Marcus Lemonis seems willing to pay $162,500 so he can avoid working with Phil Tadros and Bow Truss Coffee Roasters. That could be the cost to Lemonis if he backs out of a December agreement to buy the coffee chain. Lemonis, the entrepreneur behind NBC’s The Profit, is considering walking away from the deal after discovering the coffee company owes vendors, employees, health insurance companies and landlords. The letter of intent included mention of $2.3 million in debt.
Sure, this could be a negotiating ploy for Lemonis to secure a better deal than the $3.25 million purchased price reported—Lemonis has supposedly already invested $100,000 in to the company. But the Sun-Times reported that Tadros and Bow Truss owes back rent at all of its 11 locations. That includes the annual yearly rent payment of $64,000 owed to the Chicago Park District for the Mariano Park location which opened in May. Evidently there are more problems than the gelato at that Viagra Triangle location.
Upon further examination of Bow Truss, Lemonis told Crain’s that he discovered “several things I just didn’t like.” That included that Tadros has a “habit of bouncing paychecks.” Vendor debt didn’t bother Lemonis, but the bounced checks made an impression. Bow Truss also was deducting health care costs for two months from employee paychecks but not paying the company’s share, according to Crain’s. Tadros said coverage remained current, but some employees said there was an lapse and weren’t sure if they were covered.
Lemonis wouldn’t be on the hook for a break-up fee if it’s determined Tadros misrepresented the fiscal vitality of Bow Truss, i.e. seller’s fraud. Tadros maintained he’s been transparent throughout. The Sun-Times reported that Lemonis was in negotiations to buy Tadros out of the company he founded. Tadros, for his part, told Crain’s he’d like to stick around Bow Truss if the company continues to expand.
Bow Truss continues to be a spectacle as 2017 begins. Pending lawsuits are scheduled to have court dates this year, so the drama promises to unfold. Maybe it’s time to cut back on the caffeine.
UPDATE: Tadros called to say that he’s “always been transparent.” He said that the debt amount he revealed during negotiations, $2.3 million, has always been accurate. He described Lemonis as having a problem with what made up that debt. That would include those missed payments to employees. He also reiterated that the purchase price of $3.25 million is based on royalties, as that amount alone would undervalue the company. The letter of intent, provided by Tadros, backed that claim.