Deciding where to eat out is a conundrum familiar to many an American consumer. The plethora of food-and-beverage concepts now dotting the retail landscape complicate the question. Food halls embody a sort of paradox — they act as a microcosm of all this variety, while simultaneously removing the need to select a single restaurant. As Michael Morris, chief executive officer of Food Hall Co. puts it, consumers “can come in with various different dietary restrictions or desires and find something for everyone.”
Nearly five years ago, founders Jack Gibbons and Randy DeWitt of Front Burner Restaurants (also known as FB Society) were approached by a Plano, Texas, developer interested in establishing a food hall. This resulted in the company’s first location — Legacy Food Hall — and the genesis of Food Hall Co. itself. A food hall located at Fifth and Broadway in Nashville, dubbed Assembly Food Hall, has since joined the portfolio, and though the company’s footprint currently stands at two, Morris says this won’t be the case for long.
Everything’s Bigger in Texas
One aspect of Food Hall Co.’s locations that distinguishes them from other food halls is their sheer size. While Morris says that the typical food hall in America is somewhere between 17,000 and 18,000 square feet on average, Legacy Food Hall totals 30,000 square feet, with Assembly Food Hall in Nashville boasting 66,000 square feet.
These measurements account for the space dedicated strictly to the food hall areas themselves, though Morris notes that other aspects of the property contribute additional square footage. For example, in Nashville, an additional speakeasy concept, restaurant and wine bar and live music venue dubbed ‘the Skydeck’ bring the total space to over 112,000 square feet. Similarly, the three-floor Legacy Food Hall in Texas features a craft brewery operated by Food Hall Co. on the third level.
When asked about the reasoning behind committing to spaces so large in scale, Morris jokes that “it’s kind of the old adage: everything’s bigger in Texas.” He adds, though, that where vendors are concerned, “the size of their space is very important to the kind of volume that they’re able to achieve.” Stalls at Legacy and Assembly err on the larger side, typically between 300 and 400 square feet. This contrasts with other food halls across the country, which Morris says normally allot under 300 square feet of space per stall.
Naturally, there are inherent challenges attendant upon developing and maintaining properties of such a size. Constructing a food hall, says Morris, is essentially “building the most expensive part of a restaurant over and over and over again.” This makes the projects “intensive” as far as capital expenditures are concerned, and Morris cites construction pricing as one of the greatest challenges in the midst of current economic headwinds.
Dinner and a Show
Abundant space also allows for what has become a cornerstone of the Food Hall Co. model — entertainment and programming activation. Recounting a recent weekend at the Nashville location, Morris recalled a sold-out concert by international EDM DJ Steve Aioki as well as a performance by a band, also sold out, in the property’s Lexus Box Garden, an outdoor venue space comprising 18,000 square feet with a capacity of up to 1,200 people.
In the view of Morris and the company he helms, programming is not just a side note, but an integral component of the business model. According to the CEO, entertainment (along with components such as larger seat count) directly translates to greater sales for vendors. While Morris attributes roughly $550,000 to $750,000 in annual sales volume to the average food hall stall in the United States, he says that vendors at Legacy and Assembly typically average over $1 million.
Aside from driving alcohol sales, entertainment activations can also bolster food sales, partly through extending the windows of demand. “Not only are we able to be successful during the lunch business, which is traditionally when fast-casual businesses see success, we’re able to drive evening business and even into later nights because of the activation and programming elements that we have,” explains Morris.
Smooth Operator
Whether it be calculating the benefits of entertainment activations or allotting space for plentiful seating, consideration for vendor success is at the heart of the Food Hall Co. ethos. “We try to create an environment for small businesses like our food vendors to connect and cultivate relationships in the communities that we serve,” he says.
As far as those communities go, Morris says the company has proven that its concept can be successful in markedly different markets. The Plano and Nashville food halls exist within “very different market demographics,” according to Morris. Legacy in Plano, for example, sees more families, with a generally younger consumer patronizing Assembly in Nashville. New York will be the next state to see a Food Hall Co. location. “We are actively looking at a number of other markets, but New York is going to be the next market that we’re expanding into,” reports Morris, who notes that a public announcement with the details will be made soon.
Within these markets, Food Hall Co. occupies its locations on the terms of a master lease — a rarity for food halls, many of which operate within a management structure wherein the property owner invests the majority of capital and essentially hires companies for the development and operation. Food Hall Co. on the other hand, both “makes an investment on the capital side and signs the lease for the physical real estate” with the landlord.
This puts Food Hall Co. in a unique position — occupying the dual role of tenant as well as landlord to its vendors. These vendors receive significant support from the Food Hall Co. team, which offers assistance in the realms of marketing, purchasing, inventory management controls, social media and steps of service, depending on the strengths and needs of a given stall operator. “We are aligned with our vendors based on the overall model that we’ve created,” says Morris. “We want our vendors to drive topline sales, so our team is there to help food vendors do that.”
With an average of 20 food stalls per location, Assembly and Legacy are within what Morris describes as the normal range for food halls in the U.S. “You typically need at least 10 to 12 different options,” he says. “Beyond that, it comes down to the size of the market, economics, the demographics of the supporting area and the community that you’re serving.”
At Legacy, the lineup includes “stalwarts in the market” Chilangos Tacos, Horu Sushi, Velvet Taco and Son of a Butcher, as well as “really talented” chef Tiffany Derry’s concept Roots.
Assembly Food Hall features many vendors that Morris points out as being “unique to Food Hall Co. in Nashville.” Offerings at the location include Thai restaurant Thai Esane, dessert concept Cotton Snow and Prince’s Hot Chicken, which the CEO says no trip to Nashville would be complete without.
Criteria for potential vendors include a product that is “well executed and crave-able,” according to Morris. From there, he says the company looks for an operator that is engaging, actively involved in their business and unique, all of which is the recipe for a world-class concept.
Morris adds that it is preferable to have “more interest in stalls from vendors than we have space for.” This accounts for both future growth and turnover, which generally amounts to one out of every 10 vendors each year. “Change is a very positive thing, and it gives us another reason to market the space and another reason to get our guests excited about coming.”
Even in economically uncertain times, Morris is certain that this guest excitement will not wane. As technology and even artificial intelligence advance, the experience of food and beverage is one that cannot be displaced in a way that some other forms of traditional retail might be, he says. “People are looking for experiences. And when you can create world-class experiences…they’re going to keep coming back.”
—Hayden Spiess