Inc. magazine recently spoke with 20 small-business owners that either dealt directly with Marcus Lemonis, CEO of Camping World, or were on CNBC’S The Profit. Many of them felt like they had damaged them in some way.
This story by Will Yakowicz originally appeared in Inc.
Some feel they were exploited to make entertaining television, while others allege Lemonis took advantage of their lack of business savvy and weak financial positions for his own monetary gain, acting more like a callous private equity investor than a small-business savior. Most of those who spoke to Inc. did so on the condition of anonymity because they had signed a nondisclosure agreement with CNBC and the show’s production company, which threatens a $1 million penalty for breaching the confidentiality terms.
In the past five years, Lemonis has been involved in at least six lawsuits, three of which have stemmed from his deals on The Profit. In those three cases, business owners and investors allege a range of misdeeds: breach of fiduciary duty, breach of contract, breach of good faith and fair dealing, fraudulent inducement, unjust enrichment, shareholder oppression, and tortious interference with a business relationship.
“I’m there to help the business, not just the owner,” Lemonis said of his critics, sitting in a conference room in Camping World’s headquarters in the Chicago suburb of Lincolnshire, Ill. “If the owner thinks that this is a free ride, or this is like some meal ticket, I need to pump the brakes and stop.” He describes business owners with whom he’s had disputes over bad or broken deals as “entitled.” Founders who do become success stories, he says, “gave more of themselves, worked harder, did the right things.”
Small-business owners who haven’t benefited from Lemonis’s intervention describe a significantly different story. Some participants claim that he promised on a handshake, and then walked away at the last minute only to criticize their business, or ability to run a business, hurting their reputation with customers and investors. Others claim he does a deal because he wants the business, brand, or real estate, but doesn’t actually want them. If he likes your business and wants a piece, he will give you a loan, or he will take over your debt in exchange for equity. When you get in trouble and need more money to stay open or the pressure of the debt comes to a head, he’s there to relieve you of that pressure by paying off your debt and taking over the company.
“Think vulture capitalist,” said a former executive who worked for Lemonis. “He looks for companies that are desperate, flies in, and picks at the bones. At some point, you realize this guy on TV who says he’s helping companies isn’t the real deal.”