The Profit: Corey’s NYC Bagel Deli Cooks Up a Deal With Marcus Lemonis
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Corey and Laurie Kaplan, husband and wife from Chicago, are in a growth mentality for their successful company, NYC Bagel Deli. They have visions of expanding their locations but need assistance with capital and strategy to achieve this. That is where Marcus Lemonis comes in. Marcus is immediately attracted to this business because it’s been around a long time, people know and love it and there are tremendous margins on bagels. Corey and Laurie sell a bagel for $1.29 while it takes about $0.10 to make it in materials and another $0.10 in labor.
Currently, the business has two primary locations and a pop-up location as a third site. The two primary locations are pulling in about $100,000 per month and the pop-up site around $50,000 per month. This shows Marcus that there is great potential with this business. When Marcus performed a walkthrough on each site, he found some common themes that needed to be addressed to move the company forward. His plan for helping NYC Bagel Deli grow is to:
- Review the product line, remove erroneous products and add in traditional NYC fare including bagel chips, coffee and cheesecake
- Rebrand the store from NYC Bagel Deli to Corey’s NYC Bagel Deli
- Develop 1 concept store at the Dearborn location to create a better process for the customer and a higher register ring for the company
- Develop a commissary model that allows the business to open more locations and wholesale product
Marcus offers the NYC Bagel Deli $200,000 for a 25% share of the company. He feels that he could drive traffic to Dearborn and grow business there from $1.3 million to $2.5 million. Corey asks Marcus what he is going to get for giving up that big of a share in his company because he doesn’t feel the monetary value is all that big considering this opportunity is about growth and not survival. Marcus shares that he knows where the market is in Chicago for the product, how to properly brand and merchandise his products and what the margins should be. He also said that he may also fund two or three more times that amount if the partnership is working well. Corey decides to decline the offer, not counter and walk away.
A week later, Corey called Marcus and asked to meet again. He shares that he has been researching Marcus and his success and he feels that his business would be stronger with Marcus than without. Marcus again reiterates that in order to scale and grow, they have to have a brand that is recognizable. They also discuss the variation in their valuation of the company and come to an agreement on $250,000 for a 25% share of the company.
— CNBC’s The Profit (@TheProfitCNBC) December 5, 2018
After striking a deal, Marcus jumps into business transformation mode with the Kaplans. He and Laurie perfected a bagel chip recipe and …read more
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