Archive for April, 2008

Make & Take Gourmet: Meal Prep Franchisor Takes Failures in Stride

Sean over at FranchisePick gives a little insight into the churn and burn mentality of this industry. It doesn’t really matter if you close and go out of business, they’ll just find someone else to replace you. Apparently taking some management queues from Stephanie.

(FranchisePick.Com) Some new franchisors might be alarmed when two of their first franchises fail and their franchisees lose hundreds of thousands of dollars. But for Make & Take Gourmet founder Michele Bellso, franchise failures seem to be no big deal.

According to Bob Niedt’s initial story and a followup piece this past Saturday in the Syracuse, NY Post-Standard, two Make & Take Gourmet meal assembly kitchen franchisees have hung up their aprons for good – within a week of one another.

But Michele Bellso, founder of the now-14 unit chain, isn’t letting a little thing like two three* of her first franchise owners losing their $174,500 to $292,000 investments get her down. In fact:

Make & Take Gourmet: Meal Prep Franchisor Takes Failures in Stride

MealMakers Faces Lawsuit

Although the details are not readily available a lawsuit has been filed against meal assembly franchise Meal Makers for “Torts-Property-Other Fraud – Diversity Fraud” according to papers filed in the Ohio Northern District Court.

The papers were filed on April 8, 2008 so it looks like another group of franchise owners feel they were sold a less than profitable system.

http://dockets.justia.com/docket/court-ohndce/case_no-3:2008cv00889/case_id-150362/

Arby’s owner buying Wendy’s for $2.34 billion stock deal

Clearly there is money in burgers, but strangely, the “Wendy’s” family doesn’t seem all that enthusiastic about the new deal.

COLUMBUS, Ohio (AP) _ After two past rejections, the owner of Arby’s shaved roast beef sandwich restaurants is buying Wendy’s, the fast-food chain famous for its made-to-order square hamburgers and chocolate Frosty dessert, for around $2 billion.

Triarc Companies Inc., which is owned by billionaire investor Nelson Peltz, said Thursday it will pay about $2.34 billion in an all-stock deal for the nation’s third-largest hamburger chain started in 1969 by Dave Thomas. Wendy’s had rejected at least two buyout offers from Triarc.

Arby’s owner buying Wendy’s for $2.34 billion stock deal

Food & Beverage – Smaller Portions or Higher Prices?

I guess these are the times we’re facing – smaller portions at the same price or is it better to raise prices. The trend has already started and considering the cost of goods will continue to rise as the cost of oil continues to rise this could be just the start of things to come. Bread, rice and other grains may soon be worth more than gold…

We bought a loaf of fresh baked whole grain bread at a local bakery today. Something about the loaf was different. This loaf was about the same dimension as the loaves purchased previously from the same bakery. The price was the same. The difference became apparent when holding the loaf in my hand. The weight was different – much lighter. I’m guessing they shrunk the loaf between 15 and 20% by weight.

Food & Beverage – Smaller Portions or Higher Prices?

The Ghost of Meal Assembly Past, Present and Future

As we finish up the first four months of the year where has meal assembly taken us? We started off by noting that store closings don’t seem to be on the decline and as we continue to hear from current owners, who find themselves in less than desirable financial circumstances, that number may hit an all time high as we head into the summer months. There is already talk of what you need to do in order to close your store and what sort of bankruptcy protection an LLC provide the individual owner.

With meal assembly not really jumping off to great start we followed that up with Dream Dinners making changes at the helm and not saying anything about it. But right after the change is announced a massive $30 million lawsuit is filed by several owners who feel they have been swindled into buying into such an unproven concept and they want to be released from their contracts. Interesting timing to be sure. Stephanie, the Dream Dinners figurehead, responds with a casual “it’s your own damn fault, don’t blame me” article on her visit to Charlotte. The very owners she hand picked to be a part of her business and her family are now not good enough and too interested in making money. They should be in business so they can give the money away, just like she does I’m sure.

Not to be outdone with things you shouldn’t say, Bert can’t seem to keep his mouth closed and continues to backpedal on all the things he said throughout 2007. The “market can handle 3,000 stores” has now been replaced with “the market is seeing a pause”. But has Bert stopped selling his wares to new owners? Has Bert counseled his clients in what they need to do in order to weather this meal assembly tsunami? About the only think Bert has seen fit to do is paraphrase the ideas presented by the users of this site and pass them off as his own in his less than illuminating newsletter.

