221: How Jack Zimmermann Built 7 Hospitality Brands in One of the Hardest Industries

Opening a night club or restaurant looks fun from the outside, but behind the scenes it’s one of the most operationally complex businesses you can start.

That’s why I was interested in speaking with Jack Zimmermann. After managing a team of over 200 people at XS in Las Vegas during its $100M peak, he returned to Austin to build Nova Hospitality, a portfolio of hospitality concepts including TenTen, Devil May Care, The Well, Mayfair, Neptune Sushi, LZR, and Coffee & Chill Austin.

Most founders in this space struggle to make even a single concept work, and somehow Jack’s been able to start and scale 7.

I wanted to find out how he decides which concepts to launch, how he funds them, and how he manages the risk and pressure that comes with leading hundreds of people.

You don’t have to be a restaurateur to get value from this one. Let’s get into it!

Mic Drop Moments

• “With nightlife, you’re actually looking to develop new customers all the time.” – Jack Zimmermann

• “I just knew if I’m going to go do my own thing, it’s going to be in Austin, a town that’s growing, a town that is still small enough where I feel like I could go in and make an impact.” – Jack Zimmermann

• “As we look at a brand like that, that’s got that level of stickiness, it’s a no-brainer that we ought to go and try in some other neighborhoods.” – Jack Zimmermann

• “I bookend my day with positive, healthy habits almost every day, and that’s a non-negotiable for me to just be at my best.” – Jack Zimmermann

• 00:00 Running A $100M Vegas Nightclub
• 05:34 Why Clubs Must Constantly Find New Customers
• 07:22 Running Multiple Hospitality Concepts Successfully
• 09:45 The Shift In Alcohol Consumption
• 11:59 Taking Big Swings in Austin
• 14:53 New Locations vs Brand New Concepts
• 18:40 Using Partnerships To Expand Faster
• 21:08 Why Hospitality is So Hard
• 23:42 Staying Healthy in the Hospitality Industry
• 25:02 Letting Your Team Put Out the Fires
• 26:49 Funding Through Strategic Partnerships
• 30:24 How To Build A Hospitality Concept
• 35:28 What He Personally Refuses To Delegate
• 39:33 Leadership Advice That Stuck
• 40:28 Non-Negotiable Operating Principle
• 41:38 Where Austin Hospitality Is Headed
• 45:47 Advice For New Entrepreneurs

Brad Weimert: Jack Zimmermann, it is great to see you, my friend. So, operational management for XS at its peak, killer nightclub in Vegas. You did concepts all over the world after that, consulting in Miami, Dubai, London, Shanghai. Then you came back to Austin. And now you have this litany of different places that everybody knows in Austin, Devil May Care, Mayfair, The Well, TenTen, a bunch of other stuff. Welcome to Beyond A Million.

Jack Zimmermann: Thanks for having me.

Brad Weimert: I want to start by asking you about how you think about driving something like XS, which is like one of the world’s largest clubs. At its peak, it’s $100 million a year. What are a few levers that you pull on to fill a space like that?

Jack Zimmermann: Yeah, that’s a great question. XS would be a complex version of the normal nightlife story. For starters, you’re in Las Vegas, which is it’s a peak city for tourism. However, competition is extremely high as well. And then each of these venues within the resorts are resort backed, or many of them are. And so, in the case of XS, especially when I was there, it was this Goldilocks era of you’re at the best resort, hands down, and still today, Wynn is top. But when I was there, it was certainly by a mile the best place to work, to stay, to spend your weekend. And then we had this large nightlife venue that sprawled out to a huge patio that just seemed to never end.

And so, when the DJ boom happened, XS had an opportunity to turn it up in a way that it had never previously planned. So, it’s actually kind of funny that the venue itself, when it was designed, was designed to hold a couple of thousand people at a time and have these big nights. The DJ boom happened in 2011 and set us off on a different path and made us utilize this gigantic outdoor space that had pretty much been quite underutilized. So, it was a giant pivot. But, yeah, the levers are many. I mean, you’re counting on the resort and looking at the occupancy levels in the rooms and mapping some of your staffing, and historical trends based on what’s happening there. Marketing is gigantic for a resort like Wynn.

You’re thinking about marketing in Mexico City. You’re thinking about all of the places where affluent people may be traveling from. And there’s so much good data out there that are showing, well, on these fight weekends, you’re getting a lot of wealthy Mexican nationals coming up, when are the Asian tourists coming over, who seem to have a bigger appetite for nightlife, and trying to pair the right DJs with the right clientele. You want your biggest, most expensive DJs on your peak weekends, so you can maximize that extremely high talent expense. So, there’s an awful lot that goes into it.

At the time I was there, I was in operations management, so I thought about all those things, and they mattered to me, but my job really started when at 7:00 PM when I would show up at the venue. We would open doors at 10. I’d lock the doors at 7:00 AM after a big night and making sure that our 200-plus staff were all doing what they needed to do and making customers happy. That was my thing.

Brad Weimert: Crazy. Yeah, I have a million questions about actually running something like that but compare and contrast that with Mayfair. What are the levers at a club like Mayfair, which give me an idea of capacity? But that’s the only like actual nightclub in Austin right now.

