‘Seinfeld’ Soup Nazi Franchises Troubled
SoupMan Bid to Turn ‘Seinfeld’ Fame Into Empire Goes Off the Boil
David B. Caruso, Associated Press reports:
The chef who inspired the Soup Nazi character on “Seinfeld” makes a heck of a crab bisque, but a group of stewed investors says he’s having problems expanding his popular stand into a franchise empire.
Soupmaker Al Yeganeh closed his original Manhattan shop, famous for its strict ordering rules, in 2004 to focus on franchising Original SoupMan stores across the country. The company launched around 40 stores in its first two years and introduced its frozen soups to groceries.
But disgruntled franchisees say many of the new shops didn’t make it through their first year: At least eight have closed for good. Two more have shut their doors for now, although the company said it has deals in the works to reopen them.
Other franchisees told The Associated Press they want out of their contracts because of poor profits or bad relationships with the company. Several have sent the company letters threatening to sue.
Kevin Long, whose Original SoupMan franchise in Scranton, Pa., lasted just one winter, accused the company of misrepresenting how much it would cost to open and run the business.
He and other franchisees said the company also had early problems with its bowl and cup sizes, which were larger than expected and inadvertently gave patrons more soup than they paid for, and never lived up to promises to provide a product line that would sell during the summers, when demand for hot soups is low.
“They are just trying to get as many stores open as possible, and they aren’t supporting them whatsoever,” Long said.
Prices of $7 to $11 per 12-ounce bowl also made it tough to attract repeat customers, he added.
At least three stores have closed, at least temporarily, in New York City. Shops also have shut in Myrtle Beach, S.C., Harrisburg, Pa., Boulder, Colo., Colorado Springs, Colo., and Ottawa, Canada.
Franchisees in locations including Stratton Mountain, Vt., and Ridgewood, N.J., have asked to be released from their contracts so they may try staying open as a different type of business.
Original SoupMan spokesman John Rarrick chalked up the store failures to the normal “growing pains” associated with any new restaurant franchise.
“This is very common,” Rarrick said.
Of the struggling stores, he said, “They were really pioneers, and certainly there are risks associated with being a pioneer.”
Rarrick said the company had fixed the problem with the bowl sizes, abandoned an early idea of having most of its franchises operate as inexpensive carts and kiosks and struck a deal with Cold Stone Creamery that will create hybrid stores that will sell soup and ice cream.
He added that the soup company had delayed a plan to open 50 franchises in Britain while the it refined its business model.
“There are some really happy, really successful franchisees,” he added.
Original SoupMan opened its first stores in 2005, simultaneously capitalizing on and distancing itself from the “Seinfeld” episode that made Yeganeh famous.
On the show, a steely eyed chef makes his patrons follow a strict set of instructions dictating how they must order their soup, and he barks “No soup for you!” at those who fail to comply.
In real life, Yeganeh’s Manhattan store had similar rules posted: “THE LINE MUST BE KEPT MOVING. Pick the soup you want! Have your money ready! Move to the extreme left after ordering!”
Yeganeh, though, chafed at the Nazi nickname, which he felt insulting, and has discouraged his franchise owners from mentioning “Seinfeld” or saying “No soup for you!” on the job.
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Comments
[...] Crosds Posted at: Let’s Talk Franchising [...]
[...] Crosds Posted at: Let’s Talk Franchising [...]
These Soup franchisees shouldn’t count on “Cold Stone” for help. Cold Stone is in trouble too, with franchisees closing up faster than they opened. . . .for the same reasons, as well.
Broken business model.
Cold Stone’s have much higher labor costs compared to Baskin Robbins or Ben & Jerry’s, along with a faddish product and poor quality ingredients. The generation that was interested in Cold Stone have moved on, and the faddish nature make it difficult to attract repeat customers. And the yuppie “business owners” that pumped their home equity to be in business are now getting squeezed by low or non-existent profits and high interest rates.
Cold Stone will be back to 500 stores in two years, clearly.
Bob,
Very succinct description of the situation the Coldstone Zee faces. Are/were you a zee?
I still think the Coldstone Brand has strong pull and I also think they have good locations in good markets.
What the Zees need, are solutions, a redux on product mix maybe exactly on point.
I just don’t see soup as the solution. Upscale bakery dessert options…maybe?
Have you seen or heard about Finale?
[...] Let’s Talk Franchising has an Associated Press article highlighting the problems that the ‘Seinfeld” Soup Man seems to be having with his franchising business. Things don’t seem to be working out too well with some franchises…$7 to $11 bucks for a bowl of soup can do that I think… Soupmaker Al Yeganeh closed his original Manhattan shop, famous for its strict ordering rules, in 2004 to focus on franchising Original SoupMan stores across the country. The company launched around 40 stores in its first two years and introduced its frozen soups to groceries. [...]
Bob is correct…it is a broken business model. All together, the financial losses to the Franchisees is near $10 million. The guy who runs the company is a real goomba and operates like that. All his “relatives” are involved collecting paychecks and the franchisees are throwing good $$ after bad in hopes of not totally losing their shirts. The company deserves to fail and the members on the board and the corporate folks deserve the same. It is the Franchisees who were totally misled and gauged.
1. The issues with the franchisor are much deeper than it appears.
1. The company is undercapitalized. An investment bank retained to raise capital for the franchisor had discontinued its efforts after having received commitments for approximately 25% of the targeted capital. This was a result of the poor operating results of the company and its underlying franchisees.
