“The Profit” and Marcus Lemonis’ next stop is at Tea2Go, a tea retailer with franchisees and a host of problems, including a bad dynamic between a father and son that has the business locked in a cycle that could lead to its ultimate downfall. There are the usual cash flow problems and arguments about how to grow the business between generations in this family business. RECAP posted below.
When you add in the fact that there are franchisees suffering because of the lack of direction from the owners, there are bigger headaches to deal with. If you watch the video preview clip posted below, you’ll understand that there are basic things at play that Marcus finds inconceivable. For example, one of the principal’s doesn’t like tea or drink it, and the shop provides seating, despite the brand of “2Go”. Preview latest: Bowery Kitchen Supplies divorced owners are killing their business
Can you get a muffin, a scone or perhaps some toasted bread to eat while you’re sitting in the shop drinking your tea? What about loose packaged tea to retail to customers who might like the taste of their favorite brew while they relax at home? The answer to both of those is a resounding “no”. In the next preview clip, Marcus gets the true scoop from the disgruntled franchisees then watches first hand the corrosive family relationship at the core of the problems.
When “The Profit” and Marcus Lemonis come to town, there’s a checkbook that can change the life of an entrepreneur and employees of a business. But, along with that comes the infamous “I’m 100% in charge”, and leaving egos at the door. That’s easier said than done, as viewers know all too well. This season has seen two deals blow up after owners were unable to live with that kind of change and lack of control.
This was quite an episode, with so many layers of change, both personal and professional for Jeff, the owner/franchisor and his son Taylor, that it was almost too much for one hour. Yet, the complicated father-son relationship was fertile ground for Marcus Lemonis and his idea to own a tea cafe concept for franchising on a national basis.
Taylor, 23 dropped out of school one year shy of a degree in business to take a job with his father Jeff, 40, in an attempt to forge a bond between the two who were estranged from Taylor’s birth. Jeff, a teen father who couldn’t handle the responsibility was absent, and Taylor resented it. Yet, he took the chance to leave a university to have some kind of relationship with him.
Unfortunately for him, Jeff wasn’t a great businessman and didn’t know how to teach his son, or get him to listen, to how to fill the role of a vice president in the company. Taylor had a bad reputation among the franchisees for leaving then in the lurch, and he wouldn’t show up on time, or at all, if he decided to stay out late partying. Marcus knew that he’d have to step in and confront the young man, which he did.
Jeff’s debt approached seven figures, despite having taken franchise fees and a royalty from more than a dozen willing people or groups of people, plus he was past due to his sole supplier of tea. Combined with how haphazard the concept was and the remaining disgruntled franchisees, the thing was about to go up in smoke.
Marcus agreed to invest $350,000 for 70% of the business, and salivated at getting into the business of tea and natural extensions such as spices, gift baskets of boxed tea and merchandise, but also food. Yes, Marcus got his muffins and cookies too. In the process of change, which included getting the vendor to convert his debt into equity in the company, franchisees were shown a whole new concept and retail design, but perhaps most importantly, a name change. Going forward the business was known as American Tea and Spice Shop.
In the process, Jeff and Taylor’s relationship split open, with the father becoming positively vicious when he learned his son didn’t really consider him a “dad” in the true sense of the word. That would take time, and Taylor saw him as more of a boss, who he called Jeff to everyone other than his father. Jeff turned on him and said, out loud with cameras filming and microphones on, “What if I called you the mistake?” He then cut his son off all financial support and essentially fired him.
Here’s thinking Jeff should be sentenced to being publicly humiliated like that on a regular basis.
Ultimately, Jeff chafed under the changes and the lack of control. He kept selling Tea2Go franchises behind Marcus’ back to chip away at his debt, despite the fact that the concept didn’t exist any longer. Taylor claimed that he had support from his franchisees to stick with Tea2Go, plus many others ready to buy into it. In a bold move, one we haven’t seen in the past, Marcus didn’t walk away, and allowed the business to be severed.
Whoever wanted to go with Jeff could do that, and because Jeff’s approach was nowhere near what Marcus had in mind for the new stores, he just wished him well and let bygones be bygones. Lemonis did Taylor a solid and told him he’d have a paycheck through the transition. He did Marcus proud and turned himself inside-out to work hard and learn, earning kudos from franchisees.
Ultimately Marcus ordered him back to college, with the company picking up the costs, knowing that Taylor would be a great asset when he had his degree, ready to go back to work with a real businessman. What did you think of the episode? We’ve seen all seasons of “The Profit” and this was a standout because of the story and Marcus’ creative handling of the situation.
Link to the new company’s Facebook page.
CNBC airs “The Profit”, Tuesdays at 10 p.m. ET/PT Image/video credit: CNBC, used with permission