17 ms·
The author's analogy to fried waffles reminded me of a real-world example from 10 years ago: Krispy Kreme Doughnuts (http://www.nytimes.com/2004/11/23/business/
by jobu 13y ago
The author's analogy to fried waffles reminded me of a real-world example from 10 years ago: Krispy Kreme Doughnuts (http://www.nytimes.com/2004/11/23/business/23doughnut.html http://www.nytimes.com/2004/11/23/business/23doughnut.html)
In the early 2000s I was living in Minnesota during the much-hyped arrival of Krispy Kreme. There were long lines at new stores and lots of doughnuts in the office every day. The hype prompted new franchises and an overabundance of doughnut shops, but unfortunately the demand dropped as the novelty wore off, and they ended up closing several stores and production facilities in the area.
Obviously Krispy Kreme weathered its over-expansion and is doing well today. I think the question for Groupon and Herbalife is if they have a business plan (and the financial reserves) to make the shift from exponential growth to more measured success.
- malvosenior 13y agoOff topic, but also see gourmet popcorn in the 80s.
- Einstalbert 13y agoThere is actually a local chain in Southern California called Bruxie that sells waffles after failing to impress high-end restaurants with their product. It is very popular and placed strategically around hip places, e.g. colleges. I was tied heavily with its inception and I know just how unsustainable the owner wants it to be. At this point, he only makes money by opening stores. He fully intends to Krispie Kreme his way through the state or country, if he can, and then let it collapse. It happened to KK, it happened to ToGos, it'll happen again.
- kevinwang 13y agoInteresting... I always thought Bruxie was a pretty popular chain. Why do you think the growth is unsustainable? Are the amount of customers decreasing at each existing chain?
- dredmorbius 13y agoFood-chain fads are pretty common. Some persist (McDonalds), some muddle along (TCBY), some collapse spectacularly, such as Boston Market (though I find it's still going). The similarities with tech startups exist, including overambitious growth plans.
- epaladin 13y agoQuiznos may have been one of the more spectacular failures. Everyone I know liked their product, but I've only seen one open store in the last year, when only a few years ago I saw them regularly. HQ forced franchisees to purchase materials through specific suppliers at high prices, which drove franchisees into debt and out of business.
- dredmorbius 13y agoI thought of adding them to my list but I wasn't familiar enough with the story. I do recall something about an implosion happening though. Oh yeah, and the pyramid scam / forced suppliers thing.
- brianbreslin 13y agoDidn't krispy kreme have a crazy accounting scandal? http://en.wikipedia.org/wiki/Krispy_Kreme#IPO_and_accounting_scandals http://en.wikipedia.org/wiki/Krispy_Kreme#IPO_and_accounting...