The following article is scheduled for publication in the July/August 1999 issue of "Entertainment Management" magazine, the official magazine of the International Association of Family Entertainment Centers (IAFEC).

Designing FECs for the International Market: Imitation is the Quickest Course to Bankruptcy

By Randy White

2000 White Hutchinson Leisure & Learning Group

An American walks into his local Family Entertainment Center. It's opening day, and he wants to see what's up. The first thing he notices is the lack of personal space - it feels claustrophobic and threatening. The next thing he notices is the colors. Wildly colorful, chaotic tile mosaics are everywhere. It makes him dizzy. He wants to sit down. He opens a door that looks like it might lead to a lounge, and nearly gets his head whacked by a blindfolded kid trying desperately to bust open his birthday piñata. He apologizes to the parents, aunts, uncles, and grandparents, and scurries on home.

This example may seem outlandish, but it's exactly what happens when American Family Entertainment Centers [FECs] are copied for the international market. Beyond the fact that many of the copycat FECs use old-line designs that don't even work here anymore, many are plopped down into foreign cultures with absolutely no concession to the values, traditions, and religious beliefs that have such a profound effect on potential customers. FECs can work well in other cultures, but their success requires careful tailoring to local tastes.

What You Don't Know Will Hurt You

Owners of failed international FECs often did just a fraction of their homework. They may have come to the U.S. to observe an FEC during honeymoon period, when the crowds were still thick. And they may not have investigated whether that FEC was making a profit even then - many of the early ones were not.

Since the first U.S. indoor FEC opened in 1989, thousands of these FECs have been built in the U.S. and worldwide. Indoor FECs provide year-round entertainment no matter what the climate, so that's the model that has taken hold. But the early indoor FECs were built on the model of the outdoor FECs with anchors like miniature golf and batting cages, which didn't translate well indoors. Many failed when customers sought out competitors that offered more quality and value.

The U.S.-based FEC industry has learned from experience and evolved. Often, however, the FECs built in other countries are based on those flawed early designs rather than the improved versions. As a result, many international FECs are failing, resulting not only in a substantial financial loss for the owner, but also creating a black mark on the owner's business reputation or the project of which the FEC was a part.

For an example of this, we need look no further than Discovery Zone and its copycats around the globe. Discovery Zone [DZ] is a type of children's indoor FEC that started in the U.S. in 1990. Its formula, which relied on soft-contained-play equipment as the anchor attraction, quickly bombed. The chain rapidly expanded with the backing of Blockbuster Video and later Wall Street, when the chain went public, all on the mistaken belief that DZ would gain first-mover advantage and could later correct any flaws. Many international business people bought and opened international franchisee units or copied the concept even though the chain had never made a profit. Today, DZ has recently emerging from bankruptcy proceedings and has few remaining units, but our FEC design and consulting company still gets inquiries from international businesspersons who want to open copycat versions.

Focused Assortment Works Worldwide

The early Western FECs tried to be all things to all people, but the newest FECs are proving highly successful because they've taken a different approach. These FECs, including some international ones, are focusing on one of three market niches: families with pre-teen children; teenagers; or young adults. They recognize that families with young children, especially mothers, don't feel any more comfortable around teenagers than teenagers do around them, and they know that an FEC designed for younger children will look very different than one designed for teens or young adults.

Age is not the only factor. Another important consideration, often vitally important in other countries, is socio-economics. In the U.S., different socio-economic groups do not always mix well in an entertainment center. That is even more true in some other cultures, which have much more segregated class systems. It is vital to design an FEC for the desired class, sometimes to the point of deliberately designing to discourage attendance by incompatible classes.

Successful FECs focus on a particular market niche of customers and offer an in-depth assortment of attractions, products, programs and services tailored to them. Our company calls this "focused assortment," a concept comparable to shooting with a rifle instead of a shotgun. But even that is not enough.

To Succeed, You Gotta Have Culture

Everyone loves Western culture, right? Levi's, rock-n-roll, McDonald's - sometimes it seems they've taken over the entire world. Although many cultures embrace Western concepts, those concepts still must be adapted to the unique character of that culture.

Our company has been assisting clients with development of international FECs for more than seven years. We are committed to respecting and preserving culture and tradition, and we refuse to just superimpose some formula based on U.S. culture. We know from experience that successful international FECs are not copycat versions of Western FECs, but are tailored to the country and local area's unique culture, including its traditions, customs, values and patterns and settings of leisure, family life, entertainment, socialization, education and play. Furthermore, our experience shows that a culturally correct design translates into profits because it provides an experience that is meaningful to its guests.

