Q&A with Dan Stone, VP of Franchise Development at The Melting Pot
Fresh after opening its first fondue restaurant outside of North America, in Jakarta, Indonesia, this March, The Melting Pot is continuing its international expansion with new restaurants in Dubai, Riyadh and Mexico City, among a total of 20 international units currently in development.
For Dan Stone, vice president of franchise development for Tampa, Florida-based Front Burner Brands (The Melting Pot's management company), the expansion has meant a lot of travel, partnering with experts in international work and being prepared for unexpected setbacks while chasing the prize of growth in some of the world's fastest growing cities.
Franchise Times: What's behind your big international push?
Dan Stone: In 2008, we [noticed] nobody else is doing what we do outside of the United States. We own fondue in the U.S., why not own it globally? We [decided to] focus our efforts on some international markets. We would hate to look back and say why didn't we take this brand outside of the U.S.?
FT: How did you actually begin the process of researching international expansion?
DS: We hired Edwards Global Services (EGS) ... to decide whether an international strategy makes sense, what countries make sense to pursue and what countries to avoid for a variety of reasons. They utilize feedback from consultants living in dozens of countries, as well as different variables like what's the political climate in that region or country, what's the ease of starting a new business in that part of the world, what kind of legal concerns are there, what type of market potential [exists].
FT: What came of that research?
DS: At the end of the day what we've learned is that many other cultures place a higher value and importance on dining and spending time with family and friends over every meal. That really goes well with The Melting Pot — a celebration of life's moments centered around food.
FT: Crafting and managing an international expansion strategy sounds very challenging. Are you having some fun along the way?
DS: It's fun, probably even intoxicating, but you've got to balance that with the due diligence of understanding [if] the brand makes sense to go international. Will it translate? Is the franchisor prepared to commit the necessary resources, and do they have the infrastructure to support that? It's not going to be easy. And then you have to find the right partners.
FT: From an outside perspective, the Middle East doesn't seem like the most natural turf for The Melting Pot.
DS: There's so much money over there, and so much interest in Western brands... It's very easy to get excited about that, and it's very easy to want to take a brand to another part of the world. It has been more work and harder than we even expected. Would we do it all again? Yes, but we thought we were thorough and realistic in our expectations. Even with that, it's been harder than we thought it would be.
FT: What has been an unexpected challenge?
DS: Being able to set up the recipes in another country, securing the appropriate products and the ongoing maintenance of making sure those recipes are being adhered to has been a much bigger challenge than we anticipated.
FT: What's been the very toughest part?
DS: In Saudi Arabia we were aware of a lot of the cultural differences there and knew there would need to be no alcohol, no pork, the beef would need to be halal-certified... We have a restaurant in Riyadh that has been developed for a year and it literally has place settings on the table, but it is still not open yet. There's a dispute between the landlord and the government. That's not unique to us. There's an Outback in Saudi Arabia that has had a similar situation happen to them...
FT: It seems like you may have chosen some of the most challenging markets to expand to...
DS: I think that's probably a fair statement. We've dealt with some interesting challenges that will make our entry into some other countries seem a lot easier by comparison.
FT: What's your parting advice about going international?
DS: Somebody who sugarcoats the effort that it takes to go international is kidding themselves and the audience that they're speaking to. I'm not trying to scare people. The opportunity is real—some well known brands get more of their revenue in international markets than they do domestically.