In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Sky Zone Trampoline Park franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Sky Zone Trampoline Park franchise, based on Item 7 of the company’s 2018 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Sky Zone Trampoline Park franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Sky Zone Trampoline Park outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Sky Zone Trampoline Park’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 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 100 franchisee-owned Sky Zone Trampoline Park locations that were open from January 1, 2017 through December 31, 2017
- average daily revenue generated by the 2017 franchisee-owned New Parks compared to the 2016 franchisee-owned New Parks
Section I – Background Information
12 Things You Need to Know About the Sky Zone Trampoline Park Franchise
Acquired by CircusTrix
1. In early 2018, CircusTrix Holdings, LLC – a leading developer, operator, and franchisor of indoor active recreation parks – announced that it had acquired Sky Zone, LLC and Sky Zone Franchise Group, LLC. With the acquisition, CircusTrix and Sky Zone have created the largest indoor active recreation and trampoline park company in the world. Sky Zone’s brand and franchise structure will remain in place and its management team will continue to manage Sky Zone operations as well as corporate-wide franchise activity in conjunction with the existing CircusTrix franchise team.
2. Jeff Platt, president and CEO of Sky Zone, said, “We are extremely excited about what this new partnership with CircusTrix will enable for our guests and our franchise partners across the world. We believe, together, we will continue to be the leader in bringing more play to more people.” Platt will continue to oversee Sky Zone, as well as CircusTrix’s global franchise division as president of franchise operations and a member of CircusTrix’s executive team.
Signs Master Franchise Deal for Pakistan
3. Last May 2017, Sky Zone announced that it had signed a development agreement with Vibractive, a business development group, to grow its concept in Pakistan. Vibractive plans to open three Sky Zone locations in the next five years, the first of which is already under construction in Lake City, Lahore, making Sky Zone the first international trampoline park brand to enter Pakistan.
4. Jeff Platt, president and CEO of Sky Zone, said, “Bringing Sky Zone to different areas across the world has been a priority of ours since the beginning. Creating a relationship with Vibractive, a company that already has an exceptional portfolio for international business development, will allow us to establish a solid reputation in an untapped market, while bringing our brand to a new Pakistani audience.”
Awards Top Franchisees at 2018 National Convention
5. In early May, Sky Zone held its 2018 National Franchise Convention, where the company celebrated milestones, commemorated achievements, and welcomed new franchise partners. The conference featured content-rich workshops, presentations, and a tour of Sky Zone’s new park in Vernon Hills, Illinois. The new park features many of Sky Zone’s latest attractions, including Augmented Climbing, Fusion Dodgeball courts, a new Stunt Zone (the first of its kind in the U.S.), and a six-lane, serpentine Warrior Course.
6. Sky Zone also honored franchise partners and key team members for their contributions to the brand’s continued growth and success worldwide. Jeff Platt, president and CEO of Sky Zone, said, “We are extremely proud of all the recipients of Sky Zone’s annual Franchise Partner awards. Their commitment to the brand, company values and the communities we serve is remarkable, and we are honored to recognize their accomplishments. Each and every franchise partner plays a tremendous part in shaping and growing Sky Zone, and we congratulate and thank each of them for their hard work and dedication.”
7. Some of the awardees were:
- Doug Fierro and Steve Berlin, who were recognized with the “Do Good” award for their active participation in both national and local charity initiatives throughout the year.
- Carrie Snyder, who was named “WoW Franchise Partner of the Year” for consistently seeking ways to better her parks’ guest experience and the Sky Zone brand, helping and collaborating with other Franchise Partners, actively engaging with guests, and fully embodying Sky Zone’s values. Snyder owns and operates three Sky Zone locations in Fort Wayne, Indiana; Mishawaka, Indiana; and Holland, Ohio.
- Bron Launsby, who earned the “Global WoW” as the individual who best epitomized the brand through the embodiment of its culture and core values. Launsby, who owns 6 Sky Zone parks, was also awarded “New Park of the Year” for the performance of his newest location in Fairview Heights, Illinois.
- Andrew Rockledge of Daytona Beach, Florida was presented the “Park of the Year” award for impeccable park operation, highly engaged team members, positive same-park sales growth, and attention to safety.
- Jay Highley, who was recognized as the first recipient of the new “Awesome Innovation & Collaboration” award for his partnership with other Sky Zone parks and corporate Home Zone to pioneer new innovative programs and processes to better the brand. Highley owns franchise locations in Shawnee, Kansas; Lee’s Summit, Missouri; Fort Myers, Florida; and Tampa, Florida.
8. Sky Zone was founded in 2004 by entrepreneur Rick Platt in Las Vegas, Nevada. Platt initially wanted the trampoline courts to be used for a new sport, which would have included rotating hoops and mid-air acrobatics. He spent $2 million to build the trampoline arena and hire and train professional athletes. Platt organized an event to drum up interest and while 4,000 people showed up to watch two live games, nothing solid resulted.
9. As Platt’s money dwindled and he didn’t know what to do with the trampoline arena, local teenaged skateboarders heard about the wall-to-wall trampolines and were interested in using the space. Initially, Platt let the kids jump for free before the athletes came to train (he was still trying to get the sport off the ground), but as money got tight, he started charging them an $8 entrance fee.
10. Platt ended up scrapping the sports idea and turned the arena into a trampoline park open to the public. Within six months, Platt’s trampoline park had hosted 10,000 visitors and total revenue for the first year was $412,000. In 2006, Platt’s son, Jeff, opened his own trampoline park in Missouri and it became profitable within six weeks of opening.
11. Around this time, Jeff graduated from college and his mother fell sick with cancer. Rick decided to leave the business to take care of his wife (Jeff’s mother) and left Jeff in charge. As other people started opening their own trampoline park businesses, Jeff knew that he had to start franchising the Sky Zone concept. Franchising started in 2009 and since then, Sky Zone has grown across the United States, as well as in Australia, Canada, Guam, Guatemala, India, Kuwait, Mexico, Norway, Pakistan, Saudi Arabia, and the United Kingdom.
Entrepreneur’s Franchise 500
12. Sky Zone ranked No. 81 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Sky Zone Trampoline Park franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Sky Zone Trampoline Park’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 88
- Outlets at the End of the Year: 110
- Net Change: +22
- Outlets at the Start of the Year: 110
- Outlets at the End of the Year: 138
- Net Change: +28
- Outlets at the Start of the Year: 138
- Outlets at the End of the Year: 150
- Net Change: +12
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 4
- Net Change: 0
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 5
- Net Change: +1
- Outlets at the Start of the Year: 5
- Outlets at the End of the Year: 5
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2018 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 – 2017 Revenue and Expense Averages (January 1, 2017 to December 31, 2017)
- Part 1 of this Item discloses revenue and expense information for certain franchisee-owned parks that were open from January 1, 2017 through December 31, 2017 (the “Measurement Period”). The results from a total of 100 (72%) of the 139 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 39 of the 139 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 (31 parks).
- The franchisor also has excluded the data concerning five affiliate-owned parks that were open and operating as of December 31, 2017. All information included below is for franchisee-owned parks operating in the United States only.
- The franchisor has included averages for all 100 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 Parks (Average)