Jack Zimmermann: Yeah, of its type. Certainly, a Vegas-style nightclub that is a great GA experience, but also, we are positioned towards bottle service and that higher-end experience. So, yeah, I mean, it’s similar principles. At the end of the day, nightclubs are about people having the maximum amount of fun and providing an environment in which they can do that, dance, and enjoy their favorite DJs with high-level entertainment, with the lasers and the lights and the whole production that goes into it. But also, you need to set up an environment where they can spend money. And so, it’s not just a bar where people are coming in for a couple of drinks. People are coming in and taking bottle service tables and paying a gigantic premium on stuff that doesn’t cost that much if you went to the liquor store in order to have an elevated experience.

And so, Mayfair, similar principles, it’s all about just turning the knob up on that, making sure on a Friday, Saturday night, people are able to have the absolute best time of their lives. Here in Austin, we can’t support more than two nights of that at a venue like Mayfair. So, it’s a great business. However, there’s no audience to be found outside of Friday, Saturday evenings, and an occasional three-day weekend moment. So, for us, it’s making sure that in those 8 to 12 hours a week that we might be open, we are hammering ad spends, making sure everyone knows about the party that we’re booking or that we’re hosting, making sure whatever DJ it is, whether it’s a great local, a regional DJ, or maybe even a national A-list person that everyone and their mom knows about it and there’s no excuses for, “Oh, I didn’t hear that so and so is there.”

We like to get our staff really engaged and get everyone focused on promoting the events and spreading the word. And then we’ve got a little bit of internal stuff where we go through our CRM, and we’ll reach out to some of our people. But, yeah, at the end of the day, it’s about delivering a great experience and making sure people are excited to come back.

Brad Weimert: So, filling the club is one thing, and I’ll go back to XS because it’s running all the time as opposed to two nights a week, right?

Jack Zimmermann: Right.

Brad Weimert: Getting people to come back is another. So, how do you think about like if anybody that’s ever thrown a party independently, it’s a lot of work, and you kind of hope that people show up, right?

Jack Zimmermann: Right.

Brad Weimert: But then to get that audience or others, but to get that audience to come back night after night after night after night, how does that work?

Jack Zimmermann: Yeah. People ask if nightlife is so profitable and lucrative, why don’t you just do more of that in less restaurants? Because there’s this assumption that nightclubs can make so much more money than a restaurant. I think the reality is with nightlife, you’re always chasing that dragon, and you need to be on with trends. You need to evolve and pivot as you go. Obviously, pay attention to what’s working and do more of that. And have one eye to the future on what people are up to, what’s hot, what’s trending, and that can mean a lot of different things from the type of music to marketing to how we’re running the lights to the hours of operation to beverage. It’s changing quickly in what people are drinking and how much they’re drinking.

So, with nightlife, you’re actually looking to develop new customers all the time. And, yes, you want some degree of regularity, and so, if Brad goes out once every couple months for a big night, you want Mayfair to be his spot, but you’re not counting on that guy as to make your P&L. You’re really looking to develop new customers and it’s all about catching people’s attention, getting them in the doors. And at some point, most people evolve from going out to nightclubs every weekend, and eventually it might be once a month, maybe once a quarter, maybe it becomes once a year, but that’s okay because we’ve got a new crop of people. Polar opposite to restaurant sort of lifetime value.

Brad Weimert: Yeah. So, speaking of that, you have Mayfair, this nightclub. Devil May Care is sort of a step down. It’s like a lounge in my eyes, which I love. But then you have a f*cking wellness restaurant, multiple now, The Well, which is amazing, but radically different concepts. You have a venue that you rent out. How do you think about, and I want to talk nuances of those in particular, but how do you think about the value proposition at one versus the other? Or is your goal and hospitality across all of them to deliver experience, and everything else is secondary? Or are you selling food and drinks at one and selling experience at another?

Jack Zimmermann: Yeah. Another great question. We are looking to deliver high-caliber hospitality across the group, no matter the price point, no matter the demographics of the customer. Can we be best in class at whatever we’re doing, and can we get excited and passionate about it? These are some of the rules we live by, but ultimately, I had a nightlife career stemming back to college, off to Vegas. As you mentioned, I went overseas and did some consulting, took me to some great markets.

Upon returning to Austin, I just knew that I didn’t want to be pigeonholed as a nightlife guy forever. I personally didn’t want to work those hours and be up at all hours of night in perpetuity. And so, really becoming a bit more broad and thinking more about restaurants was always on the cards. And then over time, one thing’s led to another, and we’ve ended up with very unique concepts that I think to some level are always going to have a little bit of tie into my own life, and choices, and the wellness side of things is really important to me. Yeah. We genuinely look at them all as different products, and no matter what, these products need to serve a set of people. Often, the person that might attend The Well three times a week may never have stepped foot in Mayfair, or in some cases, they are the same person.

And I saw this person at Mayfair at 11:00 at night, and they’re at brunch the next day at The Well at 11:00 AM. So, for us, it’s a matter of is the food-beverage service the environment? And if we are doing programming, meaning putting on an event, are we nailing it? And so, if we can nail it on all those fronts, then yeah, we’re very happy.

Brad Weimert: Yeah. I think about clubs as experiential and nothing else. And mostly for some of the reasons that you mentioned, which is that alcohol doesn’t cost anything, and you spend a fortune at a club. And the only reason you would do that is the experience. But you pointed out that the drink scene has changed in clubs, and the consumption amounts have changed. What is the trend there? And do you have to provide non-alcoholic options now or other types of stimulating drinks?

