MEAL ASSEMBLY: Meal Idea Fails to whet the appetites

Kudos to Tuckerbox on www.mealassemblywatch.com for posting this story..

Area entrepreneurs find customers’ hunger lacking for assembling own dinners

Rarely has a new retail business idea been embraced by entrepreneurs so quickly, only to fail so spectacularly, as did the “meal assembly” concept.

Never heard of it? That seems to be the problem.

In the Capital Region, no fewer than five individual stores offering the model have gone out of business. That’s out of seven — the two others, in Ballston Spa and Clifton Park — say they are still doing well.

Dinners by Design and an Independent do get honorable mentions as 2 of the remaining Meal Assembly Kitchens in the area, both who say they are “doing well”. While I hope the “doing well” part is true, the statement comes from a newly-minted second generation Independent owner that has only owned the store for a month. Dinners By Design as a franchise has been experiencing quite a shake-up lately. We certainly wish both stores continued success though.

Mr. Wechsler says:

Unfortunately, the idea just didn’t catch on — not here, and not in many other places in the country.

That would have to be the understatement of the century! It is also refreshing not to have Easy Meal Assembly/Prep “expert’s” pronouncements and outrageous quotables in this article. I am certainly glad to see a balanced article about the Meal Assembly industry.

What tickles me the most is that none of the Franchisors who are quoted here, seem to have a clue as to why the concept is a stinker.

“For some reason, the whole concept is just not doing very well,” said Dave Bellso, whose wife owns the Make & Take Gourmet chain, based in Syracuse. The two-year-old company had a store at The Crossing shopping center in Clifton Park, but closed it after a year for lack of business.

“When the industry first started, the research from the early stores showed it was a destination,” he said. “As the industry grew, that changed.”

This is the same Bellso’s that are being sued by some of their franchisees for alleged fraud and has one reported store going independent.

This is the part I like the best! Franchisors “muse” about the concept failure-while hundreds of store owners are closing their doors and losing hundreds of thousands of dollars in some cases.

Those in the business muse as to why the idea failed in so many places. Some wonder if the corporate franchise fees were too high. Or perhaps the high cost of buying and preparing food day after day made it too expensive.

Wait a minute too expensive for whom? For the store owner or the customer? This IS a food business right, whose entire marketed reason for being is touted as being a money saver for consumers? It is also a food industry that has THE highest ACCEPTED food costs I have ever seen as a culinary professional.

Maybe customers cut back due to the economy. Or maybe the concept was just not attractive enough. “Not enough people know about it,” said Teresa Shurtz, vice president of operations at Super Suppers, based in Fort Worth, Texas. Now in 42 states, the chain began about five years ago and has about 150 stores.

Super Suppers once claimed to have 270 stores in operation, that means almost 60% of their franchised stores have closed since they started franchising. In my opinion the real story is the catastrophic failure rate of Meal Assembly franchised stores.

Independents and franchised stores alike seem to be suffering from this concept failure.

Locally, closed stores besides Make & Take include the franchised Dream Dinners in Colonie, Super Suppers in Clifton Park and Dinner by Design in Saratoga Springs. The independent Dinner Me Quickly in Colonie also closed.

Fagle-Fedele is the newly minted owner of My Other Kitchen and she along with “others” continue to be stymied as to why MAK stores are continually closing.

“I don’t understand why it’s not working,” Fagle-Fedele said. “The concept is a good one. I’ve never had an unhappy customer.”

This article written by Alan Wechsler can be found at:

http://timesunion.com/TUNews

MEAL PREP: “You Can’t Fix Stupid”

Chow Bella posted the following in the comments section in response to a comment left by Karen (Who, incidentally, has pointed out that I am no Einstein and asserts that the MAK is BOOMING in her town). Every meal assembly franchisor has been begging me to divulge her IP address.

