40 IBI May 2012

t was always fun watching the old movies showing thelaunching of a newly built ship. The beautiful actresssmashes the champagne bottle, the ship magically

starts its smooth glide down the ramp, its sleek hull barelycausing a wave as it enters the water.

We may not have beautiful actresses, and we don’t wantto waste the champagne, but it’s still exciting to be part ofthe launch of Beyond Bowling. I’ve been an admirer of ScottFrager’s, and more recently Chris Holmes’, work atInternational Bowling Industry. I’ve had the pleasure of gettingto know them and the IBI staff over the last few years, andlearning a lot about the bowling industry in the process. Ourfriendship began as I contributed several articles to IBI in recentyears, reporting on the growing development of what we nowcall the “BEC” the Bowling Entertainment Center. I’ve comeat this as a family entertainment guy. I started in operationsin the mall arcade business which, in the late 80s, evolved intobigger box, more diversified, FECs or family entertainmentcenters. We took a long look at bowling as an FEC attractionas early as 1991 but couldn’t quite pull the trigger. It was 1998before I was personally involved in the management of afacility combining bowling and traditional FEC attractions. Thatwas Sports Plus in Long Island, NY, which was an early pioneerbut did not quite integrate all the great FEC attractions withthe fun and magic of bowling.

That’s all changed now. The model has been refined andits economics proven. The BEC is here to stay. Having beena part of these developments over the last few years, Pinnacleand IBI believe there is a crying need to establish a vehiclewithin IBI that will showcase and bring focus to BEC issues,trends, and best practices. We willwork together to earn your trust,your loyalty as readers, and yourrespect as proprietors as we worktogether to build Beyond Bowlinginto an industry force.

Hope you enjoy it,

According To George Chris’ Corner

INTRO

Ihen I came to IBI all of 15 months ago, myperspective of the bowling world was that ofmost average Americans: “a bowling alley is

any place that has bowling.”Little did I know that the business had been evolving for

a number of years to spawn a variety of facilities that haveso much more to offer than just bowling that the term“alley” would not do them justice. From BowlingEntertainment Centers, to ultra-cool bowling lounges, tobowling bistros, there is so much more to the bowlingbusiness today than just rental shoes and pinsetters.Traditional bowling houses are incorporating different kindsof amenities to get customers in the door and keep themthere. Whether it is the latest in arcade gaming technology,the hottest new attraction, eye-popping theming ideas ordelicious food and beverage options, there are more reasonsthan ever before to head to a bowling center.

Beyond Bowling was created to bring stories of thepeople and centers that are on the cutting edge of thebowling world’s evolution. I hope that the information willinspire you to think of the next step in your center’sdevelopment to make it more appealing to customers andthus more profitable. Partnering with George McAuliffe onthis new endeavor, there is no doubt you will not have anydifficulty finding that next gem of an idea.

This first installment of Beyond Bowling is just thebeginning, and I encourage you to actively participate ingrowing this project. Join the Beyond Bowling group onwww.bowlingindustry.com for the chance to feature yourcenter in a future edition of Beyond Bowling.

To the future and beyond!

W

Chris HolmesDirector of Advertising,International BowlingIndustry

George McAuliffePresident, PinnacleEntertainment Advisors

42 IBI May 2012

ndy Bartholomy didn’t set out to become one ofthe kings of the modern Bowling EntertainmentCenter, or, BEC. It was a classic case of necessity

being the mother of invention. In 2006-07, at the start of theeconomic downturn, Bartholomy Bowling’s Tulsa, OK, RiverLanes was an 80-lane building with a 40-lane business. Theyneeded to beef up the ancillary profits but were not sure howso they decided to check into the growing familyentertainment business, or FEC.

Before jumping in with both feet, Bartholomy and hispartners certainly did their due diligence. They discussed thepossibilities with their management team, spoke with otherproprietors and then met with Kurt Harz, John Roush and theirteam at Brunswick. In the emerging BEC market, there was

no set template to follow. They attended the IAAPA(International Association of Amusement Parks andAttractions) and other non-bowling FEC trade shows.

After weighing all the options available, Bartholomydecided that an indoor electric go-kart facility would be theperfect anchor. The sports theme tied in nicely with theexisting center, the capacity was just right, the team likedthe excitement the new venue would generate and itwould be a great opportunity to package a fun new productfor birthdays and corporate parties. While Bartholomy and

Transforming a Business

GOING BEYOND By Jackie Wyckoff

Proprietor Andy Bartholomy, Brunswick and Pinnacle EntertainmentAdvisors team up to transform a chain of bowling centers to BECs.

A

Andy B’s all lit up and ready for a busy night.

The ”command center” of Andy B’s is the best of form and function.

his team didn’t exactly reinvent the BEC wheel, theycertainly set the standard and created a working model forhow to do it right.

Once Bartholomy’s team was committed to the BECconcept, adding a redemption game room was the naturalevolution. A well-planned, designed and operatedredemption game room is a solid investment with very goodreturns and good risk management. When they researchedfamily entertainment attractions, they discovered there arevery few profit options which spans both the age and genderappeal that a redemption game room can provide. RiverLanes developed its own in house game room team, initially

Andy Bartholomy receiving the Brunswick Center of Excellence award from JohnRoush, left, regional director for Brunswick, and Sharon Moony, right, the generalmanager of Andy B's Tulsa.

