A Change Management Discussion With Bob Johnston Of The Melting Pot Franchise
Bob Johnston is the CEO and chairman of the board of directors for Front Burner, a franchise management company headquartered in Tampa, Florida, which is affiliated with several niche brands. Previously, Johnston was the COO and president of The Melting Pot, the premier fondue restaurant franchise with more than 105 restaurants in 31 U.S. states, Canada, Mexico, Saudi Arabia and the United Arab Emirates. Front Burner has more than 17 locations in development internationally.
In this interview, Johnston discusses his long career with The Melting Pot—how he began as a dishwasher to owning the restaurant with his brothers. He also talks about what it takes to run a successful restaurant franchise and how to reinvent it in a competitive market.
Q. Tell us a little bit about Front Burner.
A. Front Burner is our franchise management company and we work with dynamic brands like The Melting Pot. We later worked with a concept called Grill Smiths and Burger 21, which was an upstart franchise, a better burger concept. We sold both of those off four years ago to concentrate on the evolving flagship brand, The Melting Pot. We’re just now in the mode of putting other new concepts back underneath Front Burner to provide growth vehicles. So, you could say Front Burner is to what Bloomin’ Brands is to Outback.
Q. How did you get into the restaurant business?
A. My start in this business came at an early age. And this is the case for most people in the restaurant business. The industry employs a lot of young people and typically the job is a steppingstone while you pursue something else. In my case, I didn’t intend on being in this business. I didn’t pick it. It kind of picked me. It happened in my early college days. When I transitioned out of working in the kitchen and started working at the front of the house, I realized that I really enjoyed the guest-facing aspect of the business. And that’s where I got bit by the bug to remain in this business, so much so that I had an opportunity to join my two older brothers, Mike and Mark, to acquire the concept (The Melting Pot). I was only 21 years old at the time, a junior in college. I took a leap of faith and dropped out of school. That was not a hard decision for me. I married the girl who sat behind me in psych glass (we’ve been married 35 years). And we moved to Tampa from Tallahassee to acquire the concept, which at the time had five restaurants.
Q. What did it take for you to convince the original owners that expansion was a good idea?
A. Most of the credit would belong to my brother Mark. He worked for the founders, Roy and Bruce, when Mark was putting himself through college. He knew them well. He could see that Roy and Bruce, although they’d done an amazing job, did not really have the fire in the belly to do what was necessary to take the concept into a growth mode. Roy and Bruce wanted to see the The Melting Pot grow, they believed in it, but they didn’t want to do it themselves. They wanted to put it into the hands of somebody that they felt they could trust, who they thought could care for the thing that they started. And they are still a part of our world. They come to every annual franchise convention. They are part of our legacy.
Q. Both the franchising business and the restaurant business are extremely competitive and hard to stay in. How do you keep your concepts and businesses relevant in general?
A. The restaurant business is a hyper-competitive business. Right now, it’s the most fiercely competitive and challenging time I’ve ever seen in our industry. Competitive because the economy is good, and it seems like everyone wants to open a restaurant. There are more choices today than there were five years ago. But there’s only the same amount of time and money that guests are willing to spend on eating out. Therein lies the challenge. We are really in a battle for a ‘share of stomach’, so to speak. The other challenge we’re faced with is rising costs, least of which are rising wages and employee-related expenses. Also, the third and final real challenge is hiring team members. Because there are more restaurants on the scene, we’re fighting one another for the best employees. I’ve never seen a time like this where it’s as challenging as it is. We will recruit and set up interviews and it’s not uncommon for perspective employees to not show up to the interview. They got a job somewhere else in the meantime. We’re having to be very creative in terms of how we best the competition and the onboard perspective before they are lured away from someone else.
Q. Several experts are saying this economy is an experiential economy, that consumers not only want fast results, but they want their expectations to be exceeded. They want to be provided with something unique. Would you agree that this is the kind of economy we find ourselves in?
