Archive for the ‘Meal Assembly Franchise’ Category

Franchises that went boom — or bust

Another fad that soon fizzled? Meal prep kitchen franchises. When the economy was fit, busy families indulged in the luxury of assemble-your-own-dinner services at franchises such as Dinner by Design and Super Suppers. The idea — which, truth be told, never quite made sense to us — is that Mom visits one of these commercial prep kitchens, puts together dinner for the week with conveniences such as pre-chopped ingredients, packs it up and takes home. We’re exhausted just thinking about it.

But in 2005 and 2006, the concept gained a big following. Super Suppers grew steadily during those years, jumping from 40 locations to 206, according to Investopedia, an online financial reference site. Its competitor, Dinner by Design, had 55 outlets. Needless to say, when the economy started to fail, so did Super Suppers and Dinner by Design. People went back to making homemade meals … at home. Now there’s a concept.

No new Super Suppers opened in 2008, and existing owners with SBA loans began failing at a quick pace — 42 percent last year alone. Dinner by Design has also stopped selling franchises and has 23 remaining locations.

 

Franchises that went boom — or bust

Meal Prep Blunders of 2009

We’re not entirely sure what they did accomplish, but here’s some example of what other companies managed to pull off last year.

Top things meal prep failed to do in 2009:

And just keep in mind, this is what the franchise should have done, not ideas that should have come from the stores. This is what the royalty payments should have bought.

Give away a scholarship

Make an iPhone app

Use any of their websites to generate a few million in extra cash

Be a major sponsor for a TV show or sporting event like The PapaJohns.com Bowl

Splash their name all over a racecar

Film a commercial at Times Square during New Years

Donate toys to any worthy cause

Anything related to our troops and their families? Perhaps a discount of some sort?

Any sort of charitable donation?

Open more stores than they closed

These are just a few examples of what other food related companies are doing. I included GoDaddy because I find their advertising methods very unique and interesting. Plus, they sell domain names. People need food more than domain names right? But yet somehow they always manage to come up with money to sponsor things like SuperBowls and other extremely visible events. Now if they would only sponsor Oprah or Dr. Phil, then they would make some real money.

So what are those royalty payments going to?

When will Dream Dinners file bankruptcy?

We know the end is near for Super Suppers, so how much longer does Dream Dinners have? To say it won’t happen would be silly, they have to be losing money like a sieve. They’ve gone from 220 stores down to 130, which is a ton of lost revenue. And out of those 130 remaining how many of those are close to closing and not paying royalty payments? Further, if the average store owner gets less than 100 customers through the door per month (and 100 seems high these days) how much could the franchise actually be making in royalty payments per month?

Further still, how many people has Dream Dinners let go? Back in the middle of 2008 they rumored to have dropped the axe and dispatched multiple people from the top, most in key roles of recipe development. Since they can’t exactly offer high dollar salaries have they replace these people? Or have they decided to use their dietician to rework all the recipes so they can offer them again without having to really spend anything? Did Dream Dinners actually crank out dozens of new, never before seen recipes in 2009?

And even if Dream Dinners didn’t fold up in 2009, they aren’t expanding their reach and haven’t since 2007. Two years of zero growth is always a bad thing in business.Their little meal prep world is shrinking around them and each month they have fewer stores open. Less stores, less income.

Let’s look to those at the top. Darin certainly hasn’t been their savior. His multi-pronged, multi-point plan of attack looks like a pretty big dud to me. You bring in a new CEO and he oversees the closing of about 100 stores? That’s gotta look good on a resume!

I’m sure Dream Dinners will say their new Dinners for Life program is a great success since over 50 of their stores are now offering this to their customers. First off, are they sure this is even their idea? Second, 50 stores is less than half of what they have left. Third, Dinners for Life comes with membership fees which I’m sure is a huge turn off for all their customers. Finally, this is an option within current stores, they still haven’t opened any new stores because of this idea, so how much revenue is this really bringing in? My guess? None. To me it’s just a way to distance themselves from the lawsuits of the parent company. The heart healthy menu wasn’t a million dollar idea, what’s the expectation for this one?

Dream Dinners is struggling for sure. It’ll be interesting to see how they fair in the first few months of 2010. I wouldn’t be surprised to see owners cast off the shackles of franchise ownership and start the new year out from underneath this business. I bet we see a surge in store closings.

Some final thoughts for the year

As the year comes to a close, a few thoughts come to mind about the meal prep industry, and those "industry leaders", Dream Dinners and Super Suppers.

Dream Dinners has been using their blogs to promote Dr. Brent, but how does that benefit owners?

Personally, I had to ask just who this Dr. Brent was. The answer? He’s a farmer, who Vanity Fair thinks is sexy.

Mind you, I see nothing wrong with Dr. Brent or his ideology, in fact they sound pretty good, but I’m just wondering how constantly promoting him promotes the meal assembly industry and helps the struggling store owner in this down economy.

