After 27 years in business, Thompson Hospitality continues to diversify
- April 29, 2019
Warren Thompson doesn’t hide the fact that he runs a minority-owned business. Reston-based Thompson Hospitality regularly ranks near the top of Black Enterprise magazine’s annual list of the nation’s largest African-American companies.
Nonetheless, Thompson wants his company to be defined by its performance. “At the end of the day, the quality of our product has to be equal to or surpass our competition in order to win,” he says. “The money that we take to the bank is just as green as any other company’s money.”
Thompson Hospitality has continued to grow since its founding in 1992. It now has 5,500 employees and recorded revenue of $760 million last year. The company was born when Thompson bought 31 Big Boy restaurants from his former employer, Marriott Corp., and converted most of them to Shoney’s restaurants.
Today, Thompson Hospitality operates four divisions. One is a joint partnership with a British foodservice company, Compass Group. As part of that venture, the division operates 175 company cafeterias in the U.S. and abroad. A second division runs dining services, such as school cafeterias and food kiosks, at 25 colleges, while another business focuses on facilities management for universities.
Additionally, Thompson Hospitality is a restaurant franchisee and also owns standalone restaurants, including Hen Quarter, American Tap Room, Big Buns and Matchbox, in which the company purchased a majority stake last year.
After 27 years at the helm, the 59-year-old Thompson doesn’t show any signs of slowing down. He’s now getting involved in hotel operations. “I’ve invested in hotels over the last 10 years, but this last year, we’re taking a more active role in operating the food and beverage in a hotel,” Thompson says. “We’re developing our own hotel …I think that, going forward, we’ll end up doing more of that.”
Next spring, the company plans to open a 140-room Homewood Suites hotel at its five-acre headquarters campus in Reston. Thompson envisions his company running the hotel’s food and beverage operations while outsourcing management of the guest rooms.
More than 200 Thompson Hospitality employees will be trained in the hotel’s test kitchen. They’ll also undergo training at Matchbox and Big Buns restaurants expected to open later this year at the Wiehle–Reston East Metro station. The station is less than 2 miles from the company’s headquarters, so it will be easy for employees to go back and forth from the Thompson sites. The move would transform the headquarters from a single office building to a campus focused on employee training and development.
In addition to the hotel project, Thompson Hospitality acquired Leesburg-based staffing firm Apertus Partners last year. It now provides staffing services to Northern Virginia hospitality and IT firms.
Thompson also is considering a move into the construction business. He plans to open a restaurant every month. With that rapid pace of development, it may make sense for his company to build the restaurants, or part of them, instead of hiring someone else for the job.
While Thompson doesn’t know exactly what the company will look like in a decade, he expects it to continue growing. “I think the company will be larger, more diverse.”
Virginia Business sat down with Thompson in March to discuss his career trajectory and the latest developments at Thompson Hospitality. The interview took place at the company’s headquarters in Reston. An edited version of the conversation is below.
Virginia Business: What shaped you into the leader you are today?
Thompson: My parents; my upbringing. My father, who was my best friend and first business partner, taught me the basics that I didn’t know about business.
VB: You started some entrepreneurial stuff as a child from what I’ve read. Your father sold his hog business to you?
Thompson: Right. My father and mother were both educators in the rural part of Virginia. We always had a hog business on the side. We raised hogs. We sold produce, peaches and apples that we purchased in the mountains of Virginia and brought them to the Tidewater [area of the state]. At a very early age, I got involved in those businesses and continued to do that through high school.
When I returned from college after the first year, I got a job at a hardware store during the day, and I ran the concessions at a local park at night. That was my [introduction to the food service and restaurant business]. That’s what I really fell in love with.
VB: This is a family business. What has been the biggest blessing from that and some of the challenges?
Thompson: [Having a family business] was a promise I made to my father. … My brother joined about 30 days after I started [the business]. My sister joined 45 days after, and they’ve been a part of the company since. It’s great because I know them better than I know anyone else, and they know me better than anyone else knows me.
Because of that, we share a common background. We share common values because our parents taught those to all of us equally. I know exactly where my sister is going to come from on a particular topic or subject. There are no surprises. I can trust my brother and sister, which is very, very important in starting a business.
The challenge, though, is sometimes separating business from family, especially during the holidays or family gatherings. We would have to fight and focus on not talking about business … It becomes overwhelming if you’re always talking about it, no matter what the occasion.
VB: What direction do you [see the company going in the next decade]?
Thompson: We will stick to our core business. We will also diversify and vertically integrate as much as possible. Today, we’re operating a staffing business. That’s a vertical integration to support the hospitality part of the company. We may get into restaurant equipment maintenance over the next few years.
VB: What’s the biggest challenge you’ve faced as a minority business owner and what wisdom would you have for other minorities who want to start their own business?
Thompson: There are more advantages today than there are disadvantages. As a minority business, you’re naturally set apart. That becomes good or bad depending on how you use it. Oftentimes, there are preconceived notions of a minority business. [It’s] perceived to be one that’s struggling, that’s having a hard time. If the owner approaches the business from [a positive] perspective, then that’s ultimately the result that will be obtained.
We like to compare ourselves to the industry as opposed to as a minority firm. We don’t shy away from the fact that we are a minority company, but we don’t lead with that either. We lead with the fact that we are a [type of company, whether it’s food service, staffing or hotel business], and we happen to be minority-owned.
VB: [What new technology are you using or plan to use that you’re proud of?] Is there anything you can point out?
Thompson: The biggest opportunity and challenge facing the restaurant business is takeout and delivery. It’s the fastest growing part of the industry, which puts pressure on large restaurants because they end up with a lot of empty seats in the restaurant. You’re also challenged because a lot of third-party delivery companies charge the operators an exorbitant fee, 20% to 30% for the delivery.
We’re now testing some technology that will give us more control of that delivery process, that we will continue to control the customers’ ordering process. Then, we will be able to determine from that the most efficient way to deliver it through the third party. It’ll allow us to reduce some of the cost of that delivery process. We’re excited about that.
VB: Help me picture it a little bit. Does that mean you wouldn’t [partner with the online food ordering app] Uber Eats?
Thompson: We may use it, but we may use it at a better-negotiated rate because if they don’t play ball, then we will steer it in the direction of another provider. The customer will go to our website, choose our app to order, and then we will handle it from there.
VB: I know you’re big into philanthropy, so what’s the biggest motivator. How do you decide what to give to?
Thompson: I am committed to my church and supporting that, but I’m also now giving back to my undergrad school [Hampden Sydney College, as well as my graduate school, Darden School of Business at the University of Virginia.] … The monies that I’m giving to those institutions are directed toward students who believe in diversity and who are business-oriented. Those are the two requirements that I push. It’s not saying it has to be one race or the other, but it has to be a student who is conscious of the importance of diversity and really supports that.
VB: What does diversity mean to you?
Thompson: Being able to accept and to welcome people who have a different point of view, who come from a different background, [race, agenda, ethnicity or nationality]. It’s a broad definition, but it’s someone who is different from yourself. I have an issue with people who want to only associate with people who look like them, act like them and talk like them. That to me is a person who is a dinosaur. As a society, we’re evolving to the point where diversity will become the norm as opposed to the abnormality.
VB: What do you do to relax?
Thompson: I’m into boating and fishing. I love to do that. I still enjoy sports. I don’t miss a U.Va. basketball game. I’m into watching sports and playing on occasion. I’m not as young as I used to be. It’s more difficult to play, but I enjoy just about all sports.