FDD Talk: Urban Air Adventure Park Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on the Urban Air Adventure Park franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for an Urban Air Adventure Park franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Urban Air Adventure Park franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Urban Air Adventure Park outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Urban Air Adventure Park’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 average, median, maximum, and minimum gross sales for the 41 franchised “2.0 Adventure Parks” that were in continual operation from January 1, 2019 through December 31, 2019, and the actual 2019 gross sales for the 1 franchised “2.5 Adventure Park” that was in continual operation from January 1, 2019 through December 31, 2019

• 2019 average, median, maximum, and minimum cost of goods sold, occupancy, advertising, payroll, insurance, other costs, and EBITDA for the 41 franchised “2.0 Adventure Parks” that were in continual operation from January 1, 2019 through December 31, 2019, and the actual 2019 expenses and EBITDA for the 1 franchised “2.5 Adventure Park” that was in continual operation from January 1, 2019 through December 31, 2019

Section I – Background Information

18 Things You Need to Know About the Urban Air Adventure Park Franchise

Chooses Zimmerman Advertising as Agency of Record

1.  At the end of January 2020, Zimmerman Advertising was named Agency of Record for Urban Air Adventure Park, the nation’s destination for family fun featuring a variety of attractions perfect for all ages. The company is known for endless hours of entertainment, trampolines, rock climbing, dodge-balling, and more.

2.  With more than 110 locations nationwide (at the time of the announcement) and an aggressive plan for expansion, Urban Air selected Zimmerman as full-service Agency of Record. Work started immediately and includes strategic planning, creative development, media planning/buying, digital, social media activation, and hyper-local go-to-market deployment.

3.  Jessica Correa, chief marketing officer of Urban Air Adventure Park, said, “Urban Air is experiencing tremendous growth and we needed a marketing partner with a proven record to help us stay ahead of the game. Urban Air is a place where families make memories together in a safe, fun, clean and affordable environment; and we are fully confident that Zimmerman will help us develop the right message to reach the right consumers at the right time.”

4.  Michael Goldberg, CEO of Zimmerman Advertising, said, “Urban Air’s potential is limitless and their executive team has the right ambition and experience to succeed. We love to work with companies with this mindset because our growth engine was built for brands just like this.” Jordan Zimmerman, founder and chairman of Zimmerman Advertising, added, “We’ve got big plans for Urban Air to help accelerate success for them and we are absolutely thrilled to partner with them. Let the fun begin!”

Wins Franchise Update Media’s 2020 Innovation Award

5.  In mid-August 2020, Urban Air Adventure Park was recognized for its innovative Endless Play Membership program by Franchise Update Media in its second annual Franchise Innovation Awards. Urban Air was honored in the “Most Innovative Use of Technology: Products” category after introducing its first-in-category Endless Play Memberships nationwide in April 2019.

6.  The Endless Play Membership offers unlimited access to Urban Air’s next level attractions such as Indoor Sky Diving, Go-Karts, the Sky Rider Coaster, Spin Zone and Flip Zone Bumper Cars, Climbing Walls, Rope Courses, and more. With memberships starting as low as $6.99, the program allows guests to come back every day for a fraction of the price of a single visit.

7.  Michael Browning, president and CEO of Urban Air, said, “We’re incredibly proud of our team and our franchisee partners for making the Endless Play Membership program such a success and we’re honored to be recognized with this award. At Urban Air, we continue to make strides in innovation and franchisee support and this program is another example of that dedication. For our franchisees, the program has created an e-commerce-based revenue stream that helps build brand loyalty and increase visitation frequency while providing our guests with an amazing value.”

8.  The goal of the Franchise Innovation Awards is to identify and recognize the franchisors creating and implementing the most original and successful innovative strategies and tactics to build their brand. Winners were selected by a panel of seven judges who evaluated the innovation, objectives, and results of hundreds of entrants.

Announces New Franchise Development Incentives

9.  In early September 2020, Urban Air Adventure Park announced a new development incentive program to drive accelerated growth. The “Ultimate Adventure” program applies to new franchisees with multi-unit development agreements. Urban Air’s new incentive program offers up to $700,000 in incentives with the purchase of three franchise agreements.

10.  To qualify for the Ultimate Adventure multi-unit growth program, franchisees must sign a 3-pack franchise agreement prior to December, 31, 2020 and open all three parks within 24 months (18 months for the first two and 24 months for the third). The incentives include Attractions Purchase Credits, waived Initial Franchise Fees, and Renewal Fee discounts.

