Julie Moran Aletrio from New York’s LowHud.com did a great job in her article on the meal prep trend in New York’s Lower Hudson Valley. Thanks for quoting me in the article. Here are a few highlights:
From a Let’s Dish franchisee:
“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.
Closings nationwide:
By the end of last year, there were 1,353 meal-prep stores in the United States, according to the Easy Meal Prep Association.
Although the idea spread quickly, the failures followed with 264 meal-prep stores closing last year and another 200 expected to fail this year.
Industry consultant Bert Vermeulen, who founded the association in 2005, said the idea was too new to support the number of stores that opened.
“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.
New concepts:
Rolling out a new concept requires a deep commitment in marketing from 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.
Vermeulen pointed to Pappa Murphy’s Pizza, which has more than 1,000 stores, as a franchiser that did it right.
“If you remember 10 years ago, there was something militarily called the Powell Doctrine, which meant going in with overwhelming force. Pappa 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 rollout was very different,” he said.
….
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.
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Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115.
Um, I think they call “grab and go” meals “restaurants”. If the meal prep industry is going to a more simple place-order and pickup, then they will be directly competing with restaurants that provide carry-out, which is nearly all restaurants.
The meal prep industry is in real trouble. How can they compete with restaurants and the giant giant food chain stores and their deli’s?
Meal prep franchisors are a perfect example of pre-sale hype and PR and post- sale reality. New franchisors like to overseed in their quest to attain visibility and the visibility translates to viability in the eyes of new prospects. If it sounds good and looks good and you can sell franchises at any degree of risk with immunity under the law, and the franchisees take most of the risk, why not?
Franchisors don’t have to prove their concept one store at a time because they avoid the expense and risk of startup costs and they collect their profits all of the time the startup franchisees are attempting to bring their businesses to breakeven. Franchisees don’t all fail at the same time, and maybe the franchisor can survive if he can throw enough seeds out there and enough seeds germinate to produce gross sales of the system upon which the franchisor takes his profits.
The price wars in the QSR sectors will ensure that meal assemply franchisees will work for almost nothing, in my opinion.
Buyer Beware- Do not buy into a Meal Assembly Business. I have lost my shirt trying to support Dream Dinners, Inc.
I hope others will do a better job of researching then I did. Don’t be fooled into the belief that your ‘serving your community’
It’s a business, and it is failing me- BIG TIME!
Thanks for listening.