I've heard a lot of conflicting research about these places, does anyone have first hand knowledge?

I'd like to do a very small operation - people come in and create healthy, normal - semi-gourmet meals designed for one or two people, perfect for an at-home date. Maybe even do packages like a dinner for the adults and something else for the kids.

>I've heard a lot of conflicting research about these places,
>does anyone have first hand knowledge?
>
>I'd like to do a very small operation - people come in and
>create healthy, normal - semi-gourmet meals designed for one
>or two people, perfect for an at-home date. Maybe even do
>packages like a dinner for the adults and something else for
>the kids.


Just read an article in my local paper about 15 franchisees who are suing Dream Dinners for false advertising.

Here's the article in full and link:
http://www.heraldnet.com/article/20080603/BIZ/656303295&SearchID=73319732534884

I wouldn't go near meal assembly with a ten foot pole!

15 franchisees sue Snohomish-based Dream Dinners

By Eric Fetters
Herald Writer

SNOHOMISH -- The locally based company credited with launching the meal-assembly industry six years ago is now the target of a $30 million lawsuit filed on behalf of 15 franchisees in several states.

The lawsuit claims that Dream Dinners Inc. misrepresented the profit potential of its stores to attract new franchisees and did not give them all the information required by federal and state franchise laws.

Michael Garner, the attorney representing the franchisees, said prospective owners were given a presentation that promised stores could generate annual revenue of $360,000 and an annual profit of at least $75,000.

Stephanie Allen, Dream Dinners' co-founder and co-owner, called the lawsuit a "hiccup."

"It's part of the normal course of doing business. If you're a substantial franchise opportunity, you're going to get sued," she said.

Attempts to reach several of the disgruntled franchisees for comment were unsuccessful.

Allen noted that Dream Dinners has scores of successful franchise owners other than the 15 who are suing, including Valerie Bass of San Diego.

"We could not be happier," said Bass, who owns two Dream Dinners stores. Both ranked among the top 10 highest-­selling Dream Dinners stores nationwide last year.

Bass said she opened her first location in November 2005.

"It took off so fast, that within a year, we opened the (second) one," she said.

Bass said her stores have achieved the performance numbers mentioned in the lawsuit, so they aren't unrealistic. She said Dream Dinners' corporate office also has been supportive throughout the past three years.

Andy Potter, who tracks the industry with his Meal Assembly Network Web site, said the lawsuit comes at a time when rapid expansion of meal ­assembly stores has given way to falling sales and closed locations.

"It is a national issue. You could chalk it up to a lot of things. A lot of industries are being clobbered right now, and a lot of people still see this as a luxury," Potter said.

It was 2002 when Stephanie Allen and Tina Kuna opened their first Dream Dinners location. The idea of providing a well-stocked kitchen where customers could prepare a dozen meals in a couple of hours, take them home and freeze them for healthy, fast-made dinners caught on.

The Snohomish duo franchised their idea. The company now has 204 franchised stores open nationwide and at least 15 more in the works. It remains the largest of more than 20 such U.S. chains that have at least 10 stores.

But the explosive growth has slowed considerably. Potter said the number of meal-assembly stores that have closed have outstripped the number that have opened since the year began. While Dream Dinners' corporate royalties grew by nearly 19 percent last year, fees from new stores were down and expenses were up, according to documents filed with the state of Washington. The company made more than $7.5 million in revenue during 2007, but lost just shy of $651,000. That contrasts with a profit of $131,506 for the head office in 2006.

The company's franchise disclosure documents also list total assets of $2.9 million and liabilities and debt exceeding $3.4 million.

Allen acknowledged last year's loss, but said the business is not in trouble.

In Overland Park, Kan., Dan Day and his wife, Jana, have owned a Dream Dinners franchise for 2 1/2 years. In six of the past eight months, their sales are up, he said. The Dream Dinners store has survived an onslaught of competitors, most of whom have now closed.

Day's family used to own a Burger King franchise, so he's well-versed in the risks and rewards of buying into a franchise.

"There's nothing there that guarantees any type of success," he said. "The biggest mistake most franchise owners make is just opening the doors and expecting everybody to just find them."

The Washington Franchise Investment Protection Act requires franchisors to give extensive information and financial statements to franchisees. It's designed to prevent franchisors from pressuring franchisees from signing anything under pressure without full disclosure, said franchise attorney Peggy Hughes of Montgomery Purdue Blankinship & Austin PLLC in Seattle. Other states have similar laws.

