Why the Meal Prep / Meal Assembly Kitchen Franchises are Failing. Part 3
April 30, 2008 by Sean Kelly
Filed under Business
(FranchisePick.Com)Why are the meal assembly kitchen franchises failing?
One reason: Self-Delusion.
In a recent post, I wrote about an article on Michele Bellso, the cheery franchisor of 14-unit Make & Take Gourmet, whose enthusiasm for selling more franchises appeared unaffected by the fact that 3 of her first franchisees have lost their $200K investments. She freely admits that she doesn’t know the cause of the failures, and didn’t seem too concerned about figuring it out.
She also freely admits to not knowing for sure whether they’re in the meal prep kitchen business or in the take out prepared foods business. She talks about the concept “evolving” to a model that sounds suspiciously like one we already have. It’s called a grocery store.
Franchisor delusions that franchising is easy.
This is from an article on Make & Take Gourmet from last March, 2007 :
Make and Take Gourmet Holdings is taking over the East Coast. The DeWitt-based meal-replacement business is planning to open licensed locations from New Hampshire to the tip of Florida and everywhere in between. Between 60 and 70 Make and Take franchise-owned stores will open in 2007.
IMHO:
An new franchisor who thinks they can (or should) open 60-70 units in the first year lacks experience.
A new franchisor who blabs those plans to a reporter lacks judgement.
A new franchisor who has 12 units open and 3 failures at the end of that year lacks credibility. Big time.
(A December, 2007, a company press release stated that the company had opened 23 Make & Take Gourmet franchises. There are only 12 on the website. Where are the rest?) Franchisor delusions of invincibility
Franchisor delusions of invincibility
Suffice it to say that if a new franchisor is not familiar with federal prohibitions against providing earnings claim information outsite of Item 19 of the UFOC, they should at least have the sense not to blab all their numbers – real or inflated – to the press. Like these:
Make and Take’s Cicero location sells, on average, 3,000 meals per day, Bellso says. In December 2006, during the busy holiday season, sales increased to 6,000 meals per day, she adds.
Make and Take’s Cicero location will generate annual revenue of $1.2 million to $1.5 million, says David Bellso, Make and Take’s franchise-sales manager.
(Did you hear that sound? That was the franchisee lawyers shrieking, in unison, “Hot Damn!”)
Franchisor delusions of grandeur
Michele Bellso [is] founder and sole owner… The growth of Make and Take is entirely company funded, Bellso says. The company currently has no investors and has not taken out any loans, she says.
By “company-funded” I assume Bellso means “Franchisee-funded.” Franchisees pay a $30,000 franchise fee, 5% of gross sales, and 2% marketing contribution which I assume is paid for projects undertaken by the Bellso’s design firm. Franchise fees from the 16 who have opened would amount to $450K.
Michele Bellso has hired a director of franchise development, franchise-sales sales manager, and an accounting manager to staff the corporate office. She plans to hire an additional 30 employees to serve as corporate trainers, customer-service representatives, and procurement associates by the end of 2007, she says. Make and Take currently employs 180, including employees that work at licensed stores.
The priority of these proposed new hires contains perhaps the greatest reason that the meal assembly kitchen franchises are failing.
The first two are for selling new franchises, and are high-dollar sales positions.
The third is for someone to count the money the first two bring in.
The least priority is given to hiring those who will provide the support the franchisees were promised.
Hopefully, some of the franchisees will get a chance to meet them.
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Don’t believe for a second that they don’t have loans behind this. I wonder if they’re bank(s) are getting nervous?
I honestly don’t know anyone these days who has 3000 meals going out their doors today (I’m going to presume they mean in package form as in 3,6,8,12 meals at a time). That would be approximately 250 customers A DAY- buying 12 meals at a time….uh not so fast… that would mean they would be running 20 sessions a week with 12 per session (hypothetically speaking), that’s almost 2 or more sessions a day!
I want to hear from someone who does that kind of business in ONE DAY, most stores can’t even pull 250 people in in a month.
Delusional would be the polite way to put it!
AND yet…they are now going to the format that turns them into “a grocery store.”
In my experience, the only reason why that format is adopted is because the sessions have fallen off and they need to stay open longer for more foot traffic to generate more business because they can’t fill sessions any longer, AND they start to sell one entree at a time and hope that people pick up impulse items at the same time-AGAIN-
Thus EVOLVING and ADAPTING that doggone proven concept they sold to their franchisees when they told them their over-inflated numbers to give people “happy ears” so they would buy their franchise over someone elses….because they are “the leaders” of the industry-I think someone who owns one said leaders in the industry could mean anything…
It makes me think back to the infamous phrase spoken by someone under oath…
“It all depends on what the meaning of “is”, is.
