HopCat: the 'anti-chain chain'

Mark Sellers' love of music, specifically jazz, is where the name of the craft beer bar and restaurant HopCat originates.

"In jazz, if you're a cool cat, you're a hepcat. But beer has hops, so it became HopCat," says Sellers, HopCat's founder and CEO.

HopCat's first location was established in Sellers' hometown of Grand Rapids in 2008. Five years later, the place known for their famous "crack fries" and craft beers opened a second location in East Lansing. The Detroit HopCat followed suit a few years after that, in December 2014.

By the end of this year, there will be a dozen HopCats scattered throughout the Midwest—and even more are on the way.

"This really just started out as a hobby," Sellers tells a crowd who gathered recently at the Detroit location to hear about his company's growth and management. "I never expected it to be a career."

In fact, when Sellers first opened the Grand Rapids HopCat, he thought he was entering into "early semi-retirement." Sellers studied business at Michigan State University, and after working as a stock analyst for mutual fund research firm Morningstar in Chicago, he left to start his own investment fund. By late 2007, Sellers had done well enough to walk away from the financial world and move back to Grand Rapids.

After living in Chicago, Sellers found Grand Rapids "pretty boring." So he opened HopCat, more to keep himself entertained than for anyone else. This meant good craft beer, comfort food, no smoking at a time when other bars still allowed it, and a laid-back atmosphere for employees.

After being recognized locally and nationally for the Grand Rapids HopCat, Sellers started a second establishment, Stella's Lounge, and then a third, Grand Rapids Brewing Co. All three are under the umbrella of Sellers' parent company, BarFly Ventures, based in Grand Rapids.

When Sanders launched the second HopCat in East Lansing, more than 1,000 people were waiting to get in on the first day, and it was then, Sellers says, he realized he was onto something.

In January 2014, the company embarked on an ambitious expansion strategy with a goal of opening four to six locations per year. Since Sellers had no experience in running or expanding a restaurant, he found someone who did—the director of operations for national beer bar chain Yard House.

Sellers and his team raised $25 million in investments. Currently, the company employs 1,200 people. In the first year, HopCat made $1.8 million in sales—Seller says that figure jumped to $35 million last year. By the end of this year, he says the company will make $59 million while next year's projection is between $66 million and $70 million.

HopCat has been the "anti-chain chain" from the start. Even though there have been some bumps in the road, Sellers says his risk-taking has paid off while defying many traditional restaurant norms. For instance, most chain eateries earn about 70 percent of income from food sales, but HopCat splits their income about 50-50 between drinks and food.

Sellers has adopted the same progressive management model that he appreciated as an employee at Morningstar in Chicago. Part of that is not enforcing a dress code or uniform and taking employees on an all-expenses-paid vacation every four years.

Sellers says he knows the importance of listening to his employees, which is why when they expressed a desire for a recycling and composting program, he obliged. Around 65 percent of all HopCat's waste is recycled and 25 percent is composted, meaning that just 10 percent ends up in a landfill.

HopCat also has a slightly different strategy with opening restaurants. Where most open "soft and slow," Sellers takes advantage of the media enthusiasm around each new location and opens every HopCat with a bang. This way, the media becomes a helpful tool in building the HopCat brand in each new market.

At 48, Sellers says the only way he would stop doing this is if it stopped being fun. "That's not even close to happening, I'm having a lot of fun right now," he says with a smile.