NYT on the Meal Prep Franchise: Hot Concept Gone Cold?

by sean on February 20th, 2008

(FranchisePick.Com) See related story: Is Super Suppers for Stupid Suckers? And Other Meal Prep Franchise ???s

A common new business pitfall is the entrepreneurial tendency to become enamored so with a “solution” that one forgets to make sure it’s preceded by an actual need… and a need great enough to support multiple competitors who are also enamored with said solution.

Case in point: “Meal prep” or “meal assembly” kitchen franchises. This is where, to my hazy understanding, ex-yuppie soccer moms with more money than time can go and slurp Merlot with other ex-yuppie soccer moms while assembling meals to bring home, freeze, and serve later to their families as if they had actually used those recipes they downloaded to their PDAs from GoodHousekeeping.com.

These recent darlings of hot franchise lists and their advertising sales reps have clever names like Super Suppers, Dream Dinners, My Girlfriend’s Kitchen, Pass Your Plate, Entrée Vous!, Entrees Made Easy, Mr. Food, and Supper Thyme USA.

But are women who are NOT inclined to cook really looking for a way TO cook? It’s the same kind of question the Curves and 30 minute fitness franchise buyers wished they’d asked: Are couch potatoes really going to stop being couch potatoes, even if it only takes 30 minutes and they don’t have to shower?

My suspicion that the meal prep franchise concept is a solution in search of a problem seems supported by the current New York Times article It’s on to Plan B as a Hot Trend Cools Off. Here are some excerpts:

The concept boomed, as the number of stores mushroomed from four in 2002 to 1,400 in 2007, almost exclusively by catering to women who wanted to provide home-cooked meals for their families, according to the Easy Meal Preparation Association.

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The loyalty of these wives and mothers landed meal assembly companies on various lists of top franchises and hot new businesses throughout 2005 and 2006.

But growth in the industry has slowed sharply, long before reaching expectations. Industry revenue, which two years ago was forecast to reach $1 billion annually by 2010, is now projected around $650 million by then, said Bert Vermeulen, an industry consultant and founder of the easy meal association.

Some 264 meal preparation stores closed during 2007, Mr. Vermeulen said, more than three times as many as in the previous year. He forecasts fewer than 50 openings in the United States this year, compared with 562 in 2006.

It turns out that lots of people are simply not motivated to plan so many meals in advance. The desire for last-minute convenience remains powerful in America, often trumping the more ephemeral rewards of home cooking.

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Super Suppers, which is based in Fort Worth, once forecast it would have 600 stores by the end of 2006; it now has about 200. Dream Dinners, based in Snohomish, Wash., originated the concept. It has 236 stores, not quite meeting expectations. No single competitor of Super Suppers and Dream Dinners has more than 70 stores.

The majority of owners bring in less than $25,000 a month, or $300,000 a year, in revenue, according to Mr. Vermeulen’s data. He figures that is about $5,000 a month short of what they need to stay out of financial trouble.

Book It N Cook It, an independent store in the Tampa, Fla., suburb of Lutz, never exceeded $4,000 in monthly revenue in its eight-month life, said Terry Warner, its former owner. Monthly expenses averaged about $7,500. Mrs. Warner and her husband closed the store in November after losing about $250,000.

The Warners, retired insurance adjusters who spent two years studying the industry before jumping in, say they underestimated the public’s aversion to meal planning.

“People here have a grab-and-go mentality,” Mrs. Warner said of Florida, where free time can be spent outdoors year-round. “The last thing anyone wants to do here is plan dinner.” She said that the burger joint next door to her shop seemed to be doing great.

WHAT DO YOU THINK? SHOULD THE WARNERS HAVE BOUGHT A BURGER FRANCHISE? CAN THE MEAL PREP KITCHEN CONCEPT BE SAVED? SHARE YOUR OPINION BELOW.

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