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Food assembly hot: Franchises hope to capitalize on make-it, take-it meal trend

November 28, 2005

Put the pots and pans in the trash. Cooking at home belongs with the mastodons.

At least that's the premise of local franchisees rushing to get a stake in central Indiana's burgeoning food-assembly business. Naysayers, however, worry the industry is growing too fast.

The concept is simple: Nobody has time in today's BlackBerry-toting society to go to the grocery store, let alone cook a decent meal.

That's where franchises like Dinner by Design, Dream Dinners and Super Suppers come in. They supply the kitchens, ingredients and recipes. Patrons show up, put on an apron, follow simple step-by-step instructions, and go home after two hours with a week's worth of healthy entrées for $100-$200.

Then all they need to do is defrost an entrée each night and pop it in a microwave or oven. Voilà. No more rushing to the grocery store to get cilantro. No more ordering dinner through an intercom.

"It's a great way for people to have family meals without the hassle of planning and shopping," said Louanne Scudder, a franchisee for Snohomish, Wash.-based Dream Dinners.

Business has quadrupled at Scudder's Carmel store since she opened in June. In her first month, she had about 100 customers. Now she gets that many in a week. The store's already in the black.

Which may be why others are rushing to join her.

"People compare it to the growth of trendy coffee companies 15 years ago," said Julie Duffy, president of Grayslake, Ill.-based Dinner by Design. She founded the company in 2003 out of desperation because she was "tired of feeding [her] kids cereal every night."

The company's first Indianapolis franchise will open Dec. 15 in Fishers, where a second Dream Dinners already is serving up garlic and herb beef sirloin with mushroom sauce.

Fort Worth, Texas-based Super Suppers also has two storefronts in Indianapolis, one in Carmel and one on the east side at 9922 E. Washington St. Additional stores will open in Avon, Evansville, Fishers and Fort Wayne within months, said Ken Nugent, co-owner of the Washington Street franchise.

"We're pleased with the way business is going," Nugent said.

The store opened in October and did about $8,000 in business in its first month. Nugent thinks that should change in a hurry. He predicted monthly sales of dishes such as turkey tenderloins with cranberry compote would hit $35,000 within three months.

He's so pleased with business that he's already purchased a second franchise location in Greenwood that he plans to open in late December.

While Super Suppers has the most locations in the Circle City right now, it's anybody's guess what company will lead the market next year. All three have ambitious plans.

Dinner by Design had one location nationwide in 2004, according to franchise documents filed with the Indiana Secretary of State's Office. This year, it will open nine more. Next year, it plans to open 35 franchises throughout Florida, Illinois, New York and Wisconsin. According to its Web site, the company could have 3,000 locations within five years.

Dream Dinners has similar plans. Although it had only two stores nationwide in 2004, it has signed deals for 24 new locations this year. The company will open another 67 in 2006, including three in Indiana.

Super Suppers is undertaking the most aggressive plan. While it had only three Texas locations in 2004, it plans to open 93 new stores in 2005 and another 207 in 2006.

The rapid growth of food-assembly businesses gave one consultant pause.

"It's a real hot market right now, but franchisees should be careful," said Mark Siebert, CEO of Homewood, Ill.-based iFranchise Group.

He likened the situation to what happened with video, frozen yogurt and bagel stores. At first, there were thousands of chains. Then there were hundreds. Today, there are only a few of each. He knows of at least 10 companies vying to become the Subway of the food-assembly business.

Investors may want to turn that over a few times in their heads before they write the check for a make-and-take franchise. The initial investment ranges from just under $100,000 to almost $200,000, according to the franchise documents filed with the secretary of state. That means some franchisees could end up with a bunch of rotting lettuce in the freezer.

Anybody remember Schlotzsky's? Some disgruntled franchisees posted unflattering messages on Yahoo in 2001. The company subsequently sued the franchisees, but it didn't prevent a 2004 bankruptcy filing.

Indianapolis food-assembly franchisees know they're taking a risk.

"It's a brand-new industry," Scudder said. "Obviously, not everybody's going to make it."

Like Nugent, she opened her store after meticulous research into the market. She chose her franchise based on her faith in the company's food and brand.

Scudder isn't the only person praising the nutritional benefits of these new-age frozen dinners. Super Suppers employs a registered dietitian to monitor the nutritional value of its products. Duffy went so far as to select a small distributor that specializes in quality ingredients to supply food for Dinner by Design's corporate kitchen.

Dietitians are happy to see the businesses flourishing, too.

"We're now in the third generation of people who don't know how to cook," said Sarah Blackburn, president of the Central Indiana District Dietetic Association. "For people who don't eat at home, this is a good idea."

Ironically, the company that's done perhaps the most engineering to balance the nutritional content of its food has taken the tongs completely out of clients' hands.

Ottawa, Ill.-based Seattle Sutton's Healthy Eating pioneered the freezeand-reheat technique when it started delivering frozen entrées to diabetics in 1985. The company now delivers nationwide, but insists on doing all the cooking for its clients. It uses a computer program to make sure each client takes in the right balance of carbohydrates, fats and proteins.

"It's what the food industry is headed for right now," said Seattle Sutton, founder. "We're not going to get people back in the kitchen."

The company's Indiana franchisee has five locations that sell its frozen entrées, including one that opened last week in Avon. By the end of the year, it hopes to open locations in Mooresville and Plainfield. In January, it'll open stores in Carmel, Brownsburg and Greenwood.
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