Why meal assembly is a good business venture.
By Tuckerbox on Feb 11, 2008 in Independent Meal Assembly, Meal Assembly Franchise, Meal Assembly General, Meal Prep
Many have made the point that I am negative, perhaps even hostile toward the meal assembly industry, that I only point out what’s wrong with it and that there is still plenty of life left for business owners, they just have to get through this change in climate.
Ok fair enough, I’m not going to dispute my attitude toward the industry, but I did want to make a clarification. I strongly believe in the “idea†or “virtue†of meal assembly as a way for families to enjoy healthy foods at a reasonable cost if they are wise and proactive enough to take advantage of it.
What I no longer believe is that meal assembly is a viable and profitable business venture. I don’t see it as having market appeal, I don’t feel customers see it as a viable alternative to fast food and I don’t see customers making this a part of their weekly or monthly routine.
However, maybe I’m missing something, I certainly can’t speak for everyone.
What I would like for people to answer is, “Why is meal assembly a good business venture?†Basically if you’re in the meal assembly business now, why should you stay in it and if you’re thinking about starting up a store, why should you go ahead and open?
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mysterymiss had this to say on | Feb 13, 2008 | Reply
Really??? I’m being very serious There is honestly no one out there in business that will comment here?
Folks who are sold on the concept as is that are looking…..
Now is your chance, show us your stuff, tell us why MAK is a good “business venture.” Please!?
Kelly
ChefGeorge had this to say on | Feb 13, 2008 | Reply
Wow. No response?!
Lisa had this to say on | Feb 13, 2008 | Reply
I still believe MA is a good business venture, but I do not believe anyone should buy into any of the existing franchises without some serious digging. I know I would not recommend buying any of the biggies, but I allow that there MAY, POSSIBLY, be one or two smaller ones worth their royalties, but I doubt it. For those of you who did buy in and wish you hadn’t, stay tuned here because I think I have a great opportunity for you! That said, I should precede that offer with my reasoning for why I believe that MA can be a profitable business.
First, people will oursource their kitchens, we have outsourced everything else–we don’t sew our clothes, maintain our cars, cut our grass, or in many cases, even clean our houses, or watch our kids, why would anyone go back to chopping onions. But, we know that eating out is not the answer. We don’t have money, or time, and they do not offer the healthy alternatives we know we need.
As our society faces increasing rates of disease–high blood pressure, cardiovascular conditions, diabetes, obesity, we recognize food as medicine and know that what we consume is important, but our needs will differ. MA kitchens offer a way to get REAL, HOMEMADE, HOMECOOKED meals on the table affordably and with a minimum of work and stress. Sure you can get takeout and you can get frozen Healthy Choice, but it’s not the same as homemade food.
The USP of MA is service and customization. We can offer top quality meals customized for personal needs or tastes and do it efficiently and cost-effectively, but it will not be self-assembly meal centers, it will be take and bake, personal chef service for the masses. And what we offer will be different from grocery stores–we still use restaurant quality food, different from grocery store distributors, and different from restaurants–unless they truly enter the business, but I don’t think they have an incentive, their margin is in drinks and alcohol, and they rely on cheap labor. People will still go to restaurants, so there is little reason not to keep doing what they do best.
The key to a successful MA industry is a powerful back office that allows and eases online ordering and customization and a consolidated effort on behalf of the store owners to develop best practices, recipes and customization tools. This is going to be a great industry, but unfortunately the early developers are not going to be the ones to bring it to fruition. Like I said, stay tuned for more information! Lisa
Amy had this to say on | Feb 13, 2008 | Reply
It’s not a good or smart business venture, that’s why no one is responding.
I’ve been open for 2 1/2 years and have yet to make a profit. We are abadoning the traditional model and trying to make a go of a more retail concept. There may be a few succesful kitchens out there but I bet they are doing mostly pick up and grab and go business.
I finally convinced my sister the other day to end the kitchen session all together. It is a huge waste of time, energy and money to set up all of the catrs for 2 people. It feels so liberating to have made that decision. We are no longer a meal assembly kitchen, and I am going to stop marketing it that way. The in store kitchen session concept is dead as far as I am concerned. I tried for 2 years and have had enough. We will give it a go as a pick up only store and try to sell our meals out of other venues.
Anybody want to buy 6 like new sandwich carts?
mysterymiss had this to say on | Feb 13, 2008 | Reply
Lisa, I’m waiting with bated breath as I’m sure everyone one else is.
Amy bless your heart-Thanks for sharing, I know how hard this is for you! I hope for great thing for you and sis!!
Blessings to you!
K
Lisa had this to say on | Feb 13, 2008 | Reply
Kelly, have you not gotten my e-mails? I have tried to contact you personally… Lisa
Mindy had this to say on | Feb 13, 2008 | Reply
Be patient MM- Like Lisa said, GREAT things are about to happen! We cant wait to disclose….
