The Original Mel's Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$620,000 - $1,546,000
Franchise Fee
$20,000
Min Cash Required
$30,000
Total US Locations
14
Business Summary
The Original Mels Diners Franchising Co. offers a franchise system to operate a 1950s family-style diner restaurant. The Original Mels restaurants feature home-style cooked comfort foods like pancakes, omelets, corned beef hash, chicken fried steak, Melburgers, sandwiches, fries, chili, soups, salads, shakes, sundaes, and ice cream, along with wine and beer. These diners provide customer seating as an integral part of their design, in addition to take-out service. The Original Mels introduced a ghost brand called NYC Chopped Cheese in 2023, which certain franchisees may be permitted to offer for delivery only. The Original Mels is also exploring a fast-casual dining style where guests order at a counter and pay before eating.
Corporate History
The Original Mels restaurant system was originally founded by David Melvin "Mel" Weiss around 1988. From 1994 to 2015, the system was owned and operated by its predecessor, The Original Mels, Inc. (TOMI), which also licensed The Original Mels restaurants. The current franchisor, The Original Mels Investment Group LLC, was incorporated on January 14, 2014, and acquired TOMI's assets and franchisor rights in a merger in December 2014. Since then, The Original Mels Investment Group LLC has owned and operated restaurants similar to the franchises it now offers. In May 2016, the franchisor also began operating under the name ONE Foodservice Management and Investment Co., which serves as a buying cooperative and consulting service, with plans to spin off these activities within two years.
Financial Overview
Investment Range
$620,000 - $1,546,000
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$35,000
Minimum Cash Required
$30,000
Royalty %
4.5%
Marketing %
1%
Equipment Costs (Low)
$446,000
Equipment Costs (High)
$1,130,000
Working Capital
$90,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The Original Mels Diners Franchising Co. has audited financial statements that received an Unqualified Opinion from its independent auditor for the periods ending December 31, 2023, and December 25, 2022. This indicates that the financial statements present fairly, in all material respects, the company's financial position and results of operations. The company reported positive members' equity of $6,333,780 in 2023 and $6,031,743 in 2022, and net income of $302,037 in 2023 and $2,930,542 in 2022. While current assets were slightly less than current liabilities in 2023, the overall financial health shows positive equity and profitability, with no going concern qualification noted by the auditor.
Financing Details
The Original Mels Diners Franchising Co. does not offer any direct or indirect financing to its franchisees. Additionally, the franchisor does not guarantee any notes, leases, or other obligations of its franchisees.
Performance Metrics
Total US Locations
14
Franchised Units
10
Corporate Units
4
Avg Square Footage
3,750
Franchising Since
1994
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
The Original Mels Diners Franchising Co. disclosed one past legal issue. In May 2016, the franchisor sent a voluntary Notice of Violation to several franchisee owners, reporting that its predecessor had failed to obtain franchise registration and provide required disclosure information when those franchisees purchased their The Original Mels restaurants. The franchisor offered these franchisees the opportunity to leave the system and receive refunds, but none of them accepted the offer. The franchisor states that no other litigation is required to be disclosed.
Bankruptcy History
The Original Mels Diners Franchising Co. has no bankruptcy history to report for itself or its key personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew a The Original Mels franchise, franchisees must meet several conditions. They need to provide written notice of their intent to renew at least 12 months before their current term expires. The franchisee must not be in default of any material part of their Franchise Agreement. When giving notice and at the time of renewal, The Original Mels restaurant must be in first-class condition, clean, neat, sanitary, and adequately lighted, with all reasonable repairs and replacements made, and all employees appearing clean and neat. All monetary obligations to the franchisor must be paid. The franchisee will pay The Original Mels Diners Franchising Co. a $2,500 fee to cover renewal processing expenses. Both the franchisee and the franchisor must sign a mutual general release of known claims. The franchisee must also provide a copy of their lease, showing they can possess the premises for the entire renewal term, and make any reasonable improvements or alterations required by The Original Mels Diners Franchising Co. to meet its current specifications.
