Continue to Site

    How to Evolve and Thrive in a Trend-Centric Industry

  • Melt Shop launched as a grilled-cheese concept at the height of the fast-casual boom, but pivoted to maximize its growth potential. Here’s how it pulled that off.

    Melt Shop
    Melt Shop's Chicken Bacon Ranch melt started as an LTO but was later added as a permanent menu item.

    There was a time in the first half of the 2010s when restaurant concepts with a very narrow  menu focus took off with the success of the fast-casual category. Restaurants with menus designed entirely around foods like hot dogs, meatballs, and popsicles popped up around the country, picking up steam with plenty of attention from consumer media.

    Grilled cheese was another dish that found a home in the fast-casual category, with several concepts serving a premium take on the traditional melted cheese sandwich. From Tom + Chee in Cincinnati to The Melt in San Francisco, many brands charted a course for major franchise success with grilled cheese as their compass.

    Melt Shop was among the early entries to the grilled-cheese fast casual space, opening its first location in New York City in 2011. But, unlike some other grilled-cheese brands, Melt Shop successfully evolved into a melted sandwich concept whose menu now includes everything from chicken melts, burger melts, and salads to chicken tenders and milkshakes.

    Melt Shop founder and CEO Spencer Rubin sat down for a conversation on QSR’s “Fast Forward” podcast to discuss his tips for success and how to evolve a brand with the times.

     

    1. Set goals and work toward them

    Rubin knew he wanted to enter the restaurant industry from a young age. He decided when he was eight years old that he would attend Cornell, and he later determined that he wanted to own his own business by the time he was 25.

    Sure enough, he earned a degree from Cornell and he opened the first Melt Shop restaurant on his 25th birthday. 

    “I just set goals in my life to hit certain milestones,” he says. “It’s crazy when you do that, and you work at it, right? Things happen.”

    Most importantly, Rubin recognized the experience he would need to get to a place where he could open his own restaurant. Out of college, he chose to take a job with a restaurant development company overseeing construction so he could learn what it takes to literally build a restaurant from the ground up. While he says he didn’t master restaurant construction, the 50 or so projects he was involved with did give him a solid understanding of certain efficiencies to pursue during the build-out process.

    “Restaurants are very capital-intensive, and a lot of restaurants fail because they're out of business before they even open their doors; they overspend in the construction process,” he says. “They don't have any working capital once they do finally get their project complete. And it takes a little bit of time to ramp up a new location and new concept. If you don't have working capital to get through that, it's hard to really get something going.”

    Melt Shop
    Founder and CEO Spencer Rubin opened the first Melt Shop in New York on his 25th birthday.

    2. Find good business partners and learn from them

    Another benefit of Rubin’s construction experience? He met John Rigos and Andy Stern on one of the jobs. Rigos and Stern were Five Guys franchisees, and, like Rubin, were interested in starting a concept from scratch.

    The three of them started meeting weekly to discuss possible new restaurant ideas. That led to a business partnership and, eventually, to the opening of Melt Shop.

    But it didn’t stop there. Rigos and Stern founded the New York–based restaurant incubator Aurify Brands to continue developing new concepts beyond Melt Shop. That led to the creation of fast casuals The Little Beet, Fields Good Chicken, and MAKE Sandwich, as well as the full-service outlet Little Beet Table.

    The company is set up in such a way that each of the brands has a unique team and leadership structure, but they share resources and knowledge as a collective in order to support each brand’s expansion.  

    “I think the most interesting part about working for Aurify is the fact that we're working across from all of these different founders, so we're working next to people that are kind of going through similar things at the same time,” Rubin says. “So there's a lot of learning there, because they're all kind of emerging concepts. You get the benefit of not doing all the trial and error on your own dime.”

     

    3. Recognize when you need to pivot

    Before Melt Shop, the first restaurant idea Rubin, Rigos, and Stern worked on was a doughnut concept. Rubin says the team developed the idea for about six months, but eventually decided that it wasn’t something with legs.

    “I just didn't feel like it had 1,000 units scale potential,” he says. “And it just didn't feel like something that drove frequency at the level that I think you need to have a really sustainable, growing concept. I'm sure there are some amazing doughnut concepts out there, don't get me wrong, but I just wasn't that jazzed about it.”

    Grilled cheese stuck out to Rubin, he says, because it had the most white space nationally. He points out that burgers and pizza were both thriving in the fast-casual category at the time, and to him, grilled cheese wasn’t all that different from those two items.

    “They're both cheese and bread and protein and sauces,” Rubin says. “And it's like, all right, grilled cheese really kind of has all those similar qualities. It is a completely new space, but it's something that's really approachable and familiar to a lot people out there. Why isn't there a concept that owns the space? And that's how Melt Shop was really born.”

    The pivoting didn’t end with abandoning the doughnut concept. After opening Melt Shop, Rubin and his team eventually realized they would need to evolve beyond grilled-cheese sandwiches in order to appeal to a wider audience. They evolved the concept to encompass melted sandwiches in general, and now the menu features a variety of hot sandwiches (among other items) that satisfy many tastes and need states.

