Pop Goes The Weasel

Marcus Lemonis nixes his investment in Planet Popcorn. This commentator has a few questions. (About other stuff; the ixnay was a no-brainer.)

Screen: CNBC

Screen: CNBC

I do not have any questions about why Marcus Lemonis finally gave up on Planet Popcorn on last night's episode of The Profit. Lemonis gave Sharla enough time, expertise, and benefit of the doubt to pull it together, and didn't see too many red flags before bailing on it.

But that doesn't mean I don't have any questions at all.

Is Sharry, Sharla's mother, a masochist or a moron?

That's harsh, maybe, but: seriously? Sharla is your child; you know how Planet Popcorn run, which is to say barely and/or into the ground, stacks of cash lying around on the floor, no safe, no security cameras in the popcorn stands, no inventory tracking, blah blah blah. It's run poorly enough, in fact, that said child had to ask you to mortgage your house a second time to keep the business going. Meanwhile, she's driving a Benz and sporting a huge rock from her fiancé, Steve -- who, by the way, thinks he knows enough better than Lemonis that he's calling Sharla outside during the initial investment discussion all, "You can't give up control of the business," but as far as this viewer could tell has no skin in the game. So Steve needs to shut up, and Mom needs to nad up -- she shouldn't have given Sharla the loan in the first place, but since that horse is halfway to Canada by now, get a formal loan agreement in place. Documents. Signatures. Deadlines. I have done business with my sibling for over a decade in various iterations, and in any business transaction involving family and exceeding $1000, you absolutely must write the shit down, period, no exceptions.

Except slapping Sharla upside the head for giving you attitude when you dare to question her approach to the analysis of the accounting. That's free, and well overdue. You're a creditor, and a grown-up. Act the parts and don't let her talk to you like that.

How long did the Planet Popcorn ep take to film?

I want to say it's probably a shorter shooting window than others, because Lemonis is like, "I can't with this," and leaves at without investing -- but the reason I ask is that Sharla is sporting at least three different manicures. If the episode took 4-6 weeks to film, okay, but at the same time, if your business has reached the point where you need to go on The Profit to stay afloat, you may want to act like discretionary spending is under control on the personal side. In other words, get the weekly mani, but get the same color every time so know-it-alls like me don't wonder whether you lifted the money for it from petty cash, and speaking of that!

Could anyone turn that business around as long as Sharla is in charge?

Did anyone else see Lemonis trying to take the lottery ticket, and Sharla slapping her hand down on it so he couldn't? It symbolized everything hopeless about trying to do business with a Sharla: she buys scratch-offs out of petty cash and, worse, thinks it's cute; she forgets she has cameras on her and thinks she can lawyer/interpret actual footage that we just saw; she believes "I'm not a mathematician" absolves her from spending money she doesn't have, which is not a math question, exactly, because zero, being zero, is as much a figurative concept as a numerical one.

Dealing with Sharlae, in any sphere of life, is exhausting -- and this is exactly what they count on. Hair-trigger defensive, disingenuous ("I don't understand what's wrong" about going around Lemonis to buy the website he already reserved, for an organic brand he thought of, just for one), entitled (Sharla kept doing variations on a theme of "a billionaire won't miss the money" -- because billionaires become billionaires by misplacing the odd hundred grand?). Sharlae never admit mistakes and don't use earth logic in their arguments, and they count on others getting tired of their bullshit and giving in, just to get on with things.

I do wonder if he tried to go around Sharla to Sharry, who technically may "own" part of the business or its infrastructure if Sharla is in default on the loan from Sharry -- and then discovered that Sharry didn't get any paperwork and couldn't enforce the collection.

And now for some business nerdery.

Does snack food follow the same rule of clustering as restaurants do?

Apparently, in a cluster of restaurants -- even the same exact cuisine, like East 6th Street in Manhattan's row of Indian restaurants -- each individual restaurant does better than it would if it had the street to itself. It has something to do with people's willingness to travel to a given area to eat if they know they can get a seat somewhere, and I don't know if it translates to other cities or what (I read it in The New Yorker, so).

Does that also work for snack food? Lemonis went over the good businesses to have near a retail popcorn location -- a coffee shop (morning traffic), an ice-cream shop (evening traffic), a gas station (repetitive traffic) -- and they all made sense. But is it even better if you have a candy store/high-end chocolate "café," a cheese store, etc.? Or all "impulse" stores -- i.e., next to a Claire's?

How do you define "skimming"?