While Chow rambles a bit (cooking sherry again?), she makes some excellent points about the lack of experience of the MAK cloud merchants:

Karen your point is well taken about folks developing and franchising this failed concept with no food experience- with that in mind, let me quote from an article from the SpokemansReview.com; that I found on Cena’s own website-
Titled “Ingredients for Success” about Cena To Go- FOUNDERS-Nancy Cole-Hough & Tami Badinger- “The women, (Cole-Hough & Badinger) who two years ago were FOREIGN LANGUAGE TEACHERS at Joel E. Ferris High School in Spokane.” Jared Paben, September, 13th, 2006.
http://www.spokesmanreview.com/tools/story_pf.asp?ID=149276
They weren’t even Home Ec teachers for cryin out loud!!

“Badinger and Cole Hough decided to start franchising their small business 11 MONTHS AFTER OPENING IT” – (my emphasis)
“We decided to bust a move EARLY (my emphasis) because if we didn’t, our franchisees wouldn’t be on the ground floor of this burgeoning business,” Cole Hough said. (HMMMM….sounds a little opportunistic in my opinion)

Those quotes PRETTY much sum up everything that is WRONG with what you have to say.

With no culinary experience to speak of with a grand total of 11 months of business experience under their belts-CENA founders started selling franchises 11 MONTHS after opening ONE store in Spokane, Washington, in my opinion, certainly NOT a representative sampling of Any Town USA where these Meal Prep/Assembly Kitchens, Kitchen Outsourcing, Home Meal Replacement have opened and where most have FAILED, even in the “perfect” demographic profiles.

Did Cena’s founders know it would be successful anywhere else?

Did they consider taking their show on the road to see if the concept was viable any where else before they started “selling” franchises for their little experimental concept?

Was their concept fully vetted or did they just see dollar signs?

* * * * *

A very reliable source told me that Super Supper’s just closed 10 stores last month….

One super Suppers store in a town in Ohio closed after being opened only 6 months.

The Supper Supers Ardmore store that Admin relates is frightening and again burns my biscuits to a veritable southern fried crisp…where is the professional FrannieZor guidance franchisees PAY for when they buy one of these “opportunities’? Where is the support?

* * * * *

So, how does a Meal Prep Industry apologist explain the MASS failure of the Meal Prep/Assembly kitchen franchises that DO have a Culinary expert at the helm, Entrée Vous & Super Suppers spring to mind-neither one is doing all that well either. So that argument is shot all to hell too, right?

Even Franchise Great veteran Ex-Gov. John Brown shuttered the doors of his version of the concept after 6 months and 2 or 3 stores under the name “Suzanne’s Kitchen” (as in Suzanne Sommers). He claimed the concept was too labor intensive for consumers and was going to let experienced experts revamp it to be more customer friendly and re-open. That was nearly 2 years ago, I’m guessin’ he was smart enough to see the writing on the wall and got the hell out of Dodge with minimal financial loss- unfortunately the same probably can’t be said for the Franchisees in that organization either. At this point my opinion is that unless you actually eat the food for them it’s not going to get any more customer friendly.

Karen said: “…The convenience of a home-cooked meal, ready-to-cook, sit down with the family, that isn’t full of preservatives, etc….”

The food quality issue is funny because as stated somewhere else on this board, you all get your inventory from the same manufacturers, most from the same distributors.

There is no magic Meal Prep faerie that delivers minimally processed, preservative free ingredients to Meal Prep stores. Don’t get me wrong there MIGHT be some stores that provide that type of finished product, but it comes with a premium price tag, and is therefore no longer cost effective for the consumer.
Folks will actually have a better chance getting better quality, less expensive minimal preservativized ready-made, frozen or M&T meals from Whole Foods, Wild Oats, Tesco, Trader Joes, or even Costco who has take & bake organic fare now, and yes, even from the grocery store; than from ANY Meal Prep/Assembly, Kitchen Outsourcing, Cooking Studio, Home Meal Replacement store. It’s just simple economics and scale of buying power.

Besides, most “meals” from a Meal Prep store have to be prepped at home, thawed before cooking, or at least have some minimal planning that goes into the consumption/usage of the meals.
That is generally beyond the preference/normal practice of most busy family food preparers.

