Warren Thompson has been gobbling up restaurant brands for a few years now, but he’s still hungry. The founder and president of Thompson Hospitality said he is looking to acquire a coffee brand, something in the dessert category and/or a salad concept.
It’s the continuation of a growth tear of late for the Reston, Va.-based Thompson Hospitality. The multiconcept operator has about 70 restaurants across about 15 brands. Most are in the Washington, D.C., area, but the company is now growing in Columbus, Ohio, where the group opened the new high-end steakhouse Cut132 earlier this year. And Thompson has sights set on expanding in South Florida, where the group is also bringing several of its brands.
Thompson has been orchestrating synergistic growth of the group’s restaurant portfolio both by creating new concepts and through acquisitions.
Over the past few years, the company has picked up Matchbox (acquired in 2020 out of bankruptcy), which now includes about 14 restaurants, as well as the now 10-unit Big Buns Damn Good Burgers (acquired in 2018), the 10-unit Milk & Honey (2020) and four units of Wiseguy Pizza (2022), all of which are expanding.
The group also pulled in the three-concept Velocity Restaurant & Hospitality Group at the end of last year, which brought in the brands Locals Tacos and Tequila, Velocity Wings and Social House Kitchen & Tap, all in the D.C. area and Virginia.
And that’s just the retail restaurant side of the business.
Thompson Hospitality is also the largest minority-owned foodservice management company in the country. The group has a joint venture with foodservice giant Compass, and a separate solo division that handles many historically Black colleges and universities, or HBCUs, for example, and other accounts.
Between the joint venture and solo operations, Thompson Hospitality has more than 200 accounts doing well over $2 billion worth of business, including business and industry, large universities, hospital centers and some K-12 school districts.
It’s a blueprint borrowed from Marriott, where Thompson started his career after being recruited out of the University of Virginia MBA program. He spent nine years with Marriott, for a time leading the airport division. His team was among the first to bring national restaurant brands into airport foodservice 33 years ago, he said.
When Marriott began to move away from restaurant ownership, Thompson saw an opportunity to get his own dream of entrepreneurship started. In 1992, he bought what ended up being 31 Bob’s Big Boy restaurants in the Washington market, most of which he converted to Shoney’s.
It didn’t go terribly well, Thompson said.
But his goal was to move into contract foodservice, as Marriott had done. So he accelerated that plan—a move that proved quite successful.
Over the next three decades, Thompson Hospitality would grow into a large family-run operation with four divisions: The joint venture with Compass and the solo foodservice management operation, which together account for about 70% of revenues. A facilities management division accounts for another 10%.
And the retail restaurant side accounts for about 20% of the group’s business overall. But with the growth Thompson is planning, he expects it will account for about 45% within the next three years.
The strategy is to move into five to seven markets and cluster the brands to take advantage of synergies and the marketing opportunities of operating restaurants in close proximity, Thompson said.
The company is in the process of creating an umbrella brand that will be called the Thompson Family of Restaurants, which will have a loyalty program that will allow guests to earn rewards for dining at any of the group’s restaurants.
Doing that will require an investment to bring all of the outlets under the same POS system, a process underway. Thompson expects about 40 of his restaurants will have the new Toast system by the end of this year.
Thompson added 22 restaurants last year, and expects to add another 20 or so this year, which means the group will end 2023 with about 85 to 90 restaurants.
“In D.C. we have roughly 60 restaurants and I think there could be 120 to 150 in three years across all our brands,” Thompson said. “Our strategy is not to go to 20 to 25 markets with restaurants. It’s to go to maybe five to seven markets and try to grow the various brands within those markets and take advantage of synergy, marketing and operating several brands in close proximity.”
And, right now, Thompson feels that portfolio has a few holes.
“We’re looking now for a coffee partner to acquire, something in the dessert category and something in the salad area,” he said. “Those are three holes that we have in the portfolio today that I’d like to find a brand that we can partner with, or acquire or acquire a portion of. In most cases, when we do acquire a brand, the owners stay on.”
Hotels are another growing opportunity for the group.
Thompson Hospitality owns a Homewood Suites by Hilton near the company’s headquarters. The hotel has an extra-large kitchen, which is used as a training facility.
The group is positioning to develop more restaurant brands for hotels and taking on all food-and-beverage operations. The new modern steakhouse Cut132 in Columbus, for example, is in an Aloft Hotel.
Moving into Ohio was a bit of a fluke, Thompson said. The hotel had originally planned a different restaurant concept but the deal fell apart while the hotel was under construction, and Thompson, an investor in the hotel, stepped in.
Cut132 has been a hit and now Thompson sees Columbus as a growth market, with the steakhouse as an anchor. He plans to bring other Thompson Hospitality concepts to the city. In addition, Thompson said the plan is to bring Cut132 to the D.C. area and South Florida.
“We’re actively looking into going into existing hotels, maybe where the restaurant has either failed or it’s a new opportunity in a new hotel, and going in and taking over the food and beverage and putting one of our brands in, or creating a brand specifically for that particular opportunity. It’s a great niche,” he said. “We’ve always been in the contract foodservice business and we’ve always been in the retail restaurant business. So [we’re] kind of putting our strengths together as a contract operator and a restaurant operator.”
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