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A pot of gold for fondue franchisee

With the help of a national company, restaurateur Mira Selbo is successfully reviving a '70s fad in Orange County.

October 04, 2007|Leslie Earnest | Times Staff Writer

Like many baby boomers, Mira Selbo had her first brush with fondue in an avocado-green earthenware pot her parents owned and that her older sister would haul out for parties.

"Way back when," Selbo recalled, not very affectionately, "it was like melting Velveeta."

That was in the '70s, when fondue (from fondre, French for "to melt") oozed its way into the American culinary consciousness.

Today Selbo is the owner of three Melting Pot restaurants in Southern California, including one in Irvine that in the fiscal year that ended in July recorded $4.2 million in sales, more than any other Melting Pot in the nation -- and there are 120-plus around the country.

"I don't know how it happened," she said. "I'm exhausted."

Selbo, a 47-year-old former interior designer, never fancied herself a restaurateur, and certainly not one specializing in liquefied Gruyere.

But when she and husband Rod were casting about for business opportunities several years ago, they remembered a Melting Pot they had tried and liked. She did some research and learned that the chain hadn't broken into California yet.

"Lots of people, lots of money," she remembered thinking. "That would be a great place to take the concept."

Even better, she wouldn't have to go it alone: Melting Pot Restaurants Inc. is a franchise operation.

Selbo said she doubted she would have ventured into the restaurant business on her own.

"The thought of hiring a chef and coming up with a full menu -- that's overwhelming to me," she said.

When it comes to restaurants, the statistics are on the franchisee's side. Only about 5% of franchisees fail while about 70% of individually operated eateries fold within the first two years, mainly because they run out of money, said Janet Lowder, president of Restaurant Management Services, a consulting firm in Rancho Palos Verdes.

Typically, the franchiser provides the game plan, menu, marketing expertise, training and consulting services. In return, the franchisee plunks down start-up money, pays an annual advertising fee and gives the franchiser a percentage of gross sales. Melting Pot Restaurants, in business since 1975, charges a $35,000 start-up fee, 4.5% for royalties and 0.5% for advertising.

"Franchisees will generally succeed where independents won't, assuming they have a franchiser who provides the benefits and services," said Barry Kurtz, an attorney in Encino who specializes in franchise law. But it can be tough to work within the strict confines laid out by a franchiser, he added, because entrepreneurs tend to want to "make their own secret sauce."

Selbo can testify to that. She said she had her hand slapped when "we tried to get a little too creative" -- adding meatballs with spicy marinara sauce to the menu, for example.

"We got in trouble for that one," she said. "They were so good."

But she decided that "that's a battle we don't need to fight. They're making it easy for us. Let's go with the flow."

She did and after enjoying success in Irvine opened locations in San Clemente and Brea.

One lesson learned, Selbo said, was that if you're going to make a small business work -- even as a franchisee -- you have to tunnel through obstacles no matter how tired you get and not let them block the path.

In Irvine, she said, landlords initially were leery. None had heard of the Melting Pot and weren't keen on the concept. It took Selbo about 18 months to secure a lease.

"People are putting you down. They're like, 'Oh you're not a P.F. Chang,' " she said. "It was very frustrating. You had to get people to have faith in you and believe in the final outcome."

Potential customers were hesitant too. Most people didn't know fondue from frankfurters, Selbo said. Once they got the hang of dunking bread into cheese, steak into broth and strawberries into chocolate, they liked the idea, though not everyone is taken with the notion of plunking down, say, $45 a person for dinner out -- and then having to cook the entree.

"I prefer somebody else do it for me so I know it's cooked to the right temperature," said Heather Washkuhn, a 30-year-old accountant from Newport Beach who was in the Irvine restaurant bar recently dipping bread, vegetables and sliced apples into a pot of melted cheese. "I just get kinda weirded out."

Most people get over it. It's the fun of fondue that has drawn Irvine city planner Stephanie Rubry back to the Melting Pot several times. "You're kind of having dueling fondue forks," said the 47-year-old Tustin resident. "It's not a staid environment. You can't come here and not have fun."

Selbo said the big advantage to being a franchisee was brand recognition. She also appreciates the assistance she gets with advertising. Another bonus: annual "reunions" during which franchisees share ideas and experiences.

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