Much Joy,
Mindy
http://www.joyfilledyou.com
(The opinions I make on mealassemblywatch.com is just that, they are not intended to harm or destroy Any Corporation)
mysterymiss had this to say on | Feb 13, 2008 | Reply
Mindy & Lisa,
Honestly I can’t wait to hear, I’m not being a knothead here honest!
Lisa, no I haven’t gotten any of your emails.
Kelly
Lisa had this to say on | Feb 13, 2008 | Reply
Kelly, If you would, I would love for you to contact me since maybe I have been screened by your SPAM filter. You can call me at 573.446.1823, or email me at supersuppersmo@aol.com! Thanks, Lisa
Tuckerbox had this to say on | Feb 13, 2008 | Reply
Lisa, I certainly look forward to the additional details, but I do have to say that so far a lot of what you’re saying is a great big IF.
IF this happens, IF you can do this, IF customers do this, IF customers realize this…
I agree with what you say, but that is also the here and now. MA kitchens offer everything you describe and customers are faced with all the same issues and constraints you mention, today. MAs do offer top quality meals, and offer it in the take and bake, even delivery format.
Customers have every convenience offered to them right now. Again, I look forward to you pulling this all together, but right now you are describing a way MAs *can* be profitable in the future under the right conditions, not how they can be profitable tomorrow.
No disrespect intended, just my 2 cents worth on what’s presented so far…
As an aside, you can send email directly through the discussion forum if you like, that seems to be working pretty well.
Lisa had this to say on | Feb 13, 2008 | Reply
Tuckerbox, I think existing MAs can be profitable and many are profitable, the answer is finding the right mix of products and services and the right support systems. There is money to be made in food, people have to eat every single day and this is a service people want. I can accept your challenge, and I will write more later, but I got kids to get to bed and stuff to do before tomorrow, so more later, Lisa
Tuckerbox had this to say on | Feb 13, 2008 | Reply
Talk about a cliffhanger!!
DinnerZen had this to say on | Feb 13, 2008 | Reply
Didn’t see this post for some reason the other day– mostly b/c I look for posts to which people have responded. It is probably most appropriate for folks who have been successful to respond, but here is my rambling…
This is kind of an interesting and nearly impossible question to answer if you aren’t or haven’t made a profit yet, because the “right” answers almost exclusively seem to be derived from financial responses. What makes any business venture a wise investment? The promise of money.
We might all be inclined to say that we held the core concept of helping families near and dear to our heart, but at the end of the day, nobody got into this business because they thought they would be PAYING to go to work til their feet felt like they were going to pop off.
I think what is disconcerting to owners-new, old and retired is that the MAK concept is brilliant for so many reasons with all of the advantages being so incredibly obvious to us (or else we wouldn’t have gotten into this business). Agreed that outsourcing our kitchens is the way that many folks are moving or are already at.
What I think is lacking is the time and money to invest into hardcore marketing and other research. We all have our own anecdotal experiences to which we respond and make changes (sometimes too quickly, perhaps), but there is a scarcity of availiable research on what motivates loyal MAK customers to come back with any sort of frequency, why do some people come back monthly and others come back with less frequency, what’s the secret to getting people to pull the stuff out of the freezer and actually cook it, what motivates customers to come in the door in the first place, what types of meals do they really want/need/love and want/need/love with some sort of consistency…
I’ll let you in on a little secret, the IAMPB is conducting, through members who volunteer, a customer survey. The goal was ultimately to come up with data that would support the argument that meal assembly makes good financial sense– particularly in a time of financial hardship. However, the focus isn’t exclusively financial- it has questions about quality, cost and value. There is VERY preliminary data in with nearly 300 customers from a few states/stores responding so far (folks have til the first of April to distribute). From a long list of benefits (more time with family, less time grocery shopping, save money, make cooking enjoyable, etc) do you know what the overwhelming two benefits (tied for first place) selected thus far have been:
1. More diversity in the usual menu
2. Spend less time on meal planning and preparation
You could absolultely argue that #2 is directly connected to or a catch all for some of the other benefits- spending more time with family, spend less time grocery shopping, but if that option were eliminated, there would be this un-unanimous spread of responses across a host of other answers.
#1 really surprised me for some reason. Not that it isn’t an obvious benefit, but that is ranked so highly by so many people.
The audience is certainly biased because the pool of respondents are those customers who have been to the store. It would be eye opening to ask people who have never been to an MAK before questions about awareness, understanding…and most importantly, what has stopped you from coming in.
