The Definitive Guide to Business with Marcus Lemonis

Why Marcus Lemonis just gave this man a $50,000 bonus from his own fortune

Marcus Lemonis scrambles to save his $750,000 investment in Farrell's Ice Cream Parlour
Marcus Lemonis scrambles to save his $750,000 investment in Farrell's Ice Cream Parlour

If you want to motivate your all-star employees, a cash bonus can be a strong management tactic. That's the surprising way serial entrepreneur and millionaire Marcus Lemonis commended one employee on Tuesday's episode of CNBC's "The Profit."

In fact, Lemonis gave Travis Lee, the director of operations for Farrell's Ice Cream Parlour, $50,000 of his own money. His reasoning: While two business partners mismanaged company funds — and set Lemonis back nearly $1 million from his 2016 investment in the California restaurant chain — Lee showed unrelenting commitment to the business' success.

"The only reason that I am standing here today, going down this rabbit hole one more time, is because of you," Lemonis told Lee.

Travis Lee (L) and Marcus Lemonis (R) stand in the newly renovated Farrell's restaurant during "The Profit."

Farrell's was once a popular national chain in the 1960s and 70s, closed down by the late 1980s and reopened under new ownership in 2010.

In 2016, Lemonis partnered with Parlour Enterprises, which operated the California Farrell's locations, to revive the brand in exchange for a 51 percent stake in the Farrell's trademark.

At the time, Farrell's was generating $17 million a year in revenue, but suffered from large debts, unprofitable locations and lackluster food.

Lemonis entrusted Parlour Enterprise CFO Paul Kramer and its since-resigned CEO Mike Fleming with the task of revamping the restaurant.

Instead, Kramer and Fleming neglected the changes Lemonis had requested. The most successful Farrell's location, which once brought in over $4 million in sales, closed down because the owners' were behind on rent.

"I got basically a big F.U. and I have to decide whether I just want to cut my losses and move on because I don't want to throw good money after a bad situation," Lemonis said.

"I normally am the easiest guy to persuade with a good story but the story here isn't a good one: negligence and mismanagement of funds," he added.

When Lemonis investigated further into Farrell's demise, he spoke with Lee, who had been working as a regional manager at the restaurant for nearly six years and was in charge of updating the restaurant's menu in 2016.

Lee admitted he wasn't able to do his job properly because of Kramer's resistance to change. After negotiating a new lease for Farrell's most successful location, Lemonis agreed to help save the restaurant in exchange for a 75 percent stake in the company.

In the following weeks, Kramer and Fleming would step down as partners in the business, while Lee stayed on.

Unlike Fleming and Kramer, Lee did his best to help keep Farrell's afloat. "For Travis, it's always about the customer, it's always about the employee, it's always about the company," Lemonis said. "It's never about him."

That's why Lemonis went the extra step to acknowledge Lee's dedication to Farrell's.

"Thank yous are necessary but, let's be honest, they're not everything. So I want to give you a bonus," Lemonis said. "[This could] never have worked without you."

"This check for $50,000 comes from me personally," he added, "not from the business because the sleepless nights that I didn't have, you had."

The bonus not only showed Lemonis' gratitude for the extra effort Lee put into the business, it's also a tactic that could boost Lee's morale and productivity.

Research has shown that one-time bonuses, although not as preferable as giving raises, can increase employee output. For example, a CNBC column by business development author Ron Volper discussed how this type of bonus compensation "motivates [employees] to meet and exceed their goals and gives them the opportunity to increase their earnings."

Lee, meanwhile, expressed his appreciation for Lemonis' leadership move and said the money would help his family.

"I spent six years trying to fix this concept and got pushed down and pushed away and felt like I was nothing," Lee said. "To have this and to be recognized by you, it means the world to me."

Under Lee's new changes, the new Farrell's location is expected to make $4.2 million in revenue — which prompted Lemonis to called him a "rockstar."

"You have not only earned my trust but you have earned my respect," Lemonis told Lee. "You don't work for Farrell's, you're my partner at Farrell's."

"You're not an employee. This is your business," he added. "Don't you ever forget that this is your business."

And if you've recently received a cash bonus, here are eight ways to use the money to boost your savings.

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