Leisure Business Advisors (LBA) specializes in conducting
feasibility studies for a variety of leisure businesses, including
family entertainment centers. An independent industry expert
usually prepares this detailed study, which is required by
potential lenders and investors.
Feasibility studies begin the development process and provide
critical guidance for design, construction, and operations. The
study evaluates potential market support and forecasts usage. It
determines potential financial performance and maximum warranted
development costs. It provides physical planning parameters, such
as total land size needed and building space required. It also
recommends the attraction mix.
The following paragraphs outline the major tasks typically
involved in conducting feasibility studies.
An initial meeting would be held to discuss the project in more detail and to see the prospective site if one has been chosen.
The site and local area would be evaluated to determine its effect on potential usage. Factors include:
The family entertainment center concept would be described and industry trends discussed. Readers of the feasibility study may be unfamiliar with the concept and this section of the report provides an introduction before specific project-related issues are examined.
The market areas would be defined based on distance from the site. Demographic characteristics for the resident market would be analyzed to provide an indication of support. This would typically include:
The tourist market would be defined and analyzed. Based on available information, this analysis would likely examine:
Selected comparable family entertainment centers would be examined. Available reported information would be provided on individual characteristics, including:
Potential annual usage for the proposed family entertainment center would be estimated for the first five years of operation based on a number of factors, including:
LBA would make physical planning recommendations needed to service expected market demand. The specific parameters vary from one family entertainment center to another. For larger projects, LBA can also provide master planning and schematic design services. Physical planning parameters may include:
The financial analysis for the proposed family entertainment center would be based on the selected concept and potential usage. Financial estimates for the first five years of operations would include:
LBA would determine the warranted development cost or investment based on potential profitability. This is the recommended maximum amount that should be spent to effectively develop the project and return a reasonable return-on-investment to equity investors. This warranted amount would be compared to the actual development costs for other comparable facilities. Relative size would be taken into consideration. This comparison would provide guidance as to whether the proposed family entertainment center could be developed for its warranted investment. If it can be, the project is considered financially feasible.
Selected past consulting projects are described below. All involved John Gerner, LBA's managing director.
Andy Alligator's Fun Park is an eight-acre family entertainment center (FEC) with a variety of activities. These include miniature golf, go-karts, batting cages, and bumper boats. An 11,000 square-foot building provides space for games, food service, and parties. LBA conducted the feasibility study for this FEC in 2006. The client was Allison's Fun Incorporated.
Foxfire Mountain is a popular adventure park in the Smoky Mountains tourist destination area. It offers a zip line tour, an all-terrain vehicle (ATV) tour, and a swinging bridge. It is considering future expansion, and LBA was retained in 2012 to help define the direction of this future expansion effort.
NASCAR SpeedPark is a branded outdoor family entertainment center offering a variety of go-kart tracks and other participatory activities. In 2005, LBA evaluated the operation of the entire NASCAR Speedpark chain of centers as a subcontractor to Economics Research Associates. The client was Burroughs & Chapin Co, Inc. That company later sold its leisure attractions to PARC Management LLC.
Andretti Thrill Park is a six-acre family entertainment center that features multiple go-kart tracks, miniature golf course, batting cages, paddle boats, train ride, kiddie rides, and a playground. Inside its 17,000 square-foot main building, it provides games, food service and party rooms. LBA conducted a business valuation of this FEC in 2006. The client was MTP of Brevard County, Ltd.
Mister Mark's Fun Park was a family entertainment center that was built in 2003 and closed in 2008. LBA was retained by States Resources Corporation in 2009 to conduct a business valuation of the former center in anticipation of a foreclosure on the client's loan to the original owner.
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info@leisure-business.com
Office Address:
Leisure Business Advisors LLC
2010 Princess Anne Avenue
Richmond, VA 23223 USA
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