Semi -related to the service issue, do you know at the McDonalds where I pick up breakfast (yes, slap me I still eat at McDonalds, but mostly just for breakfast) they have recently started the order process by saying “What can I make for you today?” I thought it was a fluke when I first heard it a week or two ago, but have noticed that it has continued and that it isn’t just one person who happens to work when I pass by. It’s not earth shattering, but the idea of moving from “Can I take your order” to their new intro phrase didn’t just move from some random person’s idea to implementation without some research backing it.
Tangent, sorry.
As an aside (again)…I don’t suppose I see how a store isn’t still a “meal assembly kitchen” if your still assembling meals for sale as to go or retail items. Converting to all take and bake doesn’t mean you won’t still be assembling meals. You’ll still be interacting with customers, but it won’t be in such a full service intensive environment. I don’t think take and bakes are quite as easy as folks seem to make them out to be. Our to go business is time consumming from a staffing perspective and requires an incredible attention to detail. You still need to develop menus (probably still ones that change on some sort of basis or else your no better than the local grocer or warehouse store), prep instructions for staff to use to make meals, cooking instructions, a means for ordering online, inventory management, prep work, etc. In fact, if I were to offer all to go items, I’d probably kick up my packaging materials a notch.
I’m also not convinced that if you were all take and bake that selling off your prep stations is such a wise idea. Why wouldn’t you keep some/all of the stations and prep and stock for staff to make meals to go? They wouldn’t necessarily have to be in plain view of the customer- though that part of the process seems to make MAKs a bit more unique than other quick service food options. I loathe having to assemble even one or two meals much less a whole slew pulling ingredients randomly from a cart in the walk in. And, it’s not the safest method of food prep either.
I suppose what drives me to keep up the good fight is that I think there is still “answers” to be had, I don’t think it is a concept that has full played itself out, there is still a key to unlock the mystery of creating and maintaining a successful MAK– or a successful business for that matter. And, uh, the threat of losing my house. Seriously.
Amy had this to say on | Feb 14, 2008 | Reply
I was half kidding about the prep stations. We will keep them because we will allow sessions for private parties, 8 or more guests.
Here is the problem with the prep carts. The are not an efficient way to work. The prep stations were designed to make maybe 3 or 4 meals at a time, then the containers need to be refilled (depending on the ingredient). It’s not a smart way to make a large amount of meals at once. You waste a lot of time refilling carts when it’s not necessary to use them to make meals. For example, today we have 6 orders to make for our catholic school drop off. All orders are 6 meals or more. It will take all day to make those meals because first the carts need to be filled, and then refilled when the ingredient (like diced tomatoes) containers are used up after 3 meals. It is more efficent to just open the can of diced tomatoes and scoop from the can. It’s a wasted step to empty the can into a container.
If you are going to make a large amount of meals at once, making one meal at a time doesn’t make sense. For example, we have a spicy tomato sauce for one of our entrees. It is smarter to make a large amount of that sauce and then divy it up amongst the meals, not to set out 6 crocks and scoop the ingredients into each crock 6 times for the sauce.
We are working hard with the prep station system, but we are not working smart.
I am also very excited to hear what Lisa has to say!!!!!!!
Former Kool-aid Drinker had this to say on | Feb 14, 2008 | Reply
DINNERZEN: Do you know at the McDonalds where I pick up breakfast (yes, slap me I still eat at McDonalds, but mostly just for breakfast).
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This has nothing to do with the original topic but I just had to let DinnerZen know that you are not alone! I found this hilarious because when I had my store we ate breakfast at McDonald’s almost every morning!! There wasn’t time to worry about breakfast at home.
I also found that my kids got McDonald’s more when we had the store open because I didn’t have time to cook for them, I was making sure everyone else was covered.
We used to have magnets on our vehicle but we took them off because it was embarassing to have them on our vehicle when we were going thru a drive-thru for breakfast, lunch and dinner.
============================================
Just one of those things that I don’t miss.
ChefGeorge had this to say on | Feb 14, 2008 | Reply
Great post by DinnerZen which I can really relate to. We tried to figure it out after only the 3rd month why our return rate was lower than expected. I sent out a couple surveys trying to get at people’s motivation to return or not and even offered a gift cert if they responded but the response was very low. I then tried to get the frachisor to pursue the focus groups which they suggested as a way of figuring out what was going on but was told there were not funds for such a project. Well if figuring the basic franchise wide problem of why people aren’t coming back every month or two isn’t a absolute priority, I don’t know what is. At any rate, that is indeed the key to the mystery and why it doesn’t work. Perhaps that’s one study the industry players could work on together!
cookgal had this to say on | Feb 15, 2008 | Reply
This is very interesting. Please accept my apologies if I’m stirring the pot, but Lisa - who has a Super Suppers e-mail address is going to save us from meal assembly nightmares??? How is that - by converting us all to Super Supper zees? As an indie owner, I have received e-mails from small franchises who want to grow their networks rapidly. They try to sell me on their fantastic “system”. I just have to laugh. All of them, who have contacted me have stores who have closed in my region. As an outsider - very new to this sight and perhaps a bit skeptical I have to view this as an opportunistic attemt to take advantage of those in a vulnerable state. I wonder what Kelly and Tuckerbox think. Hopefully Lisa has something much more altruistic up her sleeve.
mysterymiss had this to say on | Feb 15, 2008 | Reply
Cookgal,I don’t have any more information than you do about Lisa’s proposal.