Karen said: “…there might be something to salvage. Get rid of the sessions and call it good - that’s where they’re all headed. Why is it so terrible for it to morph into something slightly different?”
Sorry to be Captain Obvious here, but that is indeed called a grocery store or a restaurant, not a “meal prep/assembly store”

* * * * *

Super Suppers has already become “your make & take place”, Make and on the Take Gourmet has muffed it and puts out these outrageous PR articles, MGFK’s original FrannieZOR has taken the money and ran by selling to another player in this troubled industry for pennies on the dollar to the detriment of former MGFK store owners, Dinners By Design second CEO thinks that a centralized community freezer for stock-piled meals for customers to pick-up or kiosks at Malls for pick meals is the way to go. I think all the players in this game have weighed in and pretty much have this half-baked “morphing” idea covered. And in opinion-all stupid morphisms my. All the while happily “skipping” their franchisees into financial oblivion.
My spidey senses are tingling and I have a sneaking suspicion that nobody in the game has a clue.

* * * * *

Again Karen good luck with whatever it is you do; whether it’s damage control for some lucky frannniezor, a crack PR person, a MAK apologist, propagandist for the industry or if you are indeed a person who is looking to buy one of these things and “morph-it” into a whatever you positive thinker types are calling it now, good luck and God’s speed, you are going to need that and PLENTY of cash in reserve for the lean years.
Thanks for playin’, but where I come from there’s an old sayin’-
“You can’t fix stupid.”

Dream Dinners-Living the Dream Foundation

If you check out the new Dream Dinners UFOC you’ll find something interesting…

Someone has “borrowed” $169,046, from the Living the Dream Foundation, which is a charity that most Dream Dinners owners have at one time or another supported by contributing to with their hard earned money from the product sales in their stores.

” Private Foundation ”

“At December 31,2007, the Company has short-term borowings from the Foundation of $169,046….The Foundation is directed by the majority stockholders of the Parent”

One has to wonder WHO borrowed the money and for what purpose, since it is in the control of Stephanie & Tina.

 

MEAL PREP: Another One Bites the Dish

http://http://www.lohud.com/apps/pbcs.dll/article?AID=2008806290331

Here are some excerpts from an intersting article online about the Meal Assembly Industry and the toll it’s taking on owners . Some have adapted and started a new business out of the ruins of their failed Meal Assembly Store, others have just closed.

The Meal Assembly Industry seems to be going down the drain across the board, Franchised Stores as well as Independents are feeling the burn,

Although the idea spread quickly, the failures followed with 264 meal-prep stores closing last year (207) and another 200 expected to fail this year.

It’s been very hard if not impossible to get accurate numbers on store closures due to spotty and unreliable closure information on the part of most Meal Assembly Franchisors. Their failure to post closed stores and in the instance of Dream Dinners, just lists closed stores as temporarily closed, it would seem to indicate that Dream Dinners doesn’t want potential franchisees to know the real failure rate they have experienced. Other websites that “track” both independent & Franchised operations are just as inaccurate if not down right deceiiving as to the health of the Meal Assembly Industry as a whole.

Let’s Dish, which opened in 2006 in Scarsdale during the height of a nationwide boom in what are known as “meal-assembly” or “meal-prep” stores, is closing its doors for good this weekend. Nine employees will lose their jobs.

It is the last of four meal-assembly stores in Westchester to fail. Super Suppers of New Rochelle closed last month. One … Two… Three … DINNER in Briarcliff Manor and Sip & Supper in Tuckahoe closed more than a year ago.

Although Let’s Dish is a smaller franchisor and has not been one of the Big Girls (Super Suppers and Dream Dinners), it seemed to be golden on the east coast-but that, it would seem, is not really the case.

This story seems to be the the same in every market across the country.

Terese Hunerson of Scarsdale, who was so optimistic when she opened Let’s Dish in 2006 that she was planning to expand in northern Westchester and the Sound Shore, said she was done in by a combination of rising food and gas prices, as well as the challenge of selling consumers on the unfamiliar idea of assembling meals at her store and taking them home to cook.

