The Melting Pot Financial Performance & Investment Insights

Melting Pot, the 92-unit original fondue restaurant, is known for its experiential dining on the consumer side and exceptional franchise support that leverages data and technology on the business side. Here’s everything you need to know about Melting Pot franchise financial performance when exploring opening your own location, along with success stories and insights from entrepreneurs who did it themselves.

1. Investment Breakdown & Cost Analysis:
   • Initial Investment: $1,364,389 - $2,069,638
     • Initial Franchise Fee: $45,000
     • Real Estate Services: $2,500
     • Rent (First 3 Months): $28,500 - $81,250
     • Security Deposit: $0 - $22,916
     • Leasehold Improvements: $602,110 - $963,445
     • Computer & POS Hardware/Software: $25,000
     • Computer Software Installation & Training (First Year Subscription): $8,900 - $15,000
     • Gift Card Processing & Website Development/Enhancement Fee: $677 - $747
     • Restaurant Equipment, Furniture, Fixtures & Signage: $438,826 - $572,482
     • Utility Deposits: $2,000 - $5,000
     • Opening Inventory & Supplies: $65,000 - $75,000
     • Grand Opening Advertising: $15,000 - $20,000
     • Training Expenses: $31,026 - $68,299
     • Licenses – Alcoholic Beverages, Business and Health: $6,000 - $10,000
     • Insurance: $3,000 - $6,000
     • Legal: $2,000 - $6,000
     • Accounting Firm: $2,100 - $2,500
     • Reservation System: $1,750 - $3,500
     • Additional Funds (3 Months): $85,000 - $145,000
   • Ongoing Costs:
     • Royalties: 5% of Gross Revenues
     • Marketing Fees: Up to 3% of Gross Revenues
     • Food and Beverage Costs: 24.7% (Average Cost of Food and Beverages Sold as Percentage of Yearly Gross Revenues)
     • Labor Costs: Determined by local factors
     • Other Operating Expenses
       1. Brand Development Contribution: Up to 3% of Gross Revenues, currently 1.19% of Gross Revenues.
       2. Digital Ad Cooperative: Minimum $1,000 per month.
       3. Standards Re-Training Course: $2,000 per person, plus expenses.
       4. Additional, Refresher or UMELT Management Essentials Training: Fees range from $400 to $2,000 per person, plus expenses.
       5. Learning & Communication Fee: Approximately $500 per Restaurant per year.
       6. Additional Assistance: Currently $300 per day, plus expenses.
       7. Extension Fee: Fees range from $4,000 to $8,000.
       8. Transfer of Franchise: $7,500, plus additional assistance expenses if incurred.
       9. Successor Franchise Fee: 1/2 of then-current initial franchise fee (currently $22,500).
       10. Accounting: $650 per month.
       11. Audit Fee: Equal to cost of inspection or audit.
       12. Evaluation Fee: Fee equal to our costs and expenses.
       13. Interest and Late Fees: Lesser of 1.5% per month or highest contract rate of interest allowed by law, plus a late payment fee of 5% of the amount due.
       14. Compliance Fee: $100 to $1,500 per individual violation of the Franchise Agreement.
       15. Management Fee: Will vary under circumstances.
       16. Costs and Attorneys’ Fees: Will vary under circumstances.
       17. Indemnification: Will vary under circumstances.
       18. Testing: Cost of Testing.
       19. Relocation Training Fee: $1,800 per trainer per day (not to exceed a total of $20,000).
       20. Construction & Design Relocation Fee: Up to $10,000 (currently $5,000).
       21. Hosting Services: To be determined.
       22. Website Enhancements/Integration (“WEI”) Fee: $150 per month.
       23. Gift Card Systems Fee: Currently $10 per month, plus 10 cents for each transaction, per location.
       24. Customer Comments Software (InMoment): $12.50 per month.
       25. Technology and User Fee: Up to 1% of Gross Revenues (not currently charged), not to exceed a maximum contribution of $20,000 per Restaurant per calendar year.
            
2. Financial Performance Benchmarks:
   • Average Unit Volumes: The highest third of franchised restaurants averaged $3.7 million in gross revenues or average unit volume, with the middle third averaging $2.2 million and the lowest third averaging $1.6 million.
   • Profitability Metrics: "Gross Revenues" refers to the total sum of all sales, whether in cash, credit, barter, or other forms, including sales of food, beverages, goods, services, and merchandise, both on-site and off-site, related to the operation of the Restaurant. This encompasses all revenue generated directly from the Restaurant's business activities, excluding only specific coupon discounts outlined in the Manuals.
      