    Rubin says his advice to foodservice entrepreneurs is to assume change will happen; no idea is fully formed out of the gates.

    “What you put out to the market day one is not going to be what the end product ultimately becomes,” he says. “There's a lot of trial and error there, and you need runway to figure those things out. Build yourself runway, is my best piece of advice I could give anyone. Make sure you have enough working capital to get you through the first year of your business so you can figure things out.”

     

    4. Get your process (and equipment) right before scaling

    The first Melt Shop opened in a 300-square-foot vented kiosk in Midtown Manhattan that previously housed a deli. Rubin says it was run down but had good infrastructure and was perfect to launch the brand; Melt Shop had long lines from day one.

    When the second location opened at 26th and 6th in New York’s Chelsea neighborhood, he says, the team was able to learn more about systems and how a typical Melt Shop might look in other cities. The only problem was they didn’t like what they saw.

    “We realized pretty quickly that in order for us to have scale potential, we really needed to work on our throughput times, because we didn't think that a 10–12-minute check was going to set us up for success for national growth,” Rubin says.

    That set Rubin on a quest to find the best cooking technology that could scale along with Melt Shop. At first the answer was a high-tech panini press, but Rubin says the equipment ended up being a “train wreck,” so Melt Shop switched back to griddles and “went back to the drawing board to try to figure out how to get our processing time down.”

    “Getting the mechanics of the kitchen right and tight was my No. 1 priority,” Rubin says. “So I literally spoke to every major manufacturer in the country. I went to the Middleby headquarters and tested all their ovens and went to a bunch of other companies, just really trying to figure out, what does our prototype need to look like to ensure we're delivering the highest-quality, most consistent product possible?”

    Eventually, Rubin opted to swap out the griddles in favor of conveyor technology that successfully brought Melt Shop’s ticket times down to 4–5 minutes.

    “I think people really underestimate how hard it is to make a grilled cheese at scale,” he says. “I think it is harder than a pizza. It's harder than a burger. And that was my problem to solve.”

    Melt Shop
    Melt Shop has 20 locations and is rapidly expanding through franchising—particularly in nontraditional locations like malls, kiosks, airports, and sports arenas.

    5. Discipline your growth

    Once Rubin and his team had fine-tuned Melt Shop to a point they felt it could grow, they started expanding across the New York City area—slowly. Despite intentions to become a national concept, Rubin says, the team didn’t want to rush it.

    “The idea early was like, we want to scale this thing big,” he says. “But you’ve got to crawl before you walk. We were like, let's figure out the concept for the first few years, and then we'll decide how we're going to get there.”

    The team was fairly certain it would franchise, particularly because Rigos and Stern had franchise experience with Five Guys and Subway before it. But Melt Shop didn’t announce its franchising program until 2017—six years after it launched, and after opening eight corporate locations between New York, Pennsylvania, and Minnesota (a shop in the Mall of America). At that point, Rubin says, the team felt like it was in a position to accelerate growth, and announced that it aimed for 100 locations in five years through franchising.

    That kind of patience has helped Melt Shop in other ways. The restaurant industry is one of the fastest-evolving industries, with new tools and trends coming to market seemingly every day. And the last few years in particular has seen a crush of new technology offerings—like third-party delivery services and other off-premises tools—that foodservice operators have been forced to choose among.

    While delivery is “table stakes” in New York, Rubin says, Melt Shop hasn’t reinvented the wheel for the sake of off-premises business and high-tech operations.

    “I've decided to take a more patient approach to how we look at the business from a technology standpoint, because there are lot of shiny objects out there, right?” he says. “And I think a lot of people jump really fast to try the new thing, and it takes a lot of bandwidth, testing new technology or onboarding new technology. It’s expensive. It could be a distraction. It may not benefit the business at all. So, being super methodical or disciplined with how you're testing things or onboarding things is really important.”

     

    6. Carve out a niche

    Melt Shop now has 20 locations in six states, with franchise agreements in place to continue its expansion. The decision to evolve from a grilled-cheese concept to one serving melted sandwiches was prescient; the era of super-narrow menus is mostly over, and grilled-cheese brands failed to gain traction across the U.S. in a major way. Not only that, but Melt Shop also now occupies a unique niche, offering a menu that’s much different than sandwich staples like Subway, Jersey Mike’s, or Firehouse Subs.

    There’s one other way Melt Shop chose a path less traveled, and that’s with real estate. The brand found early on that nontraditional locations were a great fit, particularly because the operation doesn’t require a huge footprint, and the menu is highly portable for on-the-go consumers. That’s a big reason why nearly half of its locations are in malls, with another one in an airport.

    “The nontraditional opportunities are where we're really starting to double down,” Rubin says. “And I think our product is just perfect for those environments—we do a ton of music festivals, and the U.S. Open every year. People go absolutely crazy for Melt Shop in these moments.”

    Now Melt Shop is specifically designing its store prototypes to fit nontraditional footprints, whether it be a food court, kiosk, airport, or sports arena.

    “But those are temporary moments,” Rubin says. “We're trying to now take those learnings and find places that have that kind of fanfare, but more full time.”