Cena Meal Prep Franchise by the Numbers
February 24, 2008 by Sean Kelly
Filed under Business
(FranchisePick.Com) Related Articles: Cena Meal Prep Franchise by the Numbers, Cena Meal Prep Franchise Boasts Slump-Defying Sales Model, Cena Meal Prep Franchise by the Numbers
Cena, a growing meal prep (”Meal Assembly Kitchen”) franchise opportunity was founded by foreign language teacher Tammy Badinger, who opened her first unit in 2005 and began offering franchises within less than a year. Unlike many others in the industry, Badinger is pretty proud of her numbers. We’ve extracted the Cena franchise and industry numbers from a recent article (Meal-prep chain serves up success) in the Spokane Journal, transposed them for no good reason, and display them here for your review and comments (please leave below):
2005: Year first store opened
2006: Year first franchise opened
22: Cena locations currently open
7: Cena franchises to open this month*
17: Cena franchises to open in 2008*
1,123: meal-preparation outlets in the U.S. in 2006 **
1,353: meal-preparation outlets in the U.S. in 2007**
14: entrees available at Cena stores at any given time
$260: Typical cost to assemble 12 meals that serve 2-6 people each
$4: What that comes out to per serving
$15: Typical cost of a Gourmet to Go pick up meal for 2-3 people
$5-7: What that comes out to per serving
$200K: Estimated cost to open a Cena franchise location
$170,000: The cost of inventory, equipment, and furnishings.
$30,000 The Cena franchise fee
5% Ongoing Cena royalty fee (on gross sales)
2% Ongoing Cena marketing fee (on gross sales)
10: # of years of franchise agreement
3-4: # of employees of typical Cena meal prep franchise outlet
1200 – 1800: square footage of average Cena franchise location.
100: # of regular customers spending $150 a month needed for a franchise to be profitable [Badinger]
9: # of months it “generally takes” for franchisees to reach profitability [Badinger]
25- 65 Age range of typical customer, predominantly women with families. [Badinger]
6: # of Cena Franchising corporate employees.
+20%: Cena Franchising corporate revenue goal for 2008.
0-1: Number of years operating history prior to franchising
* Projected **Easy Meal Prep Association
Are you familiar with the Cena or the Cena franchise? Is Cena succeeding where other meal prep franchises are struggling? Leave a comment; share your thoughts.
Can you say “earnings claims”?
Michael:
If a franchisor furnishes those kinds of numbers to a reporter, but doesn’t distribute them directly to prospects (deletes them from any reprints of the articles in their marketing package, etc.), would that be a clear earnings claim violation, or grey area item that might be brought up in litigation?
Sean
Sean, of course you are right on the technical basis.
But when a franchisor takes advantage of this loophole to make such broad claims, I would take it as a real warning signal – especially in this crappy industry.
In looking at the UFOC document dated 07/07 for Cena, I see several stores scheduled to open in the summer of 2007 that are still not open. I understand a slip of a month or three when opening a new business, but to have an anticipated opening date missed by ~10 months seems a bit odd. So did these people back out?
I also notice at least one store listed in the UFOC as open that is no longer listed on the web page, and at least one location that is listed as open (no indication that it’s coming soon, etc) and has no sessions listed in its calendars.
Just an observation.
MB
http://www.mealassemblywatch.com/
Mealblogger:
Using the “franchises sold” number instead of the “franchises open,” and muddying the distinction between the two, is a fave PR practice of the hot new franchise set. I wonder if that’s where Easy Meal Prep comes up with rising unit numbers… haven’t scrutinized, just wondering.
Selling wine seems to be a point of difference with Cena, does it not? There are a number of wine store franchises that seemed like another flat tire in the making… is it possible that the two together could work?
The idea of a wine and gourmet food “club” type business makes more sense to me than either concept alone. We belong to a monthly wine club and I often wish we were going somewhere where someone who actually knew something about wine (and food) was conducting it rather than our wino friends (who select wine by the label graphic, as I do). We’d pay money for that. Especially if they also provided a shuttle service home.
Yes selling wine is a bit different. However it brings with it an increased level of work.
Getting a license to sell alcohol can in many areas be very difficult. Dealing with yet another regulatory agency is just more hassle.
Additional work when it comes to sales tax. Just adding the retail items would change the sales tax structure for me.