Tuckerbox has voiced an opinion above I copied below in part.
Tuckerbox wrote:
“Lisa, I certainly look forward to the additional details, but I do have to say that so far a lot of what you’re saying is a great big IF.
IF this happens, IF you can do this, IF customers do this, IF customers realize this…
I agree with what you say, but that is also the here and now. MA kitchens offer everything you describe and customers are faced with all the same issues and constraints you mention, today. MAs do offer top quality meals, and offer it in the take and bake, even delivery format.
Customers have every convenience offered to them right now. Again, I look forward to you pulling this all together, but right now you are describing a way MAs *can* be profitable in the future under the right conditions, not how they can be profitable tomorrow.”
I’m waiting for more information!
Kelly
Mindy had this to say on | Feb 15, 2008 | Reply
I have recieved many emails asking if I am working for SS. (Are you kidding me, LOL!)
I do have another Job that I LOVE but my passion for this Industry remains strong.
In less then two weeks, Lisa, with an Attorney, will reveal what they are talking about. Yes, they have asked me to be apart of this, and I have agreed. This isnt based on ‘IFs’ it is solid.
Until then,
Much JOY,
Mindy
http://www.joyfilledyou.com
(The opinions I make on mealassemblywatch.com is just that, They belong to me.)
Lisa had this to say on | Feb 15, 2008 | Reply
I do have an SS address, I am an SS owner, I have disclosed that in the past, I have never kept my identity secret. I am not trying to be mysterious or covert, but we do still have some preliminary work to do and we do have to establish some more efficient means of communication! I do have a family, and a store to run, and other stuff to do, but believe me, we are not trying to sell franchises–that would be as far from our vision as you could get! If anyone has a burning desire to call or write, you can, especially if you are a current franchisee in any system that still loves the business but feels they are not getting the services they were promised. Thanks all, and have a great week, Lisa
Tuckerbox had this to say on | Feb 15, 2008 | Reply
Putting that aside for now, does anyone else have thoughts on why meal assembly is a good idea under the current climate? For example is there something within your area or your experience that makes this a solid way to make a living? As stated we go into business to make money, so how is meal assembly accomplishing that for you?
mysterymiss had this to say on | Feb 17, 2008 | Reply
Well….. to my ears that sounds like a resounding NO! Where is everyone?
I second Tuckerbox’s question.
Let’s first define profit-you are paying yourself a commensurate salary to the hours you put in AND able to pay all of bills plus royalties-That should be fair parameters to work with.
I spoke to someone today who old me they were told by ST HO (that’s funny!)that all the exisiting ST are profitable-course when asked for the confirmation and when told it would be forthcoming, it never arrives hmmmmmmm. So even if it’s just ST owners (You KNOW who your are out there and reading my posts)
Waiting to hear from all the profit centers!
Kelly
Jennifer had this to say on | Feb 18, 2008 | Reply
Lisa, Could your big “news” be that Super Suppers has been purchased by another company along with My Girlfriend’s Kitchen? Actually, that isn’t a question, I know it to be fact because a MGK owner who I know told me that that is what has occurred and it was to be effective as of Feb. 1.
I, myself, owned a Supper Thymes USA franchise, which I have now closed. Since I signed the franchise agreement a little over a year ago, Supper Thyme has lost about 40% of their stores. They also got rid of all of the employees at corporate level back in Dec. as well as getting rid of their Chef. Now I ask you, how in the world do you maintain a meal assembly business without a Chef?
I believe that this industry was a flash in the pan. I don’t exactly know what the problem is or where the industry went wrong, but whatever the reason is, it is no longer a viable industry. I would suggest to anybody looking to buy a business that they buy a local, established business and you can check out their books to see that they are turning a profit. That is a much smarter way to go into business instead of starting from scratch with a concept that it too new and not always understood. It takes too much money and time to try to educate people regarding what we do.
I have talked to many people who have lost their meal prep businesses and it is destroying lives and marriages. Sadly, even though the franchisors know that people are closing their stores in alarming numbers, they are still quite willing to take anybody’s money and allow them to open a store, though the chances of succeeding is slim.
Just wanted to share my opinion from someone who’s been in the trenches and through the fire with this industry.
Jennifer had this to say on | Feb 19, 2008 | Reply
No, that is not her big news - and your information is incorrect.