Kelly
excess-is-overated: if you would, paste the email address you submitted with your comment (For verification) and send it to our private mailbox at unhappyfranchisee@gmail.com. Other commenters may do the same in confidence.
Indeed the numbers they are giving are delusional….spelled “deceitful”! And to even contemplate growing that fast says they are interested only in making what they can as quickly as they can with no regard for store success. The MAK industry is house of cards to begin with, but this franchisor sounds like they are amoung the worst.
Great post, Sean. Franchising is hard — for both parties in the model. I’m not ready to declare meal prep dead yet, but there’s some definite soul-searching going on.
Mike Butler, the founder of our franchise system, posted yesterday on the trials and triumphs of a growing franchise system. I thought it was well written…would love to get your thoughts.
Would still love to partner with you on some content. Guest post? Interview with our founder? Other ideas? I’m open to whatever works for you.
Keep up the good stuff.
Sean, I am a bit selfish here. I want some information on your thoughts with Dream Dinners, Inc.
I own a Dream Dinners store and a few weeks ago attended the ‘Stephaine & Darin Show’
Darin mentions under his breath that they are facing some difficult times but with thier 87
initiatives plan are confident in turning this around. The only talk about the lawsuit is THEY beleive THEY did nothing wrong and will ‘fight-it’ because THEY know THEY will WIN!
I walked away somewhat hopeful, until I read the article http://www.charlotte.com/business/story/571256.html that featured Stephanies face and what she quoted saying.
I was SHOCKED & HURT.
If you were me, would you continue to stay open in ‘hopes’ that this will turn around?
This is my third year being open and I am faced with the summer challenage. I am trying not to be so emotional about this, but up until this article, I am starting to see what other have been saying to me for sometime. Is Dream Dinners, Inc full of greed? Better yet, they are branding with Martha Stewart, Dr. Phil & catering to weddings…
Please advise.
@Jeanie: I’m so sorry to hear about your experience! Dream Dinners was a client of mine when I sold advertising, and I’ve been a customer, too. I love the concept, but I hate to hear of franchisees who feel hurt like that.
Our company is a franchise company, and one of the reasons I enjoy working here (disclaimer: I work at HQ) is that the franchisees and the staff at the franchisor level work very closely together to help the franchisees and the brand succeed.
What has it been like working with the franchisor at Dream Dinners? What are the biggest challenges to your success? What things work well?
jeanie:
I will read (or reread) the article.
Though others who have tried to make MAKs or even DDs work may be more qualified on your particular situation.
I will say that I’m always skeptical of big-name tie ins for newer chains that don’t have thousands of units. Your marketing universe is within 5-10 miles of your location. Getting your message in front of the likeliest prospects within that universe in as frequently and persuasively as possible is where there money and effort should be focused.
YOU, your prospect’s neighbor and fellow community member, are the most powerful celebrity to promote – not Martha or Phil or Oprah.
IMHO, looking like a big, national chain helps sell franchises, not your services.
Sean
Scott Hepburn said: Our company is a franchise company, and one of the reasons I enjoy working here (disclaimer: I work at HQ) is that the franchisees and the staff at the franchisor level work very closely together to help the franchisees and the brand succeed.
Scott works at the HQ of PR Store, a franchise that provides PR and Ad-agency services. Scott,, hypothetically, how do you think your CEO would react if he found out that your agency-of-record was repackaging the marketing programs you paid them to develop, and marketing them to independent competitors of your franchisees? And worse: they set up a website to promote the program, and published the response rates of your campaigns to promote their package?
Check out my mealprepmarketing.com comment:
http://www.franchisepick.com/make-take-gourmet-meal-prep-franchisor-takes-failures-in-stride/#comment-33737
Sean: I thought you might be interested. If I have overstepped my bound, I apologize.
Ladies and Gentleman,
I wanted to post this front and center for all to see. I wanted to bring to light the type of people who work at and are in the employ of Dream Dinners. Stephanie has clearly revealed the type of business woman she is, but now let’s turn our attention to one of her minions who has been skulking around this very site posing as three different people. One of their very own has been touting the very virtues of Dream Dinners as a great and wonderful business that was pillaged for it’s new found ideas and would be doing exceptionally well had competition not arrived on the scene. He has also been pretending to be a troubled owner who wants us to feel sympathy and camaraderie for his plight and wishes to share in the warm glow of store ownership. Finally, he has been pretending to be a defiant and combative owner who doesn’t see why his parent company is the target of such hostility and blame.