Food not ready to eat and to be consumed off site, is a different sales tax issue than a ready to eat or a retail merchandise business.
It may seem like a better idea, but it just seems to add more complexity to the business model.
Your statement also assumes that the person in the store will actually know something about wine……
Just my opinion.
MB
Please stop referring to Easy Meal Prep as an association. It’s a for profit company that originally called themselves an “association” before they got called on the carpet by dues paying “members.” They sell products to stores and have begun to market themselves as consultants to stores who want to sell or sell of their assets. Fortunately, you only used them as a reference for store numbers, which still aren’t accurate.
The NYT recently relied on this company for financial data. Unlike franchisors, there is no legitimate source behind easy meal prep numbers. They are a best guess. When you receive “profit” data from these people, please , please ask for their source- who, what, when and where. Either they are illegally siphoning it off the clients who use the software product they provide or are making it up based upon the handful of stores that they market products for (recipes, operations manuals, etc). Either way it is ill gotten and not representative of the industry.
It is unfortunate that the franchisors seem to be taking down the industry they so voraciously created in the first place. There is a place and a time for this concept, but not at the cost of 8-10% off the top.
MA Owner Please stop referring to Easy Meal Prep as an association. It’s a for profit company that originally called themselves an “association” before they got called on the carpet by dues paying “members.”
The article cites them as the source, and describes them as a non-profit organization. That’s probably because they call themselves a non-profit association on their home page:
We also created the Easy Meal Prep Association. This has now runs as a member-owned non-profit.
http://www.easymealprep.com/main/index.php
Puh-lease-another dog…..People will never get tired of taking others peoples money from anyone willing to give it.
I dislike the franchising of this “dandy idea” by ANYONE in ANY configuration. How can you sell a “concept/model” after only having been open for less than one year? How can that be a “proven concept/model?”
It’s indeed just a “dandy idea-unproven” that someone had, added a twist and thought “Hey I know we’ll franchise this and make millions!” They could be right but at the cost of countless folks who have a dream and a franchise fee check in their hands.
It is sad and maddening all at the same time.
Why is there so much hostility about having to pay 7% to a fanchisor (that actually does spend 2% or more of it on marketing) and obviously, logically would prefer for its franchisees to succeed (If the stores fail, the royalties stop; and if the stores are struggling, the sales of new stores stops.), yet everyone I read on here seems anti-franchisor with not a word said about the outrageous amount of taxes the government takes? Where is the outrage there? Where are the messages back and forth crying out: “We have got to do something to get the government to quit taking so much of our money?” Seems to me you’re all blaming the wrong entity.
David: What about credit card companies that real business owners in til they’re maxxed, then triple the interest rate on them, then when they can’t pay offer them a home equity line so they’ll get a shot at their house after they force them into bankruptcy…?
And how about… wait, there’re only so many hours in the day.
We can’t cover every way people are getting hosed, now can we?
The hostility is not about 7%. The initial investment of a Cena is $178,400-$235,500. Many times people have their houses and retirement savings on the line. If someone fails, they don’t just lose that initial investment, they are on the line for the balance of their 10-year lease and, technically, future royalties. Do you see how things can get a bit testy?
The Cena website says “Cena was developed in 2003-2004 with unique characteristics. Our seven profit centers… Our proven system…”
How can a system developed a few years ago be a “proven” system? Has it been proven in the market a franchisee will open in? And franchisors are prohibited from promising franchisees they will be profitable or even acheive any particular level of revenue. So how can they say they have “7 profit centers.” Why do they provide their numbers, as Michael points out, to be published in the press?
The whole problem is that the premise of franchising is duplication of a refined, time-tested business concept. These Meal Prep concepts are experimental beta concepts being sold as “proven” systems.
The reason the 7% isn’t a huge concern is that it’s likely few will be around to pay it.
David Said: Why is there so much hostility about having to pay 7% to a fanchisor (that actually does spend 2% or more of it on marketing) and obviously, logically would prefer for its franchisees to succeed (If the stores fail, the royalties stop; and if the stores are struggling, the sales of new stores stops.),
In my case-my Zor could not even produce a report for us to tell us where our “marketing fee” was spent on-I suspect it was for food stylists, photographers and to get her self serving blog up and running. Oh we got to pay for several PR firms(who never got us any meaningful coverage in the media, a special recruiter guy (who as far as I know never recruited anyone), advertising kits quarterly that we had to spend hours on to format into information we could use at our store-most of the network just did their own ad copy, a person who created all manner of Jane’s for us(they were cute!)…our own advertising agency..all of which went byebye when the stores started to close.
