Brothers John and Damon Morris have built a business in the Pacific Northwest that gives board gamers what coffeehouse giants have given java lovers: a place where customers can come, pull up a chair, grab a sandwich, sip a beverage, and play a fantasy card game with a friend.
Card Kingdom’s Mox locations in the Seattle neighborhood of Ballard and nearby Bellevue, Washington, offer game libraries, full restaurants, and spaces for gamers to eat and play. “In the end, all anyone wants is a place to go out and hang out with people and not be judged and be themselves,” John Morris said.
It’s going well, and Card Kingdom is expanding. Thanks to a booming business and support from their local Wells Fargo commercial banker, the brothers are adding a third location in Portland, Oregon, in 2020 — and already planning the fourth.
‘The situation was dire’
Card Kingdom’s first foray into retail was a small store without a restaurant or places for people to play Magic: The Gathering and other games. It opened in 2006 with a $650,000 SBA 7(a) loan1 from Wells Fargo, said Wells Fargo Commercial Banker Kathi Ferrari.
“It’s the most unique business I’ve served in my 18-year career at Wells Fargo,” Ferrari said. “This is a business where the assets are cards — and not accounts receivables or real estate or equipment — and where the normal lending criteria are out the window.”
She has since immersed herself in the Card Kingdom world to learn everything she can about the unique business and community and to help the brothers avoid the pitfalls that can sink startups and rock balance sheets — from a lack of accounting controls to financing miscues, cyberfraud, and more.
The Morrises leased their first Card Kingdom retail space to another business and opened their first Mox Boarding House board game café in Ballard in 2011 with most of their own money and a $350,000 loan from Wells Fargo Commercial Banking. It was in 2013, when they began work on their second Mox location, supported by a $3.1 million SBA 7(a) loan from Wells Fargo, that trouble arose.
A contractor’s cost overruns nearly sank the project — and Card Kingdom itself — before it could open in October 2014. “The situation was dire,” Damon Morris said. “Sometimes, we were down to a week of payroll.”
“The business has doubled four times since we opened that store and we now employ more than 250 people.”
— John Morris
“The initial estimates from the contractor were inaccurate, and the project was way over budget. In order to finish the store, they had to put all the money they had into it, and we stepped up with additional loans to complete the project,” Ferrari said. “Since I had worked with them so long and knew their business, I knew them well enough to know they could get through this and could advocate for them and speak with confidence that, ‘They know what they are doing.’
“And they did. It’s been fun to watch them grow and be so successful.”
Added John Morris, “The business has doubled four times since we opened that store, and we now employ more than 250 people.” They also have a charitable giving foundation, Engage, whose game tournament called The Gauntlet raises more than $100,000 each year for nonprofits, he said.
Morris said another $1.8 million Wells Fargo loan is helping Card Kingdom renovate a building for the Mox Boarding House coming to Portland in 2020 — all while the company continues to serve the global market for Magic: The Gathering cards. The online business alone ships to 88 different countries and territories.
“Just as I saw other retailers do here in the region for their brands, I wanted to see what would happen if we went all in and raised the bar for a board game café, including what that means for our relationship with the manufacturer for the Magic: The Gathering game,” Damon Morris said. “Our financial goal was to literally ‘not lose money.’
“To me, Card Kingdom is a place that you can make anything happen. I believe it’s a place that we can make the world a better place.”
The board game café concept went over so well that Hasbro added a visit to Card Kingdom’s Bellevue Mox Boarding House in July 2015 as part of its board of directors meeting in Seattle — showcasing how the game could be marketed to high-end customers.
‘We grew up buying and selling things’
The Morris brothers trace their Card Kingdom business success to their childhood in Mason City, Iowa. Their parents owned an antique mall, and they grew up buying and trading baseball cards, used CDs, and other items.
“We grew up buying and selling things at an early age,” said John Morris. “You don’t notice it as a skill. It’s just what we knew. But neither of us are sales people, so that was hard.”
Their younger brother, Aaron, was the first to get hooked on the Magic: The Gathering card game. In the strategy game, declared to be the world’s most complex, players assemble and play decks of 60 cards — using the spells and other special powers of their associated creatures and characters to finish off their opponents before the same can be done to them.
“Aaron didn’t want to pay retail for the cards,” John Morris said, “and so the supplier said, ‘You need to have a store to buy wholesale.’ So he moved the business to our uncle’s antique shop.”
John Morris eventually bought the business from Aaron (called Magic Madness), and the business took off so fast that he was able to quit his day job as a software engineer in Minneapolis, relocate and start the business as Card Kingdom from the basement of Damon’s house in 1999, and convince Damon to join him as an equity partner in 2001.
“The further I got in,” John Morris said, “the more I realized this was what I wanted to do. I personally love the infinite number of things to tinker with and see what happens. It’s so fun building a website feature or new store and seeing how the customer responds.
“I’ve always told folks that the number one reason is that we never stopped,” he continued. “I saw several websites that I deemed better than Card Kingdom along the way, but they never lasted. Apparently, the owners moved on to other things.”
‘The right advice’
Damon Morris had banked with Wells Fargo ever since moving to Seattle in 1997. “It was the first bank right down the street, and they treated me well, so I’ve been with the bank since,” he said.
When John Morris moved in with Damon, he moved the Card Kingdom accounts and his personal financial accounts to Wells Fargo, too, on his brother’s advice. He uses the company’s Commercial Electronic Office® (CEO®) Portal to run, monitor, and manage his business, and relies on its add-on products to help fight check fraud and stop unauthorized electronic debits.
“Those controls are particularly important to me, because my merchant account at my previous bank was frozen when fraudsters ordered thousands of dollars of Magic: The Gathering playsets using stolen credit cards,” Morris said.
Along with briefing Card Kingdom about how to avoid common phishing schemes and protect against wire transfers that appear to be coming from an owner or person in authority at the company, Ferrari has also helped the company tighten accounting controls to reduce risks.
“One of the best things about running and growing Card Kingdom has been working with Kathi,” John Morris said. “She’s been there for us all the way with the right advice.”
“The unique thing about Wells Fargo is that we’re a bank that can work with the smallest companies to the largest companies in the world — scaling our products and services to meet the wants and needs of the customer,” Ferrari said. “For me, it’s a great thing, since I never have to send my customers to another bank. They can stay with me as they grow and as they change since they have everything they need right here under our roof.”
1All financing is subject to credit approval and determination of SBA eligibility by Wells Fargo SBA Lending.