The lawsuit, first filed in New York and refiled recently in Snohomish County, alleges that Dream Dinners franchisees weren't given all the disclosures required by law. The original New York suit asked for at least $30 million in damages and legal fees. The locally filed suit doesn't mention a specific amount.

Based on a quick review of the lawsuit's complaint, Hughes said the charges made against Dream Dinners are serious.

"They've made some fairly significant allegations under the franchise act," Hughes said. "It will be interesting to watch."

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.

Unless you're planning on franchising someone else's idea, ignore RW's post.

I have a business prospect who does this and I have a contact who also does this.

One is making a nice living marketing his meals via a distribution channel. I wouldn't call his a small operation, but then I don't have a lot of details on his operation either.

The other fellow prepackages meals for old folks' residences and he had the good sense to hook up with meals on wheels so, he delivers pre-packaged meals to them and they deliver them to the final recipient.

What you should know up front is that you cannot simply package these meals in your home kitchen. You can use a certified catering kitchen sometimes available through your local business development center, called incubator kitchens. You can rent a certified catering kitchen at a church, etc. to get started. But the easiest thing is to take a ten by ten space, separate it from the rest of your house, install a private entrance and build a kitchen in there. Which is what the fellow I mention above did.

His is a pretty neat set up. He cooks the food then puts it into microwaveable/oven proof serving trays. He has a machine that heat seals a plastic layer onto the meal and then he simply slaps a sticker on the top with the details of what's inside and the date it's packaged.

If you're doing it for private couples and small groups, it's the same idea.

Either way, you'll need to have the licensing and permits that a caterer would require. These you can get detailed information on from your local city hall.

If you avoid meat in your packaging, you'll have way fewer rules to follow.

Good luck with it.

It's not quite at all what I do, but if you have any questions, I can help steer you in the right direction... so post away.

There's lots of other posters with varying experience in food service and they'll post their two cents as they find your question.

Good luck with it.

Tina Brooks, VP Marketing
Brooks Pepperfire Foods, Inc.
Makers of Peppermaster Hot Sauces
http://www.peppermaster.com

Eat more peppers!

I may design robotic marketers but I am actually a tax accountant and with more than 1100 tax returns a year, I have come across several small businesses focussed on this business model.
Low margin high volume (think pizza).
http://www.monthofmeals.com/ are great but they are expensive and my kids won't eat alot of what they make though we do and have.
If you have a niche market then focus on it and it should do well. People go with brand or franchising because they know little about marketing and set up so they go with a brand that does alot of that.
If you are going alone, appear like a global brand, your CS has to be top notch and your meals, great value for money.
Still, those customers of mine who do this, use their homes, claim a real loss and offset it against their tax liability from their other income.

Good luck.

>I may design robotic marketers but I am actually a tax
>accountant and with more than 1100 tax returns a year, I have
>come across several small businesses focussed on this business
>model.
>Low margin high volume (think pizza).
>http://www.monthofmeals.com/ are great but they are expensive
>and my kids won't eat alot of what they make though we do and
>have.
>If you have a niche market then focus on it and it should do
>well. People go with brand or franchising because they know
>little about marketing and set up so they go with a brand that
>does alot of that.
>If you are going alone, appear like a global brand, your CS
>has to be top notch and your meals, great value for money.
>Still, those customers of mine who do this, use their homes,
>claim a real loss and offset it against their tax liability
>from their other income.
>
>Good luck.
>

If someone is using their home kitchen for packaging food products and selling them to the public, they are going to find themselves in a position to be fined to the extent of several hundred thousand dollars by the FDA. It is not legal and such companies may be doing it, but they are doing it illegally.

I don't recommend it.


Tina Brooks, VP Marketing
Brooks Pepperfire Foods, Inc.
Makers of Peppermaster Hot Sauces
http://www.peppermaster.com

Eat more peppers!

There are a couple of places like these up here in Canada (Ontario).

My problem with these places is that they are expensive and you have to make large portions, about 6 servings I think. Too large for a working couple and would a family spend the money on them? The location near me never looks busy. I also don't think they have flash-freezers which is what I'd want if I were preparing these - just from a food-safety aspect.

Please see the following website as part of your research into this industry:
mealassemblywatch . com