Every retail business has to build it into their accounting, and it's not necessarily stealing; the pizza place I worked at didn't care if we ate the merch, as long as we logged it. Accountant Casey guessed the amount at $35 a day -- did he mean strictly employees pinching small bills from the till, or eating the product? Did that include the assistant manager donking the drawer count? Little kids wandering off with unpaid-for bags of cheese corn? Dead stock/stale corn?

Lemonis didn't seem concerned with it on a micro level, probably because two accountants and Lemonis couldn't figure out where the eff 400K got to and Sharla pretended she couldn't explain it either.

Where did that money go?

Never mind that not only did Sharla not get "alarmed" that Lemonis assessed hundreds of thousands missing, but she also didn't seem bothered by inaccuracies she claimed to see on the balance sheet, or by the fact that she couldn't "say yes or no" to specifics on those inaccuracies…that level of ignorance of your own profit/loss statement is astounding, if it's actual ignorance and not more like plausible deniability.

And with piles of hundos used as doorstops at Planet Popcorn, it could have gone anywhere, I guess. But it probably went to personal expenses Sharla took "as a write-off" and didn't keep track of (she's probably calling that Benz a company car to herself, but didn't run it through the accounts as such, the better not to get bitched out by Casey or her mom). Steve isn't as savvy as he thinks he is, but I bet he knows where it is, and I'm kind of dying for the IRS to take Sharla to court for the taxes I furthermore bet she's in arrears on, so it's a matter of public record and we can see where it got to.

  • ProfitWatcher

    400k missing???? seems to be hiding it to avoid taxes.....I see an audit in the early near future after the airing of this episode

  • ProfitWatcher

    After running a search, there seems to be a planet popcorn in Taiwan & Malaysia......seems to be better managed and organized too...lol

  • nrgins

    Re. "Is Sharry, Sharla's mother, a masochist or a moron?" The answer is: she's a mom. And she'll go to her grave helping her kid. Because that's what moms do. You can see in the way Sharla snapped at her when she asked about the missing money that she controls her mother. And that's probably how Sharla got her to loan her the money: by controlling her. Sharla's a fierce, controlling woman, and her mother loves her and trusts her. But she's being used. It seems (emphasis on the word "seems", because no one knows anything for sure) that the money's going into the company and then into Sharla's pocket. She doesn't see it as "stealing" because it's her business, right? But her mom's paying the bills with her loan. And Sharla's using the profits. And this "I'm not good at math" thing is just an excuse. She may not be a math-wiz or know how to use QuickBooks. But she has enough sense to know that if she takes cash out of the business and lives off of it instead of depositing it in the bank, then that's money that doesn't go into paying bills. Or paying mom back.

  • YouShouldWatchCloser

    Clearly it is not to avoid taxes if the balance sheet reported a profit. The question was "Where is the $320k your accounting says you have?" If they were hiding the profit, it would be "What are these debits totaling $400k for these expenses which we can't prove legitimate, resulting in you showing zero profit."

  • chris lock

    She may be a mom but she is also a moron. Sharla seems to be in arrested development and reacts like a 15 year old when confronted with facts. Her "mom" owes it to her to cut her off.

  • chris lock

    I really enjoy this show. Lemonis comes off as a sharp and reasonable business person. It comes off real because he is using his own money so he scrutinizes deals accordingly. Other reality shows should take note. The "real" in most reality shows seems to be fading.

    Lemonis would be welcomed into my business. I would try to negotiate him down to 40% but I would give him 50% if necessary. I only disagreed with his idea to price the container popcorn at $16.00. I don't see people paying that much even with a fancy container.

    He was wise to nix this deal. An angle that the writer touched on was the fiancé. Everything pointed to him manipulating Sharla. The accounting audit, the new websites, 50% ownership were all challenged by Steve and it seemed to sway Sharla away from Lemonis.

    I would bet a steak dinner he doesn't work regularly and always carries around cash that smells like popcorn......

    Sharla is probably afraid of losing him and probably steals from the business and her mom to keep him around. Why did Steve object to everything and try to steal the website? He is a loser and knows Lemonis would discover it quickly and force him to actually get a job. Its the only logical explanation. (Notice how Sharla had no problem with Lemonis going over the accounting until she left with Steve.)

    Shame on Sharla for being such a child. She had a golden opportunity to grow her business exponentially and give real financial security to herself and her family. However, she seems to be more concerned with protecting her sex life. After this episode, I predict an IRS audit, a mom who will either run out of money or patience, and a business that will be severely diminished or put out of business. Where will Steve be???? Gone...

  • Rashida

    I think she is doing something shady, seriously. A horrible businesswoman!

  • Aaron

    Wow. Run away, Marcus. RUN AWAY. I'm guessing Sharry will be living in that Benz in the near future.

