TO WATCH (Tampa Bay): Bob Johnston

ENTREPRENEURS TO WATCH: TAMPA BAY

The Melting Pot

Bob Johnston

Bob Johnston's best decision as an entrepreneur is one he admits he would never recommend to his children.

The decision: At 21, dropping out of college, marrying his wife and moving from Tallahassee to Tampa to help run a little fondue restaurant business called The Melting Pot in 1985.

"We saw this tremendous opportunity," Johnston says.

With sales of $217 million, 132 franchisees and 5,000 employees last year, Johnston's hunch about The Melting Pot was right. But success came after years of pain and corporate soul searching.

The first 10 years, the company opened 19 restaurants. It lost a few along the way. "Not good growth," recalls Johnston, 43, president and chief operating officer.

In 1995, at age 31, Johnston and his brothers Mark and Mike were trying to get the 19 franchisees to do business a different way. Previously, they were focused on profits first, customers and the team-member experience, second.

Gradually, they introduced a customer-first model for business, a new menu and had trainers work with the franchisees.

The Melting Pot didn't have a mission statement, so it wrote one: "Total guest satisfaction." The Melting Pot became known as a special occasion restaurant where guests would escape and create memories.

"We wanted to make the guest experience perfect, whether it was a graduation or anniversary," Johnston says.

The new strategy worked. In the next 10 years, The Melting Pot increased its restaurant count from 19 to 100. Average restaurant volume tripled.

Unlike the early days, when management tried to provide all the answers, this time, The Melting Pot turned to its franchisees and employees for ideas on the turnaround. Some did not buy into the new model.

It also hired Kevin Frieburg, professor, speaker and author of "Nuts," a book about the success of Southwest Airlines, to help develop the new model.

Another business author, John DiJulius, who wrote, "What's the Secret?" which features The Melting Pot, also helped pen the new mission statement.

The company plans to add 17 more franchisees this year. It has recently opened locations in Buffalo, N.Y. and Spokane, Wash. It has 43 restaurants under development.

Johnston says being an entrepreneur is especially important in the restaurant business because it allows someone to stomach the risks that you have to take.

"You take the plunge," Johnston says. "You try new things."

The Melting Pot has also brought in industry consultant Jim Sullivan, who has talked at many Melting Pot conferences. His trademark advice: If you always do what you always did, you'll always get what you've always got. Never rest on your laurels. It is never good enough.

The Melting Pot is also trying to grow another restaurant, Grillsmith. It will open its fifth location in Wiregrass (Wesley Chapel, in south Pasco County) late this year.

It is also developing a third concept, a wine bar/small plates restaurant, similar to tapas. While there are opportunities, it is also a challenging time again for restaurants, Johnston says.

"It's the perfect storm," he says. "Costs are increasing. Guest counts are slackening. There's a lot of downward pressure. We know, we've been here before. We don't let it change who we are. We don't change portions. We stay really focused. At times like this, all of us feel budgetary pressure. But people will all eventually want to enjoy themselves all the more."

BY THE NUMBERS

the MELTING POT

Year Revenues % Chg.

2005 $160 million -

2006 $194 million 21%

2007 $217 million 12%

Three-year ave. rate 16.5%

Employees

2005 4,500

2006 4,750

2007 5,000