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And Now For Something Different

With its unique concept, The Melting Pot is not just your average restaurant franchise.

Bob Johnston was still in high school when older brothers Michael and Mark recruited him to work in their The Melting Pot restaurant. The brothers operated two franchises-one in Tampa, Florida, the other in Tallahassee-before buying the chain, specializing in fondue appetizers, dinners and desserts, from its founders in 1986.

In the 16 years since buying The Melting Pot, the Johnston brothers have worked to develop a concept and system they believe will gain their chain national notoriety. Franchise Zone spoke with Bob Johnston about the growth of his company, the benefits of franchising and how he would like to see The Melting Pot perceived.

Franchise Zone:Why did your family decide to buy The Melting Pot?

Bob Johnston: We purchased the concept because we believed The Melting Pot required an owner/operator's involvement to be as successful as it could be. Only three of us were involved with it, which meant we could immediately see the topside of our growth potential.

[Our] plan was to grow through franchising using the day-to-day involvement of owner/operators, and then to develop a much greater number of restaurants.

Did you change any part of the concept when taking over?

We did a lot of work when we took it over; we had a lot of ideas. We expanded the menu, enlarged the restaurants, changed our price point and created a new logo, interior design, service standards and food standards. We reengineered the concept to tool it up for the growth we knew it was capable of.

That took quite a bit of work at first. We were a very small company, and we were busy running restaurants, too. Now we're enjoying the results of those efforts and growing quite nicely. We have 10 restaurants under construction right now and 54 restaurants operating today.

Did you resume franchising fairly soon after acquiring The Melting Pot?

Not immediately, because we had some work to do. But all our growth, with the exception of two additional company-owned stores, has come through franchising. That's a testimony to how strongly we believe in the concept of franchising. We feel it's a very viable business format and growth strategy.

Why do you feel so strongly about franchising?

Partially because [we believe in] the participation of an owner/operator; also because of the incredible network franchising creates. We're able to provide a business operator with so much more support than any independent business operator could expect to have at their disposal-operating systems, training, specifications for product production and service, a strong, branded advertising campaign.

When you were revamping the system and starting to expand, did you have any mentors or role models?

Our mentors were the two gentlemen who founded the company. While we did many things differently, what fueled us through the beginning of our company was their undying enthusiasm and belief in what The Melting Pot could become. That's why they were so eager to see us come in and buy them out-we could do what they knew was possible but weren't prepared to do themselves. Their faith in us and in the concept propelled us quite a bit.

How did you get the word out about The Melting Pot when you were starting to franchise on a larger scale?

Initially, the exposure came from our very loyal guests. Many of our new franchisees were loyal Melting Pot patrons. Now we're using a small amount of print advertising and a lot of Internet-based marketing.

Have you had any difficulty franchising The Melting Pot because the concept is so unique?

Actually, being unique has been a selling point. As the single largest fondue concept worldwide, we virtually own this niche market. Our franchisees enjoy not being part of the restaurant sameness. Who wants to own another steakhouse or pizza place these days?

What are some of the challenges the company has faced while growing?

The first challenge we faced was that of being both a restaurant operator and franchisor. It was very hard to find time to do both. That accounted for a little slower growth at first, but we've overcome that by developing a very strong infrastructure with our training department.

One of the other challenges we faced was developing the right marketing message. We struggled through that, determining exactly what it is we should tell our potential guests about us. We have a very strong communication message now and a very strong strategic alliance with our advertising agency, which has developed the branded advertising campaign we use now. In the early days, the messages being used by licensees in different markets weren't necessarily the same nor as strong as they could have been. We're proud of our marketing communications now.

How did the company develop the right communications message?

We started off by going to the guests, speaking to them and conducting focus groups, doing what we called attitude profiles of the guests. We interviewed loyal Melting Pot users, first-time guests and guests who, for one reason or another, maybe hadn't been back in a while. We used that as the platform from which to build our communications. Then we did psychographic studies and a micro-vision study-a lifestyle segmentation marketing tool-to determine who our core customers are. We used demographic tools to help find what markets had the highest concentrations of these individuals, so we knew where to locate.

Why did you decided to continue operating your restaurant while launching the franchise?

We continue to operate our own restaurants because we love the restaurant business and like to be close to it. We learn from it, and it gives us a connection to every one of our licensees.

What are some different successes the company has had that stick out to you?

The success that stands out the most is the expansion of our menu. Originally we only had three items on the menu; as a result, there weren't a lot of reasons for guests to return quickly to the restaurant. Through redesigning the menu, we've given guests a wide variety of flavors, which has accounted for the incredible growth in the average unit volume of a Melting Pot restaurant.

What are your goals for The Melting Pot?

Our vision is to be the restaurant of first choice. When a guest is thinking of a place for a special dining experience, we want to be their first choice. We want to maintain our ownership of this category. We are the largest by far, and in most markets the only fondue restaurant, and it's our objective to continue to absolutely own this category.

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