Jack Zimmermann: Yeah. I think it’s well documented that alcohol sales are down globally in Austin.

Brad Weimert: Stupid kids.

Jack Zimmermann: Yeah. In Austin, we’ve seen that alcohol sales are down, but they’re not perhaps to the level of some other markets, or it may just be that the media always overinflates a story, right? So, we are seeing 10%, 12%, 15% down across venues with where we’ve got historical data to look at. We’re seeing a tendency to drink less during the week. We’re seeing folks certainly spending less on champagne. That’s a pretty well-documented thing, and usually that ties in a little bit more with the economy than people’s health choices. But champagne has taken a real beating the last couple of years. It’s a luxury item, but we’re still seeing Friday, Saturday as people are absolutely out tearing up the town.

So, it’s still happening. But, yeah, we’ve got non-alc drinks across the group. Every venue you walk into, you’re going to be able to find some really good options, and in some cases, plethora of options. Most of them are non-functional, so your zero-proof beers, and zero-proof cocktails, and whatnot. And now we are exploring THC, now that we’ve got some pretty good validation. Unless something changes federally, Texas is never going to care about THC again. And for that reason, we’re going to implement a few THC options that you can add on to zero-proof drinks.

Brad Weimert: Nice. Yeah. I mean, the trend of specifically the youngest generation coming of age, talking sh*t about alcohol is hilarious in the face of all the other drugs that they do.

Jack Zimmermann: Right. Yeah. It’s definitely a trend. I’ve been hearing more about GLPs having an effect on people’s ability to drink alcohol.

Brad Weimert: Oh, interesting.

Jack Zimmermann: And even when they go to restaurants, ordering less food, maybe having one drink, but they can’t have several, I heard it’s like 8% of Americans are now on GLPs.

Brad Weimert: Insane.

Jack Zimmermann: Yeah.

Brad Weimert: Wow. That’s crazy. Okay. So, I want to talk about kind of the different concepts, but before we jump to that, you’ve brought it up a couple of times, you came back to Austin, and you went to school here originally.

Jack Zimmermann: At Texas State.

Brad Weimert: At Texas State. Sorry. And you came to Austin to create. Why did you think Austin was ready for a nightclub or the concepts you had? And what did you find out when you got here?

Jack Zimmermann: Yeah. So, I went to Texas State, worked valet at Eddie V’s downtown. When I was a freshman, as a sophomore, I barbacked in various establishments downtown. I got to my junior year and started putting on parties for my fellow Texas State students, often in Austin. And so, we’re busing students from Texas State up to downtown Austin, putting on a party, busing everyone home, doing it again the next weekend. So, I had my finger on the pulse with nightlife and events in Austin to some degree before moving to Vegas to pursue that career. And whilst living in Vegas, I would visit Austin frequently, two or three times a year. I had a ton of friends here. I just loved the way the city was starting to evolve. So, this is like 2011, 2012, 2013, 2014, and Austin was really beginning to boom.

So, I would come back, I would stay at the W, which was new at the time. We’d go out to eat and have drinks in places. And it just seemed like the town was really coming to life, but the landscape for food and beverage seemed fairly humble. A lot of different versions of the same thing. Didn’t seem like too many folks were taking big swings. And so, I just kind of always had my eye on Austin. And so, when I left Vegas and went into the consulting stint for a couple of years, I just knew that was going to be short-lived. Just living out of suitcases for quarter after quarter was tiresome, so I just knew if I’m going to go do my own thing, it’s going to be in Austin, a town that’s growing, a town that is still small enough where I feel like I could go in and make an impact, and I just felt comfortable here. So, it was a no-brainer to me.

Brad Weimert: My perception, and I’d love your take on it, is that that has changed now, meaning that there are lots of people that seem to be trying to create concepts that are bigger, unique, different, some from other places, and some that seem to be new. Is that your take on Austin’s scene now?

Jack Zimmermann: It’s changed drastically, yeah, in 10 years. And really, the last five post-pandemic Austin, it’s been a rocket ship.

Brad Weimert: Does Austin have a good food and drink scene right now?

Jack Zimmermann: I’d say so, yeah. I’d say per capita for still being a relatively small city, I think it’s an absolute A+.

Brad Weimert: Yeah. I agree with you. I also think that it’s interesting to see how many new spots pop up here on a routine basis. Like, if I’m not actively, when I first moved here in 14, I would be out all the time. And then like when you’re out all the time, everybody knows you. You know all the spots. You can get into all the spots. If you stop doing that in a town like Austin for a few months and there’s new staff at the places, new places pop up, places close. It’s wild.

Jack Zimmermann: Yeah. It’s evolving quickly.

Brad Weimert: So, a lot of people like the idea of hospitality like me, but I hate the idea of expiring goods and low-paid staff, right? So many challenges with that in general, variables you can’t control to some extent. Nova, your hospitality company, manages and owns all sorts of different concepts. How do you decide when you want to just add a new concept to the mix, like a new type of restaurant, bar, club, or create a second of one that already exists?