If Dream Dinners can promote Dr. Brent, who doesn’t seem to have any affiliation with meal assembly, how come there isn’t a section on asking their dietician for help and guidance? It would seem a little more "grass roots" to me if they turned to someone within their own ranks. It’s certainly possible I missed it (perhaps that chef touched tips site is a gem and has all the answers), but so far, I’m not seeing it.

Why is Dream Dinners using the same marketing materials they used 3 years ago? (I think the pictures are even the same) If it didn’t work back then, what makes them think it will work now? Do they figure everyone has just forgotten? Is this what they’re spending all that marketing money on; free blogs and rehashed brochure material? Not to mention the free Twitter and Facebook accounts (that again seem to promote Dr. Brent more than anything else). Hmm, what is Dream Dinners actually paying for?

Dream Dinners is acting as though Dinners for Life is a new idea and new company, not just a menu change from their original idea. Remember how owners thought it was just a "test"? Dream Dinners couldn’t con(vince) busy mom’s to latch onto their idea but now they expect to con(vince) diabetics (who probably have even less time and stamina to stand around and make meals) that what they’re offering is a good idea? I recall Dream Dinners promoting their "heart healthy" menu, how did that work out for them? Did it bring in droves of new customers through the doors?

Where is the Dream Dinners iPhone/iPod Touch app? Considering this is the device for the person on the go (and is selling like wildfire), how come none of the meal prep companies have made a way to order while on the go? Pizza Hut managed to figure out how to do it.

Companies like Dell have been able to bring in an estimated $3 million in sales using Twitter. What has Dream Dinners corporate accomplished with their account and its 380 followers?

As an aside, the SuperSuppers account on Twitter isn’t even owned by Super Suppers HQ, it’s used by a forward thinking store owner. Just another example of how technology challenged the meal prep industry is. We can’t all be hairdressers I suppose. Kind of also makes you think Super Suppers really isn’t in the game anymore, doesn’t it?

What do owners plan to do when Dream Dinners drops below 100 stores (thereby having only half the stores open they used to have, or a 50% failure rate)? Considering how things are going this should happen within the next 90 to 120 days. Escape plan anyone? Golden parachute? Bankruptcy attorney on speed dial?

What will owners do if Dream Dinners corporate loses the $30 million lawsuit? That court case has to be resolved some time.

With Super Supper barely clinging to 60 stores, do owners have a plan for the corporate office declaring bankruptcy? Since they really don’t seem to have a leader anyway, will there actually be much difference?

Besides the obvious store closings the meal assembly industry is in pretty sad shape. There are so many missed opportunities and oversights. Those in charge clearly don’t have the business savvy to turn this ship around let alone keep it on a steady course. A steady course in this case would be smashing into an iceberg. It’s questions like these that would make me cringe and keep me awake at night.

At Year’s End

If you’ve been following along for the past couple of years this is the time when I reveal my mystical insight about the meal assembly industry and foretell how the events of the New Year will unfold. But at this point in the game, what’s left for this wreck of an industry? To say more stores will close would be redundant and obvious (even though it’s going to happen, en masse). No points for that one I’m afraid. So what else is there really to say?

Super Suppers is nearly defunct, it exists in name only; there’s nothing holding this company up. Just look at the number of stores they’ve lost this year. What can you say about a 60%+ failure rate? Even the franchise creator has walked away to try something different.

The gals at Dream Dinners are relying on a new name and their brand new unique idea to bail them out of the troubles that have overshadowed them for the past year. Appealing to the busy working mom and family hasn’t worked out so now they’re going after the diabetic crowd, because clearly, they have a lot more time to come in and make meals.

Besides targeting this very niche market they’re also espousing the works of this mysterious Dr. Brent and rehashing all the same news articles from two to three years ago. It might make for good keyword indexing, but that’s about it. Endless stories of spending time around the dinner table and talking to your kids had their place. It got some interest back in the day, but you can’t keep playing the same song over and over again. It’s time for something new, or better yet, it’s time to come to terms with reality.

Even with this “new” image the leopard can’t change its spots and in the end Dinners for Life will get the same acceptance as the parent company. There might be a spike in customers, perhaps even a spike in owners who ignore the truth, but this new idea will burn out more quickly than the idea it’s based on. Dream Dinners is quickly crashing to 100 stores (down from 220, and certainly down from 180 when declarations were made that everything was fine).

Even the meal assembly experts have decided to keep quiet. Are you hearing any real news about this industry? Has anything of consequence really happened this year? Will anything of consequence happen next year? What was the last meal assembly article you read? And what was the last big ad campaign?

Meal assembly ended last year, but some people refuse to admit it. How some stores got this far is a mystery to me; there’s no money to be made in it. We certainly didn’t make 3,000 stores and a billion dollars in revenue did we?

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