  • Michael

    She's not even that smart. Probably just takes handfuls of cash when needed.

  • Katy132

    Looks an awful lot like the daughter is hanging her mom out to dry and she and her man are living high off the profits instead of paying down the mortgages mom took to help her stay afloat. What a shame. I think it's pretty clear that the moms afraid of the daughter cause she knows deep down this little witch will walk away in a second leaving mom holding the bag, the empty bag.

    Who in their right mind wouldn't know that there was $400k missing from the bank? Shayla must sell bridges to fools in her spare time!

    And then to try and sneak around the guy and get the websites and have the nerve to look him in face and make believe she was doing it for both of them? Lol. Wow. What a thug!

  • http://www.facebook.com/people/Molly-Katt/100003262633554 Molly Katt

    I've worked for high cash flow businesses that had high debt - bars and restaurants. In every case the owner was into drugs, gambling or both. Every time. and in very case the business tanked. In one case they discovered the owner was taking 80K per month from the business for his lavish tastes. She fell victim to what a lot of poor business owners who got money fast do and figure they can't steal from themselves. They just say "I'll have to sell more whatever."

  • adam_baum

    Marcus was right to not do a deal with Sharla. She is a bold faced liar and con artist. It is obvious she is draining the cash from the business since she controls the cash.

    He mother is the patsy and big loser here. She is going to lose her house and her daughter probably couldn't care less.

  • BuckJohnson

    You see he knows that she was stealing the money and using it for her and her daughters expenses along with her fiance. Ask yourself this, why did she buy lottery tickets. It's because it was a sign of desperation and hoping she would win a crap load of money to replace the missing 400,000 dollars. And the grandmother or her mother knows exactly where that money went. To that Benz, probably to her and her daughters condo/house and to expenses and vacations that her fiance talks her into.

    Nobody and I mean nobody would be laze fair about a missing 400,000 dollars and not caring. She knows where it went, it went to her pocket. The accountant knows where the money went, but wants to protect his job (you don't see him anymore after they break up the meeting). I guarantee you she hasn't paid taxes on that money, soon she will be audited just watch.

  • JLo

    I noticed she kept bringing up the $2.5 million, I think she was living in some kind of delusion that she had actually made that as profit rather than the $400k that was missing. Spending like she's made even more than she has. I wonder if Downtown Disney is reviewing its contract with her given that she is likely to be shut down by the IRS soon enough.

  • TLP

    Sharla is nothing but a Big Manipulating Bully... Not only did she TRY to Bully Lemonis, without success, but she has her Poor mother Bullied.. What a Horrible Daughter/Businesswoman.. I would Never buy that Popcorn..

  • Ron

    Sure looks like Sharla is spending some of the money and not keeping track of it, However the way Steve behaved he may be the bigger problem. Sharla needs to have a hard look at Steve and what he is doing when he is not with her. He may be dating and gambling with the companies money way beyond what Sharla knows. This looks like the opportunistic "boyfriend" who says I would love to help you out with your business. You are so smart so beautiful. I love you here is a beautiful ring (bought with her money) will you marry me. Lets go on a trip have some fun. Right up until the money is gone.

  • todtown

    I'm just gonna say it. I think Sharla has a drug habit, her boyfriend is a tool that validates her addiction for his own gain and Sharry has a very unhealthy codependency with her daughter.I wasn't sure whether I was watching The Profit or Intervention.

  • Fred95

    Love this show. Marcus comes across as sharp and direct without being brutal.

    As for Planet Popcorn ... the woman is scum. She's screwing everyone around her. Heck, she couldn't even say on camera that she's never screwed anyone without laughing over it.

    Great series. Here's hoping it finds its audience and is around for a while.

  • Fred95

    Mom could have been paid off in just a few months ... if she ever needed to lend her scum daughter the money at all.

    As for trying to get the domain name ... rank amateur. If Salem was going to look after someone, you'd have to be a fool to think it wouldn't be Marcus.

  • Fred95

    She's pulling $400K tax free from the business, so she's not about to be homeless. Of course, if she invests in a creperie she'll start blowing that cash faster than she blew the deal with Marcus.

    But before that happens she might find she's heading for a new home ... in prison.

  • Fred95

    Oh, no. Steve is a brilliant "trusted advisor".

    lmao ... can't even type that with a straight face.

  • Kevin Wong

    I just started watching The Profit and I have to say I'm enjoying it very much. While production editing probably shows highlights of Lemonis and exhibits the low-lights of the business owner, the business problems are so apparent. Generally it seems like it's too easy to open a business and there are too many delusional people who don't understand basic business practices. One thing I appreciate about Lemonis is that no job or task is beneath him.

