Nobody Wants a Cooled-Off Hot Trend
February 22nd, 2008 | 
Author: Wow, it looks like even Entrepreneur is starting to change their mind on this industry. Maybe they will finally take it off their list of hot trends…?
What? What was that sound? A hot trend cooling. The fatal flaw. Damn.
This is what bothers me with the idea that there are types of businesses that can be hot or cold, good opportunities or bad. I think it’s about what you want to do, what your market needs, who you are and so on, as in my mirror post a couple of weeks ago. But people keep asking what’s a good business to start. They keep looking for lists of hot businesses. I worry about that.
- Link to NY Times article on meal assembly removed –
Choosing a business isn’t a matter of selecting from random business offerings, franchises and models that are out in front as hot trends. It’s about you and what you do. And note that some people got into the meal-assembly shops because they wanted to, they genuinely liked the idea, and they were good at it. Do you want to bet that those are the ones doing fine? It’s the trend spotters and list makers who get in too late. Usually.
Nobody Wants a Cooled-Off Hot Trend
Other Articles of Interest:
- But people have to eat
- Building out like a Starbucks
- Meal-assembly centers and supermarkets could be natural partners
- Beyond Blogs
- A Fine Kettle Of Fish
- Meal-assembly kitchen keeps up with times
- The question still remains, Meal Prep Franchises: Hot Idea or Flash in the Pan?
- Eyes Wide Shut
- Changes to the Discussion Forum
- Meal assembly store survives
Posted in 
So, here is my concern about this article, all the chatter on blogs, entrepreneur website, etc, etc…is it the chicken or the egg? Is the negativity going to lead the industry down the tubes or is there 100% assurance that the industry is already going down the tubes and the negativity was slow to follow?
A lot of people seem to have opinions (good, bad or otherwise), but very few opinions really seem based in hard facts. The “facts” quoted in NYT article, other than the number of store closings and openings, which I think are probably fairly accurate, seem like a bit of a guess at best. It’s fairly evident that most of the facts that lured so many of us into the industry were best guesses as well.
Maybe franchisors have a clue, but they are certainly tight lipped about it. and frankly, their only “clues” are going to be about what is happening in their franchise, not others. It’s fair to say it doesn’t take a rocket scientist to say that the big franchisors are having a hard time of it.
Wasn’t it a NYT article a couple years ago that was so glowing in its praise of the concept?
How come the entrepreneur mags and franchise pubs aren’t in the hot seat for touting the MAK as the best thing since sliced bread? It seems their objective measure of “hotness” was what was selling fastest, not what had the greatest potential for success.
Kudos to the MD Let’s Dish folks for stepping up and speaking with some sort of sanity and for putting forth their desire to stay the course. Though, I believe they already offer the same set of services that many stores are just now starting to tout. I suppose only time will tell if digging in their heels to ride out the storm is the way to go, or not.
11% of the small number of survey respondents on this site’s survey said they are in business and successful- now there is no objective measure of that success, but it seems by some measure that someone somewhere is successful. For those companies who are successful or have some measure of hope, do articles like this undermine (our) potential? What am I supposed to say when my customer comes in and says they saw the NYT article and man it seemed like a nail in the coffin…I can see folks talking about the MAK concept and someone saying, well I heard that it’s a bust, why waste your time, it’ll be gone before you get your food, etc, etc.
Are the “successful” stores keeping their heads down waiting for everyone (big franchisors, independents, etc) to spontaneously combust?
I wanted to point out that my comment above “A lot of people seem to have opinions (good, bad or otherwise), but very few opinions really seem based in hard facts.” was NOT meant as a slam to anyone on this site.
It is fair to say that folks on this site have repeatedly asked some good, hard questions, to which there are few/no answers. No single entity has ever been forthcoming with solid info based on actual data, ever.
I think back to the UFOCs I poured over, NONE of which disclosed financial info. By law they aren’t required to do so, but perhaps if by law they WERE required to do so, a lot of people might have thought twice about whether this concept would really work.
DinnerZen,
You bring up some good points that I want to expand on.