Lisa had this to say on | Feb 19, 2008 | Reply
Thanks Jennifer, do I know you? And the first Jennifer does have wrong information. I do think that MGFK was supposed to be bought out but I don’t think it is happening. I also am pretty sure that SS considered merging with LD at some point in recent history, but I don’t think that will be happening either.
I have stayed away only because I am trying desperately to get caught up at my store and on the info I promised would be forthcoming–it takes a long time to create a website and all the other stuff that backs up a corporation, but I don’t really have any “news” to share, only the possibility that we can create a forum to share what does work across owners and outside franchises and build a way out of the morass many of us find ourselves.
There is a lot of lamenting going around on this board and I know many of my fellow franchisees find be negative, but I am as far from negative as you can get. I am not afraid to call out a bad idea and I expect people to call out mine, but only by putting out bad ideas can you find the gems that become great innovations. I believe in this industry, I just think that the people who have the most stake need to wrest control away from the ones that are paralyzed by their failure! New industries are not born overnight, and just because a bunch of people without the ability or vision to support them put stores on every corner and let them fail doesn’t mean it was a flash in the pan. I might be wrong, but I am not ready to roll over and die just yet, I see too much appreciation and gratitude come through my door every day! Hang on, things can only get better, Lisa
Tuckerbox had this to say on | Feb 19, 2008 | Reply
I would assume from your comment that you are creating some sort of spin-off “Save Meal Assembly†website?
flybox had this to say on | Feb 19, 2008 | Reply
I have been exploring the meal assembly business for a while now trying to figure out if this is a profitable business to invest in? Coming from a marketing/retail backround, it amazes me to hear that so many of these MAK are not even advertising. The ones that do are spending less than 5%. Most ESTABLISHED industries spend far more than that. My research suggests that (nation wide) only 20% of America knows what MA is. Thats a great deal of untapped customers out there.
Another reason that I am hearing why this industry is failing is because the owners are undercapitalized. Too many people have attempted to start their business with virtually no working capital. I would like to know from the stores that have failed how much working capital they started off with? What is adequate?
I agree with a lot of you, the franchise companies out there are doing this industry no good by selling to anyone who wants to buy. In fact, the more they sell the worse it seems to be. This does not seem to be the kind of business that can be on every corner. There are WAY to many kitchens out there. The amount of locations that have opened in the last 2 years is staggering. I have seen some locations open up across the street from another. Really! Its oversaturation at its highest level. I guess the good news is that only the strong will survive and as stores continue to close there will be customers out there looking for another kitchen!
This is truley a unique industry and before I take the next step into opening my own location I would like to hear some feed back.
Former Kool-aid Drinker had this to say on | Feb 19, 2008 | Reply
I can only speak from a franchisee perspective, but the reason no advertising was or is being done is because the company line was that you didn’t need to advertise - word of mouth advertising was going to do it for you. They sold that line above anything else. I was told countless times that advertising would be throwing money away because people don’t get the concept - it’s something you have to explain, in person, blah, blah, blah.
We wrote our business plan for $250,000 - our franchise told us we would need between $125,000 - $150,000 for build-out, equipment etc. We figured we’d have about $100,000 left for working capital. However, our built out cost us around $200,000 because between the time we signed and the time we opened they changed the buildout package. We only had $50,000 left and that was gone in 6 months. From there on, we took out an additional mortgage on our house for $40,000, which bought us another 5 months. When that was gone, we finally figured out that we couldn’t bleed out $10,000 a month of our own money to keep it going. We closed after about a year, when our franchise asked us for our credit card number so they could charge our royalty payments.
If you are serious about entering this business, DO NOT GO WITH A FRANCHISE! From what I can tell, they are pretty much all the same.
ma biz owner had this to say on | Feb 20, 2008 | Reply
Regarding the working capital question: We were in business for 2-1/2 years. The first year, we spent more than we had planned, partly because of cost-creep and in some cases because of our own learning curve - probably not too abnormal for first-time business owners. Our working capital was gone in a few short months. In year two, we settled into a very conservative spending pattern which left us short approximately $5,000/month which came out of our pocket. We were an independent, so I have no franchise fees to blame for our financial dilemma. We simply never reached the sales levels we had planned for. By my calculation, based on the lackluster performance for our business, we would have required a minimum working capital of $60,000/year for a minimum of 5 years (term of our lease) to keep us afloat. So is a $300,000 working capital fund too much? I sure think so. Especially when getting off the ground requires $250,000 or more. And keep in mind, none of those numbers (for us) got the owners paid. That’s just to get the business going. I can’t imagine how awful it would have been for us if we had been responsible for franchise fees on top of everything else!