Jack Zimmermann: Yeah. I would say, for starters, with the breadth of stuff that we’re up to, each type of business has its own style of how it’s managed and a different cost structure. We’ve got one particular concept that runs a very high cost structure for labor, and it’s just the way it has gone over time with the type of food we’re putting out. We’ve got another concept that’s only open a couple of days a week, so we don’t have to have a huge management team, that being Mayfair. And so, you can analyze the cost structures and make some decisions based on that. I would say, as you mentioned earlier, Mayfair is kind of unique. It doesn’t have too much for competition at the moment in Austin. It has at some stages. Today it does not.

And so, we wouldn’t be inclined to go and open a similar type venue of our own because we think that the audience is only so big for that on any given Friday and Saturday. So, that type of thing is pretty much off the table at the moment. Even getting into the higher-end side of things, as we talk about some of our Devil May Cares, like a nice boutique nightlife spot. We’ve got TenTen. The moment you dip into higher end, you can be at risk of not developing super regular customers. So, you can become a bit of a special occasion spot or a place that people, even if they’re regulars, they might pop in once every few weeks or month just because that price point is a fair bit higher.

So, as we think about where we’re headed as a group, we really like to be best in class, absolutely over-delivering on the money people are spending with us. Certainly, never cheap. We can’t go that route because of the offering we have, but we like to find this band to live in, in which we can become a regular spot for people. So, as we talk about The Well, The Well has done that brilliantly. It’s become a place where it’s a little spendy. If you’re used to an omelet costing $10, and at The Well, it’s $16, once you dig in and look at the ingredients and how it’s all sourced, you can start to understand why things are slightly pricier than they would be at a diner. However, it’s the sweet spot where many, many people will choose to eat there multiple times a week. Some people, every single day.

And so, as we look at a brand like that, that’s got that level of stickiness, it’s a no-brainer that we ought to go and try in some other neighborhoods. And once we’ve got even more data there, and we will be opening more Well locations, then we can say, “Okay, it’s worked in a wide array of zip codes with different demographics. Now, we’ve got all the data we need to go and comfortably, confidently move into enter zip code here or town here.” We’re really focused on Austin, but maybe some of the suburbs could take a location. For new stuff, we’re just looking at impact and making sure if we’re going to do something new because of the gigantic lift that that takes creatively, financially.

If it’s going to be something brand new, do we firmly believe that it’s going to make a huge impact? And that means taking care of lots and lots of people on a weekly basis. Financially, does this make sense? Are we going to be able to hit big revenues if things go right? Things may not go right, but if they do, can we hit some huge revenues and make lots and lots of people happy? And if so, then we should explore it.

Brad Weimert: I think about one of the most common mistakes entrepreneurs make is forgetting to focus, and said another way, shiny object syndrome. And they want to do the new thing because it seems flashy and like it’s going to produce for them. And when I look at running 5, 10, 12 concepts, and as you said, they all have different management needs, different cost structures. How much of a playbook that you run can you take and run across the different concepts, and how much is narrow? Like, what percentage of the playbook is like, “Oh, at least I can apply this much”?

Jack Zimmermann: Yeah. Oh, I think our playbook has become quite focused on better-for-you food and beverage, where there are principles that we can take across the group to ensure that even though we may have different cuisines at different places and a totally different cocktail program here versus there, that that’s a theme that lives on no matter what we do. So, beautifully, that gets to happen everywhere, but if we were to open a barbecue place or a Tex-Mex place, nonetheless, you’ve got these principles, but you still need to go and develop the menus, and that’s where all the nuance comes into play. Our playbook’s solid. We’ve got a few things like that that we can sort of, that are foundationally look to for Nova, but this is our baseline.

But I think every time you develop something new, it’s inevitably going to be a big creative lift. And what we’re looking to do more of now is really smart partnerships where that person or team who does this thing so, so well, or they’re so deeply passionate about that thing, can come together with us and make two plus two equal five.

Brad Weimert: When you say partnerships, what do you mean?

Jack Zimmermann: It could be, in one example, it might be a chef, an incredibly high-caliber chef who’s hardworking and passionate and high integrity, and they just do this thing so well. We can provide the platform for them at this point and say, “Hey, look, let’s do a joint venture. Let’s partner up on this. You go be incredible at what you do. We will handle a lot of the rest, including some of the annoying things like marketing and social media, and making sure we’ve got merch, HR, and payroll, and all the things that a chef doesn’t really want to have to think about. So, let’s give you the platform, you be the face, and we’ll go do this together.” That’s one example. The same could happen with a bar person. These are things we’re actively exploring, like how can we use our platform to just amplify somebody else’s talents and abilities?

Brad Weimert: Yeah. I am terrified of restaurants and running them. There are very few that I have any level of confidence to invest in because it just seems like a brutal business. Why hospitality in general? What is the worst part about it or the most difficult part about it, and why do you choose to live there?

Jack Zimmermann: Yeah. The second question’s easy. I choose to live there because it’s all I’ve ever known. I mean, every job I’ve had, dating back to high school, has been tied in with hospitality, and I’ve always just loved it. I like being in it. I like the operational jobs that I’ve had, but I really like the strategic side of it. And I love paying attention to trends and asking people what they love about something and why they don’t go to that spot anymore. But just understanding what’s happening in the world of food and beverage and events, it just lights me up. So, it’s all I’ve ever known. The scary part of it is that it’s so human-intensive. You do need a lot of people on your team. Some of them need to be really specialized. Some of them need to be quite broad.

