I belong to a Linkedin.com group on family entertainment centers. It is a very active group with good discussions on many topics. Recently a FEC developer asked whether it was a good idea to include a bar with alcohol. Jim Kessler, who I have great respect for, has influenced my thinking in a number of areas and is the owner of the very successful LaserTron entertainment center in Buffalo NY with laser tag and go karts, offered the following advise:
“If you design it for adults, you will get the kids and teens anyway.
“If you design it for adults, you need a bar.
“If you put a bar in, you will get more adult birthday parties, adult groups, corporate groups and a lot of walk in adults.
“If you put a bar in, you will also get MORE kid birthday parties. Plus you will get MORE families during the daytime hours and early evening as well.
“I didn’t think all the above would be true until we did it [at LaserTron] and it happened (and continues to grow). More difficult to manage? Absolutely, but that’s another barrier to entry for those who can’t handle the complexity of the business. I love barriers to entry.
“We are currently designing our next center and it will be even more focused on what adults would want (if they knew they could get it). I can’t believe it took me this long to figure it out.
“By the way, the key is designing your attractions for adults and not kids. Why? Because when you design it for adults you get the adults and you get even more kids and teens. Why? Because when you build it for adults you build it a lot cooler than you would build it for kids.”
Jim makes some very good points based on his experience. Industry results tend to support what he says, at least in terms of revenues per square foot. Adult-oriented entertainment venues have sales per square foot far in excess of children’s entertainment centers or the typical FECs without bars.
There are several factors that produced the outcome that Jim experienced at LaserTron by adding a bar and increasing the focus on adults:
1. If you want families, you have to consider the needs of parents. Ignore the parents and you have created a reason for parents to veto your facility and steer their children to a different venue where the parents will be happier. Most Chuck E. Cheese’s sell beer and wine. They don’t have a bar, but they know the appeal of alcohol to adults. If dad can have a beer, he will come (we call beer at CEC’s or similar type venues the dad pacifier. The wine is probably more for moms). The overall quality of the facility, including its design, ambiance, food and customer service is far more important to adults than kids. Many FECs that we label as carnivals in a box appeal to kids who aren’t as discriminating, but do not appeal to parents and adults.
2. When you have a bar, assuming your attractions are age appropriate (which laser tag and go karts are), you start attracting adults in addition to the families.
3. Alcohol sales increase per capita sales. Alcoholic drink prices are much higher than soda. Gallup polls show that 72% of 18- to 54-year-olds drink alcohol. The percentage is 81% for households with $75,000+ incomes. For drinkers, the preference is 44% beer, 33% wine and 23% liquor.
4. Kids, starting around age 8 or 9, think its cool to go to a more adult-oriented venue.
5. When you appeal to adults, your busy evening hours will extend to a much later time than when the kids need to be home, increasing sales.
Dave & Buster’s is a good example of what Jim is talking about. There is little doubt that D&B is designed for adults. And yes, they have several bars. And yes they have much more upscale finishes and décor. And yes, they do attract families with children, especially during early evening and weekend daytimes; so much so they have a policy to exclude kids after 9pm when the crowd needs to be strictly adult. By some reports 20% to 25% of their business comes from families.
Main Event in Texas is another great example of this phenomenon. They are designed for adults and get lots of family business. Although it doesn’t offer entertainment, Red Robin restaurants illustrate the power of targeting families with teens and teens and having a bar. Red Robin also attracts adult groups without children. Their average unit sales exceed $3.0 million.
But here’s where many FECs get it wrong. Dave & Buster’s and Main Event are purpose-designed for adults, not for families. They target adults. Whenever you target a particular market, you will also get a secondary market, in this case, families. But imagine how much business a D&B would do if they had also tried to be designed for families? It would diminish the appeal to their primary adult market. That’s the mistake some entertainment venues make. They try to design for both the family and the adult markets, diminishing the appeal to both. You get maximum sales for designing for one market niche and then a second niche will become a secondary market by default.
Now, if you are targeting younger children, basically children 8 and younger, like Chuck E. Cheese’s, you won’t attract adults coming alone and a bar is probably not appropriate (CEC doesn’t have a bar. The beer and wine is at the bottom of their menu board in smaller lettering.) But, even without a bar, it is still necessary to consider the needs of the parent. This includes the type and quality of the seating, and the quality of the décor and food (CEC is upgrading their pizza quality for this very reason. See our previous blog on What’s Happening with Chuck. E. Cheese’s.)
What works in Buffalo might not work everywhere in the America, especially in some very religious communities in the South. But for most markets, Jim is on the money with his advice both figuratively and literally. It may well be that the generic indoor FEC without a bar is an obsolete model.