Five tips on how to scale your family business from Thompson Hospitality

BY Preta Peace Namasaba January 18, 2024 8:14 AM EDT
Fred Thompson, Jr., Benita Thompson-Byas, and Warren Thompson. Photo credit: Thompson Hospitality

Originally founded as a restaurant franchise over three decades ago, Thompson Hospitality Corporation has grown to become the largest minority-owned food service in the United States. The family-run business generates a revenue of over $700 million and is one of the nation’s largest retail food and facilities management companies. Warren Thompson runs the company alongside his siblings, Benita and Fred, Jr.

Warren founded the company in 1992, propelled by a $100,000 personal investment and the dream of becoming a restauranteur. Thompson leveraged his nine years at Marriott to grow the family-run operation. Thompson Hospitality has expanded to over 70 restaurant locations across 18 brands and is still growing.

These five tips from Thompson Hospitality will help you scale your family business.

1. Choose a brand identity
“It isn’t simply what you do in your life that matters, it’s who you are,” Fred Thompson, Sr. taught his children. This creed has guided the way Warren, Fred Jr., and Benita choose to lead their company. From the age of 12, Warren knew that he wanted to work in the restaurant business and went on to earn business degrees and gain relevant experience. He initially bought 31 Bob’s Big Boy restaurants in the Washington market but the business wasn’t very successful. The goal was to enter into contract foodservice so he accelerated the plan and eventually built a successful company.

2. Pursue acquisitions
Thompson Hospitality has grown the group’s restaurant portfolio through pursuing acquisitions. It acquired the now 10-unit Big Buns Damn Good Burgers in 2018, Matchbox which includes 14 restaurants and 10-unit Milk & Honey in 2020, and four units of Wiseguy Pizza in 2022. The group also acquired the three-concept Velocity Restaurant & Hospitality Group and continues to expand.

3. Embrace joint ventures
Thompson Hospitality has a joint venture with Compass Group, the nation’s largest food and support services company. The company has been able to access a broader network for business growth, serving 60 Fortune 100 companies across multiple industries and several HBCUs. The partnership manages more than 150 accounts for clients and generates about $1.5 billion in annual revenue.

Warren Thompson notes the importance of the company’s joint venture:

Simply, we could not compete. The joint venture was a strategic move that required the right partner. It has provided us with the ability to supply large clients who would not have awarded business of that magnitude to a smaller company. Additionally, it offered us the opportunity to expand our presence globally more quickly than we would have been able to otherwise.”

4. Diversify revenue streams
Thompson Hospitality has diversified its operations into four divisions over three decades. The joint venture with Compass, the solo foodservice management operation, and the facilities management division account for about 80 percent of revenues with the retail restaurant side bringing in approximately 20% of the overall business. Thompson Hospitality also owns a Homewoeod Suites whose kitchen it is uses as a training facility. The brand is looking to bring in a coffee partner and enterprises in the dessert and salad category. It has also diversified its locations and operates in 45 states and six foreign countries.

5. Give back to the community
As a family company, the Thompson Hospitality business model isn’t solely driven by profits and philanthropy is built into its purpose. The company has provided over $50 million in capital investments and scholarships through its philanthropic efforts. It donates an average of $4 million annually to HBCUs. Thompson Hospitality understands that business can only grow in thriving communities.
“Companies who do business with schools, and in particular HBCUs, should feel a responsibility to give back to the community. We are proud of the fact that we have been able to step up, and we’ve also caused our competitors to follow suit,” Thompson highlights the value of philanthropy.