I personally don’t think it matters if you go with a franchise or go independent - the concept requires changing deeply rooted habits and shifting cultural norms. Those are pretty lofty changes to make as a “little old independent” or even a franchisee that’s been left to fend as if they were an independent. It was bigger than we were and, in my opinion, would have taken an army of talented, strategically savvy people to successfully change the way America eats. We couldn’t afford to bring in the talent - so we made the tough decision to stop. In my opinion it’s going to take PHD-level people to figure out how to get into the minds and hearts of people in order to change how they think and feel about “their food”. And then it’s going to take brilliant strategic thinkers to create and communicate the ultimate MAK brand. Just my opinion…
mysterymiss had this to say on | Feb 20, 2008 | Reply
The almight word of mouth marketing- WOMM is still hearlded far & wide in STville as being the only way to go. You should be doing grass roots marketing is what we were told. There is no national marketing because “we don;t hae the money for it” so whatever. I agree with the post above, smart people, lots of money and a lot of time to make this thing fly.
Kelly
Ben had this to say on | Feb 20, 2008 | Reply
I just started looking into buying one of these businesses, a MGFK that is for sale, there are a couple available and the financials don’t look bad in the ads. I know that can be deceiving, sometimes you get the actual financials and there are dozens of asterix with disclaimers and notes telling you the number were adjusted which is business broker code for we lied through our teeth.
cookgal had this to say on | Feb 20, 2008 | Reply
Ben,
I know quite a few MGFKitchens have closed. You would never know from their website so be careful. in my opinion they are one the biggest failures.
Ben had this to say on | Feb 20, 2008 | Reply
Well I appreciate the info, I think I’ll pass on the MGFK, you are right you can’t tell from the website, several owners have more than one so I assumed they were happy campers.
When I saw the ad on Bisquest the numbers looked decent 100K asset sale, 450 k revenue 60 K cash flow. But I haven’t seen the actual financial statements and I know a lot of people get real creative with the ads.
I was looking at another business that stated sales of 120K and when I checked into it, the business wasn’t even running, the sales figure was an estimate of what the owner thought someone else could make if they really pushed it
The ones I have looked at had empty carts up front, I think the owners do all the assembly and its really just a take and bake joint
independent owner had this to say on | Feb 20, 2008 | Reply
Ben,
As cookgal says, “be careful”. I’ve been in business now for 4 years and, like so many on this board, am intimately familiar with this industry. I have yet to see a successful franchise - have watched many close their doors after not even a year in operation, and many try to sell with no success. Cookgal’s right - once the kitchens close, they usually remove all traces from the websites, so it’s hard to gage what’s going on unless you’ve been watching them.
I don’t see how it’s possible to pay royalties (4 to 6%) plus “advertising/marketing” fees (some as high as an additional 2%) and make a decent living. 8% off the top is *a lot*. Everyone’s definition of ‘decent’ differs, but for me if I’m not making over 6 figures, it’s not worth the financial risk (and lack of benefits…) that come with owning this kind of business.
From my point of view, being a franchisee in this industry is less like owning your own business and more like being a low-paid laborer, working late nights and weekends, to line someone else’s pockets.
My two cents for what they’re worth…
Ben had this to say on | Feb 21, 2008 | Reply
You’re absolutely right, my feelings exactly, I am looking at buying a business, not a low paying job that I can spend 60 hour weeks running. I was actually looking for something I could manage with about 10-15 hours a week, I have a couple of other irons in the fire, and the low margins, high royalties, and paying a manager doesn’t seem to work with this business.
ChefGeorge had this to say on | Feb 21, 2008 | Reply
Ben we just closed a MAK store after a year. I will just reiterate what has already been said. Run the other way as fast as you can. If you want to throw money away flush a couple hundreds down the toilet and save yourself hundreds of thousands.
just me had this to say on | Feb 22, 2008 | Reply
I personally have experience with a smaller MAK Franchise… Average for the chain monthly revenues are about similiar across the board. Over 80% of the stores did over $450,000 with the highest over a mil
DinnerZen had this to say on | Feb 22, 2008 | Reply
independent owner-
From the sounds of it, I’m guessing you must be pulling down a profit…
What percent are you spending on marketing/advertising?
What’s your secret to success at 4 years in?
I never really bought in to the idea that WOMM was the gas that was going to make the MA enginge run. Don’t get me wrong, I have referral programs, we do relatively good party business (thank goodness!), etc, but cracking the nut on selling the concept via traditional marketing/ad routes seems pretty important.
The big “gal” in town here seems to have picked up on the fact that focusing on the original target market (married moms with money) and WOMM ain’t going to keep the boat afloat. They are advertising EVERYWHERE. Even saw an ad in valpk, which I personally never open and wouldn’t ever consider.
