Aug. 23, 2010
Mark Johnston is the president of Melting Pot Restaurants Inc., the casual-upscale fondue chain with more than 135 units in the United States and Canada. Its multi-course, wine-centric format is exactly the genre that customers have eschewed for no-less-experiential fast casual chowhouses.
Still, it’s doing better than expected: Franchise ranker AllBusiness.com included the restaurant on its AllStar Franchise list of top concepts, even though it slipped from No. 87 last year to No. 104 now.
This year, Johnston has decided to take the company 180 degrees and get into the pizza business. He’s teamed up with Floridian celebrity chef Chris Ponte to open two new fast casual concepts: an upscale burger place, and a Neapolitan pizza joint called “Peel.”
PizzaMarketplace.com chatted with Johnston about the reasoning behind the brand’s jump from fondue to pizza, and the future implications for the move.
PMC: From an operations, markets and marketing standpoint, why did you choose to go into pizza after a fondue concept?
Johnston: Mainly we wanted to open a restaurant that was fast casual and lower priced. We wound up focusing on the soup/salad/sandwich thing, and we went through several versions of preliminary design and concepts. But the thing that kept worrying us was the fact that all these types of places are strong at lunch but weak for dinner business.
So then we (Mark and wife Arlene) met with Chef Chris Ponte [a consultant for The Melting Pot]. He’s always wanted to do a pizza place; he makes a fantastic pizza at Café Ponte. A lot of people go to Café Ponte, even though it’s upscale, for his pizza, and he wanted to do a pizza/pasta quick serve thing. We decided to put it all together in one concept and called it Peel. So we're not opening a pizza joint … it’s a good size portion of our menu, but by far not just a pizza place.
We wanted to have a restaurant that people would use at nighttime and dinner, and in between. We’re actually even contemplating being open for breakfast.
Your [Melting Pot] director of public relations mentioned that you were targeting the very small Italian fast casual segment, which Technomic’s Darren Tristano put at about 2 percent of the segment. Is that where you started?
It was more a coming together with Chris Ponte, myself and wife. We wanted to do a healthy restaurant. But then when we met Chris and started talking about it, putting it all together, we figured we would have a better chance of hitting the higher volumes you need to hit and pay your rent (with fast casual pizza).
Is there any sort of synergy potential between Peel and The Melting Pot concepts?
The only potential for synergy is in purchasing, because we use so much cheese (at The Melting Pot). These two brands are way different in how people use the restaurants. But there could be lots of synergy in the back of house and training department here, and the financial back of house systems. I wouldn’t say there’s synergy.
Did you all decide you wanted to do something like Peel first, or simply that you wanted to do another concept?
We wanted to franchise another concept in addition to this one (Burger 21 is another fast casual concept Melting Pot Restaurants is working on). A lot of our franchisees are looking for (new) things to do.
The economy changed when we started thinking about it. It seems to be a little more on target with the price point we’re going to be hitting: $5 to $9. And the burger concept is the same sort of positioning: high quality burgers, plus a variety of salads, fries, etc. And prices (where people can visit) every day.
Did the change in segment choice have anything to do with slipping casual sales? How is The Melting Pot doing?
To say that we’re not seeing the effect of the economy would be wrong. Our sales had leveled off this year. We’d had same store sales increases for I don’t know how many years, seven to nine years in a row. And that changed a few years ago. Some markets are tougher than others: Florida is tough, California is tough. But we’re holding our own really well overall. Many more stores are up this year than was the case last year. So we have some really positive sales trends happening in the past year.
What about the name? Do you fear that people won’t understand “Peel” is pizza?
Most people won’t know what the word means – we’re hoping they’ll think of “fresh,” fresh ingredients. Not buying produce from someone that bought it days ago. We’ll define what a “peel” is on the menu. [Cooks use these wooden slabs to slide pizzas into high-heat ovens.] But there’s also “Fresh artisan cuisine” underneath the word, which could be changed. We don’t want to scare people with “artisan,” but the word “fresh” will definitely stay there.
Another reason we’re not worried about it is that we don’t see ourselves as a pizzeria. We see ourselves as a contemporary restaurant, almost more of a flavor of a CPK, but a fast casual version; or a Wolfgang Puck express. It’s more of a Cali thing: Contemporary, fresh cuisine, simple but high-quality ingredients, and great flavors.
The expansion plans for peel seem quite assertive?
Our goal is to have (hundreds) of these restaurants. I don’t see that we do that in next couple years. Once we (nail down the first local location), we will say we’ll open in first quarter next year. To say we’ll open up left and right wouldn’t be correct. Even though the price point is right and the concept is right, there are other factors not helpful in growth right now, like the availability of money.