2. The company has been seeking an acquiror of its operations. Throughout this effort the issues and challenges brought to the attention of the company by its franchisees have been quietly addressed but none of the problems have been resolved.
3. The misrepresentations made by the franchisor to induce franchisees to acquire territories and open up an Original Soupman outlet are many: (a) understatement of food costs; (b) co-branding with Cremalita ice cream to balance overall sales in warm months was abandoned soon after first 12 stores opened for business; (c) mandated use of cups and bowls that are 25% larger than purported serving portions, resulting in giving away 25% more product than consumer was paying for and at the same time causing an increase in purchases of product from the company to replenish inventory.
[...] It was reported here on Let’s Talk Franchising that “Seinfeld’ Soup Nazi Franchises Troubled” that disgruntled franchisees say many of the franchises didn’t make it through their first year: At least eight have closed for good. Two more have shut their doors for now, although the company said it has deals in the works to reopen them. [...]
[...] It was reported on Let’s Talk Franchising that “Seinfeld’ Soup Nazi Franchises Troubled” that disgruntled franchisees say many of the franchises didn’t make it through their first year: At least eight have closed for good. Two more have shut their doors for now, although the company said it has deals in the works to reopen them. [...]
[...] It was reported on Let’s Talk Franchising that “Seinfeld’ Soup Nazi Franchises Troubled” that disgruntled franchisees say many of the franchises didn’t make it through their first year: At least eight have closed for good. Two more have shut their doors for now, although the company said it has deals in the works to reopen them. [...]
DID ANYONE KNOW THIS? I JUST FIND OUT,,,,,
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Entry for February 09, 2009
THERE (3) THINGS I HAVE NEVER DONE IN MY LIFE:………AL YEGANEH
1 — I HAVE NEVER MADE ANY SOUP, CONTAINING ANY KIND OF NOODLE OR PASTA PRODUCTS.
2 — I HAVE NEVER NAMED OR APPROVED ANY CHARITY FOUNDATION UNDER MY NAME “AL YEGANEH”.
3—I HAVE NEVER APPROVED ANY KIND OF MERCHANDISING (T-SHIRT, MUG, ETC….) TO BE SOLD OR GIVEN AWAY…
SO……IF YOU SEE:
1— Any soup containing any noodle or pasta products with my name on, it is not mine.
2 – Any charity foundation under my name (AL Yeganeh), it is not mine.
3 — Any kind of merchandising with my name and photo on, it is counterfeit.
Monday February 9, 2009 - 05:04pm (PST) Permanent Link | 0 Comments
THE ONLY PRODUCTS I EVER MADE AND AUTHORIZED TO BE SOLD.
THESE 48 SOUPS ARE THE ONLY PRODUCTS, I EVER MADE AND AUTHORIZED , THE COMPANY WHO PICKED THE NAME “ORIGINAL SOUP MAN” TO OPERATE UNDER.
. . ……………………………………………… THE REAL SOUP MAN, AL YEGANEH
AS YOU SEE BELOW:
I NEVER, EVER MADE ANY SOUP THAT CONTAINS ANY NOODLE OR PASTA PRODUCTS.
IF YOU SEE ANY OF MY SOUPS CONTAINS ANY KIND OF NOODL OR PASTA, IT IS NOT MINE.
*Chicken vegetable, garden vegetable, tomato & zucchini, tomato & basil
Tomato & mussel, tomato & wild rice, broccoli & cheese, jambalaya,
Italian wedding, mulligatawny, so many bean, Eggplant parmesan
Minestrone, cream of asparagus, butternut squash (hot).Split pea w/ham
Lentil, white bean w/ham & bacon.
* Chili: CHICKEN, beef, turkey, 5 bean.
* Goulash: beef, veal.
* Bisque: lobster, crab, shrimp, seafood.
* Chowder: corn, chicken & corn, Manhattan clam, New England clam, seafood.
* Gumbo: chicken, shrimp, turkey, sausage, seafood.
* Barley: chicken, beef, mushroom.
*chilled soups: tomato & corn, vichyssoise, borscht, butternut squash, fruit cornucopia. Gazpacho, cucumber
Friday January 30, 2009 - 10:01am (PST) Permanent Link | 0 Comments
Entry for November 04, 2008
AL YEGANEH , SOUP MAN , NEW YORK,USA yeganeh1@aol.com
NOTICE: TO MEDIA Who have misinformed public for last 4 years while I have been away from United States.
In case you did not take a minute to call 212 757-7730,my closed store on 55th st. & 8 ave. Manhattan New York or have not checked my website ( http://www.therealsoupman.com ), I have created this blog for you to give the public, accurate, fair and balanced information to prevent any disasters.
SINCE I don’t have AND never had any PR , spoke person and manager, I AM THE ONLY ONE WHO SPEAK FOR ME.
If you visited my website or called my store’s voice mail, it says: I do not live in United States any longer (since March, 2005) and have not resided there for the last 4 years.
And: I only sold the North America right to this company who PICKED the name “original soup man” to operate under.
And: any inquiry regarding North America right including franchises, contact (email) THEM at: http://www.originalsoupman.com
And: For rest of the world franchise right,
Contact ME: yeganeh1@aol.com . AL YEGANEH, SOUP MAN
Tuesday November 4, 2008 - 04:20pm (PST) Permanent Link | 0 Comments
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