You also are talking about, in the case of a successful venue, you’re talking about hundreds of thousands of customers a year, and all of their wants and needs, and reviews and comments, and the variables that can go on there. And then with all that, you’ve got an ever-changing landscape with competition coming up around you. So, it’s a highly competitive environment with a lot of people involved. And I think without an amazing team, no one should attempt to go into this field.

Brad Weimert: Amazing team and the demeanor to manage people all day.

Jack Zimmermann: Yeah.

Brad Weimert: Yeah. Like, there are some people that are not built to manage other humans. Right?

Jack Zimmermann: Right.

Brad Weimert: And of course, this is going to be a mix, but do you think that you were born a people person that is capable of managing people? Or do you think you develop that skill through the process?

Jack Zimmermann: I think both. I believe I used to have extroverted tendencies. Loved working with people, being with people all the time, hosting people, making people happy. And I think by virtue of having that naturally and then being quite good at the work, it was like a self-fulfilling prophecy that I was going to get better at that and then stay with it. I say ‘used to’ because these days I think my tendencies have gone more introverted of late. I think you just spend so much time dealing with your team and your colleagues and your stepping foot in the restaurants and saying hi to all the friends and the VIPs and the random customers and connecting with people and having a lot of small talk and then attending lots of events. And so, I’ve come to value my alone time more and more.

Brad Weimert: I understand. Yeah, I can only imagine. Well, and that brings me to you like to stay in good shape. You have this healthy food and drink concept, The Well, which is awesome. And you started your days at excess at 7:00 PM, leaving at 7:00 AM, and you have Mayfair here. Do you have any rules or boundaries set to protect yourself so that you can live a healthier lifestyle amidst a hospitality world?

Jack Zimmermann: Yeah. These have gradually evolved. I think at one stage, as recently as a couple of years ago, I felt the need to be on all the time. And if the venues were open, I would either be there, or I would be glued to my phone until we knew things were going to be fine, and it was just this kind of unrealistic, unsustainable approach, especially as you go and open multiple venues, and have bigger and bigger teams and more people to want your direct line time and attention. So, these days, I would say my sleep and rest are paramount. I go to bed fairly early. I wake up quite early. I get my workout in right away, and I bookend my day with positive, healthy habits almost every day, and that’s a non-negotiable for me to just be at my best.

The phone rings. It does ring at 11 midnight sometimes on the weekends. I’m often asleep and miss it. I’ll typically just decline the call because in 95% of those examples, that person is going to figure it out, and occasionally, if it’s a true emergency, I’ll get involved and answer the call or go to the venue, no problem. But it needs to be a real emergency for that to happen.

Brad Weimert: Yeah, I love that. Well, I think you have to be okay with an actual fire burning in order to give your team the capacity to be firefighters.

Jack Zimmermann: 100%. And we’ve hired well. We’ve got amazing people that can deal with almost any issue. So, what can I do that they cannot?

Brad Weimert: Yeah. We have an internal framework, which is 131, which is if you have a problem, you better come with three solutions, and you better tell me which one you think you should do.

Jack Zimmermann: Okay, love that.

Brad Weimert: And what that’s intended to do is to prevent you from just coming to me with your bullsh*t.

Jack Zimmermann: Right.

Brad Weimert: Right? And also, the rationalization is like you probably have the answer, and you certainly were hired because you have the capacity to think through it. You may come up with a better answer than I have a lot of the time. But if we don’t do that, and somebody comes to you with a problem, and you are the problem solver, you will always be the problem solver. And I can imagine, as you pointed out, 95% of the time when people call you with a problem, if you don’t respond, they just figure it out.

Jack Zimmermann: Yeah. Even with a VIP customer, sometimes you need to train them to be more organized next time and make sure they’re on the list or have a reservation or reach out to me at a reasonable hour of the day to get coordinated. And so, sometimes it’s an important lesson learned for them that, “Hey, I’ll answer at 8, but I won’t at midnight.”

Brad Weimert: Yeah.

Jack Zimmermann: You know?

Brad Weimert: Yep. Alright. So, on the business operation side of things, how do you fund all of this? You’ve got new concepts. They’re totally different. Some of them are huge buildouts on the front end. How do you think about raising money to create a new concept?

Jack Zimmermann: Yeah, a couple of different avenues there. Ultimately, it’s equity, so a typical restaurant structure would have or be funded by a group of LPs that will own a minority stake in the business, a large minority stake in the business, and have some waterfall structure for getting paid back as quickly as possible before becoming a pro rata, a more simple investment. And for us, historically, that was how we had done things. Friends and family, we’ve got an idea, we’ve got a location. This is what we think it’s going to take. So, you put the fund together and go raise capital. With something like The Well that’s going on to have multiple locations, at this point, we’re using profits to do so, which is best way to go, best case scenario.

And then we are also now looking, as we’re a little bit more mature, we’re looking at doing a bit of a roll-up that’s going to allow for our earliest investors to have a chance to have a liquidity moment and come off the cap tables if they so choose. And this’ll be with some more sophisticated, larger check-writing type of investors that’ll be able to provide the liquidity for us to buy folks out if they want but also fund some of our upcoming stuff. But the last thing, one thing we’ve done really well lately, and I think we’ll continue to work on this, is partnering up with developers and folks that have a stake in seeing their property come to life.

