Melting Pot CEO Bob Johnston joins Yahoo Finance Live to discuss the state of the restaurant industry, inflation concerns, adaptable business models during the pandemic, and the labor shortage.

Video Transcript

ALEXIS CHRISTOFOROUS: All right. Want to switch gears now and talk about the restaurant industry. Because we know the pandemic decimated restaurants, shuttering some 90,000 of them across the US. But here's a success story. Fondue restaurant franchise, The Melting Pot, has reopened all of its restaurants. And sales are actually better than pre-pandemic. Joining us now is Bob Johnston, Melting Pot CEO. Bob, good to have you here. I want to talk about some of the challenges to your business, and to your industry in a moment.

But first, talk to us about this turnaround. Why do you think foot traffic is so strong at your restaurants?

BOB JOHNSTON: Sure. Well thank you for including the Melting Pot story in the conversation today. And I think there are several reasons. The two main ones are that the concept is a very special concept. It's a restaurant where you don't go to just have a meal, but rather you go to escape and create some memories. And some people go there even to pursue their future. And I think that's something that everybody is looking for now is an opportunity to escape what's going on around them, what we've all experienced over the course of the last two years.

But secondly, and I think one of the most important things, all of our locations are franchised locations. This means that they're owned and operated by independent business owners whose neck is on the line. It's important to them and their families that they succeed. And the way that we do that is by providing an experience that brings the guests back again and again.

- And then you said that you actually anticipated some of this inflationary pressure that the restaurant industry has been seeing. How did you then navigate to make sure that you avoided some of those pitfalls?

BOB JOHNSTON: Yeah, well one of the great things about the Melting Pot franchise opportunity is that we have a team of over 50 really talented support folks here in Tampa, Florida that support all of our franchised locations. And one business unit focuses on purchasing and distribution. And this is something they do every day, not just as a result of the pandemic. But they look at what the futures are on various commodities and do very intelligent buying on behalf of the franchisees to try to stabilize or drive down costs where able.

And it's been difficult to drive costs down in this environment, I think for any business, but especially for restaurants. But they've done a magnificent job in stabilizing cost and protecting the profits for our franchisees.

ALEXIS CHRISTOFOROUS: When I think about fondue, just the nature of the meal is one of sharing, of bringing people together around this one pot. And you're sort of dipping your food in there. It's very communal. And I have to think that's not real popular during COVID. I mean, did you have to change protocols within your restaurant to make people be at ease?

BOB JOHNSTON: Sure. Well it's a fair question. And I'm happy to report that we continue to serve our guests in a extremely safe environment pre-COVID, during it, and we will after it. But it's a fair question to ask. And what the numbers are proving is that the guests are finding our environments to be comfortable, enjoyable, and most importantly, they're finding them to be safe.

- And then sir, in this sort of inflationary environment, how worried are you about it's a tight labor market, people are having to pay more for their staff. Is that something that you're concerned about? We've seen the year has gotten off to a really rocky start. There's a lot of economic uncertainty at the moment.

BOB JOHNSTON: Yeah, I mean it's a challenging time for all businesses. And the restaurant business certainly. And we feel very blessed. We have been performing enormously well. 2021 ended up over 22% higher than 2019. You can't comp against 2020 because of what happened there. But we're up 22% in sales. And that's with 2,372 days of zero sales due to COVID related closures in the first part of last year. So it's really tremendous. And we count ourselves to be very fortunate.

Now there's been a lot of hard work that's gone into that. You talk about the labor environment. We were prepared for this. We were in the restaurant business. Finding and keeping good employees is always something that we've had to focus on. So we were ready for this. And our feeling is the best way to create an environment that attracts talented people and makes them want to stay is to focus on them. We don't just give a day's wage for a day's work. We feel committed to taking our team members from where we found them and bringing them someplace else.

We're a stepping stone industry. Nearly all of our team members are on their way to something else. Our job is to create a learning environment, a comfortable environment, a rewarding environment, a fun environment for them while they're with us.

ALEXIS CHRISTOFOROUS: All right. Bob Johnston, CEO of the Melting Pot. Thanks for sharing your story today.