“This concept is meant to help a busy person, but people found themselves so busy that they didn’t know how to incorporate this into their lives,” Hunerson said.

The self-proclaimed expert in the Meal Assembly Industry says:

Industry consultantBert Vermeulen, who founded a Meal Prep association in 2005, said the idea was too new to support the number of stores that opened.

Mr. B opined in this same article that:

“This is a concept where the stores got ahead of the market. The majority of the target market is not aware of this concept and why it works,” he said.

And yet; here’s an example of Vermulen’s Meal Assembly BAD fortune-telling, it reminds one of the late Johnny Carson’s -”the Great Carnak” Schtick

In 2006, Vermeulen predicted the number of meal-prep outlets would reach 3,000 by 2010 with $1 billion in revenues. Today, the association forecasts just 1,935 stores with $650 million in sales in 2010.

In reality, if you read his website carefully you will find that a few more than 1250 Meal Assembly Stores exist in the US, the remainder are on Canada. Even that number is in dispute as per the observation at the beginning of this article.

And those outlets will be very different from the original stores that struggled to find customers. In 2004, 90 percent of meals were assembled by the customer. Vermeulen said more store owners are adopting a “grab-and-go” model where they assemble meals for time-pressed consumers reluctant to spend up to two hours crafting a pack of meals themselves.

He predicts that by 2010, 80 percent of the meal-prep industry’s revenue will come from grab-and-go meals.

I predict they’ll find out that he is full of hot air, and if I’m not mistaken his descriptions are already in operation, and doing a brisk business- they’re called Grocery stores and Take Out Restaurants.

He likened it to the failure of pioneering online grocery store Webvan, which went bankrupt in the dot-com bust. Today, Fresh Direct is making a success at online grocery delivery because the concept has had enough time to percolate into consumers’ consciousness, Vermeulen said.

It has “percolated” into the “consumers consciousness” as he so eloquently puts, because of the very same economic down-turn, the skyrocketing food and fuel costs that have caught most Meal Assembly Store owners in between a rock and a hard place. Those same factors have made services like Fresh Direct more economical for some people.

It needs to be pointed out that the one of the reasons that Meal Assembly Stores are getting “out-dished”, is because Grocery Stores and by extension services like Fresh Direct, have stepped up to the plate and are pretty good at getting a large piece of the tummy pie. One stop for Mom or Dad after work equals time and money saved in today’s hard economic times.

Rolling out a new concept requires a deep commitment in marketingfrom the franchiser, Vermeulen said, something that Let’s Dish and others didn’t provide.

“Many of the franchisers thought it was easier than it was. They sold franchises without thinking through the marketing program they were going to run,” he said.

Mr. Vermulen is also in the business of selling Independent Meal Assembly store owners everything from soup recipes to the nuts & bolts needed to open a Meal Assembly operation. ALthough he has never owned or operated a Meal Assembly store he only provides services and products to run one. He also operates several self-promotional websites to funnel Meal Assembly owner-wannabes into his plethora of services and products. He also runs an for profit organization for Independent Meal Assembly Store owners.

He likens the Meal Assembly business to the Papa Murphy’s Take & Bake Pizza organization, he feels that they did it correctly.

” Pappa (sic) Murphy’s wouldn’t go into a particular metro area unless they went in big so they could establish awareness of their concept. Their concept is pizzas you pick up uncooked that you cook at home. It’s not that different from meal prep, but the roll-out was very different,” he said.

EXCEPT: It’s like comparing the perverbial apples to oranges- it’s proven that kids LOVE pizza of almost any kind (re-Little Caesars Pizza), not so with Meal Assembly Meals. Those little rug rats are harder to please than the average bear; which means the meal that Mom bought at the local Meal Assembly store for dinner will have to be supplemented with PBJ or Chicken Nuggets from Mickey D’s for the little ones.

Here’s another difference-Papa Murphy’s vetted their prospects and if they didn’t meet the criteria, they didn’t get the location. Not so in Meal Assembly Land where anyone with a valid check can own a franchise.

