroma, rather than the traditional harsh odor that most cleaning products give off. Marcus was especially impressed with a sneaker spray Max had developed. When he wondered if she had sold it to any shoe stores, Max said that had tried. Marcus worried that she did not understand fully the shape her business was in.

Marcus was concerned about the brand and direction for Murchison-Hume. Max sold candles, garment cleaners, and the shoe spray, single products in varying categories that communicated a muddled brand. Max revealed the spray cleaners sold for $9, which was more than double the cost of her competitors, unless she planned on sending someone to do the cleaning, too.

A wildly inefficient production process was costing Max about $1 per unit. A third-party logistics company was having her products produced in Chicago before being shipped to Dallas, which was adding costs and losing customers. This was where Marcus would start.

Marcus felt the look and feel of the office space did not properly represent the products Murchison-Hume provided. The framed pictures of icons displayed throughout the space seemed to Marcus to be more appropriate for a fashion business rather than one that supplied cleaning products. Meeting with the art director, Marcus was told that it was a challenge to get anything approved by Max, who was continually looking to class up the business.

Mounting expenses and piling bills resulted in Murchison-Hume losing $477,000 the previous year. Max had plans to create a fulfillment center in the basement of the office plaza that housed their headquarters. No one but Max was enthused about this idea and Marcus felt it was a bad idea to move product across the country when they didn’t have to.

Marcus confronted Max and asked why she was still operating like the business was going well. It wasn’t. Murchison-Hume should have been closed months ago, but Max kept it going, feeling she had to make it work for her family. She’d moved them out of a beautiful home in Australia to a small home off an LA freeway.

Max was looking to The Profit for a $1 million investment to turn things around. Marcus felt the business was too risky and countered with $250,000 in exchange for 50 percent equity in Murchison-Hume. Max began to cry and countered with $500,000 for 30 percent of the business. The compromised and met in the middle by shaking on $250,000 for 30 percent of Murchison-Hume. Marcus would also get 70 percent of Max’s Best in Show pet product trademark she owned.

Getting to Work on Murchison-Hume

Marcus went right to work on changing the branding messaging for Murchison-Hume. In working with the art director, Marcus decided to change the name of the business to Clean Evolution, which upset Max to the point that she left the room. Marcus called her on the phone. She told him she was stressed and when she began to become a bit hysterical, they decided to meet up later.

Marcus brought in Kathy Ireland on the branding problems. Max was ignoring the work her art director had created, impressing neither Marcus nor Kathy.

Eventually, Marcus was able to start saving money for Murchison-Hume and Max by moving the manufacturing and distribution facilities to Chicago. He discovered the inventory to be off by as much $230,000 and gave Max one week to figure it out or he was getting out of the deal.

A week later, Max still had not figured out the large discrepancy in the inventory, having no idea where it went. She did not even seem phased by it or acted remorseful in any way. Marcus backed out of the deal, wishing her the best of luck in the future.

Where Are They Now? Murchison-Hume After The Profit

Though he backed away from the deal with Max and Murchison-Hume, he still retained equity in the Best in Show label to make up for the lost equity in the business.

Murchison-Hume is still in business under the original name, selling plant-based cleaning products on their website and through Amazon at exorbitant prices.

Max’s products have been featured in Marie Clarie, Vogue, and Home & Garden magazines.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Murchison-Hume, The Profit, or any of its subsidiaries.

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240SweetThe Profit

240Sweet: The Profit Updates in 2020

by Rolando Herrera
written by Rolando Herrera

The company 240sweet evolved from a partnership that spawned at a company called Lemley’s Catering. Alexa Lemley, as you can tell from the last name, had a personal link to the catering company. Lemley’s Catering was owned by her father, and with access to his equipment, she was able to start her venture, 240sweet. She did so with the help of Samantha Aulick. The pair met while they both worked at Lemley’s Catering. They got along as well as could be. The partnership that began as a close friendship between employees eventually led to a marriage between the two a few years after initially meeting.

Samantha and Alexa worked on a project together to attempt to drum up business for the catering company. In their efforts, they tried making some gourmet marshmallows to see if that might create some new business. People were so impressed with the gourmet treats and they became so popular that Samantha and Alexa felt there might be a business in it. So, that’s where it began. And while things were good for a while, at least good enough to maintain the business, things did not stay that way. The company finds itself in a pretty rough predicament. That is where Marcus Lemonis comes in.

240sweet on The Profit

The Profit Season 3 Episode 19

240sweet is based in Columbus, Indiana. Marcus had an initial idea of what he expected to see; 240sweet had been featured in magazines and on TV shows, so what he expected was a fairly well-running business. Certainly, it would be far from perfect, or else they would’ve never reached out to him for help, but he still expected something established. What Marcus finds when he arrives is a jumbled mess of a company. There is no separation between the retail area and the shipping area. You wouldn’t want any business operating under these types of conditions.