Amy- I have built in stations that are extra deep and often have too much space (depth) on some stations for ingredients. So, it was hard for me to appreciate that filling bins on smaller stations was so inefficient. In my head I see this little “assembly” line of paid workers preparing meals by the 100s and see bilingual prep instructions posted at “stations” for the workers to follow. Just like the line out the door at Subway everyday…
Seems that if churning out to go product becomes the focus (the new hot trend within the trend), then you really only need a wall of freezers to blot out where the customer stations used to be and a 10 x 10 customer pickup/reception area with the rest of the “store” being an open catering /commercial kitchen. Dumping containers into bus tubs to scoop ingredients…when we’ve done large events in the past that’s essentially what our too small back of the house gets turned into. We would use our stations more in that manner if we had more to go business, but I hate the idea of customers walking in seeing 20 meals strewn across the counter.
Former Kool Aid Drinker- I REFUSED to have my car “wrapped” even though a couple store owners swore by it…mostly because I get overtaken by severe cases of road rage and that just wouldn’t work out so well (I HATE when people drive too fast or foolish around my son’s school.)…I never thought about the McDonald’s angle. Shew, SOMEBODY had my back on that one.
independent owner had this to say on | Feb 23, 2008 | Reply
Hi DinnerZen,
In 07 we spent 1.5% on advertising/marketing, that includes some web expense. We have always taken a heavy grassroots approach (community events, speaking to groups, etc) and in our case WOMM has been *huge*. The vast majority of our customers have come to us because they have heard about us from their friends.
In 06 we upped our advertising and included radio, which took us up to a little over 2% (we cut back on a few other ads to help offset the cost). We did ads with the top station for our demographic. No good ROI there for us and we opted to drop it. We’ve also done small space ads in the newspaper and local magazines. OK for branding, not much else.
It sounds cliche as everyone says it, but we focus heavily on quality & invest enormous amounts of time in recipe r&d. And, as so many others have also said, our customers tell us that our quality is far better than our competitors’ and our prices (in many cases) lower.
We’ve never tried to price lower - we price fairly. We don’t coupon, so have never used ValPak. And, as an independent, we don’t have to give 8% off the top to an HO that’s more focused on their profitability than ours. It’s hard for any franchise to compete with a strong independent on price/quality and make any money.
io
cookgal had this to say on | Feb 24, 2008 | Reply
Hi Independent Owner,
You have provided some very helpful/useful information on this site. As an independent myself I totally agree with you on investing in food quality - it should be what we are all about combined with superior customer service. What % of revenue do you invest in r&d? Do you do any type of market testing before you release new recipes? Do you find your cogs are higher than the typical MAK due to the premium ingredients? I guess that is my struggle - we provide very high quality ingredients (I won’t sell anything that I wouldn’t feed my own family) but there is eventually a price point that will turn people away.
I also am with you on the grass roots marketing approach, and the WOMM - but what happens when that is no longer effective? What should the next step be? Your marketing expenses as a % of revenue is very low, I’m wondering what the absolute dollars were. If your revenue is high you are realizing some economies of scale that the rest of us have not reached. I for one am in awe of your success - great job!
Thanks for all your helpful input on this sight. I feel for all of those who have pursued this path and suffered great losses. I am trying very hard to stay the course and make this work. There is great information to be found here, but I do get pretty down from some of the posts. Your messages get me back on the positive track again.
Former Kool-aid Drinker had this to say on | Feb 26, 2008 | Reply
Hey - look everyone!!! The industry has turned itself around. Based on the numbers to Tuckerbox’s survey, we now have 94 successful MA’s for 50% and 43 hopefuls for 23%.
So, 75% of the industry is OK - and we are in the minority. Don’t you feel better now?
InItForMoms had this to say on | Feb 29, 2008 | Reply
I don’t know if this is the right place to post this, but since this is such an active blog with so many people who have been in the business for some time and are clearly taking the time to think these things through…here goes…
Dream Dinners is really big on this promotion that most stores do which is called a “Sneak Peek”. A Sneak Peek is where an existing guest invites 8-20 of her closest friends who have never been to Dream Dinners to a party/marketing event where they sample three menu items and make one 6-serving dinner to take home and feed to the family. The guest is offered an additional free 6-serving dinner if they sign up right there for a session of 36 servings or more. (some places modify one or both of the free dinners to the 3-serving size)
These work great for stores that are completely new, but once the stores become well known this becomes an opportunity for people to host a fun, free party, no strings attached. Even as I say that it works well for new stores, I should back track. It works well at getting 50% of the people to sign up for the first session. So they have received two 6-serving meals and you are getting one session out of them. Then, when they come to their first session, the great majority of them will never come to a second session because the freebies stopped.