Entrepreneur magazine has taken a few good hits to their dubious credibility in the past couple of years.
Just look at which companies it has listed in the top 5 or 10 recently. iSold It an eBay drop off store is a perfect example of this. (Not familiar? Do your research)
They are in the business of selling magazines; there is no altruistic motivation on their part to actually vet various business models.
More and more people are looking to sites like FranchisePundit BlueMauMau and MealAssemblyWatch.com to get the real on the ground information which was previously unavailable. In our industry specifically, it’s people like yourself, Kelly (Mysterymiss), Mindy, and of course our esteemed pundit Tuckerbox that are providing a more balanced view of this particular industry. We don’t always agree, but at least information is flowing.
Chicken or Egg, in this case it’s pretty clear, the stores were failing and nobody was talking about it.
As far as I can remember the only open discussion about this industry prior to mealassemblywatch.com was a thread about Super Suppers on FranchisePundit.com.
Now thanks to mealassemblywatch.com there is a place for open and honest discussion about this specific industry which previously did not exist.
UFOC’s I’ll say this again, learn about the item 19. (Now renamed “Financial Performance Representations†or “FPR’s†)
The UFOC laws changed recently but the FPR’s still aren’t mandatory.
Unfortunately I think the NYT piece might have been the nail in the coffin, but they didn’t dig the hole. The industry created this mess all by itself.
What’s the saying? Don’t blame the messenger.
There was however an interesting comment in that NYT article.
“Dream Dinners’ stores rely solely on preordered meals, mainly assembled by session customers. Darin Leonard, the chief executive, argued that his competitors blundered in chasing the grab-and-go business, which he says turned their $200-a-month session customers into $50-a-month pickup customers.â€
This is absolutely true; diluting the concept into grab and go is in my opinion one of thing things that has caused this industry to fall to where it is now.
As for the numbers touted in the article by the Let’s Dish group 1.3 million? I call BS on that one. Is it possible for a store to do that much business ABSOLUTELY, but is it currently happening, in 2008, in my opinion, no. 2005-2006 yes. Just for fun, I looked at the calendar for the Let’s Dish in Baltimore doesn’t look full to me, and I’m of the opinion that the grab and go business model couldn’t generate that much revenue.
Here is an open challenge, find a link to any store ANYWHERE in the US right now that has a calendar that is actually full. Or if you frequent a store that is booked solid, I’d love to hear about it. Or a store that has a constant stream of so many grab and go customers they have a hard time keeping up.
Let’s give those successful stores the credit they deserve.
MB
As I sit here writing, my wife, an independent owner and personal chef, is hosting a girl’s birthday party at her kitchen. She has been at work since 8:30 this morning and I don’t expect her home until after 5:00. By the way, it is Saturday her 6th straight day of working in the kitchen. Tomorrow she will be home, but will probably spend half of it behind her computer. I don’t mean to sound bitter (the children and I are very supportive) this is just the reality of being a small business owner. I realize this is not news to any of you.
My wife has been in business for just under four years. She left corporate life to follow her dream of running her own business; just as many of you have done. It hasn’t been easy (many hard days and nights), but she has never been happier. Our store was one of the first in the area, so we were able to ride the initial wave of enthusiasm for this concept. Unfortunately, her success led to many copy cats and soon the area was saturated with new stores opening. Two years ago we hit $70k in the month of March, last year with many competitors we hit $45k. This year we expect $30k for the month of March. Fortunately, we have been able to lower the breakeven point, so we haven’t had to dip into our personal finances. Like many of you we have been trying to find different ways to keep the customers coming back. Hosting Boy Scout and Girl Scout meetings, birthday parties, private parties, small catering jobs and pretty much everything else mentioned throughout this site.