  • http://www.Melindesign.com/ Melindesign

    She's a carnie. What did y'all expect?

  • 1reallytaxed1

    I like this show, its like an in your face "shark-Tank" we don't have to wait to see the Shark in action !! As far as Planet Popcorn is concerned, Lemonis didn't run fast enough away from that train-wreck of a company !! If I walked into a room where hundreds of thousands of dollars was on the floor, I think that would have been enough !!

  • POV

    I think she is completely skimming off the top, the bottom, and everywhere in between. The scariest part is not that she is probably hiding money from the IRS, it is that she is probably under-reporting her sales to Disney. While the IRS is intimidating, you don't try to cheat Mickey Mouse! Surely, Disney has called for an audit of her sales.

  • Kazador

    My guess is the money is going either up her nose, into her arm, being gambled away, or someplace illegal. Also, what gives with the forensic accountant showing up to tell her what's visible on a sheet of paper (that was just theatrical)? He did no digging when he was there at all (at least not filmed) which is what forensic accountants do. Most likely he didn't do anything because the deal wasn't going to go through at the end any way. I highly doubt that Sharla wasn't stealing from her business. It's easiest to blame others, but the nonchalant manner in which she took a loss of almost 380K means only one thing to me, you have no one to blame but yourself so why are you going to look... Let's just hope they audit her and her mom can take over the business and maybe run it.

  • Kim

    Love this show. Just started watching this weekend, one episode after the other. Love Marcus. Sharla acts like a meth addict. That's where the money went. Steve probably picks up a pile now and then, too. All that money and Sharla still looks like crap. Car, nails, vacations. How about a salon once in awhile?

  • TakeASecondLook

    The problem is the balance sheet didn't show the profit (balance sheets do not show profits). The profit appears on the "profit and loss" statement and that amount of cash has to book-keep somewhere on the balance statement (either increase in an asset or decrease in a liability).

  • Justin L Borden

    One word: meth.

  • Greg Voss

    Damn...I guess I drew the wrong mom when they were handing them out. Can I trade mine in on one stupid enough to take out a second mortgage on her house and give me the money? I want to start a business. I think I will name it "give me all your money and stfu about how I spend it, mom".

  • Greg Voss

    Planet Popcorn's Downtown Disney lease was terminated and they were asked to leave.

  • Stephanie Hart

    buys crepes...

  • DuckyBob

    It's called fraud. After doing business litigation for 25 years, I have coined a saying: Show me a closely-held corp or a sole proprietorship, and I will show you fraud, on every level.

  • profitmargin

    Can someone explain what would happen to the two websites (for Planet Popcorn) that Mr. Lemonis bought?

  • Brad Hagler

    Does anyone honestly think this moron won't get pinched for taxes? I'd bet the whole $400K not a bit of tax was ever paid on that money. The IRS will no doubt shut this whole biz down for unpaid taxes at some point. Sharla, had she had even an ounce of brains, should have chased Marcus for his help.

  • CherylEm

    I'm thrilled to hear that. The woman made me sick!

  • CherylEm

    He will continue to be the owner unless (or until) he decides to sell them.

  • bucklaw

    She gets a contract with Disney and can't tell where the money went. It
    is odd that she doesn't even put up a decent argument. One telling,
    thing is when she says, "The money is MINE!" Still it would seem that the "forensic accountant" could pull her bank records and tell us the rest of the story. Crepes?

  • ryryonline

    I know this episode is 7 months old, but I just started watching the show. I'm curious to see where some of these businesses are now. This one cracks me up because now they 1) have a website that looks like the one from the show, 2) stole the new logo from the show, 3) and have popcorn tins.

    However, they have also been booted from Downtown Disney. They claim that their popcorn sales were greatly exceeding Disney's own popcorn sales so that they had to go. 1) I don't think Disney does their own popcorn. I think it's all outside vendors. 2) Why would Disney boot them if Disney gets 35% of sales? My thought is maybe quality of product or service dropped. Disney is very strict on these.

    While I don't want to see anyone that worked hard for it go out of business, I think this woman is trying to live beyond her means and it is starting to catch up with her. It's too bad she didn't keep her integrity. I feel that she could have at this point taken her self out of the corporate structure and just collected paychecks (ala 4-hour work week style).

  • Sarah Moglewer

    I re-watched the Profit - Planet Popcorn. Sharla McBride is in Newport Beach and accuses CNBC of poorly editing the show to make her look inept and dishonest. She claims that it is 99% false. She doesn't want people to believe the negative comments. This was written on 12/15/13. You can go to Planet Popcorn, through Manta and read for yourself. I don't think that CNBC was unfair in the portrayal.