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FDD Talk 2015: The Melting Pot Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on October 28, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Restaurant Franchise



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The Melting Pot Restaurant Photo by Frank Kehren

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on The Melting Pot franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for one The Melting Pot restaurant, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of The Melting Pot’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average sales, guest count, sales per guest, and cost of sales percentage for 3 company-owned The Melting Pot Restaurants in the United States that were open a full 12 months ending fiscal year March 31, 2015
  • 2014 average sales, guest count, sales per guest, and cost of sales percentage for 123 franchised The Melting Pot Restaurants in the United States that were open a full 12 months ending fiscal year March 31, 2015
  • 2014 average sales, guest count, sales per guest, and cost of sales percentage for 20 franchised The Melting Pot Restaurants in the West region, 20 in the Midwest region, 27 in the Northeast region, 44 in the Southeast region, and 12 in the Southwest region, respectively, that were open a full 12 months ending fiscal year March 31, 2015

Section I – Background Information

Fondue was invented in Switzerland in the 1700s when peasants would take their stale cheese and stale bread and make a meal by melting the cheese in a pot and then dipping pieces of the bread into it. The stale cheese tasted better and the hardened bread became soft – a win-win for the peasants! The word fondue comes from the French verb fonder, which means to melt.

If you’re a fondue fanatic, then you’ve probably heard of The Melting Pot, one of the most successful fondue restaurant chains in the United States. Fondue, for the uninitiated, involves dipping your food into a sauce, typically a cheese sauce for a meal and a melted chocolate sauce for dessert.

It was 40 years ago in 1975 when the first The Melting Pot restaurant opened in Maitland, Florida, near Orlando. Mark Johnston worked there as a waiter during college and was taken by the concept. He and his two brothers, with the blessing of the original owners in Maitland, opened a second Melting Pot in Tallahassee. It was wildly successful and opened the doors for further development.



In 1985 the trio of brothers purchased all the rights to The Melting Pot brand and began franchising. There are currently more than 120 locations in North America, with one north of the border in Canada and one south of the border in Mexico. Outside North America, there are recently opened locations in Jakarta, Indonesia, and Dubai, United Arab Emirates.

Here’s how The Melting Pot stirs things up in the upscale dining segment:

An Innovative Dining Experience

Fondue is still a novel idea for many, and it seems exotic for those who have never tried it. The Melting Pot approach is one that feels upscale, with its interior décor of black and red, dim lighting, and wine selections. For this reason, it does well for romantic and special occasion meals. Many feel the pricing is also rather upscale.

The standard 4-course meal (each course is also offered individually) consists of a cheese fondue (into which you dip pieces of bread, apples, and veggies), a salad, a main course, and a dessert fondue (usually chocolate, into which you can dip all sorts of things, such as brownies, angel food cake, strawberries, bananas, marshmallows, and so on).

Because fondue has to be kept warm, each table has one or two flat-top burners in the center, and you actually cook your food yourself right there at the table.

On the Way Up or Down?

It’s hard to tell what’s happening with The Melting Pot as a chain. The number of locations has declined by a handful of restaurants each year since 2009, when it had 142 locations. Now there are only 126.

Then again, the chain may be on the rebound. It engaged in major menu and operational overhauls in 2011 and 2012, and this year achieved the number one ranking in Casual Dining from the 2015 Consumer Picks through Nation’s Restaurant News. It got high ratings in a number of categories, including Cleanliness, Service, Atmosphere, Craveability, Food Quality, and Likely to Recommend.

Section II – Estimated Costs

  • Please click here for detailed estimates of The Melting Pot franchise costs, based on Item 7 of the company’s 2015 FDD.

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis



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