In 2014, Tom Ryan, one of the co-founders of Smashburger, saw an opportunity in the bustling sports bar category, and co-founded Tom’s Watch Bar at the entertainment complex La Live in Los Angeles. At the beginning, it was self-capitalized.
Ryan says Tom’s Watch Bar drew on “changing demography, viewing choices, fan engagement and gender balance.”
How could Tom’s Watch Bar compete against the existing sports bar chains such as Beef O Brady’s, Hurricane Grill & Wings and Walk-On’s Sports Bistreaux? Ryan replies that “My partners and I take familiar thematics that most Americans know and find modern perspectives and next generational approaches to execute them in new ways.”
Ryan built it up to the point where Tom’s Watch Bar had grown to six sports bars including venues at Coors Field in Denver, Mohegan Sun Resort/Casino in Connecticut where the WNBA Connecticut Sun play, and at the Vegas Strip in the NY NY Hotel and Casino, and its newest in Minneapolis, located in proximity to the Target Center (Timberwolves/Lynx) and Target Field (Twins).
His first five were self-financed. Knowing how much capital it would take to expand quickly, savvy Ryan hired Stephens, a family-owned investment fund, which helped secure financing of $30 million for expansion, with Sagad Credit Partners, an international alternative asset manager based in Toronto.
“That’s always been our approach. Use internal founding capital for start-up and then when you get a point, we go outside to fund accelerated growth,” he explains.
Now Tom’s Watch bar has seven new sports bars in construction; all company-owned, none franchised. All are being built near stadiums or high-traffic entertainment centers.
These new locations planned for 2023 include three in Washington, D.C., with one each in Orlando, Houston, Sacramento and Pittsburgh.
He says that traditional sports bars “cater to the last generation market” that tend to watch one sporting event at a time. But the 25-to-45-year-old generation who are avid sport fans watch multiple events at once and can do so in Tom’s Watch Bar’s 360-degree viewing room. They watch their local favorites, but also concentrate on Fantasy League players or follow sports betting.
While many sports bars attract a 70% to 75% male audience, Tom’s Watch Bar’s clientele is closer to 50% male and 50% female who come to watch the WNBA among many sports.
In addition, three of the existing Tom’s Watch Bars have Top Golf Swing Suites as part of the experience, in addition to hockey, soccer, baseball and carnival games.
Tom’s Watch Bar also pays teams “a partnership fee across the season that works with our store level economic models,” Ryan says. It allows it to “target fan bases for pregame, postgame, home game and away game fan parties,” he adds.
Ryan says that each Tom’s Watch Bar includes anywhere from 120 to 150 televisions. “Our broad promise is sports all the time. You’d be hard-pressed not to find the game you’re interested in,” he says. Moreover, it prints it TV-watching schedule two weeks in advance, enabling friends, couples and fans to plan their visits.
Sports bars are known for specializing in high margin liquor and beverage sales rather than lower margin food items. Indeed, Ryan says that about 45% to 50% of its revenue derives from liquor and beverage sales. He describes the menu as “elevated bar food combined with upscale signature dishes.”
For example, it offers a sushi-grade tuna tower, lobster and shrimp macaroni and cheese, and Nashville hot fried chicken on cornbread, besides the requisite chicken wings.
Reactions from Tom’s clientele at the Los Angeles outpost on Yelp were favorable but mixed. Allen from Fullerton, Calif, chose Tom’s “to watch some football since they have a plethora of TVs so it’s a good spot to watch some sports.” He described his burger “as pretty decent,” and he placed his order online. But he added “the beers can cost you as much as if you were at a game.”
Cindy on Yelp described the atmosphere at Tom’s in Los Angles as “super awesome with everyone rooting for their team.” She was also pleased with her 40-ounce beer. She also liked the buffalo wings, which were “tasty and tender,” but thought the cost of $28 for a dozen, was a bit steep.
Since it’s opening sites from Florida to California, Ryan says it has hired a COO, Shannon McNiel who has experience with Darden Restaurants and Texas Roadhouse, and can develop managerial talent as well as rely on his known connections.
“That way we can establish a national footprint sooner rather than later,” he says, dedicated to sustained expansion nationwide.