Dinner by Design to expand – Continued

I have to say this article had me fuming! Now, I already posted this article a few days ago noting the expansion seemed “excessive” in light of current conditions. Again, they claim 30 stores in the Chicago area. That for a single state seems incredibly high. However, they go further to state they plan to open another 30 in the state – 15 in the suburbs and 15 in Chicago.

Holy Saturated Market Batman!!! California doesn’t even have that many stores from a single vendor and Dinner by Design thinks the city of Chicago needs 60??? I mean honestly, that just boggles my mind!

What infuriates me about this article are comments like “This industry is going through growing pains …” Really?

· Is that what you call 60 meal assembly stores going up for sale each month – growing pains?

· “Growing pains” are why store owners are scrambling to close their doors before they sink deeper into debt?

· “Growing pains” are why owners are desperately trying to figure out how to make it to the end of the month?

· “Growing pains” are why store owners aren’t paying themselves a salary and have been just breaking even for months on end?

Thank you Mr. Understatement!

I guess by this yardstick going into debt by $800,000 and declaring bankruptcy is a slight financial oversight. And no that isn’t my situation, that is based on comments made here and on other sites I have read.

I know nothing of the Dinner by Design sales (how many stores have opened/closed or customers per month), but how do you validate the rest of the statement above ” … but Dinner by Design is rocking”. What exactly constitutes a “rocking” company or industry? Is it by the sheer number of people you had pay the franchise fee? Is the industry “rocking” when most owners will agree there has been a huge drop in sales from last year? And by huge I would say a 50-70% drop in overall sales since this time last year? So how is Dinner by Design, “rocking?” What is the yard stick? What data, facts, figures support this claim? Sure, selling 60 franchises in a single state is “rocking” from a marketing an franchise standpoint, but let’s check in next year and see if the owners of those stores think it’s “rocking”.

I take this as yet another example of someone making a claim without a single piece of evidence or data to back it up.

The last thing this industry needs is expansion! It needs marketing, it needs consolidation, it needs leadership, it needs to be more owner and consumer focused. It doesn’t need comments like this.

Good luck to Dinner by Design, but I shudder to think of the wake of destruction that will follow this course of action.

(Crain’s) — Dinner by Design plans to expand its meal assembly concept in the Chicago area and the Midwest.

The company is seeking franchisees to open locations in Lake Forest, Winnetka, Palatine and Naperville in addition to Michigan, Missouri and Iowa. Those areas provide “excellent demographics for us,” said John Matthews, president and chief executive officer of Dinner by Design.

Mr. Matthews said the company has nearly 30 locations in the Chicago area and believes Dinner by Design can support another 15 more in the suburbs and an additional 15 in Chicago.

Grayslake-based Dinner by Design is one of more than two dozen chains that allow customers to come to a store and assemble multiple meals from fresh ingredients. The food can then be frozen and prepared at a later date. The company has 60 locations and agreements for another 40 in North America, which puts it in third place behind Seattle-based Dream Dinners and Super Suppers of Fort Worth, Texas, which each have more than 200 locations.

“The industry is going through growing pains, but Dinner by Design is rocking,” said Andy Potter, founder of the Meal Assembly Network, based in Evergreen, Colo. “This industry is still generally filling the niche of busy people who want to put food on the table.”

Dinner by Design has only two corporate-owned stores, with no immediate plans to open more non-franchised locations.

Franchisees pay a one-time fee of $35,000 in addition to footing the bill for store construction which Mr. Matthews said could run between $125,000 and $225,000.

Dinner by Design has only two corporate-owned stores with no immediate plans to open more non-franchise locations.

“That’s plenty for us right now,” he said.

http://www.chicagobusiness.com/cgi-bin/news.pl?id=27184

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7 Responses to “Dinner by Design to expand – Continued”

  • Former MA Owner in the SE region:

    I recently learned that a major franchise (let you all figure out which one) recently achieved a milestone that they showcased to their franchisees as a positive outcome of hard work and dedication. This milestone happened in the month of October and had to do with sales. I did the math and figured out that if you divide the amount of the milestone (pretty impressive number to those that don’t stop to do the math) by the number of stores open that month (approx. 244) it comes to about an average of $26,600 per store. How is this good? I guess since the franchise is still getting their share (they did pretty well) it is a milestone…but for the poor franchisees work there butts off to only achieve $26,000 it is very SAD.