A. I will say this, I think The Melting Pot is a concept that is perfectly positioned to take advantage of what people are interested in when they dine out, which is more than a meal. People don’t want to satisfy their appetite when they go out, they want more than that. The Melting Pot as a concept is all about that. Frankly, that’s why you’d chose The Melting Pot because you want to dine out differently tonight and not pick from a sea of sameness. I think we have the good fortune to have a concept that’s more than food. It’s very social. I’m not going to tell you that guests don’t use their phones when they’re at The Melting Pot experience, but it is far less often as compared to other types of restaurants. The Melting Pot is a lousy place to go with someone you’re not interested in (laughs). You’re going to be talking to them, you’re going to be interested in them. That is the nature of the concept.
Q. Could the answer that you gave about an experiential economy apply to a poor economy? Are people more likely in a down economy to choose The Melting Pot over some other establishment when they do go out?
A. We’ve been through several downturns and there hasn’t been clear consistency there. In some cases, we were relatively unaffected by changes in economic conditions. However, in 2008 and 2009, we thought that was going to be the same situation for us. When 2010 came, when some restaurants had found the bottom and were trying to climb their way back up, we finally started to see downward pressure. We were a little late to the dance. We were also a little bit late pulling out of it. That was a very hyper-competitive time. It was commonplace for casual dining to be basically buying business with three-course, two-person meals for $19. That certainly made an impact on our business. Even though it was casual dining and not what we do, consumers were taking advantage of the bargain pricing happening.
We’ve closed restaurants in the course of time since 2010. I don’t want to tell you we’ve been unaffected. But we’re fortunate to be able to say that for three years in a row we’ve posted positive top sales and it wasn’t because we increased price to do that.
Q. Could you tell us about a prototype restaurant that you have in place and what the goals are for it?
A. The Melting Pot has been fortunate to have been around since 1975, a long time and unusual for restaurants. Not much has changed with the concept since the mid-2000s. And we are now in a three-year process to refresh and evolve the brand both from an environment standpoint as well as what’s on the menu and the product offerings. The first store we did that with was in New Jersey, the second was in Texas, and the third was in Pennsylvania, and fourth in Texas again. This is part of a strategy to contemporize the brand and keep it relevant and interesting for the consumer. Because, candidly, some of our competitors are very hip and cool local restaurants and are besting us in that area. Our guests deserve the best we can offer. We’ve come up with some really exciting designs and some new environments that our guests seem to be very pleased with.
Q. Continuing with that, didn’t you do the same thing with your office space a few years ago?
A. We did. This followed when we sold off Burger 21. We left what was a typical office environment with cubicles of different sizes where senior management in the company got a bigger workspace than others. Or if you were really ‘important’ you got an office with two windows. I didn’t agree with this cultural statement. It was out of sync with what we stood for. When we decided to move to a different environment, it was really important that we talked to our team to have them cast the vision of what our new office would look like. We also used a local design firm called Create + Co to help us with the design of the space. The new space is very open, very collaborative. We all work in the same environment. That’s been very beneficial. Employees are sitting in an area with someone who works in a completely different unit then they do. You get conversations that wouldn’t happen otherwise.
Q. What’s the best piece of advice you’ve ever been given?
A. The best piece of advice was actually given by a vendor partner in the very early days of the The Melting Pot, someone I still stay in touch with today. We had a program we were launching that wasn’t going well and it was featuring this person’s product. Very selflessly he said to me, “Look, if you know in your gut something is wrong, it’s not working, don’t drag your feet on addressing it. It’s not going to fix itself. Act and get your feet moving.” He said that at the expense of some business, because we pulled the program. It was the right decision to make.
Q. Where do you go for inspiration?
A. The truth is, I go to church. My wife and I are active at two churches. One in Tampa and another in North Carolina. Our faith life has become increasingly important to us later in years after our kids left and we became empty nesters. That’s one place I go.
In a business sense, I meet with business owners in Tampa once a month. We help each other out with our challenges and hold each other accountable. In addition, I have a business coach, Sheldon Harris with CEO Coaching International. I’ve been working with him for two years now.
Q. What books are you currently reading?
A. ‘The Second Mountain’ by David Brooks. It’s basically written for someone my age. I’m 55 years old and I am focused on matters of significance more so than matters of success and greater than I ever have been.
This interview was conducted by the team at Stonehill. Stonehill is a strategy and innovation firm that helps businesses to identify opportunity, implement change, and accelerate growth. Our team consists of an innovative blend of creative, strategy, technology, and change management experts that allows us to unite the functional silos of business in the common objective of creating differentiated customer experiences.