That’s been a big deal for us lately, and saying, “Hey, like we can do all kinds of things, food, beverage, events, you name it. We can work with you to develop your dream space. And in some cases, we may end up making it our dream space. However, X amount of the funding would need to come from the development side. And typically, they’re working with the banks and getting pretty favorable interest rates. And for them, it’s an extra $2 million on a $50 million project, but it can create a source of gravity for their property where we can bring thousands of people every week. So, that’s been a more fun, unique journey of late.

Brad Weimert: I think that that’s applicable to lots and lots of different businesses, which is think about the other people that win when you win. And are they an opportunity to force a strategic partnership? And you went beyond strategic partnership to investment in your company, which I like. Would you rather have one big check written with a brand new concept in a city like Austin or 50 small ones?

Jack Zimmermann: Ah, there’s such a trade-off either way. It’s so wonderful to have that group of cheerleaders in the beginning, someone that may have written a fairly small check, but they’re excited, and they’re going to come by with their friends, and they’re going to drum up some additional interest and amplify our message. But it is an awful lot of admin. There’s an investor line, that concierge-type line that helps people get their reservations sorted out and questions answered, and catering and what have you. And then there’s K-1s and tax time and updates and distributions, and then obviously a lot of opinions too.

End of the day, people have opinions, especially if they’ve got a stake in something. So, then to have one investor is, again, if this is an individual or a group that is high integrity and their approach is really patient and thoughtful, then that could be great. Sometimes, especially with hospitality investors, you could find someone who really, really wants to be involved, but only on the fun stuff, and so that could be a bit of a problem. So, I think the answer is somewhere in the middle.

Brad Weimert: Yeah. Okay. Let’s talk about concepts for a little bit. So, I mean, I certainly have had ideas where I’m like, “Oh, that would be a great idea.” And I talk to lots of people that feel that way also, “Wouldn’t it be great if blah, blah, blah existed in Austin?”

Jack Zimmermann: Or, “I saw this thing in New York and it should be here.”

Brad Weimert: Totally. Yeah. Let’s say somebody wants to create a new concept for hospitality, and that could be restaurant, could be club, could be bar, whatever, what are the building blocks that you start with when you want to build a new hospitality concept?

Jack Zimmermann: Sometimes we start with space, and sometimes we’ve got concept, and we’re looking for space. So, I don’t think space has to come first.

Brad Weimert: Meaning that you found a cool location and open area. Is it about location or about the inside/outside area?

Jack Zimmermann: I think I would say the actual features of the space matter a bit more than the neighborhood and location that you’re in. Well, none of us like to drive more than five or 10 minutes for a meal, but for an experiential meal or a real world-class dinner or just a beautiful environment, whatever the thing is, we’ve all also driven 30, 40 minutes for a meal because that space, that venue, that food, whatever it might be. I think about The Oasis in Austin as this incredibly unique pain-in-the-butt restaurant to get to, but with those views, people will drive.

Brad Weimert: Well, also, I’m sorry, I have to state my piece on this. If you have an amazing venue with an amazing feature, you do not have the same capitalistic pressure to create amazing food.

Jack Zimmermann: Correct.

Brad Weimert: Because you’re selling the experience in the venue. So, like if you drive up and down any coastal city, there’s all sorts of trash as the coast restaurants, because people are going to stop there anyway.

Jack Zimmermann: Exactly right. It takes the pressure off, and ideally, you’re nailing it on all fronts, and for that reason, you’re busy on a Monday, like you would be on a Saturday. But yeah, so I think space and location and the features of the venue, they do matter. Our approach going forward is, again, moving away from some of the higher-end and going more towards concepts that are going to serve Austinites as 80%, 90% of our customer base. So, less reliant on tourists, less reliant on having a big weekend, more so, can this concept carry itself seven days a week with really great local business? And I think to do that, you need to create stickiness. So, it’s going to be food, beverage, and spaces that people just want to be in and kill time.

They just love being there. I think some places near here, I think about Cosmic Saltillo. They’ve created such a great environment where people just want to spend time there. And you pair that with some good coffee and some nice food, and you’ve got the perfect formula. So, for us, we were looking at this going, “Okay, I see how this could be busy Friday, Saturday, but everyone’s got that in Austin these days.” Friday, Saturday, everyone’s looked after. What about Monday, Tuesday? How can you ensure that people want to be here, families, young professionals, whatever your demo is, how can you make sure that your offering hits that group and gets them here?

When someone pitches me on a concept that’s going to be high-end and really dependent on incredible execution with food and service, it’s always a moment for pause. Hey, like if you get that right, it can be extremely successful, but you’re really trying to thread the needle there. When you can take things into a more casual nature, have more space to work with, bring the sale price of your food and beverage down, and take care of a higher volume of people, you’re really mitigating a lot of risk.

Brad Weimert: So, venue layout is a huge part of the concept. Comes first for you often.

Jack Zimmermann: Often.

Brad Weimert: If you are building a new concept and allocating $2 million to build a new concept, how much of it goes to kitchen versus bar versus design versus sound?