3. Return on Investment (ROI) Potential:
   • Factors Influencing ROI:
     • Location and Market Demographics
     • Operational Efficiency and Cost Management
     • Marketing and Branding Strategies — franchisees receive everything they need to run business day to day with pre-vetted and mapped out strategies. The team will make sure they have the tools, training and resources needed. 
     • Franchisee Engagement and Support — franchisees receive thorough support and training that encompasses real estate, national and local marketing, construction and more. The Melting Pot team has built an operational playbook based on decades of in-restaurant experience to support franchisees’ success, while owners also have consistent access to team members at the Restaurant Support Center for additional guidance.
     • Customer Service and Guest Satisfaction
     • The generally accepted formula to determine ROI is based on individual results using this calculation: (Net Profit ÷ Cost of Investment) x 100
        
4. Financing Options and Funding Sources:
   • Franchise Financing Partners. 
     • Melting Pot doesn’t offer financing for new restaurants. 
     • In the context of certain existing and former Restaurant locations, a Path to Grow financing program ("PGP") is available, allowing qualified individuals to acquire a Melting Pot Restaurant already in operation or recently closed. PGP is specifically tailored for experienced restaurant operators or franchisees, subject to review and approval by the franchisor.
     • Under the PGP program, the individual establishes a new business entity ("NewCo"), which either acquires franchise rights from an existing franchisee or enters into a new Franchise Agreement with the franchisor. NewCo then purchases the existing Restaurant, including all associated assets and rights. To facilitate the purchase, the individual contributes an initial capital amount to NewCo (ranging between 5% and 15% of the total purchase price), while the remaining balance is financed by the franchisor and/or a third-party "Sponsor" who is an existing Melting Pot franchisee.
        
5. Success Stories and Case Studies:
   • Case Studies of High-Performing Franchises: The highest-performing franchises are said to have the capacity to bring in $2,298,501. 
     • Chris Millsap: Chris Millsap began his career in the food service industry as a server and manager before venturing into restaurant ownership. Inspired by his managerial experience, Millsap and some friends explored the possibility of owning a restaurant. Their search led them to the Melting Pot franchise, and they bought a location in Cincinnati, Ohio, from its previous owners in November 2007, just before the economic downturn in 2008. Despite the challenging conditions of the recession, this experience honed their operational skills and resilience, proving essential for running a successful restaurant. Nearly two decades later, Millsap and his partners now operate four Melting Pot locations across the United States, in cities including Pittsburgh, Colorado Springs, Kansas City, and Cincinnati. Their achievements include multiple accolades, with the Pittsburgh location notably winning “Franchise of the Year” for two consecutive years.
     • Brian Neel: Starting at Melting Pot during college, Brian Neel now thrives as a successful franchise owner. His Charlotte restaurant, opened in 1989, remains a cornerstone of his success. Today, Neel not only manages multiple restaurants but also mentors around 30 aspiring entrepreneurs.
     • Anthony Wheeler: Anthony Wheeler began his journey after college, working temporarily at Melting Pot while planning to pursue teaching. Unexpectedly, his mother's cancer diagnosis led to a year-long break to care for her. Uncertain about his future afterward, a former manager suggested a managerial role at Melting Pot. Initially hesitant, Anthony accepted, starting at a top-performing Colorado location. Climbing the ranks, he eventually purchased the restaurant in December 2021 from its owner. The restaurant continues to be one of the top performing in the system. 
     • Jay and Heidi Supple: Jay and Heidi Supple are experienced entrepreneurs who have found success in various business ventures, including their franchise with Melting Pot. Jay, who grew up in a family of franchisees, along with his wife Heidi and brother John, ventured into entrepreneurship early on. They started franchising with Melting Pot in 2003, adding it to their diverse portfolio, which includes independent restaurants, a hotel, projects with the NFL's Green Bay Packers, and a brewery concept. Their decision has paid off, with Melting Pot becoming a cornerstone of their business for over two decades. Recently, they achieved a milestone by breaking a 20-year sales record, highlighting the success and appeal of the brand within their diverse portfolio. 
       The Supples are investors in a Hilton Garden Inn hotel. The expert entrepreneurs highlighted the value for existing hotel operators to add a Melting Pot location either onsite to their hotels or into their portfolios like they did. 
        
   • Financial FAQs
     1. How much does it cost to open a Melting Pot franchise? The total costs to open a Melting Pot franchise range from $1,364,389 - $2,069,638, including an initial franchise fee of $45,000. 
     2. How much can I make? In 2022, the highest third of franchised restaurants averaged $3.7 million in gross revenues or average unit volume, with the middle third averaging $2.2 million and the lowest third averaging $1.6 million.
     3. What ongoing fees can I expect? Franchisees pay royalties of 5% of Gross Revenues each month and local advertising fees of up to 3% of gross revenues. 

Click here to learn more about owning your own Melting Pot franchise.