FDD Talk 2015: The BounceU Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2015 post, you’ll learn the following:

• Section I – Background information on the BounceU franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a BounceU franchise, based on Item 7 of the company’s 2015 FDD

• Section III – Presentation and analysis of BounceU’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:

• 2014, 2013, and 2012 average and aggregate gross sales for the BounceU Facilities that have been in operation for at least one year as of December 31st for each respective year

• monthly percentage allocation of the systemwide sales reported to the franchisor from all BounceU Facilities during 2014 that had data available in the same period year-over-year

• average gross sales of three franchise BounceU Facilities that opened in 2011 and three franchise BounceU Facilities that opened in 2012 in their first and second years of operation

Section I – Background Information

BounceU Provides Fun, Safe, Stress-Free Party Time

What kid doesn’t love a bouncy castle? With BounceU, children don’t have to wait for the carnival. They can enjoy private birthday parties, as well as other events and “open bouncing” time, in a variety of inflatable play structures.

Parents magazine picked BounceU for its list of 2014 Top 10 Best Birthday Party Places for Kids, so it appears the chain is a top pick for both children and parents.

Gigantic Inflatables Provide Safe Fun

The chain creates birthday-party experiences for kids that are designed to be fun, safe and free of stress, featuring gigantic inflatables such as obstacle courses, slides and basketball nets. Parents can also arrange for photos to be taken at parties, as well as food, beverage and goody-bag add-ons and other specials.

From Bounce Zone to BounceU

BounceU was founded in 2003 in Gilbert, Arizona, by Brent and Carron Schmick, whose first location was initially named The Bounce Zone. Franchising began in 2004.

The Schmicks teamed up with Laura and Eric McCabe in 2004. The McCabes invested about $400,000 in the chain, including start-up costs for opening a second location. The company was renamed BounceU.

The chain was purchased in 2008 by PIU Management, the holding company that owns Pump It Up, previously BounceU’s top competitor. The two chains operate separately under the umbrella of Fun Brands, a PIU Management brand, along with Fun Brands Carousels.

BounceU today is based in Tempe, Arizona, with about 50 locations in 18 states: Arizona, California, Connecticut, Georgia, Indiana, Maryland, Michigan, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, Tennessee and Texas.

Parties, Camps and Open Bouncing

In addition to birthday parties, some locations offer events such as themed camps and parents’ nights out, as well as opportunities to enjoy bouncy activities for no reason. Parents can also sign their kids up for Open Bounce for casual fun or take the experience up a couple of notches and opt for the more flashy Cosmic Open Bounce, which features a light show in the dark, glow-in-the-dark accessories, and music.

Sweepstakes Helps Child With College

BounceU celebrated its 10th anniversary with a sweepstakes that brought a $10,000 scholarship to a 10-year-old boy from Fishers, Indiana. Jackson Caldwell, the grand-prize winner, was one of thousands of people to enter the sweepstakes. The money was deposited into a 529 College Savings Plan, according to a January 2014 news release from BounceU.

At 10, Jackson already has an idea of where he’d like to go to college.

“I am interested in geography and computers and would like to study both of these things,” he said in the news release. “I would like to go to the University of Kansas or Butler University when I grow up.”

Section II – Estimated Costs

• Please click here for detailed estimates of BounceU franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis