One of the hardest things about being a leader is parting ways with someone who has made a meaningful contribution to an organization's success.
On Tuesday's episode of CNBC's The Profit, Marcus Lemonis found himself in the unenviable position of having to dismiss one of the co-founders of Staten Island, New York-based Standard Burger. What's more, the decision came shortly after Standard Burger won "Best Burger in New York" at Time Out magazine's Battle of the Burgers.
After Lemonis invested $400,000 in the company in February, he returned to check in on the business in August, only to find a group of feuding partners. At the heart of the conflict was a dispute between co-founders Joe Tranchina and Sammy Lazoja over the menu. Tranchina had recently introduced a new discount burger that was losing money on each transaction.
The conflict couldn't have come at a worse time, because Lemonis was in the early stages of expanding Standard Burger into a national franchise.
"We have a management problem, but I need to put that to the side and get focused, because we have a meeting with the first potential franchisee," Lemonis said during the episode.
After successfully lowering some of Standard Burger's food costs at the request of the potential franchisee, Lemonis found himself in the middle of another dispute involving Tranchina. The co-founder had recently dismissed, over the phone, a female employee who had worked at the restaurant for three years. Lemonis learned that Tranchina had been romantically involved with the employee before firing her.
Tranchina admitted to having had a personal relationship with the employee, but defended his decision to fire her. "If we asked the staff, they would have nothing but great things to say about my decision making," Tranchina told Lemonis.
Although Lemonis praised Tranchina for his hard work managing the restaurant, he drew the line at letting Tranchina's personal life come into the business.
"If you mistreat other employees, you cannot work here," he said. "You need to slide back into the role of partner and friend."
After parting ways with Tranchina, Lemonis closed the restaurant's first franchisee deal by meeting all of the franchisee's requests, which included adding hot dogs to the menu. "Standard Burger is on its way to great success," Lemonis said.