Why the Meal Prep / Meal Assembly Kitchen Franchises are Failing
Why are the meal assembly kitchen franchises failing?
One reason: Self-Delusion.
In a recent post, I wrote about an article on Michele Bellso, the cheery franchisor of 14-unit Make & Take Gourmet, whose enthusiasm for selling more franchises appeared unaffected by the fact that 3 of her first franchisees have lost their $200K investments. She freely admits that she doesn’t know the cause of the failures, and didn’t seem too concerned about figuring it out.
She also freely admits to not knowing for sure whether they’re in the meal prep kitchen business or in the take out prepared foods business. She talks about the concept “evolving” to a model that sounds suspiciously like one we already have. It’s called a grocery store.
Franchisor delusions that franchising is easy.
This is from an article on Make & Take Gourmet from last March, 2007 :
Make and Take Gourmet Holdings is taking over the East Coast. The DeWitt-based meal-replacement business is planning to open licensed locations from New Hampshire to the tip of Florida and everywhere in between. Between 60 and 70 Make and Take franchise-owned stores will open in 2007.
IMHO:
An new franchisor who thinks they can (or should) open 60-70 units in the first year lacks experience.
A new franchisor who blabs those plans to a reporter lacks judgement.
A new franchisor who has 12 units open and 3 failures at the end of that year lacks credibility. Big time.
(A December, 2007, a company press release stated that the company had opened 23 Make & Take Gourmet franchises. There are only 12 on the website. Where are the rest?) Franchisor delusions of invincibility
Franchisor delusions of invincibility
Suffice it to say that if a new franchisor is not familiar with federal prohibitions against providing earnings claim information outsite of Item 19 of the UFOC, they should at least have the sense not to blab all their numbers - real or inflated - to the press. Like these:
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.
(Did you hear that sound? That was the franchisee lawyers shrieking, in unison, “Hot Damn!”)
Franchisor delusions of grandeur
Michele Bellso [is] founder and sole owner… The growth of Make and Take is entirely company funded, Bellso says. The company currently has no investors and has not taken out any loans, she says.
By “company-funded” I assume Bellso means “Franchisee-funded.” Franchisees pay a $30,000 franchise fee, 5% of gross sales, and 2% marketing contribution which I assume is paid for projects undertaken by the Bellso’s design firm. Franchise fees from the 16 who have opened would amount to $450K.
Michele Bellso has hired a director of franchise development, franchise-sales sales manager, and an accounting manager to staff the corporate office. She plans to hire an additional 30 employees to serve as corporate trainers, customer-service representatives, and procurement associates by the end of 2007, she says. Make and Take currently employs 180, including employees that work at licensed stores.
The priority of these proposed new hires contains perhaps the greatest reason that the meal assembly kitchen franchises are failing.
The first two are for selling new franchises, and are high-dollar sales positions.
The third is for someone to count the money the first two bring in.
The least priority is given to hiring those who will provide the support the franchisees were promised.
Hopefully, some of the franchisees will get a chance to meet them.