I am a Dream Dinners owner, and the marketing department has been all about us throwing money at these events because they “increase sales”. Well, they decrease profits, which is a problem. Moreover, while other franchises in the meal assembly industry have certainly attempted to copy things that work, I have NEVER noticed any other franchise copying this one! Yet Dream Dinners continues to hang their hat on it. New owners are instructed to never stop doing these things, and by the time their cash flow settles in and they actually look at a P&L to realize that they are loosing their butts on this type of event, they are too far in.
Sorry to be so negative, but I just have to know - has any owner from any other franchise started to do an event like this, or is it broadly considered idiotic by everyone but us? Within the DD community, we catch a lot of crap for not doing these, but we feel like our money is better spent in other marketing areas. The bottom line is that the great majority of customers who come once for the novelty or out of loyalty to a friend NEVER come back, so to blow our whole wad on them right out of the gate seems silly.
I really believe in meal assembly and I think that families really do need to have an option like us. We are just too saturated.
Thoughts on the freebie marketing?
Lisa had this to say on | Feb 29, 2008 | Reply
SS does these, and has for over a year, they call them 101’s–if I were very prideful, I might claim that DD copied our idea, but I could care less, it is not an idea I would copy! I do believe that for the first year you need to throw free food at anyone who will take it, some will stick, but in our second year, we gained NOT ONE new customer from any freebie, not teacher appreciation, not newpaper, or radio ads, or any other giveaway, plus our takeup rate increased to over 50% where in year 1 it was about 10%, so people were getting the clue that we had a great product, one worth getting for free, but not paying for… At some point you reach a level where people know you enough to want to win it when they won’t pay for it, and that is when the bleeding has to stop. We also never gained a real customer from a private party, that was a lot of fun but a tremendous waste of resources. Go with your gut and TRACK your customers and collect DATA–that is the only way for youto get an answer, it may work for some stores, and they should do it, but if it isn’t working for you, don’t do it, but that’s just my opinion, Lisa
mysterymiss had this to say on | Mar 1, 2008 | Reply
I agree with Lisa-the most “free” thing we gave to people attending a private party was dessert that was very inexpensive for us to make or buy.
I think discounting entrees (except for over runs & quantity discounts) send the wrong message. I did NOT want to be the Walmart of Meal Assembly if/when a competitor opened shop in my little burg.
That didn’t happen while I was in business (a competitor opening), but I wanted to set the “standard” in my community.
Supper Thyme did copy the SS practice of 101’s…they called it something different.
ST also encouraged monthly open houses and giving away free single serve samples for folks to take home. They encouraged us to have Grand Reopenings as well.
We got NO takers on professional or company wide discounts i.e if you work at (blank) industries you get 10% off your entire order…..
We had the ability to track special offers, coupons, trade or company discounts through codes. We could track data very well and sort customers by visit, what they bought , how often they visited, special requests. Each customer had their own account that we could access and mine a great deal of data from it. We had a great system.
I’m with Lisa on this one.
One size does not fit all in this industry and if I could say one thing about the bennie of being a ST it was they let us be as independent as possible within the frame work of being a franchisee.
Coporate did listen to us when we made suggestions and more often than not put those suggestions into practice. In a weird way I saw ST as being the one to follow,being on the cutting edge and not DD or SS…..it’s just that I don’t feel the original model or concept worked past the novelty stage from the get go.
You need to do as Lisa suggests and collect data, ask customers what they want and then quite honestly give it to them! You also need ways to find how to make your space more productive for more than just the times you have session.
Kelly
independent owner had this to say on | Mar 1, 2008 | Reply
“InItForMoms” said…” the marketing department has been all about us throwing money at these events because they “increase salesâ€. Well, they decrease profits, which is a problem. ”
That pretty well sums up a major issue with franchising. The ZOR wants increased sales, but the ZEES want (logically) profit. Unless both sides are focused on the profitability of the ZEE, it’s a doomed relationship.
mysterymiss had this to say on | Mar 1, 2008 | Reply
Brava!
Kelly
Tuckerbox had this to say on | Mar 9, 2008 | Reply
From pretty much everything I’ve seen the “Sneak Peek†is the Holy Grail when it comes to Dream Dinners. Apparently the more of these you hold the more profitable you are. And if seems that if you complain you aren’t getting enough customers or can’t afford marketing then you just aren’t doing enough of these. This seems like a great deal for the customer but not so great for the owner.
A better choice would just be to hold tastings on a regular basis. You could still get customers coming in, they could see how the whole process works and you would have a fraction of the food costs, prep time and expense.
I don’t dispute this can be viable the first couple of months you’re open to entice people, but as a standard business operation you’re just throwing money away.
If you’ll excuse the pun, this is nothing more than a free lunch and customers can easily take advantage of you.
Having an open house or allowing customers to come in and make a single meal would probably accomplish the same thing at far less cost.
onthego had this to say on | Mar 10, 2008 | Reply
How about instead of a free meal you just get a single serving to take home?