Despite Inflation, Tradition Drives Diners to The Melting Pot
THE CHAIN WANTS TO OPEN 15 STORES BY 2025.
Consumers may be tightening their wallets, but tradition and experience are still driving them toward The Melting Pot, according to franchise strategist Collin Benyo.
From what he’s seen, guests are pulling back on spending for smaller events. They’re exchanging those two to three restaurant visits for a more extravagant occasion at The Melting Pot. It’s still the place that people think of to celebrate, whether it’s good grades, the grandparents coming to town, or a special anniversary.
“We’re always going to have that connection,” Benyo says. ” … I think that we see a consistency. I think we hurt just like everybody else, of course. But I don’t think we see as big a drop as a lot of other competitors.”
In the post-pandemic landscape, The Melting Pot finds itself at 94 U.S. restaurants across 30 states, with about 95 percent being franchised. That’s a net decline from the 104 stores it had in March 2020 when COVID rocked the country. The fine-dining chain did not open any restaurants during the fiscal years ending March 2021, 2022, or 2023.
There are indicators that the environment is improving. At an annual franchise reunion in Puerto Rico, Dan Ammen, senior director of project management and purchasing, informed attendees about contracts allowing operators to forego big hits on commodities. He gave franchisees direct numbers on how much they’re saving, but also a sense of realism around the fact that The Melting Pot is an experiential concept. So some cost areas will reflect that. However, Benyo says customers are willing to spend “a little bit more” for what these restaurants offer.
Currently, the brand is competing with its own success. The chain had record years in 2021 and 2022; this year isn’t bringing the same leaps, but financial figures are holding steady.
Unit growth remains on the radar as well. The Melting Pot sorts through opportunities using SiteZeus, a company providing an AI-driven algorithm that spits out information on population demographics, psychographics, and market segmentation. It also gives estimations of 12-month rolling sales if The Melting Pot were to open in a certain area. Using this data, Wichita, Kansas, has become a key target. The Southeast will play a major factor too, especially since headquarters are in Tampa, Florida. North Carolina, Alabama, Texas, and Tennessee are particularly huge draws.
The long-term objective is to open 15 locations by 2025. This expansion is measured, but necessary for a brand like The Melting Pot, which requires a higher population per unit.
“Typically, our stores have very large depths and regions that they work with,” Benyo says. “If we were to put a store in Wichita, it more likely would be the only one there, which is a big draw for candidates when they see that we have an eight-mile territory built into the franchise agreement. And then with the technology we have, we actually monitor the range and reach of our locations with the information that [SiteZeus] gives us. We have an understanding of where those locations are pulling from because the last thing we want to do is put a store that’s too close and cannibalizes and no one wins.”
The beauty of having a separation between stores, Benyo says, is that franchisees aren’t stressed about competing with each other. It gives room for transparency. For instance, The Melting Pot’s operations team distributes a scorecard to the franchise community to show where they rank in terms of sales, labor, retail, online, and other factors. Everyone can see how the other fares. So if something isn’t working in a market for an operator, they feel comfortable asking someone who scored higher for advice.
“We just got back from Puerto Rico from our annual reunion where all our franchisees got together, and just seeing them around each other exchanging, talking—it is a community that helps each other,” Benyo says. “I think when you deal with fine dining or something a little bit different, there’s a friendliness and openness to the community that is hard to find in a lot of other brands.”
As for the availability of real estate, Benyo says The Melting Pot can fit in a variety of venues (previous operators have transformed a cave and an old church into a restaurant). There are no ovens or grills. Traditionally, The Melting Pot is a prep kitchen because much of the experience is tableside, giving the chain flexibility to be in spaces that many others wouldn’t consider. It could be endcap, standalone, or in-line. Wherever it is, The Melting Pot wants to be part of an attractive area, not the actual attraction, to capture the most customers possible.
In some cases, the brand wants to partner with a hotel. Benyo says it’s a win-win scenario; The Melting Pot moves in with an entity that understands hospitality, and the hotel has a distinct way of luring more visitors.
“Without really a draw, a hotel tends to lack in that area,” Benyo says. “They tend to be more of an attraction to people traveling through, maybe see them once or twice. But the local community really doesn’t have a recognition of the hotel itself. Other than, ‘Yeah, there’s a hotel down the street from where I live.’ To have that draw, an understanding from the community to the hotel, is a win for them. And then us partnering up with somebody that can help us maintain a great spot and thrive in the community, that’s great for us as well. It’s a beautiful thing.”
In addition to new openings, The Melting Pot is working on refreshing its existing footprint. Called “Melting Pot Evolution,” the revamp involves more space, lighter colors, and a bigger focus on the bar. To expand on that last point, the bar was an oversight when The Melting Pot first began, Benyo says. It was simply an area where a customer had a drink before their table was ready. But now, the brand recognizes guests have different ways of using restaurants, and that doesn’t always include sitting in a dining room. The chain wants to open up opportunities for consumers by offering better seating near the bar so that they can enjoy the dining experience but also converse with the bartender or watch television.
About 60 stores have undergone the remodel. The whole system should be finished by around June.
One factor that separates The Melting Pot from most franchisors is that it doesn’t require prospective operators to have restaurant backgrounds. With ease of operations and education systems in place, Benyo is confident that the brand could take anyone and teach them how to make cheese fondue or melt chocolate. He estimates that 90 percent of existing franchisees were fans of the chain beforehand.
“People circle this restaurant on their calendar,” Benyo says. “I think sometimes people literally change their diet before they come in knowing full well how big this meal is for some people. But we have the ability to host a party every night, which makes the guests happy, which makes the employees happy. And at the end of the day, it makes for a great experience.” – Source: FSR.