Jack Zimmermann: Yeah. We’re desperate to find a second-generation space unless we’re working with a developer who’s going to fund a lot of the infrastructure. So, for us, if we were just going out with our own $2 million and this is all we’ve got, we’ve got to make it work, we would be looking for a second-generation space that has already had a kitchen built into it. And for that reason, we should be able to save $400,000 or $500,000, $600,000. If you’re building a restaurant from scratch with $2 million, you’re going to expect 1.5 to go into hard construction, finish out, furniture, lighting, HVAC, all that stuff, leaving you $0.5 million for some loose furniture and some the plates and the initial food orders and staffing costs and uniforms and marketing expense and PR and all of that.

So, an immense amount of capital can be tied up in construction if you’re not being thoughtful about the types of deals you’re doing, and that if you’re going second generation versus brand new. So, second generation, like a beautiful second-generation space, is worth its weight in gold.

Brad Weimert: So, you have personally done, I don’t know, a dozen plus concepts in Austin, something like that?

Jack Zimmermann: Yeah.

Brad Weimert: And you’ve now got hundreds of people that are working throughout those. When you create a new concept, what are the things that you feel like you need to personally own throughout the process to get the concept right? And what can you effectively delegate?

Jack Zimmermann: Yeah. I suppose there are non-negotiables as we’re creating something, and for me it’s become quite personal, but I think for a group, everyone’s on the same train now, where we want to be known, our legacy, to be this better for you F&B entertainment group. And so, some principles that matter to us are no seed oils across the group, no refined sugar across the group. So, desserts and cocktails and all these things need to be made with a high-quality sweetener and local protein as much as possible. Sometimes that means regional in Texas, but for us, local, high-quality, grass-fed, pasture-raised proteins, sustainably sourced fish, stuff like this. So, for me, this is like one of the very core things that is just a non-negotiable, and I’m always going to stay really tethered to that.

I personally am always very involved in the initial push on really doing the deep dive on market, saying, “Okay, we’ve got this amazing location. What does it want to be? Is it a restaurant? Is it a bar? Is it a hybrid? Is it a bit of both? Is there an event space component? Do we have room for sports courts here? What are we going to do?” Best use of space is something I’ll stay really tethered to. And then, yeah, as we get into the concept and just constantly asking the team, like, “Why is this going to work? How do we know this is going to work? What’s our comp set?” Analyzing all of the establishments that may have some similarities to what we’re up to and saying, “Why does that one work, and why didn’t that one work? And look at their reviews, and here’s what people are saying about them.”

So, I’m very, very active in that whole process, how we’re capitalizing it, who we’re working with for architecture, interior design, construction. I’m very, very involved. And then the initial hiring, who’s our GM, our exec chef, who are these people that are going to be absolutely key to our success? And in some cases, that person wants to be a managing partner where they’ve got some equity or a vesting schedule, and they’re able to become an owner of the business with us. And so, all of that feels really important for me to stay in high touch with. Once we’ve got the place open and we’ve got a couple of months behind us, I will tend to step away a bit.

And the things that I care about at that point are reviews, like how happy are we making our guests, top-line sales, and bottom-line profit. And if those three things are in line, if our sales are great, our profits are great, and the reviews are great, I might have a thing to say here and there, but for the most part, the team’s crushing it, and I don’t need to do much.

Brad Weimert: Awesome. I love that.

Jack Zimmermann: At that point, I like to get really involved in partnerships and activations, and how we can do more fun, unique things that amplify our message or help solidify us as a trendsetter. I really love that part of my role these days, connecting the dots and doing unique things within hospitality. But yeah, once a place is up and running, as long as it’s smooth sailing, then I can step back. And if it’s not, then I’ll tend to be quite involved.

Brad Weimert: Do you think that would be different if you had one concept versus 12?

Jack Zimmermann: Yeah, absolutely. It’s more simple. If you’ve just got one concept and it’s working and you’ve rolled it out to many locations, that is far more simple. It is still hard to weave them together and make sure that there’s continuity of experience. Because we’ve all walked into that one store that was wildly different from its sister venue, but it’s still far more simple, and it’s a lot less of a lift on marketing, for example. From the marketing team, they’ve got one set of things to think about if it’s 12 of the same venue. But if you’ve got a bunch of concepts creatively, it’s a lift forever.

Brad Weimert: Forever.

Jack Zimmermann: Yeah.

Brad Weimert: What’s the best advice you’ve gotten for leadership in hospitality?

Jack Zimmermann: Yeah. As I was leaving the win, I remember someone gave me the advice, I was moving into a consulting role that really was starting with interim GM. I was going to be an interim GM somewhere, as a consultant. And they said, “You just don’t have to be right. And you don’t have to have all the answers.” And I think they gave me that advice based on who I was at that time. I really valued being right. I really valued being the guy that people would come to, to solve their issues and make things happen. And yeah, that stuck with me to the point where I think it emanates through our culture now, where I love to be challenged on whatever we’re up to. And if my internal team wants to raise a concern with an idea that I’ve got, like I relish those moments. And we’ve got an amazing set of folks, and we’ve hired well, and everyone’s opinion is really trusted. So, yeah, I’d say that one has stuck with me.

Brad Weimert: A decade plus later, what is an operating principle that you won’t compromise?