One of the first things Marcus notices is the smell of the facility and the products. The marshmallows don’t smell exactly like they’re supposed to. Even more, the facility doesn’t smell like you would expect it to. It is then revealed to Marcus that the couple shares the facility with Max, Alexa’s father. His company produces different spices. The result is that 240sweet is not producing the kind of quality products that they could be producing if they had their own place. 

At this point, Marcus meets with Max for a bit to get a better idea of what he does on his end. He makes different spices and sauces and his business is rather successful. However, even though both he and his daughter use the same facility, only his daughter pays rent on the building. Upon hearing about this situation, Marcus has a better understanding of why the two women are struggling to grow the business. However, it is also a red flag as far as Marcus is concerned. It seems that the problems with this business are mostly family and relationship-based. Marcus would prefer to help with technical and operational problems a business is having rather than to be a family therapist.

So, he looks into their operations to see if there might be some easy changes to make that could benefit the company a lot. There are a lot of inefficiencies that are visible immediately. Most notably, Marcus realizes that their production time can be cut down significantly if they got some new equipment. This would mean far more product to sell.

Despite all of the issues, Marcus is still interested in working with these short-haired women. He realizes that the main problem is with Max; he is taking advantage of his daughter and daughter-in-law, it would appear. If that situation can be rectified, there is definite potential for this company to grow. Alexa is a talented chef. But the Max problem is a bit bigger than the pair even alluded to at first. It turns out that Max took out a loan to start a new business venture. The women are paying it off for him. It is unclear why this is going on, when Marcus presses Samantha she says that, as far as she can tell, the only reason they are paying that loan off is that Alexa says so. Marcus can empathize with Alexa’s desire to help her family, but he explains to her that there is no hope for the business if they continue to lose money on things like this.

Marcus does not have nearly the same excitement to invest as before he got there, but he’s still willing to consider it. There are dramatic moments throughout the episode in which it sometimes seems that the business owners are enjoying it. Mostly this can be seen through Sam’s behavior. There is a somewhat uncomfortable scene where Marcus mentions something that Sam says she was unaware of. Immediately, Marcus does a minimal investigation to find that she had indeed been aware of it. When he points out that she lied, she claims that she did not understand the question. It was a very simple question, so Marcus doesn’t believe her. He tells her so, and then she makes a dramatic short speech about how she’s the type of person who wakes up every day trying to make the world a better place.

In the end, Marcus offers them $100k for 51% of the business. The two women accept, but with one caveat: that Marcus gives 5% to their accountant Dede. Marcus agrees, and so it’s a deal.

Life After The Profit

240sweet is no longer a company. The deal which had been agreed upon never ended up working out. Marcus claims that the $100k he invested was lost, but that a lawsuit would be an even bigger waste of money. The fans of The Profit let 240sweet know loud and clear how they felt about the company. They were bombarded with poor reviews which hurt the company.

Their website is no longer active and the Facebook page shut down years ago. It appears now that the couple has a new business venture called KetoLuxe. Quite a different business than one selling marshmallows. It is hard to tell, but it seems like since this business is closer to what Max does, they might even be working on it together. There is not much info available but it seems like the couple is doing a lot better this time around.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with 240Sweet, The Profit, or any of its subsidiaries.

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The ProfitWorldWide Trailers

WorldWide Trailers: The Profit Updates in 2020

by Rolando Herrera
written by Rolando Herrera

WorldWide Trailers Before The Profit

Back in 2001, Tom Etheridge and Nancy Pappas founded a company that designs, builds, and sells concession trailers to food vendors and a few other industries.  By the time Season 2, Episode 4 of The Profit rolled around, the company was facing two life-threatening problems.

One was logistical: although manufacturing took place in Waycross, Georgia, Tom and Nancy were based in Tampa, so if the trailers were delivered to Tampa with any damage that couldn’t be fixed on site, the trailers had to go all the way back to Georgia for further repair before returning to Tampa.

The second was personal: When Tom and Nancy started the company, they were a couple. But after seventeen years, they had suffered a bad breakup, and there was little – if any – trust between them. While they said they tried to keep personal drama out of the workplace, unresolved anger (mostly Nancy’s) had a way of popping up during the business day.

Marcus Visits WorldWide Trailers in Tampa

The Profit Season 2 Episode 4

Marcus’s first impression of WorldWide Trailers was that the plant was very small and not many people worked there. When he met Tom and Nancy, he learned that the Tampa operation wasn’t bigger because the trailers were manufactured somewhere else. He didn’t understand why the company needed two different facilities in two different states, and figured they could save a lot of money in real estate, labor, and transportation costs if the operations were consolidated. Why weren’t Tom and Nancy living in Georgia where they would be closer to manufacturing? Nancy didn’t want to give up her beach house in Florida.

Marcus asked about the company’s sales performance. Tom said they sold 125 trailers for $4 million in revenue and about $400,000 in profit. Marcus wanted to know about their costs, but neither Tom nor Nancy seemed to know what it cost to make a trailer.

