With a projected annual growth rate of 15% to 20%, Thompson Hospitality aims to become an enterprise with revenue exceeding $1 billion within two years.
The Reston, VA-based business has annual sales of $800 million. But its President and Chairman, Warren Thompson, recently told Black Enterprise he is confident another $200 million will be added to the company’s top line over the next two years. He anticipates the gain will primarily come from his company’s joint venture with Compass Group USA —the nation’s largest food and support services company— increased revenue from its retail restaurant operations, and potential acquisitions.
Founded in 1992, Thompson Hospitality has been ranked as the nation’s largest Black-owned food service business, and one of the country’s largest retail food and facilities management firms. It was ranked No. 7 on the most recent Top 100 roster, the industrial/service component of the BE 100s, Black Enterprise‘s annual listing of the nation’s top Black-owned businesses.
Thompson Hospitality today has more than 6,000 employees. Its operations in 48 states and six countries include the pact with Compass and retail brands like Matchbox, Milk and Honey, Big Buns, Wise Guys Pizza, Velocity Wings, and Makers Union. It has contracts with 18 HBCUs, with offerings that include dining services, catering, and facilities management. The firm hopes to boost that number to 20 by late 2023.
Millions of people served at restaurants
Last April, Thompson Hospitality teamed with NBA Hall-of-Famer Ralph Sampson to open Ralph Sampson’s American Tap Room at the University of Virginia in Charlottesville. Sampson became a basketball legend there due to his phenomenal performance during his playing days in the 1980s. Thompson said his firm invested about $1.5 million to help open the business, which is projected to have sales of $3 million in 2023. Thompson and Sampson are both UVA alumni.
The opening is fitting, given most of the restaurants Thompson Hospitality owns operate in Virginia, Maryland, Washington, D.C., and South Florida. The company has grown significantly since it launched in 1992 by acquiring 31 Bob’s Big Boy restaurants. Now, Thompson Hospitality restaurants serves an estimated 32 million guests annually. Moving forward, Thompson expects his firm to grow to 100 restaurants by late 2023, up from 60 at year-end 2022.
Reaching major peaks as a company and partner
Another game-changing event came in 1997 when Thompson Hospitality united with Compass Group USA as large companies were consolidating and outsourcing their contract food service business.
Last fall, Thompson Hospitality celebrated its 30th anniversary and the 25-year milestone of its transformative partnership with Compass.
But the journey was not always easy. Warren Thompson reflected on how the joint venture has been a game-changer for Thompson Hospitality. He said the venture allowed it to scale its enterprise. He noted that in the late 1990s, the industry was shifting, companies were contracting with larger entities that could do more under a single umbrella.
“Simply, we could not compete,” he said. “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.”
He added, “The partnership also ensured that we were able to diversify our portfolio beyond our retail business to include other sectors, including business & industry; healthcare; vending; facilities management; and K-12 and higher education. It has offered marketing and brand recognition for our restaurant concepts.”
Thompson said about $400 million, or 50% of his company’s revenue, comes from its alliance with Compass. The partnership has grown from scratch to roughly $1.5 billion in annual revenue and manages more than 150 accounts for clients. Thompson said that includes his company doing business with about 60 Fortune 100 companies across multiple industries, including financial, pharmaceutical, and transportation.
Providing diverse suppliers opportunities
Moreover, the partnership is helping the local Black community by purchasing goods and services from businesses there. Benita Thompson-Byas, senior vice president and vice board chair at Thompson Hospitality, said last fall all 150 of its accounts include diverse suppliers. She is Thompson’s sister and oversees all aspects of the company’s strategic partnership with Compass.
So, how are Black suppliers an integral part of the company’s success story?
She said the theme for Thompson Hospitality’s anniversary has been “Lighting the Path of Opportunity for Others.” Thompson-Byas added that they have achieved its impactful goal by sourcing and mentoring diverse suppliers in its communities. In fact, she noted that nearly 30% of all Thompson Hospitality’s purchases are made with certified diverse suppliers. “Our own experience has shown us the importance and power of supplier diversity, and we are committed to paying it forward.”
Lillie’s of Charleston, a Southern-style sauce and spice brand, is among its suppliers. In 2019, Lilie’s of Charleston’s co-founder and CEO Tracey Richardson said her business grew about 47% annually before working with Compass and Thompson Hospitality. As a result of working with the joint venture, Richardson said her average annual growth has risen 131% to an undisclosed dollar amount.
“The growth has allowed us to move into a larger warehouse, expand our product line and distribution, and open a local pop-up retail space.”
Rick Post, who served as chief operations officer at Compass Group USA for 26 years, said Compass has long been committed to supporting diverse suppliers. “This has meant we’ve been able to help our clients achieve their goals faster and do even more good for customers, associates, and diverse suppliers.”
Black entrepreneurs interested in working with Thompson Hospitality and Compass should be proactive. Thompson-Byas says that includes obtaining the relevant business certification and working with advocacy organizations like the National Minority Supplier Development Council and local development councils. Inquiries should be sent to firstname.lastname@example.org. “We are always building new relationships with suppliers of various sizes and connecting them to the right partners.”
Giving back to the community is a top priority
Making sure to give back to the community has also been a significant focus. Over the last 30 years, Thompson Hospitality has given $21.1 million in capital investments and $32.6 million in scholarships and non-capital investments through its philanthropic efforts. The company added that its investments in, and donations to, HBCUs average about $4 million annually.
“While Thompson Hospitality has been successful as an enterprise, we are not driven solely by profits,” Thompson-Byas said. “As a family company, our purpose is built into the business model.”
She added that the company believes in building the next generation of leaders in hospitality. “Together, with our partner Compass Group, we support the Navigate program, which offers high schoolers in large metropolitan areas real-world experience and training in the industry.”
Positioned for future growth despite obstacles
And Thompson Hospitality’s growth has come as its sector – food service and hospitality – were among the hardest-hit industries by the pandemic, Warren Thompson explained. Yet, instead of retreating, he said, his company’s senior leadership team took pay cuts and invested in growing the business stronger for the future, advancing an aggressive acquisition plan.
“With this expansion, we are testing an approach that we believe will be the model of the future. Unlike a national chain with tens of thousands of restaurants across the country, we are betting that operating 25 brands in three to four states and deepening our presence and influence in a concentrated region will provide a strong competitive advantage.”