The Math We Don't Have to Show You.
But we're going to anyway. Here's what it actually costs — in dollars, in years, in things we've said no to — to run this lounge the way we believe it should be run.
Most businesses don't open their books. There's no reason to — customers pay a price, they get a product, the math in between is nobody's business but the owner's. We've decided that's not good enough for us.
Industrial Cigar Co. isn't a chain, and it was never supposed to be one. It's a family business, run by one family, for one lounge, and every decision we've made — the ones you notice and the ones you don't — comes out of a number somewhere. Below are eight of them. All real. Nothing rounded up to make us look better, or down to make us look like martyrs. Just the actual arithmetic of trying to build something worth belonging to.
Eight Numbers Nobody Asked to See
Presented the way we see them internally — line by line, no spin, in the order we'd walk you through them if you asked in person.
Our concierge program is priced flat — the team member pouring or delivering your bottle doesn't earn a commission on the sale, because it isn't one. What people miss is what that actually means for them: it's not that they're giving up a commission, it's that they're giving up the tip they'd otherwise be working for on a traditional bottle service. We made that trade on their behalf, on purpose, so your night never depends on being upsold.
Here's what it costs the business side of that trade: liquor in Texas is taxed three separate times before it reaches your glass. A bottle of Buffalo Trace, for example, costs us normal retail price to begin with — and that's before any of the three layers of tax get applied on top. By the time all of it is accounted for, we clear less than 8 cents of profit on every dollar of bottle revenue. The business loses the margin. The server loses the tip they'd have earned elsewhere. We keep the program anyway, because we think it's the right way to take care of you.
We think our food is genuinely remarkable, and we've heard the same from most of you. What we don't advertise is that the kitchen loses roughly $40,000 every quarter keeping it that way — we pay our culinary team well above what a lounge our size would typically justify.
We also keep asking you what you want from it, and keep building what you ask for. New items, new formats, new hours — when members and guests tell us what they'd like to see, we go build it. More often than not, once it's actually on the menu, it doesn't get ordered. We build it anyway, because the alternative is a kitchen that stops listening, and we'd rather keep losing money than become that.
Seven years in, and no one in our family has taken a raise — not once. Pops hasn't paid himself a single dollar since the day we opened. He also personally funded over $1,000,000 of our expansion project out of his own pocket, with no expectation of being paid back on any particular timeline.
This isn't a sympathy line. It's just true, and it's the clearest evidence we can offer that this was never built to extract from — it was built to put back into.
Every dollar this business makes goes back into this business. 100% of it, every time.
What it costs us to run this lounge every month has climbed 321% since we opened. Rent, labor, insurance, goods — all of it, up, every year, without exception. For six of those seven years, we never touched our membership pricing at all. We simply absorbed it.
This year, for the first time, we made an adjustment. We didn't do it lightly, and we didn't do it first — we did it last, after six years of trying every other option we could find.
It's not just Friday nights at a table in the lounge, though there's plenty of that. It's the golf course. It's family dinners that turn into whiteboard sessions halfway through. It's standing on the sideline at a kid's practice when an idea hits and someone pulls out their phone to write it down before it's gone. A lot of those ideas get built. Most of them get quietly used by a small handful of members and nothing more.
We keep having those conversations anyway, wherever we happen to be having them. This isn't a job we clock out of — it's a love and a passion we're thinking about when no one else is watching.
We've had more than twenty conversations with investors who wanted to turn Industrial Cigar Co. into a multi-location brand. Every one of them started with real money on the table. We've said no every single time.
Not because we don't see the opportunity — we do. But a second location means split attention, and split attention means this one, the one you're actually a member of, gets less of us. We'd rather give one lounge everything we have than give five lounges a fraction of it.
We pay our team more than the market average for this kind of work, in this city, at this level. Not because we have to — because the people who take care of you when you walk through that door are the entire product. We'd rather pay more to keep the best people we can find than save a little and roll the dice on who's behind the bar tonight.
None of this is a complaint, and it isn't a request for sympathy. It's the deal we made with ourselves the day we opened Industrial Cigar Co., and we've kept it every year since — reinvest everything, pay our people right, and never let the math talk us out of doing this well.
We have a long way to grow, and we know it. But every one of you who walks through our doors gets a family that's putting everything it has into making that walk worth it, day in and day out. If you ever wonder what you're actually paying for when you pay your dues here — this is it. Every number above, and the family standing behind them.
— The Frakes Family
Industrial Cigar Co. · Fuselage Parlor & Kitchen