In the typical fashion of not confirming anything, rumors abound about My Girlfriend’s Kitchen and The Dinner A’Fare merging – one of about 4 rumors we’ve heard already this year of stores buying each other out. Even the owners aren’t sure what’s going on or what name they will be known by. Normally when companies merge together it’s seen as good news and something that will make the company stronger and more competitive. This merger doesn’t seem to make sense on any level. Only time will tell if there really has been a merger of the two companies and what we can expect to see from the new My Girlfriend’s Dinner Kitchen A’Fare.

Judie, are you still out there? Hello, Judie? Head honcho of Super Suppers and purveyor of the famous chili beans over pasta has dropped off the radar. Is she dedicating time to her side business as cooking personality, strategizing about how she will drive her company through the tough times ahead or just trying to stay out of the crosshairs? Apart from adding pizza to their menu not much has been heard from the SS camp.

And speaking of side businesses, who in the meal assembly industry doesn’t have a side business of selling junk to meal assembly owners? Dream Dinners has PR firms, Super Suppers has cooking shows, MGFK has a site dedicated to finding suppliers, the EMPA now has a coalition trying to coerce you into breaking away from your Zor so you can pursue a life of leisure as an independent owner (regardless of the legal ramifications and profitability of this industry).

So as we hit the final stages that will rocket us into the normally slow summer months what can we expect? Are the franchisors more helpful to their owners? Darin has been cruising the countryside offering his pearls of wisdom to his captive audience. Is it going to make a difference? Are owners armed with what they need to be successful? Do they have the tools and marketing they need to grab the attention of customers who tend to do their own cooking travelling during this time?

If a merger has indeed taken place will the Kitchen A’Fare be a stronger brand to get them through the summer months or will the rebranding of stores be too much of a financial burden and the be straw that breaks the camel’s back? Will Super Suppers re-emerge from hiding and offer up it’s own plan for how to deal with the slower summer months?

Besides sending a slew of Press Releases about their massive takeover of the continental U.S., what have we heard of Dinner by Design? Their “innovative” offerings must surely be in full swing now, are they helping? What’s next on their agenda? Pre-assembled and curb side service isn’t new, so what other plans do they have for their owners to help them succeed? You can’t just go running around announcing some grand scheme of opening all these stores across huge tracts of the country, you still need a plan to make your current owners turn a profit, not just some plan to replace them with new ones.

Is MealMakers even still in business? 6 months now and not a word from them. Are there still MM owners out there? How are you doing? Are you doing better than the rest? Are you in the same boat? I don’t believe there are any of these within 100 miles of me so I can’t even look for myself.

Meal assembly franchises seem to be in a complete state of disarray if not down right chaos. None of the brands seem to be getting their names out there, owners seem to be in the dark as to the future of their franchises, companies like MGFK may or may not be for sale and other companies like Dream Dinners are subtly offering themselves up for sale, food prices are going through the roof, gas prices are going through the roof, customers are tightening their belts, teens are even showing a sign of maturity and curbing their spending, water shortages will probably be a concern again and in this time of crisis it seems that the franchisors are no more certain of what to do than anyone else. I don’t think a “throw it against the wall and see if it sticks” or a “wing it” kind of attitude is going to get your through the next couple of months. For example, where is the plan to deal with the growing food shortage? Rice and other grains are now at premium prices and now Sam’s has put limits on how much you can buy. Are the franchises going to make changes to their meals to exclude these as side dishes? Will they actually do it in any reasonable amount of time or will they wait until most owners have paid gold level prices? Perhaps they’ll simply say owners aren’t actually using enough so there is no reason to change. This would be a good time to with Jim’s “Take Mine” idea. It could certainly generate some good will and some fine PR. But then again they haven’t executed on any previous plans why should they start now?

What cost saving and protection measure do the franchises have in place? What methods are they using in order to keep their current owners? What marketing strategies have they shared with their current owners other than toothpaste and some sort of plastic cup set (and some sort of face cream that makes you break out in a horrible rash)? Where is the marketing money going to be spent to bring in customers for the summer? What assurances do owners have that they will still be in business by the time August rolls around? The economy has turned on its ear and it doesn’t sound like franchises are making any adjustments to their business plans. Now is not the time for business as usual or blaming your current owners because they want to make money instead of giving it all away. Since Judie and Stephanie are so keen on altruism perhaps they should give back the last 3-6 months worth of royalties they took from owners. I mean the government is giving refunds, why don’t the Queen Bees? It’s all for the family right?

The big push into summer months is about to begin and considering the state of some stores it needs to be big and there needs to be a lot of momentum in order to get them into the holiday season. What are the franchises doing to save their owners and their companies? If there is a mass exodus of stores across the country do these corporate owners really think they will still be able to stay in business?

The franchisors have 8 months left to save their owners and their companies, how do you think they’ll do it?

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