This year, Black Enterprise named Thompson Hospitality, a Black-owned, Virginia-based food service and restaurant firm, its Company of the Year.
The magazine also listed the company, whose sales are well over $300,000,000 per year, on its Top 12 ranking of industrial service companies. Praised for remaining profitable in a downturned economy, Black Enterprise also applauded the business’ sharp eye for investment, its potential for long-term growth and nimbleness in a crowded marketplace of competitors.
Business owner Warren Thompson takes pride in the award. “I have read Black Enterprise now for some probably 25 years or more,” he tells BET.com. “And reading that magazine back in college, and reading about other entrepreneurs back then -- from John Johnson to Reginald Lewis -- the magazine definitely influenced my way of thinking. So to be honored at the 40th anniversary of Black Enterprise was quite a night for my family, as well as other senior executives in the company and for me.”
But how did Thompson become so successful in the food service business, profitably operating restaurant franchises like Austin Grill, Marvelous Market and American Tap Rooms? How does the company maintain a diverse list of satisfied clients that include large corporations, public schools and some 20 historically Black colleges and universities?
I spoke with Thompson about his business, his path to entrepreneurial success and what gets him out of bed every morning to focus on growing and expanding his already successful enterprise.
How did you get started and why did you choose to start a hospitality service company, as opposed to any other line of business?
I grew up in the rural part of Virginia, in a small town called Windsor. Both my parents were educators, in fact, schoolteachers. At a young age growing up in that environment, I didn’t have a lot of exposure to businesses or people who owned them. Most of the people were farmers or worked at the local factories. So, when I was about 12 years old we were out one night eating in a ‘70s restaurant in Portsmouth, Virginia and I said to my parents, “I would like to own one of these one day.” From that point on – I was about 12 years old – I really focused on getting into the restaurant business and starting a hospitality company. Now during those early years, I had various businesses with my father. We raised hogs and we sold produce. And when I was a college student home for the summer, I worked in a hardware store during the day. But at night, I had a concession stand in the local park. I ran my concession business at night during softball games and so forth in the summer. I really had more fun running that at night even though I spent 8 hours a day working for the hardware store. I really looked forward to going to work at night, because that was my own business. I got it in my blood early. After finishing business school at the University of Virginia, I started to work for the Marriott for nine years. I even did the special fast track program Marriott had created in order to get MBAs interested in the hospitality industry. So, that was the perfect opportunity for me to start at the bottom. I started as an assistant manager in a fast food restaurant at one of the Roy Rogers restaurants. Then I moved up through the ranks and ended up as the vice president of the Host International Airport division at Marriott. Then I left and bought 31 Big Boy restaurants through a leverage buyout and started the company in 1992.
In this economy, how have you adjusted your business strategy to stay afloat and stay profitable in this downturned economy many are calling the “great recession”?
Fortunately, we followed the Marriott business plan. I spent nine years at Marriott and I actually spent a lot of time thinking about and understanding the importance of having a diversified portfolio. Back then, Marriott had restaurants, contract food services, hotels, in-flight food service businesses, catering, airport operations, etc. So they really had a pretty diverse portfolio of businesses within the hospitality industry. So that’s exactly how I set up our business plan and model. After the first six months of being in the restaurant business, we quickly moved into contract food services. Soon, we went into the various aspects of the contract food industry from K-12 school districts, to college and universities, corporate dining, hospital businesses as well as operating restaurants. We even got a car wash business. We got quite a bit of diversification that hedges against ups and downs in the economy. So, for example, our corporate dining revenue declined over the last two years, but we saw a tremendous surge in K-12 school districts such as D.C. public schools and other urban school districts. We saw a 9 percent growth among college students in the segment of HBCUs as well as major campuses. We have also seen a major surge in the community college business. So we’ve been able to grow in those segments to offset the decline we experienced in those more retail or corporate dining segments.
What are some of the things that motivate you on a personal level? What keeps you going and inspired?
I think the number one driver for me is to see the growth of people in the company. We have people in the company who have been with us for years and to see their growth and maturity as business leaders is tremendous. Secondly, the ability to give back to my community -- to actively go in and spend time on college campuses talking to students about business ownership. We take pride that we don’t only provide meals but we really provide a strong sense of partnership and family by offering significant scholarships and renovating the cafeterias, using capital from Thompson to fund that. But more importantly all our executives are encouraged to spend a certain amount of time on college campuses, speaking to students, teaching classes on business development or entrepreneurship. That’s probably the one part of my job I enjoy the most: having the opportunity to speak to the students. I spoke to about 600 6th graders recently. From that level to college, is a great time to plant the seeds of entrepreneurship. It is an important part of what I do. The third thing that keeps me going every day is the fact that it is very much a family business. My brother and sister now have children who are getting old enough to recognize it as a family business. And, hopefully, one or two of them will end up getting into the business. The oldest is 11 and he said he will either be a professional athlete or run Thompson Hospitality. I think he will be successful in whichever one he chooses.
Where do you see yourself and the company in 10 years?
Our next major goal is to get this company to the billion-dollar level. I feel that before I turn the reins over to someone else, we can get this company to a billion-dollar annual revenue. That means we will have to acquire some other companies and add some brands to our retail portfolio. We will continue to focus on the major sectors we have down (food services on campuses, corporate dining, providing facility management to those sectors, as well K-12 school districts). Hospitals are going to be a tremendous growth avenue for us. We have three brands -- Austin Grill, the American Tap Room, as well as the Marvelous Market brand. We will grow those brands into both company stores and franchise stores. We are looking for something in the burger or pizza category, a retail brand that we can consequently acquire or develop and begin operating on our contract side of our business as well. So the bottom line is, our goal is to get to a billion dollars in 10 years.
What is the most important piece of advice you can offer a college student who wants to be businessperson or entrepreneur?
I think that there is a high correlation between people who make a decision early on in life about what they really want to do and their success rate. So, I try to encourage them to make that decision sooner than later. It’s kind of hard for me to understand (because I decided on what I wanted to do at 12) when someone is in their fourth year of college and have no idea what they want to do. I try to encourage them to focus and spend time in various disciplines early on to hone in on what exactly they want to do. So they may end up taking various courses and different paths to get there. They may not jump right out in college and end up in that exact profession that turns them on, but know what it is and work toward getting there so that they can learn along the way to better prepare themselves for the opportunity when it arrives. I knew I wanted to own my own company in the restaurant business. I wasn’t sure in college how I was going to get there or what path I would take, but I knew where I would want to end up. I didn’t go working for a bank or a brand management company. I tried to stay focused on the hospitality industry.
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