Jack Zimmermann: I’d say now, again, tying back to this better for you thing, that feels like such an important part of our legacy, that I don’t care much about legacy, but I do think that’s one area where we uniquely get to make an impact on food and beverage. And maybe over time, that emanates out to beyond Austin, and we go down as a real thought leader in that space. I think my take is that we have a responsibility to deliver great experience, food, beverage, and for people to feel as good as possible about the decisions they made with us. So, if they come and have a steak frites and three cocktails and spend more than they had planned to, hey, so be it. We’re here for that. That is genuinely what we do.

However, that person ought to know that there was a bunch of trusted love and care that went into the food and drinks that they consumed, and so they can hopefully feel a little bit better the next day than they otherwise would have. And I think that’s where we get to make a huge impact. And so, that’s the one thing I’d say just lives rent-free in my mind.

Brad Weimert: What does the future of Austin look like when it comes to hospitality and nightlife?

Jack Zimmermann: Nightlife is a question mark. I do believe people will continue to value experience, and getting out for a night out dancing, seeing their favorite DJ or band. Where it’s headed, I’m not sure. I do know there’s one huge venue coming to town in a couple of years that’s going to sort of rival Moody to some level and put on 5,000-plus attended shows.

Brad Weimert: Separate from? Where’s that going to be?

Jack Zimmermann: That’s East Riverside.

Brad Weimert: Oh, is that where the statesman is currently?

Jack Zimmermann: No. Further east, heading towards past 35, heading towards, what is it, 71 over there? Yeah. So, I think Austin will continue to be a hub for music and big events. In terms of nightlife, I’m really not sure. It does take someone taking a big risk. Nightclubs are expensive to build, to do something of real meaning of impact that can hold 500 plus people. With all the audiovisual that goes into it, you’re spending millions of dollars, and you need high ceilings. You need some specific elements that are going to make for a great experience. So, I think nightlife is a tricky one. If folks are willing to take a huge risk, then we’ll see more nightlife pop up. We do not want to do more nightlife, so for us, we’re tapped on that.

Austin’s hospitality, I think this is still, despite the last couple of years, cooling a lot. I think Austin’s going to be one of the hottest markets in the country. Again, it’s Goldilocks city. You’re in Texas, but you’re in the cool cultural heart of this big red state. You’ve got nature. The city has been well designed, and people just like being here. I think downtown is absolutely thriving, despite some slowdown on development. So, I think hospitality in Austin is going to continue to absolutely boom. As long as we get people moving here, like we have, and as long as the tourists keep showing up Thursday through Sunday, then there’s no reason why more great hotels won’t open, lots and lots of great new restaurants. Hopefully, more diversity in restaurants. That’ll be cool to see. Nightlife, I’m sure, would follow suit. It’s just a smaller set, and there’re not that many people that have the experience, and so it takes somebody taking a huge risk.

Brad Weimert: And how does that inform what Nova Hospitality is going to do next?

Jack Zimmermann: Yeah, I think we want to help set the trend on what Austin is becoming. There are some amazing groups here doing really cool stuff. We are really keen on helping to being one of the groups that can set the standard and set the trends and not necessarily follow them. We are betting on Austin continuing to grow, especially the east side. We think that there’s a lot of opportunity to do a few great concepts over here on the east side of town. We are hedging the alcohol bet. So, as we create concepts, we are really not focusing on alcohol as the main driver. We want to make sure we have fantastic food, no matter what we’re doing. Even if it feels like a bar, the food has to be great. Non-alc program has to be great, and it has to be multifaceted.

So, whether that’s live music, whether that’s sports courts, whether it’s just great landscape space for people to hang out, bring their dog, bring their laptop, whatever that might be, we’re really looking to hedge the bet and not just go for like a commodity bar type of experience.

Brad Weimert: I love that. What are your favorite restaurants in Austin, and your favorite craft cocktail spots?

Jack Zimmermann: Okay. With restaurants, I do love many of the big names, the heavy hitters that everyone loves, but I think about El Alma as just one of my favorite, probably once-a-quarter restaurants.

Brad Weimert: Austin staple.

Jack Zimmermann: Austin staple. Who doesn’t love Tex-Mex, but Tex-Mex done really well, kind of veering towards interior Mexican. So, huge fan of El Alma. Cocktail bars, I mean, every time I go to Here Nor There, it’s an absolute dream. The experience is absolutely dialed. But I love Garage Bar. I love a couple of the old classics. Small Victory, it’s fantastic.

Brad Weimert: Oh, the speakeasies.

Jack Zimmermann: The speakeasies. Yeah.

Brad Weimert: I went to Firehouse the other day. Speaking of speakeasy, that’s been around forever.

Jack Zimmermann: Yeah. There are so many to choose from now.

Brad Weimert: What advice do you have for a brand-new entrepreneur starting out today?

Jack Zimmermann: Stay in the fight. For anyone that doesn’t know me or us or our story, it can look really glamorous, but it’s just a series of ups and downs, and consistency matters, and staying in the fight and not giving up, and just continuing to move your feet day after day after day. That sort of 1% better everyday thing really, really matters. And you stack that over a few years, and you’ll be there in the end. The story will never be what you thought it was going to be. It’ll always be imperfect, and it’ll never play out as you envisioned, but that doesn’t mean it’s not great.

Brad Weimert: Awesome. Jack Zimmermann, I appreciate you carving on time, man. It’s always good to see you.

Jack Zimmermann: That was fun. Thank you.