*Why are we a complaining about the 7%? beause while we struggled (doing our own advertising locally-we had to spend at least $1500 per month out of pocket for advertising contractually)-trying to keep our heads above water, our Zor was and still is collecting money monthly from each store for basically providing a website. They no longer have a chef on staff, the franchisee are responsible for new recipe development. So currently the network I was in pays 7% for just a functional website. That’s a hefty chunk change every month for the use of a website dontcha think?
If your particular store is making a profit and able to support your family from your business-or make a nice little income as some other poster wrote recently- then that 7% may not bother you-but for the VAST majority of zees, that 7% that is drained out of their business that could be going to pay bills or support them monthly seems obscene…
My point is that 35% is a whole lot more obscene. It would make more sense to me to hear you bitchin’ about that. But I agree that if your Zor was doing little more than providing you with a website, then you are not getting your money’s worth. What type of guerilla marketing have you implemented? Or have you been operating under the FIeld of Dream mentality?
Okay David you are obviously a marketing guy-How about YOU come up with a valid way of marketing the Meal Assembly Industry that works for the Zees and makes ZEES profitable?
I would venture to say there isn’t one-do you want to know why?? Well even if you don’t want to, I’ll tell ya.
I have LITTLE confidence in an industry that boasts several Franchisors that were Marketing Professionals BEFORE becoming ZORS.
UH WHAT??
If MARKETING professionals turned ZORS can’t find an effective way to make their ZEES profitable and not just themselves;(ZORS have ways of cutting costs to stay “profitable” that Zees do not-they just fire staff and move into a home, home office), then I would venture an educated guess that it can’t be done- and this with the summer season coming and Meal Assembly Zees are going to go through a blood bath of closures this summer and fall…
My ex-Zor has indicated his doubts that his franchise network will survive intact through the summer…what is he offering his remaining zees?
A website… BFD… I will guarantee you that he and his lovely wife won’t forgo their royalties anytime before each 5-year contract they have with their Zees are up.
Sean, a marketing guy indicates he thinks this industry is a dog…he is the smartest,savvy marketing guys, I have ever met. That makes me think that the marketing pprofessional who have started Meal Assembly companies as franchisors are either inept(my vote), egotistical(can I choose two?-because this one gets my vote too), or are just on the take-(bingo the tri-fecta)!
Where do you fit in the above?
Gorilla Marketing, WOMM, Field Of Dream Mentality or Positive Thinking crap are someone else’s ideas or concept, that MA’s franchisors have high-jacked and tried to pawn off on their Zees as viable ways to market their businesses; Here’s a novel idea, how about giving sotre owners something they can actually use to make this dog of a business profitable?
High tax rates for most Zees is not a high priority problem because they aren’t making the vast amounts of money that their Zors are to have taxed now are they??
David:
You’re trying too hard, man.
Defending the royalty and ad fee because it’s not as bad as income tax – which they have to pay too?
Why not compare it to, say, genocide? It’s not as bad as that, either.
I’ve been launching and marketing franchise companies for two decades. I’m a big believer in LSM, Guerilla Marketing, Four Walls Marketing, Neighborhood Marketing, Permission Marketing,1:1 marketing, Relentless Promotional Marketing and all variations in between. I believe that franchisees with good concepts are responsible for their own success, and need to conquer the 5-10 miles around their store.
That said, the best marketing in the world can’t help a concept that people don’t need. Guerilla marketing can get people in the door to try it. It can remind them of their experience and incentivize them to come back. But it can’t make them buy something they don’t need.
David: once your marketing gets people in the door, how many of them come back? How often do the come back? And how much do they spend?
My guess is that the real problem here is that your target customers just aren’t that into meal prep. They love the idea, but aren’t compelled to do it regularly.
