Dream Dinner Case

Dream Dinners: Evaluating a Franchise Opportunity

Paul Roseman was deep in concentration reflecting hard on his recent business venture. The franchise opportunity was only an idea a year ago. The investment seemed reasonable, the time to profitability appeared short, and the required skill set matched up well his background and interests. Unfortunately, the new venture had not panned out as expected. The business was bleeding cash and a decision had to be made to continue or pull the plug. Regardless of the decision made, Roseman was determined to learn from this experience. Looking back, he wondered if there was anything else they could have done in assessing the venture.

Paul Roseman was hunched over the latest set of financials from his family’s venture into the world of franchising and the numbers did not look good. For 18 months “Dream Dinners” hovered on the brink of profitability, but had consistently fallen short. After an initial investment of $40,000, signing on to a $250,000 SBA loan, and pumping another $36,000 into the business, Roseman was wondering when they would turn the corner. He knew he needed to make a decision to cut his losses and fold up shop or continue trying to forge his way to profitability. Roseman wondered if there was a better way to assess the true risk of a new venture. At the time of the initial investment the numbers looked good and the assumptions seemed reasonable. At the end of the day, Roseman was determined that if the business did go south he wanted to learn enough from the experience to avoid a similar situation in the future.

Background

Dream Dinners is a retail service center hosting pre-arranged sessions for the preparation of self- prepared home meals. Its primary value proposition is to help families both save time and enjoy healthy, delicious dinners in their own home. At a Dream Dinners location a client can assemble six to 12 entrees or more for the month in about two hours and then take the assembled...