After ready many posts in this and other sites, I have much empathy for those Zees who have closed their doors and to those still struggling to stay open. During the last four years I have seen many strategic mistakes made by the Zors (big and small). From the way their UFOCs were constructed (high franchise fees was only one way they made money off of their franchisees) to the lack of guidance given to their franchisee’s. I will share one situation to support my opinion. In our town of 70k, we had my wife’s store and a major franchisee’s store when we got wind that ANOTHER store was going to open. The new store was with a regional Zor, so they should have known there were already two of us in town. Unfortunately, the franchisee was a couple from another town and did not realize until after they opened that they were not alone. As you may have guessed the Zee did not succeed (market too small and customers already had formed a loyalty to one store) and closed in less than two years. The couple relied on the Zor to have a certain amount of knowledge in the industry and market they served. The Zor failed miserably in this case.
My wife and I, like many of you who write posts on this site, still believe that providing healthy meals to the masses is an honorable endeavor and continue to find a way to make it profitable.
Thanks for letting me share with you!
JS
Thank God for supportive/understanding spouses & families! You are the most important part of your wife realizing her dream and keeping it alive. God Bless you on your continued sucess!
Kelly
Hey MB-
Re: the dream dinners comment, I think it was on target, but I also think he misses that the reason that so many people felt alienated by the concept was a price point that was too far out of the norm for most people to commit too for a concept they couldn’t grasp. However, it is the reason that I’ve held out from going to regular walk in sessions and reducing the meal purchase minimum to 1. It is painful enough setting up for a session for 1 that has 8 or 12 half size meals. The idea of staffing a session for 1 for 1 meal? I certainly see the upside of convenience, simplicity – it’s like a make your own dinner buffet- walk in anytime, make anything. That’s a lot easier to understand than book a session online, bring your cooler, make a boat load of meals, fill your freezer, thaw, cook, repeat. That may be the inevitability, but I’m not sure it’s sustainable. And for it it work, I think a larger number of stores would need to transition to this model. Right now, so many different brands are going in different directions, which creates customer confusion.
Add in a NYT article that says the industry is failing and it doesn’t make things easier on stores still in operation…
As a transition to the response about Let’s Dish…what I hear them saying, which I applaud, is we have a model and we are sticking to it. Calm rationality in an article/sea of crisis. The LD figures quote an “average” of revenue across all their stores. I may be naive, but I actually don’t doubt their figures, and think they’d be foolish to lie to a reporter or embellish. Take off the 15% to go part of their business…and guesstimate an average ticket price of $150 they’d need just over 600 customers per month to get that sort of revenue. While their volume has probably dropped off in the last year or so from their hey dey and probably is much better and worse at some stores, I can see hitting that sort of volume.
Now that I’m up and running I see that guessing volume from calendars can be quite misleading– particularly if the calendar stays open for bookings til the day before the session. If you glanced at my calendar, you wouldn’t really be able to ascertain the type of volume I actually end up doing. (It’s very fair to say its not 800 people and my average ticket price is a little lower then $150.) The calendar also isn’t going to show folks who call in to add at the last minute, which can be substantial.
Supportive Spouse-
Kudos for sticking in there for 4 years! I can only hope my currently “supportive spouse” and son feel the same way in 3 years. It is heartening to hear from folks who have been around so long. I’m certain that store that have been around in my area for a similar length of time (no store has been around 4 years here) feel malice towards my store and others that have since opened since I opened a year ago. I think the saving grace in our area was that an overly tight retail market and painfully long buildout process kept stores from opening as quickly as they have in other areas.
To some folks’ credit, I think we are all still learning about the types of demographics it takes to “support” a successful store. Once you’re completely enamored with the concept it is easy to get caught up in dreams of every home in the neighborhood tossing aside their old ways and using meal assembly stores as the solution to the dinner time question. That said I don’t doubt franchisors should have erred on the side of greater caution. And let money motivate them. I read an article about Super Suppers in which franchisees were complaining that the zor was allowing stores to open within blocks of one another and felt it didn’t take a rocket scientist to figure out that was just a bad business practice. Unless you’re McDonald’s.
And, even if you have the theoretical right nos in terms of population, there are other factors about the population that make such a substantial difference in success or lack of.
Thanks for being supportive of your wife and other wives who are in the same pair of shoes every morning to night.