I had a discussion with Mindy about Sean’s comment about “profitability” and whether a franchisee should be dependent on the ZOR to make them profitable…I keep using the word profitable and I think I need to clarify…no I don’t think that you should hold the Zor responsible for not becoming profitable. I truly understand what Sean and some others are saying…
Here is my problem with the word “profitable” and maybe someone can give me the correct term so I quit using the term that is obviously wrong…How do you define the way that MAK store owners in VAST numbers can’t take a salary out of their store to pay themselves-they end up working for free? When I say “show us a way to make our store profitable,” that is what I mean, show us how to get our stores in the position that they are grossing enough so that the that the store owners actually get fairly compensated for the time they work. I know I can hear the backlash now….”it takes 3-5 years before a business can” statistic. yeah, yeah yeah…Does that really mean that any and all franchisees and small business owners never see a paycheck for 1-5 years into a business? Have I somehow missed a vital piece of the puzzle? Or is this just a MAK phenomenon?
So what is the correct term for that?
I know one owner who sometimes grosses $500-1000 over her monthly costs on a inconsistent basis (she is the only one to date that I know who does this)
No one can make a nice little side income on that when you realize that she is not paying herself anything, that $500-1000 IS her pay in the months she is able to gross that much.
Store owners in the MAK business are growing poorer and poorer every month they are in business. The only ones getting paid consistently are the Franchisors.
Kelly wrote: Here is my problem with the word “profitable” and maybe someone can give me the correct term so I quit using the term that is obviously wrong…How do you define the way that MAK store owners in VAST numbers can’t take a salary out of their store to pay themselves-they end up working for free? When I say “show us a way to make our store profitable,” that is what I mean…So what is the correct term for that?
Kelly: What you’re referring to could be called a “viable business model.” While it’s not the responsibility of a franchisor to “make a franchisee profitable,” it is their responsibility to provide an opportunity that is not fundamentally flawed, that is doomed from the start or is not based on a “viable business model.” Here’s the difference:
Zee buys a Buck-a-Burger franchise. While no one’s getting rich off a single store, stores that follow the system, have average locations, can pay a modest manager’s salary breakeven at $200K, show a profit of 15% at $300K and 20% at $500K.
The BAB franchisor has provided a business model that can be profitable under normal circumstances. If the Zee makes his Corvette payments through the business, or doesn’t manage his labor costs, gets ten new competitors or didn’t realize he opened in a vegetarian neighborhood, his unprofitability is not BAB’s fault. It is an “opportunity.”
However, if it turns out that each BuckaBurger costs the average owner $1.25 to make until they are doing $1M in sales and the only ones doing that are in airports or highway rest stops, the neighborhood BuckaBurger model isn’t viable.
Sometimes it can be a grey area. Even if a concept is viable in a high income, trendy neighborhood, it might not be in a middle class neighborhood or a small town.
Other concepts, like the eBay Drop-off stores, aren’t grey at all. Their cost structure makes profitability near impossible.
The question is, which is the MAK franchise?
IMP-I like that -in my opinion-
MAK’s fall in the hell no category-but you didn’t give me that option so I would say completely non-viable.
I guess the numbers don’t look so GOOD now huh?
Cena expands meal-assembly business to include bistro
By My-Ly Nguyen
Press & Sun-Bulletin
JOHNSON CITY — Cena, which offers ready-to-cook meals at its site at 201 Oakdale Road, said it has expanded its business to include a bistro.
Cena Fresh Bistro offers lunch and dinner for dine in or take out. Owner Fran Cianciosi said it’s an upscale, affordable eatery featuring organic salads, gourmet sandwiches and soups, and other items.
Cena originally opened as a meal-prep business in Johnson City in October 2007. Cianciosi said he wasn’t getting enough customer traffic so he expanded the business to include the bistro.
Make and Take Gourmet, a meal-assembly business that opened in Vestal last August, closed in May, less than a year after opening. The reasons for the closing were undetermined; Make and Take representatives were unavailable for comment at the time.-I BET they were!!!
Because of the added in-house dining, Cena will no longer be offering public meal assembly sessions or private parties, the business said on its Web site. Gourmet to Go pre-assembled meals still are available for order and pick up.
An article that talks about the Cena brand is found on their website, it says that two teachers who were co-founder of Cena To Go Gourmet- “rushed this thing into franchising-so their future franchisees wouldn’t be left-out”
…two teachers who were co-founder of Cena To Go Gourmet- “rushed this thing into franchising-so their future franchisees wouldn’t be left-out”
I’d imagine their franchisees are thanking their lucky stars that the teachers were looking out for them!
Question-How do you “expand ” a meal assembly business by removing the “meal assembly” part