Every Meal Assembly Franchisor disregards even THEIR OWN specifications for ownership, and in fact a couple are on the second round of “finding” just the “right” franchisee, since the first round of franchisees were forced into bankruptcy when their dreams turned sour.

Some ex-owners have been able to land on their feet after their Meal Assembly business went bust.

Melanie Heim of Super Suppers in New Rochelle said she and business partner Beth Dexter of Bronxville put in a lot of hard work on a failing concept.

“It was a huge disappointment. In retrospect, I don’t know if we did enough research. I don’t know what other research I should have done, but I should have done something. The franchiser won’t tell you much except that it’s fantastic,” she said.

Making their own meals just didn’t resonate with people in Westchester, Heim said.

“I would hear, ‘This is great. I love this. It’s so easy,’ but I’d never see them again,” she said. “It never moved from novelty to habit.”

Heim and Dexter, along with Larchmont chef Liv Grey, have converted their Super Suppers location into a new catering business called The Pantry. “We’ve adapted and moved on,” Heim said.

This is hardly the position ANY one who has spent hundreds of thousands of dollars and man hours invested in a Franchise to find themselves in. Luckily they were fortunate enough to be able to move on to another venture and survive the loss. Others are not so lucky. Some folks who still beleive that the “idea” is a good one are willing to finance a “re-sale” store, some of the bigger franchises like Dream Dinners and Super Suppers are willing to re-sell a failed location to a new owner. But Buyer Beware!

Ryan Knoll, an attorney who runs the FranchisePundit.com Web site, said it is hard to distinguish between a gimmick franchise and one that will be around for decades.

“Franchisers less than 5 years old are much higher risk because they have not fully tested their systems nor have they created brand recognition and loyalty,” he said.

This describes every single Meal Assembly Franchise selling franchises today-NONE are more than 5 years old and NONE have corporate stores still in operation.

As the meal-prep business falters, franchisees are venting on sites like Meal Assembly Watch (www.mealassemblywatch), on which a recent poll asked visitors to vote on whether the concept would survive beyond this year. Sixty-one percent said yes while 39 percent said no.

The ode to Franchisepicks own Sean Kelly:

There’s even gallows humor on some sites, including a mock story that suggests meal-prep stores should diversify to offer Botox or plastic surgery as a side business with a motto like, “Nip, Tuck & Peking Duck.”

My advice to Carolyn is to please wake-up and smell the coffee.

Carolyn Calabria, owner of Entrée Vous in Pomona, said the failure of four meal-prep stores across the river has her concerned, but not defeated.

“It’s a little alarming, but I have to take it as a positive that although it didn’t work there, everyone has to judge their failures and successes as an individual. I hope that when people come and enjoy their culinary experience, they’ll come back,” Calabria said.

Practical experience has not proven this to be the case. Retention is very hard to come by in this industry. It’s more than “a little alarming”, it’s like the understatement of the century!

The story of the ever changing/evolving model is another problem that most newbies can’t understand. They thought they were buying a proven model and in reality they were the guinea pigs as Franchisors were making it up as they went along They soon realize that it is not the concept they bought and sunk hundreds of thousands of dollars into.

As a franchisee, Let’s Dish’s Hunerson blames her parent company for being too rigid and failing to adapt as it became clear the concept wasn’t working as originally designed.

With the economy turing against their best efforts, owners are being forced to make the hard decisons to close their doors for good. Most have drawn an line in the sand and refuse to sink more good money after bad into a business that has proven to be unproductive economically for them.

Meal Prep Franchisor Blames Franchisees…

Why are meal prep franchises failing? According to Michele Bellso in a recent article, the reasons are how much owners pay employees, customer relations, the price of food, and location, but mostly, it seems, greedy franchisees who “think they’ll make a million in the first year.”

The June/July 2008 issue of the CNY Business Exchange features an interview with Michele Bellso, founder and president of the small NY-based Make & Take Gourmet meal prep franchise. While other meal prep franchises (aka meal assembly franchises, meal assembly kitchen franchises) are struggling, “industry leader” Make & Take Gourmet is aggressively expanding.