Doing this isn't easy. It means rethinking the fundamental elements of the FEC design; things that we take for granted like guppies do water. But the design of the physical facility and its operations must be custom designed to the unique considerations of the local culture and community. Even such basic design elements as colors, finishes, shapes and scale of space vary from culture to culture. Westerners, for example, require a lot of territorial space and are comfortable with large-scale environments. Other cultures prefer a smaller scale and less territorial space. Different cultures also interpret design shapes and patterns differently. What might seem like a disorganized and confusing mosaic of tiles in one culture will seem comfortable and familiar in another. Even the speed of escalators differs. The fast-paced U.S. escalator will scare the heck out of someone from a more languid culture.

Other important considerations are how the genders relate, how parents and children relate, and the culture's values, traditions, customs and religious beliefs. These elements affect weekday business, because, for example, you may be designing the FEC for nannies as much as for mothers. Another example of how traditions affect FEC planning involves birthday parties, a major source of revenue for FECs. In the highly mobile U.S., a party room made for 12 children and six adults will do just fine. But in countries with lower mobility and large extended families, they'll be spilling into the hallway. And in other countries, celebrating birthdays at all runs counter to religious customs.

Another important cultural aspect of FEC design is the FEC's storyline and theme, which often include a mascot costumed character. A storyline and theme that has a connection to the culture and customers will not become dated and obsolete, but will provide a strong brand for the facility. The best way to create a new brand for a community-based leisure center is to reintroduce the local community to itself. In a sense, the community becomes the brand. To accomplish this, you find out about the target market. You identify what about the community makes them proud, you learn about their values and their heritage, and then you integrate them into the storyline and theme as subtext. Our company calls this cultural- and values-based theming and design.

Now We're Going to Tell You Our Secret

The secret of developing a successful international FEC is research, research and research. (You were expecting maybe magic?) Research is followed by planning, planning, and more planning. It is the extensive up-front work that produces long-term success. Although some of the research is based upon published information, most of the cultural research deals with subtle cultural considerations that can only be unearthed by an astute trained observer who conducts on-site research in the culture.

Before our company even begins the preliminary design process for an FEC, we immerse ourselves in the culture observing, researching, and analyzing. We find out where the target market goes, and we go there, too, to restaurants, shopping, leisure and cultural attractions. We study architecture, design styles, construction methods and materials. We visit schools and meet with educators to understand both the pre-school and grade school education systems. We visit play areas to see how children play and how parents and children interact. And our female staff members hold focus groups with mothers, who make the decision to attend more than 80 percent of the time. In cultures where nannies are prevalent, we research their needs as well.

In some cultures religion is especially important. In Muslim countries, for example, religion and everyday life are inseparable. Religion's impact on design is everywhere. Considerations can include seating arrangements in restaurant areas, design of restrooms, the need for prayer rooms and prayer preparation areas, and the selection and preparation of food.

Cultural research will also guide the prices charged by the FEC. If the FEC is the first in its area, it is important to research what the market will support. If the pricing formula is too high, repeat business will suffer; too low, and profits are lost. This research often requires interpolation of sometimes unrelated consumer pricing to arrive at the culture's perceived entertainment values.

One area of research looks dramatically different outside the U.S., and that's financial planning. Financial planning includes a market feasibility study; attendance projections; a financial proforma of revenue, expenses and profit; a concept plan; and a realistic, detailed cost estimate. If current and reliable demographic and socio-economic data are not available, you must create it. Our company has used such resources as school attendance, satellite TV subscriptions and has even counted houses in aerial photographs to develop reliable demographic data. Getting family incomes can be even more difficult. In many countries, and in many territories of the U.S., much of the economy is underground and invisible to people who publish economic data. So we interpolate data from a combination of sources, including gross national product, retail and restaurant sales, housing prices, even automobile registrations. However difficult, it is critical that reliable attendance and proforma projections be developed.

Doing our homework has allowed our company to incorporate a variety of culturally and economically important design elements, such as:

  • Morocco: We incorporated large smoking sections in the restaurant for mothers who attended during the week. Women there like to rebel privately against the male-run society by smoking when men aren't around.
  • Qatar: We designed the FEC to operate as a club restricted to women and children on weekdays, allowing the women to relax and remove their hijabs and al-abayyas outside the sight of men.
  • San Jose, California: Our company, which treats every city in the U.S. as a separate (and sometimes) culture, incorporated a low-tech educational component into children's events targeted at a narrow age group, and we offered an upscale food and beverage selection to meet the demands of the highly sophisticated parents in Silicon Valley. Contrary to conventional wisdom, we barred computers from the center, reasoning that it would be impossible to provide computers and software better than those the children had at home.
  • Mexico: Based upon our focus group research, we choose an interior color and theme that appealed to the women in the culture, both of which were quite different than what the male owner preferred. We also included special piñata-breaking areas, which are essential to birthday parties.

