In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Sky Zone Indoor Trampoline Parks franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Sky Zone Indoor Trampoline Parks franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Sky Zone Indoor Trampoline Parks franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Sky Zone Indoor Trampoline Parks’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average open jump revenue; event revenue; non-jumping revenue; total revenue; cost of goods sold; advertising and promotion – ad fund; advertising and promotion – all other; amortization and depreciation; current POS system expense; cleaning, building/facility supplies; credit card fees expense; insurance expense – general liability; insurance expense – other; interest expense; labor (management labor including payroll taxes); labor (non-management labor including payroll taxes); owner compensation/management fees; office expense; party expense; rent expense; replacement parts/court maintenance; royalties; utilities expense (including telephone); other expenses; total expenses; operating income; EBITDA; and EBITDA + owner’s compensation for the 85 franchisee-owned Sky Zone Indoor Trampoline Parks that were open from January 1, 2016 through December 31, 2016
- average daily revenue generated by the 2016 franchisee-owned New Parks compared to the 2015 franchisee-owned New Parks
Section I – Background Information
13 Things You Need to Know About the Sky Zone Indoor Trampoline Parks Franchise
Ultimate Dodgeball Championship 2017
1. Sky Zone is holding an Ultimate Dodgeball Championship tournament over the summer of 2017. According to the rules, for $99, teams can enter to compete in the tournament, which takes place on Sky Zone’s trampoline courts. If a team wins its Regional Qualifier, it will earn a chance to compete in the Championship in Chicago for $50,000 in cash prizes.
2. The Regional Qualifiers were held from May 16 to June 11 and the Championship games will take place from August 3 to 6.
3. Sky Zone continues to grow as it opens new locations around the country. The newest location will open in Winston-Salem, North Carolina and will be the sixth location in the state. The other five parks are located in Greensboro, Asheville, Charlotte, Durham, and Raleigh.
4. Another Sky Zone will open later this year at the West Ridge Mall in Topeka, Kansas. The owner of the location is L. Dee Murdock, who will simultaneously open a second location in his hometown of Joplin, Missouri.
5. Also opening this year, is a Sky Zone in Bismarck, North Dakota, which will be the state’s second Sky Zone park.
Special Programs and Attractions
6. To keep things fresh, Sky Zone offers several different special events and programs at each of its locations. One program that Sky Zone is currently offering is SkyCamp, which offers kids age-appropriate exercises with instructors, and other activities like Ultimate Dodgeball. Parents can drop kids off to participate in SkyCamp.
7. Sky Zone’s newest game is SkyWars, which allows guests to engage in team battles using blasters and foam balls or darts in a variety of activities such as team elimination, capture the flag, and duck hunt.
8. In addition to special programs, each Sky Zone location offers a different attraction other than the trampoline courts. Some Sky Zones offer The Foam Zone, a pool of huge foam squares that customers can jump into; SkyLine, a millimeters-thin raised slackline; Ultimate Dodgeball and Ultimate Volleyball; a freeclimbing bouldering wall; and several other unique attractions.
9. Sky Zone was founded in 2004 by Rick Platt in Las Vegas, Nevada. Platt originally intended for the trampoline courts to be used as part of a new sport with professional athletes. Platt initially hired athletes for his proposed sport, which would have included rotating hoops and mid-air acrobatics.
10. The sport failed to generate interest, but Platt opened the facility up to the public for $8 per person after local skateboarders asked to bounce on the trampoline court. The idea quickly caught on and within six months, the facility had hosted 10,000 visitors.
11. In 2006, Jeff Platt, Rick Platt’s son, opened a second Sky Zone in St. Louis, Missouri. Jeff Platt is currently the CEO of Sky Zone and has run the company since he was 22 after Rick left to take care of Jeff’s mother Jan. Rick Platt never resumed an active role in the company, but retains a board seat.
12. Franchising began in 2009 and today there are over 170 locations in six countries.
Entrepreneur’s Franchise 500
13. Sky Zone has appeared on Entrepreneur’s annual Franchise 500 list since every year since it made its debut in 2011. The company’s highest rank was No. 53 in 2017, while its lowest rank was No. 453 in 2011.
Section II – Estimated Costs
- Please click here for detailed estimates of Sky Zone Indoor Trampoline Parks franchise costs, based on Item 7 of the company’s 2017 FDD (updated).
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Sky Zone Indoor Trampoline Parks’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
- Since the franchisor does not own any Sky Zone Indoor Trampoline Parks, the information contained in Item 19 is based upon the financial performance of Sky Zone Indoor Trampoline Parks that are owned and operated by its franchisees.
- The operations of the franchisees are similar to the operations that are contemplated by franchises described in the Franchise Disclosure Document. Certain material differences in the economic or market conditions known to or reasonably ascertainable by Sky Zone are more fully described below.
- However, no two Sky Zone Indoor Trampoline Parks are exactly alike and there are differences in certain aspects of the Sky Zone Indoor Trampoline Parks as more fully described below.
Part 1 – 2016 Revenue and Expense Averages (January 1, 2016 to December 31, 2016)
- Part 1 of this Item discloses revenue and expense information for certain franchisee-owned parks that were open from January 1, 2016 through December 31, 2016 (the “Measurement Period”). The results from a total of 85 (79%) of the 107 franchisee-owned parks that were open and operating over the Measurement Period are disclosed in Part 1 of this Item.
- To gather the data associated with Part 1, the franchisor provided a standard template to franchisees and requested that they complete it. Franchisees populated their own data and returned the completed templates to the franchisor. The franchisor aggregated this data to determine the average revenue and expense line items discussed below.
- The information provided is not a forecast, projection, or prediction of how your franchise will perform. These figures should not be relied upon as the actual or potential revenue that you will realize. It is likely that your revenue will differ from the information in this financial performance representation.
- These statements have not been audited, and may not be based on generally accepted accounting principles.
- A total of 22 of the 107 parks are not included below because they either (i) were not required to submit in accordance with their individual Franchise Agreements (8 parks); or (ii) did not submit their respective historical information at the time the franchisor compiled this information for inclusion in this Item 19 (14 parks).
- The franchisor also has excluded the data concerning five Affiliate-owned parks that were open and operating as of December 31, 2016. All information included below is for franchisee-owned parks operating in the United States only.
- The franchisor has included averages for all 85 parks disclosed in this Item 19 (“All Parks”) in Part 1.
- Jumper capacity is often tied to the overall square footage of the park but, in certain cases, utilization of the space may enable variations in jumper capacity.
All Park Average