Make & Take Gourmet is the industry leader

Says Michele Bellso: “In a year and a half, we’ve become industry leaders in the meal assembly industry. We’re ahead of the pack, but I consider that we’re still an emerging company. We are not close to our potential.”

Make & Take Gourmet franchise is “on track to have 100 stores in three years”

According to the article, Make & Take gourmet is thriving:

Michele Bellso, founder and president of Make & Take Gourmet, says the company isn’t even close to reaching its full potential. Since May 2006, the company has grown to include 15 stores in five Northeast states, including two in Onondaga County, six in Rochester and one in Auburn, Watertown, and New Hartford.

“…We are on track to have 100 stores in three years,” Bellso says…”

“The only thing that may have changed for us is to make a better selection of our owners.”

According to Bellso, the 13-unit chain had the normal slew of failed stores like any franchise:

Make & Make & Take franchise stores in Baldwinsville, Camillus, Vestal and the Albany area haved closed. Bellso says every loss hurts, but the business is still growing. “…Unfortunately, in the franchise business, there will be stores that close for a variety of reasons.”

“The only thing that may have changed for us is to make a better selection of our owners.”

Make & Take Franchise Owners Failed Because “Too many people think they’ll make a million in the first year.”

According to the CNY Business Exchange interview:

Because the stores that failed were operated by franchise owners, Bellso had little control over such things as how much the owner pays employees or customer relations. Other reasons can be the price of foods, location and community awareness. “Too many people think they’ll make a million in the first year. It’s a marathon, not a sprint.”

Where did those greedy meal prep owners get the idea they could make a million in the first year. I mean, besides the numbers that the Bellsos quoted to the press in March, 2007:

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. Make and Take expects to generate between $6 million and $7 million in annual revenue in 2007, he adds.

“What’s exciting is the economy is helping us…People… losing their jobs - taking buyouts or layoffs…”

Some might see the worsening economy, lost jobs and layoffs as a bad thing. Not Bellso:

“What’s exciting is the economy is helping us from a franchise perspective. People who are losing their jobs - taking buyouts or layoffs - might not be interested in returning to the corporate culture, so some of them will be opening their own business. Your success rate is higher with a franchise than trying to start from scratch.”

There’s lots of interest in people opening stores.

“There’s enough business for everybody. Competition is healthy…”
Competition is of no concern to Bellso or industry leader Make and Take Gourmet:

“There’s enough business for everybody. Competition is healthy because it helps explain our concept. Also, we’re confident in our convenience and in our food quality.”

For $200,000 to $320,000, Make & Take Gourmet Makes the Process Easy.

What does Bellso do for the franchisees?
“We help them with the build-out, design of the store, equipment specifications, partnerships with other local vendors. We make the process easy. Once open, we create the menus, which change every month…. We tell them how to lay out their stores, their stations, and we help with marketing. They have a lot of help. We also have an intense training.”

In fact, it sounds like Make & Take Gourmet and Michele Bellso do everything for the franchise owners except fail.

When it comes time to fail, they’ve got to do that on their own.

WHAT DO YOU THINK? SHARE A COMMENT BELOW.

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Dream Dinners Franchise Owners Focus on Fund Raisers

(UnhappyFranchisee.com) Franchise owners in the controversial meal preparation segment continue to seek creative ways to build business. According an article in The Capistrano Dispatch, San Juan Capistrano franchise owners of the local Dream Dinners “a lot of school fund-raisers.” Stacy Wagner and Chad Douglass purchased the franchise as a resale last year.

