Reply to Badlands. Why is it just getting more expensive?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]A friend and I (who both run businesses) looked at the finances of play places in general because we were asked to invest in one. Badlands is owned by the wife of David Blair, who ran for MoCo county exec in the last election and lost to Elrich in the primary by only 77 votes. He is a successful businessman, and I know he has his hands in Badlands since I've seen him there.

Their lease probably isn't too bad since that mall is sort of dying, and they spot there were in was vacant for a while, They did have a lot of expenses on build-out -- my guess would be $500k-1mln but I don't know how much it costs to bring in and assemble all that rock stuff.

They are making money on weekends and do a brisk birthday party buisness. The issue is mid-week. Take a day like today, right now (ok, tomrrow.. they're closed on Mondays). They are open 10am-2pm, but I bet the place is nearly empty. Only kids not in preschool/school yet would go, yet they need a certain minimum of staff there to keep it running. I bet the'yre lucky to bring in $200/day in revenue on a day like that. Summer is better -- they contract with camps and the kids come in during the day, but that's only 2.5 months of the year.

So they make nearly all their money on the weekends, and there's a limit to how many people can be in there at once. I guess they are having revenue issues, so they raise the prices since they can't raise the number of people who can be in there.. so get more money without increasing who is in there, since they have no more space. I bet they didn't count on how very cyclical this business is - -you make nearly all your money for the week during just 2 days with a little revenue boost during the 2.5 months of summer due to summer camps. Also since they have in-house food service and all that crazy rock stuff, they have higher staffing needs than most play places. You need some spotters for the rock stuff, and 1-2 people to run the cafe (and at least one must be a certified food handler).

If I were getting into this business, I'd do it like BounceU in Rockville, which any parent of a MoCo K-2nd grader knows well. They paid &lt; $100k for all the bounce houses, and they are in a warehouse in the industrial district on Gude Drive = cheap rent. They are pretty much only open on weekends, and only when they have birthday parties. Most of the staff is high schoolers. Very low costs, and fairly stable revenue (kids always have birthdays).
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Do you honestly think that they didn't think of all those points you have stated?[/quote]

No, I don't. This is a case of "we can do it better by offering a more premium product" where decisions are driven more by emotions and that doesn't always work. The owner's husband has deep pockets so they can run at a loss for a few years, but let's see where they are in 5 years. [/quote]

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