Training & Support Program
Franchisor Assistance
The Original Mels Diners Franchising Co. provides extensive support to its franchisees, both before and after opening. Pre-opening assistance includes general guidelines for site selection, approval of the chosen site within 180 days, provision of a general interior layout design, and a list of approved suppliers for equipment, decor, furniture, and inventory. The franchisor offers an extensive training program for the franchisee, their general manager, and the kitchen manager, along with online or printed modules for other staff members. Franchisees receive a loan of the Operations Manual. The Original Mels Diners Franchising Co. also helps with initial staffing levels and scheduling, conducts a pre-opening final review, and assists in preparing a 12-month business plan. After opening, The Original Mels Diners Franchising Co. sends personnel to the restaurant for up to 10 days to assist with initial setup and staff training. A representative visits the restaurant at least once every two weeks for 60 days post-opening to help with objectives. Ongoing support includes periodic training for new products and operational procedures, regular certification examinations, and training materials for supervisory employees. The franchisor also distributes schedules for management courses and information on equipment maintenance and legal requirements. They provide updates to the Operations Manual, mandatory menu pricing guidelines, advice on best business practices, and consultation on operating problems. Franchisees also have opportunities to attend conventions and regional meetings.
Initial Training Hours
176
Training Location
Sacramento, California
Ongoing Support
After opening, The Original Mels Diners Franchising Co. provides ongoing support through a variety of channels. Personnel are sent to the restaurant for up to 10 days at opening to assist with initial setup, furniture placement, Point of Sale (POS) training, and general staff training. A representative visits the restaurant at least once every two weeks for the first 60 days after opening to help implement additional objectives. The Original Mels Diners Franchising Co. offers periodic training when new products or operational procedures are introduced, and may require attendance at these programs. They also conduct periodic certification examinations to measure proficiency in skills taught during initial training. Franchisees receive training materials for supervisory employees, current schedules for management courses, and information on equipment repair and maintenance. The franchisor publishes legal and regulatory updates, designates continuing inventory and supplies, and provides advice and consultation on restaurant operations, including new developments in management and food services. They also update the Operations Manuals and provide mandatory guidelines on menu prices. Franchisees receive information on best business practices and advice on operating problems discovered from reports or inspections, and are offered opportunities to attend franchisee conventions and regional meetings.
Franchise Requirements
Ideal Candidate Profile
The Original Mels Diners Franchising Co. seeks franchisees who are committed to direct, on-premises supervision of their restaurant and are willing to devote full-time energy to its management and operation. For Area Developers, an "Operator" must be designated who has sufficient experience in operating a restaurant of this size and type to effectively manage day-to-day operations and demands, reflecting well on The Original Mels brand and reputation. This includes maintaining customer satisfaction, ensuring health and safety compliance, managing staff, and accurately reporting revenue.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
full-time
Territory Type
limited
Territory Size Requirements
The Original Mels Diners Franchising Co. defines a territory based on population density. The average territory size is a 3-mile radius around The Original Mels restaurant. However, the franchisor retains the right to adjust this size, granting a smaller radius in very dense areas and a larger radius in more sparsely populated areas. While a territory is granted, The Original Mels Diners Franchising Co. reserves the right to place other The Original Mels diners within a franchisee's territory if it is in a "Non-Traditional Location" such as a large shopping mall, sports arena, airport, military base, or college campus. Additionally, the franchisor and its affiliates may develop "express/fast casual" businesses or other brands with similar products and services in the area, although they will not place these within the protected territory of an existing The Original Mels franchisee.
Staffing Notes
The Original Mels Diners Franchising Co. requires franchisees to maintain sufficient staffing to ensure customer satisfaction and consistent service. The franchisee or a franchisor-certified manager must provide direct, on-premises supervision of The Original Mels restaurant, dedicating full-time energy to its management and operation. The franchisor offers advice on initial staffing levels, scheduling, training guidelines, and job descriptions, and provides training materials for supervisory employees. All employees are required to wear The Original Mels branded shirts as part of a standard dress code.