11.  Josh Wall, chief franchise officer of Urban Air, said, “Urban Air had an extraordinary year of industry-leading growth in 2019, and we are proud to continue our expansion across the country despite the current environment, supporting our franchisees as they have reopened while also welcoming new franchise partners into the family. Given the growing demand that we have seen over the last months, we are excited to offer this incentive program to successful multi-unit owners looking to take advantage of the current commercial real estate landscape. Our model is ideal for multi-park owners – which represent half of our current franchise system – and we are relentless in our pursuit of new ways to support our franchisees as they expand their portfolios and continue to reinvest in the Urban Air brand.”

12.  This news comes as Urban Air continues to rapidly expand across the country, opening over 50 parks in 2019, and 18 new locations during the first half of 2020. The company’s pivot to virtual Discovery Days and remote recruitment has continued to fuel franchisee interest, with 11 of last year’s 16 new franchise agreements signed since March. With another 16 parks scheduled to open before year-end, Urban Air will surpass a system-wide total of more than 150 open locations.

Company History

13.  Urban Air Adventure Park was founded in 2011 by Michael Browning, Jr. with help from his father, wife, and mother, in Southlake, Texas. Browning, who was a marketing software developer, said that he wasn’t looking to start a new business when he visited a trampoline park for the very first time. However, he was excited by what he saw and began developing his own trampoline park concept.

14.  Although Browning and his family had no experience in the entertainment and attractions industry, the first Urban Air Adventure Park was a success. The Brownings opened a second location in the Dallas-Fort Worth area.

15.  After finding a mentor in Jay Thomas, who was vice president of international park development for Six Flags, Browning refined the concept for Urban Air and began expanding the Adventure Park’s offerings to include bowling, ropes courses, climbing walls, indoor coasters, skydiving, and go-karting.

16.  Initially, Browning didn’t have plans to franchise Urban Air, but customers kept asking if more locations would open in their hometowns. At that point, Browning discovered the added value of the systems and procedures he and his partners had created so they could run more than one location.

17.  In 2018, Urban Air received a strategic investment from MPK Equity Partners and AHR Growth Partners to help the brand continue its expansion. Today, there are Urban Air Adventure Park locations around the United States and one international location in Vienna, Austria.

Entrepreneur’s Franchise 500

18.  Urban Air Adventure Park ranked No. 55 on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Urban Air Adventure Park franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Urban Air Adventure Park’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  15
• Outlets at the End of the Year:  32
• Net Change:  +17

2018

• Outlets at the Start of the Year:  32
• Outlets at the End of the Year:  61
• Net Change:  +29

2019

• Outlets at the Start of the Year:  61
• Outlets at the End of the Year:  115
• Net Change:  +54

Company-Owned

2017

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  5
• Net Change:  0

2018

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  5
• Net Change:  0

2019

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  2
• Net Change:  -3

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

Part 1 – 2019 Annual Gross Sales of Franchised 2.0 and 2.5 Parks Open Full Year 2019

• At the end of Urban Air’s 2019 fiscal year, there were a total of 115 franchised Trampoline Parks and Adventure Parks open and in operation in the United States (comprised of 96 franchised Adventure Parks and 19 franchised Trampoline Parks).

• The average, median, minimum, and maximum annual Gross Sales data presented below represent only the Gross Sales data from the 41 franchised 2.0 Adventure Parks that were in continual operation from January 1, 2019 through December 31, 2019 and the actual annual Gross Sales data from the 1 franchised 2.5 Adventure Park that was in continual operation from January 1, 2019 through December 31, 2019.

• “Adventure Park” or “2.0 Park” refers to the following grouping of attractions: Action Cam, Sky Rider, ropes course, soft play, Adventure Hub, dodgeball course, trampolines, battle beam, basketball goals, Wipeout, warrior course, climbing walls, stairway to heaven, leap of faith, pro zone, runway trampoline, and dropzone (airbag). Urban Air’s minimum franchise offering is a 2.0 Park.

• Additional optional attractions are available such as spin zone (bumper cars), virtual reality, bowling, laser tag, go-karts, and indoor sky diving. Adventure Parks that include any such additional optional attractions are referred to in the disclosure document as a “2.5 Park.” Certain trade areas and markets may be designated as a 2.5 Park market, in which case you may only develop a 2.5 Park in such market.

• Part 1 excludes the 54 franchised Adventure Parks that opened during fiscal year 2019. The Gross Sales data for the 19 franchised Trampoline Parks also was excluded because Urban Air no longer offers the opportunity to acquire the right to develop and operate a Trampoline Park.

• The financial performance representations in Part 1 do not reflect the cost of sales, operating expenses, rent/real estate, or other costs or expenses that must be deducted from the Gross Sales figures to obtain your net income or profit.

A.  2.0 Parks