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How Much Does It Cost to Open Melting Pot Franchise?

Do you want to open a restaurant business by buying Melting Pot franchise? If YES, here is how much it cost to open a Melting Pot franchise successfully. Melting Pot Restaurants, Inc. started operations in 1975 and they began selling franchise in 1984. They have their corporate headquarters at Tampa, Florida and presently they have an estimated 110 franchise units in operation.

The franchisor is The Melting Pot Restaurants, Inc. The franchise is for the establishment and operation of restaurants featuring fondue and offering a wide variety of food and beverages, including required alcoholic beverages, under “The Melting Pot” trade name and business system. Here are areas where you are expected to spend money and the cost associated with it;

Financial Requirement & Fees to Open a Melting Pot Franchise

1. Initial Franchise Fee: $45,000

Please note that the current initial franchise fee is $45,000. The initial franchise fee for Restaurants that are developed under a Development Agreement after the first restaurant is one-half of the current initial franchise fee.

2. Real Estate Services Fee: $2,500

3. Real Estate (Rent – First 3 Months): $28,500 to $68,750

While some freestanding buildings and mall shopping centers may be suitable, a typical The Melting Pot Restaurant should occupy between 4,000 and 5,500 square feet of leased space in an upscale strip shopping center near a substantial number of middle and upper income managerial and professional residential neighborhoods.

Please note that the annual rent for such space is estimated to range from $114,000 to $275,000, and may be more. The initial investment assumes you will rent.

4. Security Deposit: $10,000 to $20,000

Please note that the franchisor estimates that the security deposit will equal one month’s rent.

5. Leasehold Improvements: $430,000 to $640,000

Cost of leasehold improvements, which include floor covering, wall treatment, counters, ceilings, painting, window coverings, plumbing, electrical, carpentry and related work, and contractor’s fees, will vary significantly depending on the condition, location, and size of the premises; the demand for the premises among prospective lessees; contractor and labor costs; and any construction or other allowances granted by the landlord after negotiations.

Please note that these costs also include estimated impact and permit fees.

6. Computer and Point of Sale Hardware/ Software: $8,600 to $20,500

The franchisor’s estimate for the back office computer and point of sale (POS) hardware and software expenses assumes that you will purchase a computer and peripherals with the most current Microsoft Windows operating system capable of running Microsoft.Net, color monitor, cable or DSL modem, and laser printer.

Please note that this estimate includes the POS remote terminals, remote printers, cash drawers, power supplies, hubs, related cable requirements, POS software, and integrated credit card software.

7. Computer Software Installation and Training; First Year Subscription: $8,500 to $8,900

You must subscribe to Data Central, a restaurant management software system from Accsys, Inc., d/b/a Restaurant Magic Software, The Melting Pot’s current prescribed system. This software, used to control inventory and determine the target cost of goods sold, is an essential management tool.

Please note that you must order the Data Central software through the franchisor.

8. Gift Card Processing, Search Engine Optimization Fee, and Customer Survey Services (3 months): $677 to $747

Please note that the Melting Pot currently requires you to pay for gift card processing services and customer feedback services, which you must order through the franchisor. So alos it is important to mention that these services are provided by third parties that bill the franchisor collectively for all Restaurant locations. The franchisor covers the cost of these services and re-bills the franchisees for them, at cost.

9. Restaurant Equipment, Furniture, Fixtures, and Signage: $275,000 to $350,000

Please note that the low end of the range assumes that you will either take over an existing restaurant space with some of these items already in place, or purchase used equipment. The high end of the range assumes that all new equipment is purchased.

10. Utility Deposits: $2,000 to $5,000

11. Opening Inventory and Supplies: $25,000 to $50,000

Please note that the difference between the low and high range (4,000 square feet to 5,500 square feet) is attributable to the actual size of the Restaurant and the amount and variety of the food, beverage, and alcoholic products, smallwares, janitorial and paper goods, and other materials and supplies necessary for the opening of the Restaurant in compliance with the franchisor’s prescribed standards.

12. Grand Opening Advertising: $8,000 to $15,000

13. Training Expenses: $23,500 to $39,000

You must provide or purchase a laptop and have it available during initial training in Tampa, Florida. The estimated cost of the laptop computer is $1,000. Training expenses also include hotel, airfare, food, and payroll for 3 owners/managers to attend the initial training program and the initial order of hiring and training materials for the new restaurant opening.

Please note that this estimate does not include additional training fees which would apply if more than 3 people attend initial training. The franchisor will train up to 4 people at no charge.

14. Licenses – Alcoholic Beverages, Business, and Health: $6,000 to $10,000

You must obtain, at your expense, all required permits, licenses, and approvals for construction and operation of your Restaurant. Please note that the franchisor also requires you to obtain a license or permit for the sale of beer, wine, and liquor. The cost of the beer, wine, and liquor license varies substantially from state to state and county to county.

15. Insurance: $3,000 to $6,000

Please note that you must obtain insurance in the amount and types of coverage the franchisor specifies.

16. Legal: $2,000 to $6,000

17. Accounting Firm: $8,500 to $10,000

Please note that you must use the accounting firm the franchisor designates or approves for a period ending no sooner than one year from the date your Restaurant opens for business.

So also, after one year, the franchisor may require you to continue using a designated or approved accounting firm, or the franchisor’s internal accounting services, at its discretion, if you fail to submit required financial statements or reports in a timely manner, or if the financial information is not accurate.

18. Reservation System (3 months): $1,750 to $3,500

Please note that the Reservation System fees range from $7,000 to $14,000 per year and are paid monthly. This estimate is for the first 3 months of the operation of your Restaurant.

19. Additional Funds (3 months): $85,000 to $145,000

This item estimates your additional initial start-up expenses. This estimate includes payroll costs for your General Manager, Assistant Manager, Kitchen Manager, and restaurant staff. Additional funds also include loan origination fees, loan closing fees, potential SBA loan guarantee fees, and other various costs.

Please note that these figures are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the business.

20. Total Estimated Initial Investment Under the Franchise Program: $973,527 to $1,445,897

Please note that the franchisor relied on its experience from opening restaurants in the past and its experience in the restaurant business to compile these estimates.

In Conclusion;

  • Total Estimated Initial Investment under the Franchise Program (Excluding Real Estate Purchase Costs) = $1,391,820 – $1,774,210
  • Development Fee (Includes $20,000 Initial Franchise Fee for the first Restaurant) – $10,000 – $40,000
  • Total Estimated Initial Investment under the Area Development Program (Excluding Real Estate Purchase Costs) – $1,404,320 – $1,824,210