‘As scrappy as it gets’: Restaurant owner launches his business using $5,000 he earned online gambling. It’s now a $20 million empire

Tom Armenti offers one such path to success. After winning $5,000 in online poker during college, the College of New Jersey alum opened his eatery, Fat Shack, in 2010. Last year, the national chain reeled in $20 million in revenue.

In the 15 years that led to this explosive growth, Armenti didn’t just bet on luck; he made calculated decisions with his windfall.

That’s the chance he needed.

A ‘scrappy as it gets’ beginning

After graduating from the College of New Jersey in 2010, Armenti tried to open his own restaurant with his $5,000 gambling winnings. But the startup costs didn’t make sense. Construction quotes were nearing $200,000, and he pivoted.

“Instead of building a restaurant, I figured out how to borrow one,” he told Business Insider (1).

He started Fat Shack out of a local bagel shop, operating in the evenings after the owner closed for the day. Moneywise attempted to reach Armenti, but did not hear from him by press time.

“The beginning was about as scrappy as it gets,” he said. “I didn't even have space to store food in the shop, so I kept everything in freezers in my off-campus garage and transported one day's worth of inventory at a time.”

He handed out menus on campus, and the phone kept ringing.

A year later, he found a location and opened the first full brick-and-mortar restaurant near Colorado State University with roughly 30,000 students, his target demographic and more than seven times larger than his test location.

By 2015, he had tested and grown his franchise model. But it wasn’t until 2019 that Fat Shack gained real momentum.

A presence on Shark Tank

With 11 locations within his domain, Armenti responded to a Shark Tank casting call in Denver on a whim.

“We made it all the way through and got four offers from the five sharks,” he said.

In the end, Armenti and team struck a deal with Mark Cuban for $250,000 in exchange for 15% stake in the company. Cuban remains involved today.

It paid to know his business, and his numbers paid off. When the episode aired, it boosted brand awareness and fueled further sales.

Navigating industry swings

As inflation erodes consumers’ purchasing power and people eat out less, businesses like Armenti’s face added pressure.

Still, value remains central to the entrepreneur’s business model.

“We haven't raised prices in more than two years and a few months ago, we increased the size of our sandwiches,” he said.

Wider cultural shifts also play a role. Changes in consumer habits tied to weight-less drugs like Ozempic can affect the bottom line.

But Armenti isn’t budging.

“We've always been about indulgence — a late-night, over-the-top meal,” he said. “So, instead of shrinking portions, we're doubling down on making sure that, if someone's going to treat themselves, it's worth it.

How to bet on your dreams, without losing the house

There are many other lessons from Armenti’s example.

As he discovered, launching a business, especially one with overhead, can be costly. Equipment, inventory, utilities, licenses, insurance, marketing and payroll mean you will spend money before earning your first dollar. The U.S. Small Business Administration (SBA) agrees (2).