Picture an “urban Waffle House for millennials and Gen Z.” A 50,000-square-foot private social club, complete with a craft cocktail bar, restaurant, health club, and remote working space. A polished casual concept with an in-house bakery and flower shop squarely in the middle of the restaurant.
Sound ambitious? You could have accused Robert Thompson of the same thing eight years ago when he transformed a 24,000-square-foot Big Lots into an eatertainment space with no proof of concept or portability. Yet less than a decade later, Punch Bowl Social had 18 locations and was thinking bigger after Cracker Barrel spent $89 million for an initial non-controlling stake, agreeing to provide upward of $140 million.
COVID-19 disrupted the brand’s trajectory, as eatertainment absorbed an especially severe hit from lockdown mandates. Cracker Barrel elected to take a $133 million blow and cut ties with Punch Bowl Social. Four units permanently closed. Three reopened. The rest are on track for September. A reorganization could still occur.
However, as much as everything is changing around Thompson these days, his past is inspiring a familiar future. He recently launched a new startup out of Denver called Thompson Growth Group, which is, at the core, an incubator platform for new, national growth projects.
And that’s something Thompson has undeniable mettle in. “There’s never been a better time to do that,” he says.
Thompson believes the COVID-19 arena favors those in development mode over oversight.
“Ask any of us that have been spending the last five months managing existing assets and trying to figure out how to manage cash and zero revenue, government PPP programs. This is a great time to be developing and launching products next year when the worst part of this is behind us,” he adds.
Namely, Thompson has three concept visions in mind for his new company to start—Nobis, the private social club; Dinette Fine foods, an all-day operation concepted along a modern Waffle house vibe; and Fiona, an upscale experiential brand he believes can foster communities and attract younger guests.
Before exloring each brand, it’s worth remembering where Thompson hails from in the restaurant space, even before Punch Bowl Social crashed the category with average-unit volumes in the $7 to $8 million range, high-end food, shuffleboard, bowling, pinball, and something unheard of at the time—nearly 90 percent of revenue coming from food and beverage.
When Thompson was 25 he opened a 22,000-square-foot billiard parlor, and then a supper club on top of that. He debuted one-off, market-specific concepts until he landed on Punch Bowl Social, getting hooked on developing a growth chain.
“I’m a concept creator and an operator. I just happened to, somewhere along the way, figure out how to do financial engineering as well,” Thompson says. “When I put all those things together, I would describe it this way: I am finally qualified to launch an incubator program.”
Additionally, as Punch Bowl Social illustrated, Thompson works best when building around demographic sets.
Nobis, Latin for “we” or “us,” will be oriented specifically for millennials. Despite current pandemic conditions, Thompson doesn’t see the generation’s need for experiences vanishing. And they continue to mature into spending brackets that spark hope for brands, Punch Bowl Social included, that can make it to the other side of the pandemic.
Nobis will intermingle its different elements—health club, private restaurant, cocktail bar, social space—to create a “third-place” of sorts designed for a modern era. How Starbucks achieved this for a generation, Nobis will do it on a big-box level.
“I think it’s a timely product,” he says, spotlighting the office-sharing concept in particular.
Thompson says they’re looking at sites across the country. Nobis is considering Miami, Los Angeles, Denver, Dallas, and Canada spots in Montreal and Vancouver.
Of the three concepts, Thompson says Nobis is the one where the real challenge “is going to be figuring out who to say no to.”
“Right now,” he says, “we have more demand than we can possibly handle.”
The cascade of big-box retail bankruptcies nationwide could bring upward of 10 million square feet of vacant space, Thompson says. “And a 5,000-square-foot restaurant doesn’t help [developers] figure out what to do with that box. But if you could put a 50,000-square-foot private club, fitness, and remote and/or co-working space inside one of those boxes, now they’re cooking, right? Now they can develop around it.”
Nobis solves a lot of problems in the landlord community as well as satisfying unique consumer demand, he adds. “It’s really happening faster than I imagined,” Thompson says. “I guess maybe I should have been prepared for that because that’s how the world works. But I’m figuring out very quickly that I’m going to have to start bringing in the infrastructure to support it.”
“But that’s not an issue,” he continues, “just because I’ve been scaling a brand across the country for the last 10 years.”
Dinette Fine Foods skews a little younger than Nobis. Thompson believes it has 200–225-unit potential at full maturation, and is slated to launch in Denver next year.
Like 1,900-unit Waffle House—America’s largest sit-down chain—it’s going to run 24/7 and boast a strong late-night dinner business. He sees 26 percent of revenue flowing from takeout and delivery, with a 3,500-square-foot venue featuring counter seating, an open kitchen, thin labor model, and built for urban, high-density markets. Busy at lunch and dinner with off-premises surging after hours.
“We’re not trying to be Waffle House. We’re trying to be Dinette,” Thompson says. “But there’s something inside of that Waffle House model that I always thought could be elevated for a new generation.”
Fiona is experiential is a very different way than Punch Bowl Social and other eatertainment chains, like Topgolf and Pinstripes. It’s really an invasion of the five senses, Thompson says. A retail component (flowers) coupled with a pastry program that can serve as a coffee shop. Fresh breads will allow for an artisanal sandwich counter during the daytime.
That mix of a coffee shop, flower shop, and sandwich counter will develop a sense of community, Thompson says, almost like something one might imagine on a town square 50 years ago.
In Dinette and Fiona’s case, Thompson says he’s negotiating leases and has a pretty good idea where they’re headed. He just can’t share details at this juncture.
On the topic of Punch Bowl Social, Thompson says to claim this change was unrelated to COVID “would not be fair or accurate.”
“But the final decision was less about COVID and more as I found myself believing that the world aligned itself to help me pay attention to the opportunity of finally launching TGG. Something that I wanted to do for a large portion of my career,” he says.
Thompson remains a stakeholder in Punch Bowl Social and said he’s willing to be a part of its journey in the coming months, whatever that might be. Just not as the CEO and with no direct oversight responsibilities.
“Punch Bowl the brand is going to continue and whether I’m part of it or not, there’s good enough material,” he says. “But it’s going to endure, as it should. And the eatertainment category is not going away. Millennial and Gen Z’s need for experience is not going away.
“And I think that by the time we get to this a year from now, and we’re looking at late summer 2021, I think we’ll still be coming out of a recession or slogging through it. But I think we’ll see the light at the end of the tunnel and Punch Bowl will be reaping the benefits of having survived at least that far. I think everybody will be fine.”