How Smashburger Founders’ Sports Bar Chain Is Reshaping The Game-Day Experience

Key Concepts

• Technologically advanced sports bar experience
• Strategic location near sports venues
• Elevated menu and extensive TV coverage
• Rapid expansion and profitability
• Sports-anchored mixed-use districts
• Rebranding and differentiation in the sports bar market

Tom's Watch Bar: Reshaping the Game Day Experience

1. Overview and Rapid Growth

• Tom's Watch Bar, founded by the team behind Smashburger, is transforming the sports bar experience with technology and strategic location choices.
• The chain emphasizes speed, aiming to deliver food in under 8 minutes and beer in under 2 minutes.
• Launched in 2019 with four locations, Tom's Watch Bar has expanded to 13 restaurants by 2024 and is projected to reach 16 this year, with plans for 18 by mid-September with new venues in Cincinnati and Milwaukee.
• The company plans to open two more outlets in 2025 and an additional 10-13 each year thereafter.

2. Financial Performance and Market Position

• Despite competition from established chains like Buffalo Wild Wings and local bars, Tom's Watch Bar has seen its core business revenue increase by approximately 4% year-over-year.
• The chain's run rate, including new locations, exceeds $100 million, with outlets averaging over $6 million in sales.
• All 18 locations are company-owned and profitable, with restaurant-level margins exceeding 25% on average.
• This success contrasts with the struggles of Hooters, which filed for Chapter 11 bankruptcy and closed over 30 locations.

3. Key Differentiators and Strategy

• Tom's Watch Bar differentiates itself through an elevated menu featuring items like lobster tacos and craft beers.
• A key element is the "360° viewing experience," with each restaurant equipped with over 100 televisions showing multiple sports events.
• The chain strategically locates its restaurants near stadiums and arenas to capitalize on foot traffic, aligning with the trend of developing sports-anchored mixed-use districts.
• Co-founder and co-CEO Brook Shaden emphasizes that "All of our demand is driven by sports," avoiding locations that lack consistent sports-related activity.

4. Origins and Leadership

• Tom's Watch Bar originated in 2014 as Tom's Urban, an upscale diner concept from SIF Partners.
• Co-founder Tom Ryan previously worked at Pizza Hut and McDonald's.
• Rick Shaden, Brook's cousin, ran Quiznos for 15 years.
• Ryan and the Shadens founded Smashburger in 2007 and sold it to Jollibee Foods Corporation in stages, with a valuation of $335 million for a 40% stake in 2015 and an additional $100 million for 45% in 2018.
• Brook Shaden, with a background in private equity and investment banking, became co-CEO last year.
• Shannon McNeel, formerly with Texas Roadhouse and Darden Restaurants, joined in 2018 and is now co-CEO, overseeing operations.

5. Rebranding and Market Opportunity

• The decision to rebrand as Tom's Watch Bar in 2019 was driven by the co-founders' belief that they could easily differentiate themselves in the sports bar market.
• Early success in locations with added TVs and proximity to sports environments validated the concept.
• Brook Shaden noted, "What we started noticing is as we added some TVs and because we were in a sports environment, all of a sudden we were really busy on a Monday."

6. Sports-Anchored Mixed-Use Districts

• Tom's Watch Bar strategically targets locations within or adjacent to "sports-anchored mixed-use districts," also known as "entertainment districts" or "ballpark villages."
• These developments combine commercial and residential real estate around sports venues, creating consistent foot traffic and demand.

Conclusion

Tom's Watch Bar's success stems from its focus on technology, strategic location near sports venues, an elevated menu, and a comprehensive viewing experience. The chain's rapid expansion and strong financial performance demonstrate its ability to stand out in a competitive market by catering specifically to sports fans and leveraging the growing trend of sports-anchored mixed-use developments. The leadership team's experience in the restaurant industry, combined with a data-driven approach to location selection, positions Tom's Watch Bar for continued growth and profitability.