  • That does seem to be part of the spin. Send out the numbers but don’t give people a chance to work it out per store. Plus you have to figure that the MA business is a pretty hefty bell curve with a slight push toward the low end. There are a small number of stores which do really well, a noticeable number of stores which don’t do that well, and the rest are smack in the middle doing about average. Of course we don’t know what “average” is.

    Now $26k in sales a month sounds pretty good, until you take out what the franchise gets, what you have to pay out in food costs, employee costs, electric and water bills and not to mention trying to pay down the banks loans, CC bills and advertising. Oh yeah, don’t forget to set some aside to pay yourself for all the hard work you did in the month.

    Oh wait, that doesn’t add up…

  • Amy:

    I think Dinner By Design is fooling themselves that the Chicagoland area can support 30 new stores. No Way! They say they want to open a location in Lake Forest, you had a location in Lake Forest that closed. The store is for sale on the easy meal prep site and the DBD website is no longer taking orders for that location. As for the Palatine area, they had a buyer for that area who backed out. I heard it was because of teritory disputes between two surronding locations. This is just what I heard through the grapevine, I am not reporting facts. The Northbrook location also closed this year and the Park Ridge location is for sale. Sounds like things are really rocking! As I have stated before, my store is in the Chicagoland area and I compete with DBD. They have the name share and are the market leader here in Chicago, but I do not think their stores are doing any better than anyone else.

  • indie owner:

    I looked up the Meal Assembly Network and see they are a company that provides:

    ” entrepreneurs in the meal assembly industry with valuable tools to grow their business and reduce costs”

    and

    “brands with a unique and innovative channel to reach busy consumers”

    Seems to me it would be in their best interest to say DBD is “rocking”–otherwise how could they convince Kraft or Reynolds or Nestle to promote their products through MAK’s?

    I wish we could get more unbiased opinions as to the current health and future viability of this industry.

  • According to the Meal Assembly Network website: “Our goal is to be the most complete, accurate, and useful directory of meal assembly kitchens on the web.”

    On the surface that sounds like a pretty good idea – I even pointed it out awhile back. But, when you dig just a touch deeper – as in you go to the About Us page, that’s when the ulterior motive comes out. As Indie Owner points out, their other motivation is to sell you something. They want to help you reach your customers, reduce your costs, and learn from their marketing prowess – for a price I’m sure.

    So once again a self appointed representative of the industry is going around saying how great and wonderful everything is while at the same time trying to sell you products and tools on how you can tap into that vast market you have at your disposal.

    Why not just make an infomercial and be done with it!

    Of course they’re going to say the industry is rocking so they can try and get sponsors. Of course the industry is booming, buy this store I have listed for sale. Of course the industry is great, buy this website software which I make a percentage off of. Of course you can make money fast in this industry, just buy my helpful guide and the customers will beat a path to your door. Of course consumers know about this industry, look it’s on TV! (or maybe not :))

    10 MA stores in a single state?
    20 MA stores in a single state?
    40 stores?
    How does 60 stores sound to you? And you could be one of the lucky owners!!! And look, free knives! :)

    I would say get Suzanne Sommers to help you out, but even she doesn’t want anything to do with this.

    So while a business franchise talks of their massive expansion plans and the “Meal Assembly Network” gives it the big thumbs up as a rocking good idea, stores in that same area are closing and going out of business.

    Yeah, that’s rocking!!

  • mysterymiss:

    2 cents girl strikes again! It’s a lazy Sunday-something I can once again enjoy what can I say?
    The $26,000/month for me would have been super except I still would have made about $7.50 an hour for my 80 hour work week (no I didn;t do the actual math that would be my hubbies job!), yeah that is really the way I saw things going when I opened my store! I could have made
    more money that that at Mickey D’s working part-time!

  • […] PlansDinner By Design Expanding Into Chattanooga Dinner by Design Plans Major Expansion in IndianaDinner by Design to expand – ContinuedDinner by Design, Midwest’s Largest Meal Assembly Company, to Expand In MichiganDinner by Design […]

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