Every month Dream Dinners—a company that provides everything patrons need to assemble dinners to take home and even freeze—offers 17 new menu items complete with instructions and fresh pre-cut ingredients, including beef skewers with sweet garlic mustard glaze, Thai fusion shrimp, sweet cider barbecue chicken, red skin mashed potatoes and cheesecake. Dream Dinners takes orders online, by phone, fax or e-mail, and then customers can come in to pre-prepare either in the morning or at night. Each meal takes about 10 minutes to prepare. “It’s a great way to serve people; it’s time and cost effective for families,” said owner Stacy Wagner.
She and her business partner, Chad Douglass, purchased the three-and-a-half-year-old business about a year ago and do a lot of school fund-raisers where a portion of the proceeds go to the respective school. 31734 Rancho Viejo Road, Suite D, 949.481.5700

WHAT DO YOU THINK? CAN CREATIVE MARKETING SAVE DREAM DINNERS? CAN FRANCHISE RESALES PROSPER WHERE FIRST OWNERS COULDN’T? SHARE A COMMENT BELOW.

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Dream Dinners Franchise Closes in Salt Lake City

(UnhappyFranchisee.com) The Salt Lake City Tribune has reported that the Dream Dinners franchise in the Brickyard Plaza closed last week:

Dream Dinners closes at Brickyard Plaza
The Dream Dinners meal-preparation store in Salt Lake City’s Brickyard Plaza closed last week. The national franchise still has locations in Sandy, Kaysville, Orem, North Logan and St. George.

The Dream Dinners website lists the Brickyard Plaza Dream Dinners franchise owner as Julie Kelso. Our best wishes go out to Ms. Kelso, her family and staff.

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The Problem of Lack of Rightful Services for Franchisee from HQ

One of most vital and important things franchisees pay for through their initial licensing fee and monthly royalties is services and support from their respective Franchisor HQ. Franchisor HQ support is vital to the success of any franchisee, by way of marketing material, training both initial and on-going, positive press coverage, guidance to franchisees when an operational problem arises, problems with food purveyors, recipes development, recipe problems/question, product questions, additional product & service development, website support & development, the list goes on.

What started to happen in the Meal Assembly industry is, as the store-owners closed their doors, due to lack of business, royalties decreased to HQ. Lay-offs at the corporate office of key positions resulted, positions such as, recipe development, trainers/mentors, liaison positions that serve as a vital human link between the HQ leadership and the store-owner and marketing positions. They just ceased to exist. In my franchisor’s HQ (Supper Thyme USA) the staff count went from 7 down to 2 in a matter of months. This was due to massive store closures in a short amount of time. This cut back has happened in Dream Dinners and other Meal Assembly companies as well.

Store-owners are left in the unenviable position of handling many problems, including vital operational problems themselves, problems that traditionally are best handled by trained corporate employees. When this happens, how is it possible for an HQ to fulfill its contractual obligation of support to its franchisee/store owners? It isn’t…although; to date no Meal Assembly HQ has seen it necessary to decrease the required royalty payments extracted from franchisee as a “give-back” to its franchisees even though the services and support available to franchisees have been drastically cut. When asked by franchisees, the Franchisors decline the request of a reduction or cessation of royalty payments until the store owners can reach a ‘break even” position, as several Supper Thyme franchisees found out. Are franchisees getting their money’s worth? Ask any franchisee and you will hear a resounding NO!

When corporate lay-offs occur, communication between storeowners and HQ breaks down. Two-way communication between a frantic franchisee and HQ becomes very difficult to non-existent as the remaining HQ staff members scramble to try to fill vacant jobs and answer questions that they are not trained to handle. Phone calls and emails about urgent matters from franchisees to HQ go left unanswered.

What makes this difficult aside from the fact that franchisees were promised and pay for that support through their royalty payments, is that it leaves the franchisees out in the marketplace with no support from HQ staff that has been trained to handle their day- to day-operational problems. This places unnecessary stress on storeowners who are already balls to the wall stressed to the max. Storeowners are left to solve problems that can only be taken care of, in most cases, by a corporate staff member that has been trained to help solve that particular problem when it arises. It also makes it nearly impossible to get an issue taken care of in a timely fashion for the storeowners. Customer service at the local level begins to suffer, sales in turn suffer and in the end, many stores have to close.

However, more important and rarely talked about is the Franchisors failure to its main consumer-the franchisee. The consumers in the Franchisor/franchisee relationship are getting much less than what they paid for with no means of redress.