When will Dream Dinners file bankruptcy?
January 3rd, 2010 | 
Author: We know the end is near for Super Suppers, so how much longer does Dream Dinners have? To say it won’t happen would be silly, they have to be losing money like a sieve. They’ve gone from 220 stores down to 130, which is a ton of lost revenue. And out of those 130 remaining how many of those are close to closing and not paying royalty payments? Further, if the average store owner gets less than 100 customers through the door per month (and 100 seems high these days) how much could the franchise actually be making in royalty payments per month?
Further still, how many people has Dream Dinners let go? Back in the middle of 2008 they rumored to have dropped the axe and dispatched multiple people from the top, most in key roles of recipe development. Since they can’t exactly offer high dollar salaries have they replace these people? Or have they decided to use their dietician to rework all the recipes so they can offer them again without having to really spend anything? Did Dream Dinners actually crank out dozens of new, never before seen recipes in 2009?
And even if Dream Dinners didn’t fold up in 2009, they aren’t expanding their reach and haven’t since 2007. Two years of zero growth is always a bad thing in business.Their little meal prep world is shrinking around them and each month they have fewer stores open. Less stores, less income.
Let’s look to those at the top. Darin certainly hasn’t been their savior. His multi-pronged, multi-point plan of attack looks like a pretty big dud to me. You bring in a new CEO and he oversees the closing of about 100 stores? That’s gotta look good on a resume!
I’m sure Dream Dinners will say their new Dinners for Life program is a great success since over 50 of their stores are now offering this to their customers. First off, are they sure this is even their idea? Second, 50 stores is less than half of what they have left. Third, Dinners for Life comes with membership fees which I’m sure is a huge turn off for all their customers. Finally, this is an option within current stores, they still haven’t opened any new stores because of this idea, so how much revenue is this really bringing in? My guess? None. To me it’s just a way to distance themselves from the lawsuits of the parent company. The heart healthy menu wasn’t a million dollar idea, what’s the expectation for this one?
Dream Dinners is struggling for sure. It’ll be interesting to see how they fair in the first few months of 2010. I wouldn’t be surprised to see owners cast off the shackles of franchise ownership and start the new year out from underneath this business. I bet we see a surge in store closings.
Other Articles of Interest:
- Dream Dinners Distributes Liz Claiborne Magazine
- Dream Dinners is running another recipe contest
- Dream Dinners creates Dinners for Life
- Dinner for Life – Now with ridiculous membership fees
- Meal Assembly Cookbooks…
- Dream Dinners of Fort Mill Celebrates Three Year Anniversary
- Meal Prep Blunders of 2009
- Redbook partners with Dream Dinners
- Last time I looked it was February
- There’s a sucker born every minute
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As a long-time manager of an independent meal assembly store, I must admit to a small amount of sinful pleasure in the downfall of Dream Dinners & Super Suppers. They, indeed, swept in on the “fad” and took down the quality of meal-assembly store reputations throughout the nation, not to mention how they royally screwed a lot of nice people by selling franchises like tacos off a truck.
My store has strived to maintain a high quality of product, and have been able to retain a decent sized customer base by doing so. The franchises really hurt our business for a few years, but we have managed to survive — maybe we didn’t come out smelling like a rose, but a good shepherd’s pie, perhaps? haha!
Good for you, Tuckerbox, for keeping up your vigil! I, too, have followed their lies, especially those targeted at seniors and those with health issues, both issues which are very near and dear to my heart. I have a large chemo, heart & diabetic following, and we have adjusted and developed recipes to meet various needs. It’s a shame some of the franchises are unable to REALLY meet those needs as they drain cash into their pockets, rather than putting it into healthy, fresh food.
Keep up the good work!
This is an interesting blog, but I don’t think some of your comments regarding Dream Dinners and their management are fair.
To be clear, one of the most important things that a new CEO sometimes needs to do is to take stock of the system and close underperforming stores. Given the state of your industry, this seems very true in the case of Dream Dinners. It’s incredibly difficult for everyone in the organization, but can be necessary. So…something for you to think about.
Also, franchise organizations like DD can operate successfully in a wide range of stores provided that they live within their revenue stream. Right-sizing the organization to fit the # of units is important and DD needs to do that.
The last thing is that I’ve followed the issue of the lawsuit a bit. Lawsuits are incredibly taxing and (regardless of whether DD’s zees or zor is right) the legal bills must be paid. The real measure of DD’s future prospects need to factor in how profitably they can operate in their post-suit era.
Max,
On the face of it, much of what you write is true, reading from the last paragraph backwards. But I believe you are wrong in the second paragraph, assuming Darin has his hand on the tiller deciding what underperforming store or stores to close. Most if not all the stores that have closed did so not because of any decision of Darin’s…but after long and agonizing soul-searching by the cash-strapped zees. Because the model doesn’t work. Didn’t. Doesn’t. Won’t. Period.
I can only speak to the DD nonsense, but Stephanie and her partner made one huge mistake right off the bat… they never ran their one-store test long enough to find out if it really had legs. Greed took over.
I agree that cutting back on underperforming stores is a sound financial move, but that isn’t what happened in this case. The owners were the ones giving up and going bankrupt. It wasn’t an agreement between the corporate office and store owner to do what’s right for both parties. Owners simply couldn’t go on and Dream Dinners stepped in an extorted another $30k from them for breach of contract. This isn’t a case of a smart CEO making a tough but necessary decision for the good of the company, this is a case of Dream Dinners trying to make up for lost royalties as owners make up their own minds to call it quits. Closing stores isn’t part of their strategy for company health, it’s happening despite them.
Dream Dinners does need to get the right number of units, but I doubt they have any idea what that number would be. They sold stores in any location and to any owner who had a check with complete disregard as to whether the area would support that store or support another store or stores as the case may be. Growth was completely unchecked and that oversaturation ruined many markets. They should have been checking their growth on the way up instead of on the way down. It’s a bit late to close the barn doors once the horses have run out. Same case here.
The lawsuit has been dragging for years with really no end in sight. I think it’s pretty obvious that Dream Dinners as well as Super Suppers and dozens of others sold franchises on false promises and completely unrealistic and unsubstantiated expectations. It’s hard to say what the cost of this lawsuit has been (in actual lawyers fees, not lost revenues and savings from owners). Since very little progress is being made is anyone actually working on it? Do the lawyers on both sides feel they’ll never get paid so they’re in no rush to push forward? I personally feel Dream Dinners is just dragging their feet to try and outlast the owners. If they stall long enough the other side will run out of cash and be forced to drop the suit.
But looking beyond that, I think customer sand potential owners alike realize that the future of this industry and these companies is sketchy at best. They could collapse at any moment, and in the long run will do just that. Customers saw this business rush in like a lion and then all but disappear in their neighborhoods. I doubt they have any confidence in investing their money in meals let alone buying into one of these businesses. I sure Dream Dinner is hoping everyone will just forget everything that’s happened so suckers will start buying franchises again.
If the store closings were actually a strategic plan of the Dream Dinners corporate office I would agree that they’re trying to reorganize with the intent to rebuild and slowly fortify themselves. I just don’t see this company as having the business savvy to understand such a business dynamic and I doubt the public would fall for it, even if they did manage to pull it off. Stores are just closing as owners give up. No plan, no forethought of how best to serve the community, businesses are just going under.
It would be great if they were following your line of thinking, but that kind of thinking doesn’t exist in this industry.