This is who Dream Dinners is. This is who they employ.
My comments from the last post he left as Store Owner
John Tramatana/Jim Coosteel/Store Owner – You are one in the same and I can tell by the very garbage that spews forth from your lips, but beyond that, server logs don’t lie, I can see right through you. You sir, should be ashamed of yourself. Your deception and fraud are clear and this pathetic and downright scandalous behavior proves once and for all the type of company Dream Dinners really is. You are an embarrassment to this industry and you have no moral integrity whatsoever.
For this type of behavior you deserve to be terminated immediately. However, I am sure you fit right in with the rest of the Dream Dinners crowd; not only do they seem to support and encourage this type of behavior, they will probably even give you a raise.
I am going to leave your posts exactly as they are because you are right, customers can see this, and this is something they should see. They should see the types of lies and deceit Dream Dinners is capable of. They should see the level of misdirection they try to employ to make themselves look good and cover up their mistakes. They should see how you try to manipulate events and throw blame on others when you know you are guilty to the core. They should see the types of business practices you employ to discredit people who have worked for you, slaved for you, lost millions BECAUSE OF YOU. They should see the type of person a Dream Dinners will employ. They should see the type of person the store owners have to deal with while struggling to save their homes. They should see the level to which you will sink.
As John Tramatana – http://www.mealassemblywatch.com/wordpress/index.php/2008/01/07/can-you-compete-by-not-assembling-meals-for-customers/#comment-4131
As Jim Coosteel – http://www.mealassemblywatch.com/wordpress/index.php/2008/02/28/on-the-topic-of-a-coalition/#comment-4664
As Store Owner – http://www.mealassemblywatch.com/wordpress/index.php/2008/03/17/dream-dinners-the-bell-tolls-for-thee/#comment-5276
So what do you have to say for yourself John?
Make no mistake, I will do what I can to make sure this gets posted on Franchise Pundit, FranchisePick and Blue Mau Mau. I think everyone will be interested in what you have to say.
http://www.mealassemblywatch.com/wordpress/index.php/2008/05/03/the-deception-and-lies-of-dream-dinners/
Tuckerbox said: If I have overstepped my bound, I apologize.
Everyone is free to set their own rules for their own site, I suppose.
For me, sharing server logs, IP information and email addresses that are not being provided to webmasters for publication are a violation of privacy. I don’t think it’s wise, Tuckerbox, no matter how tempting. There may even be legal ramifications.
My policy is to never share that information and just let shills expose themselves with their contorted arguments.
Sean, I still need some clarification. You say that exposing these unethical scum-bags, their could be legal ramifications? How?
I beleive this is creating due-diligence on the Meal Assembly as a whole.
The goal is having the ZOR stop selling a failed concept (including re-sales) to ANYONE.
I would like to add that Meal Assembly is a GREAT concept=a Great CAUSE. It just does not make money, unless your super rich and need a great tax write off then I say- This is it- Serve your community, and do it well!
Sean, I still need some clarification. You say that exposing these unethical scum-bags, their could be legal ramifications? How?
I’m saying that when you own a website you may have the ability to collect information about the visitors of your site, just as others can collect personal information about you.
Having the information doesn’t necessarily mean you have the right to use it in any way fit if there is an “expectation of privacy.”
I don’t know what the legality is – I’m sure it’s posted at the Electronic Frontier Foundation site.
I’m not saying right or wrong – I’m just saying that in my opinion I want people to participate – even those I don’t like – confident that their undisclosed info will stay that way.
For example, will a franchisee who’s reluctant to share be confident that someone won’t decide to expose their identity or location for some reason?
I’m just saying it can easily backfire…
Is there a branch of law out there that services and sets legal guidelines for the internet?
Michael do you know?
I’m planning a legal career and that type of law really interests me.
Thanks!
In case Michael is en route to AAFD, I’ll answer: Yes… It’s part of the Intellectual Property practice of most firms. It’s a very hot area of law, as it’s all so new… and complicated.
Check out the Electronic Frontier foundation, Chillingeffects.org, and links off them. Look into the DMCA digital millenium copyright act.
It is important to be familiar with the basics, because there are sharks that can slam you for an innocent mistake.
Sean
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