A Dinosaur Tale

If you doubt the difference between research, planning, and customizing with the culture in mind vs. just cloning a Western FEC design, we offer the real-life comparison between Dinotropolis and Alpha-tropolis.

Dinotropolis is a 5,000-square-meter indoor FEC our company designed in Caracas, Venezuela. It opened in 1996, and was the product of extensive cultural research. Our research found that although Venezuela does have an extensive history, most people there place no value on the country's past, preferring instead to look to the future. We also found that children there were fascinated by dinosaurs. So we developed a storyline about an intelligent civilization of dinosaurs called Momosauros, named after King Momo, who appears in many local children's fairytales. The storyline is about four Caracas children who find a space ship that transports them to the planet of dinosaurs and its capitol, Dinotropolis. There they make friends with the Momosauros and visit the magnificent Play Palaces built for the dinosaur children. The four children return to Caracas and build a replica of a Play Palace that they call Dinotropolis in honor of their new friends.

Our company then developed a unique design motif to match the theme we called "dino-tropical-deco." The design has elements of Miami deco style, with which many Caracas parents are familiar. We then custom designed every element of the FEC for its target market, including the mix of attractions, which includes rides; hands-on, interactive play areas and events for young children and birthday party rooms with piñata-breaking areas, some large enough to hold parties of 150 persons.

At the same time Dinotropolis was being developed at a cost of US$3.5 million, another businessperson was building Alpha-tropolis in Caracas at a cost of US$5.0 million. Alpha-tropolis was an indoor FEC modeled after some other FECs the owner saw in the U.S. The owner did not seek out any FEC experts, but instead designed the FEC himself, following the advice of U.S. equipment manufacturers.

Dinotropolis has been very successful. Its annual attendance has topped 400,000. In some months, 12,000 children visited on school field trips. Its profits are higher than the original projections and its attendance and revenues are still growing. Dinotropolis has become a major new anchor draw for the shopping center within which it is located. Alpha-tropolis, on the other hand, closed its doors less than one year after opening.

The moral is clear. Successful international FECs don't copy Western designs. They are informed by them, but are custom-designed for the area's unique culture and target market. Anything less than quality research, FEC expertise, and planning get you a cheap, doomed imitation.

Sidebar for article

The same as in the U.S., there are many design considerations that must be factored into the design of an international FEC for it to be successful. However, each design parameter must be looked at within the context of the culture. For example, the number of tables and chairs required in a restaurant area is not only a function of the needed design capacity, but also a function of table turnover. The same food setting that might result in a 15 minute turnover in the US could take 20 minutes in a slower paced culture, requiring 33 percent more seating to achieve the same throughput per hour. In the US, standard seating might be tables of two and four, whereas in some cultures, seating may need to be provided for families as large as six or eight.

Some important design considerations are:

Operational Issues

  • Minimizing labor costs at non-peak times.
  • Easy of monitoring and supervision including sight lines.
  • Traffic flow.
  • Logistics of handling group business.
  • Logistics of deliveries, trash, etc.

Mix and design

  • A focused mix for the selected target market niche(s).
  • A balanced mix of anchor and impulse attractions.
  • A mix that offers adequate variety, appropriate length-of-stay and targeted per capita expenditures for each of the different target ages of play and social groups within the selected target market niches.
  • A guest experience that creates repeat business.
  • Appropriate adjacency of uses and points-of-sale to maximize sales, meet parent needs and produce a pleasurable guest experience.
  • Wayfinding, especially for children who cannot read signs.
  • Acoustics.
  • Anthropometrics for children-sizing features for children at their scale. This varies depending on the age of the child.
  • Making the facility family friendly.

Return-on-investment

  • Selecting events that will maximize return-on-investment.
  • A design that maximizes impulse sales.
  • A mix and design that maximizes non-peak time revenues.

Capacity calculations

  • Realistic attendance projections and design day attendance calculations.
  • A mix and sizing of attractions and events that meets needed operating capacities and throughputs,

Financing and return-on-investment

  • An accurate cost estimate to avoid cost overruns.
  • Realistic (not overly optimistic nor pessimistic) projections of revenue, expenses and cash flow.

 


Randy White is the CEO of the White Hutchinson Leisure & Learning Group, a Kansas City, Missouri, U.S. firm that specializes in market feasibility, consulting and design of FECs and family and children's venues. The firm has won many awards for the design of its domestic and international FECs. Mr. White can be reach at voice: +1.816.931.1040, fax: +1.816.756.5058, or via e-mail