Tom and Nancy were grateful that Marcus was there to help them with their business, but Nancy was under the impression that the producers had reached out to them, when it had been Tom who had applied to have their company featured on the show. This set Nancy off, as she felt like Tom wasn’t communicating important details to her. Her anger seemed out of proportion to Tom’s offense and Marcus wanted to chat with Nancy privately to find out exactly what was going on between the two of them.

Nancy spilled all of the sordid details of her breakup with Tom, and it was clearly too much personal information for Marcus. While that was uncomfortable for him, he was more concerned about Nancy’s interaction with Tom. He felt their lack of trust and poor communication was bad for business.

Marcus Thinks the Process Can Be Fixed

Marcus visited the facility in Georgia and noticed a lot of parts scattered across the grounds, some of it rusty. He wondered if the workers had ever taken inventory. They hadn’t. Marcus noted that they would have to fix this problem right away so that they could have a better handle on costs and improve their efficiency. But, overall, he was pleased with the people he met in Georgia, and impressed with their enthusiasm and dedication.

Back in Tampa, Marcus met Tom and Nancy for dinner. He felt that the issues with inventory and shipping inefficiencies could be corrected, but he was worried about the communication between the owners. Tom tried to assure Marcus that his personal business with Nancy wouldn’t get in the way of their business relationship. Although Nancy said she agreed, she immediately launched into a rant about not being to work with Tom’s girlfriend. The discussion escalated into a fight, and Marcus got up from the table and walked outside. Nancy went after him and convinced him to come back in.

Marcus asked Tom to confirm the $400,000 profit he made last year, and Tom said the number was absolutely correct. With that, Marcus offered $500,000 for 50% of the business. Tom seemed ready to make a deal, but Nancy felt that wasn’t enough. She was seeking $1 million. When Marcus explained that wasn’t reasonable, she still felt uneasy about having only 25% of the business after all she had put into it. Marcus countered with $700,000 for 50%, and $100,000 of it could be split between the two owners, while $600,000 would go toward the business. Tom and Nancy agreed and the deal was made.

Truths are Revealed

After a brief meeting in Georgia to announce the deal, the owners and Marcus came back to Tampa to find major quality issues with a trailer that had just arrived. Once again, it became clear that neither Tom nor Nancy had a clue about the costs associated with their trailers. Marcus asked Tom to bring him the financials, and he noticed right away that the profit was $200,000, not $400,000. Were they lying to him? Had anyone stolen from them or were there illegal activities? Or did Tom have some knowledge that he didn’t want to share with Nancy? Marcus requested a private meeting with Tom where Tom did confess that he had kept some transactions secret to protect himself from Nancy. Marcus told Tom it was toxic for the business and it had to stop.

Marcus had Tom and Nancy meet him in Georgia to do an inventory, and Marcus brought in an inventory auditing team to help with the process. The WorldWide Trailers team didn’t have a system in place to keep track of inventory so the auditing team had to do most of the work. What they learned was that WorldWide’s estimate of $100,000 in inventory on hand was more like $20,000. Nancy felt beat up by Marcus’s acknowledgement of the problems in their business. She seemed not able to accept responsibility or criticism.

Marcus thought it was critical that Nancy move to Georgia, so he showed her a beautiful house near the facility. She still seemed unwilling to leave her beach house. She also indicated that Tom would never leave Tampa, either.

The Deal is Off!

Back in Tampa, Marcus arrived for a meeting with Tom and Nancy. He wanted to see how they were working together on a new project. But when Nancy came in she announced she wanted a conference, and then she called to request that all of the employees come to the office. When the employees arrived, Nancy passed around a customer order from a dealer. Apparently Tom’s girlfriend was an employee at the dealership, and Nancy didn’t want Tom’s girlfriend to have any connection to the business. As Nancy became more agitated and began to shout and curse, Tom did the same. Suddenly, Nancy yelled that the deal was off. Marcus couldn’t have agreed more, and he walked away from the company.

WorldWide Trailers After The Profit

WorldWide Trailers is still in business, although its revenue is rumored to be half of what it was when the show aired in 2014.  Several websites show Nancy as the only contact for the business, but Tom’s LinkedIn page states that he’s still one of the owners. It’s possible that he just hasn’t updated the page.

WorldWide’s Facebook Page seems relatively current, with the most recent post from April 27, 2020. On Facebook, the company states:

“Many of you have asked if we are still open. The answer is yes…we are fully operational. Even though some of our suppliers have temporarily closed their doors do to the Pandemic, we are outsourcing raw materials as necessary to keep pace with our custom food trailer builds.” 

(followed by a lovely photo of a custom BBQ concession trailer)

The company has several positive Google reviews from as recently as 2018, but a recent complaint on its Better Business Bureau page tears into Nancy for her toxic and abrasive behavior, and accuses WorldWide Trailers of gross incompetence.

Nevertheless, WorldWide trailers appears to be trucking along, albeit at a modest pace. If Tom is indeed out of the picture, that could be the reason the company is still operating today. Perhaps it now has a better handle on inventory and financial tracking after Marcus’s intervention.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with WorldWide Trailers, The Profit, or any of its subsidiaries.

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