44 IBI May 2012

including general manager Sharon Mooney andgame room and go-karts manager Saul Scribner.Bartholomy has found that redemption revenueaverage per game was consistently higher thanvideo games, and redemption sales held steadyover longer periods of time.

With the new attractions, transformation of theexisting building and reinvention of the business,River Lanes became “Andy B’s” in April of 2008.But this was just the start of the Andy B’s story.The results at Andy B’s, Tulsa, were an excellentreturn on investment. The redemption arcadeconcept integrated so well into the businessthat the team wanted to apply it to the otherBarthlomy Bowling centers. They immediatelybegan to modernize the existing game room and added a redemption arcade tothe 36-lane Broken Arrow center in Broken Arrow, OK.

In 2010 Bartholomy addressed entertainment in his Starlite Lanes in Lebanon,MO. Even though Starlite is a small center and had no room for a game room, hemodernized where he could with 12 brand new games. In December, 2011, hemodernized the game room in his home base location, Battlefield Lanes inSpringfield, MO, adding approximately 28 games and a redemption center. A fifthcenter, Bartlett Lanes in Bartlett, TN, is currently undergoing a full renovation witha state of the art redemption game room on the scale of Andy B's in Tulsa.

Redemption games have a high entertainment value which is defined as the sumof every sensory input that a game has, plus the time of play. It is a complicated

formula, but the ticket payout percentand hit frequency of each redemptiongame in a location must be set inrelation to all the other redemptiongames. This will ‘balance out’ eachgame so it has an equal opportunityof giving customers ‘fair value’ fortheir money and time. Of course, thebetter games will still earn morebecause their higher entertainmentvalue exceeds a small reduction intheir ticket payout percent. The rightmix of games and attractions keepsvisitors engaged and buying.

The floor plan, attraction selection,and theme development can have anenormous impact on the bottom lineof a family entertainment center.Bartholomy credits PinnacleEntertainment Advisors for helpingto enhance the center’s layout tomaximize profitability and guestsatisfaction. They worked directly withthe architect/design firm CornerstoneArchitechture to create a modern,vibrant floor plan that keeps guestsinteracting within the facility, increasingrevenue and higher probability forrepeat visits.

The Andy B’s team trains thecenter staff on Bartholomy Bowling’sgame room standards and systems,with Pinnacle’s help on the operationsside. Saul Scribner of Andy B’s, Tulsa,is the director of the in-housetechnical support department andtrains the new centers’ staff ontechnical standards.

The indoor go-karts area has been a big draw to Andy B’s.

46 IBI May 2012

technical support department and trains the newcenters’ staff on technical standards.

The last of the major factors in how they executetheir redemption game rooms is the Debit or“swipe” card system. They have used the EmbedCard system in three of the five centers where theyupgraded game operations. Bartholomy is a bigbeliever in the power of debit card systems totransform the business, and not just in the gameroom. Andy B’s integrates every aspect of thebusiness into the debit card system from gameroom, bowling and other attractions to food andbeverage. It’s an important part of the Andy B’sexperience.

Bartholomy cautions proprietors that aredemption arcade requires the same commitmentof management time and resources as any otheraspect of a business. It is important to recognize thatthis isn’t just “open up your game room and come

High design brings a sophisticated effect to the bowling lanes.

in once a week to collect the money.” Do yourhomework; understand how the game roomand family entertainment attractions in generalcan be integrated in a way to transform yourbusiness. Get some professional assistance inareas you don’t know and understand all thealternatives. Bartholomy Bowling has hadexcellent results in the four centers where they

added redemption game rooms and, thanks to meticulous planningand execution, expect the same in their Bartlett, TN, Andy B’s

Andy B’s Tulsa BEC earned the 2009 Brunswick Center of ExcellenceAward. Bartholomy Bowling centers include Andy B’s and BrokenArrow Lanes, Tulsa and Heritage Lanes in Oklahoma City, OK;Battlefield Lanes in Springfield, MO, Buckhorn Lanes in Waynesville,MO, and Starlight Lanes in Lebanon MO; locations in Tennessee areWinchester Bowl in Memphis and Bartlett Lanes in Bartlett – whichis currently in the process of modernizing and transforming into anAndy B’s. ❖

Photos courtesy of Cornerstone Architecture.

A clean and free-flowing redemption area is inviting to patrons.

The redemption counter looks chocked and full of prizes yet organized and isaccessible from all areas of the center.

Jackie Wyckoff, who started bowling in 1968, is a San Francisco (CA) Bay Areanative, avid Giants fan and gourmet chef. She was President of the BowlingWriters Association of America, 2009-2011. Wyckoff has worked andvolunteered in the bowling industry since 1972 with jobs including CenterManager, USBC (WIBC) Association President and Writer and Promoter forall things Bowling. She was a PWBA Regional Player with several state andlocal titles to her credit.

48 IBI May 2012

owling-anchored FECs are the hottest trend in thefamily entertainment center industry. Bowling is theleading asset to the mix; it is the prime draw and

anchor. Bowling appeals to a wide age group as shown inbowling leagues from toddlers to seniors. The appeal extendsto both genders and every segment in terms of age diversity.With the addition of redemption arcades, laser tag, miniaturegolf and even theater screens, that appeal is widened and helpsdiversify the audience. Bowling FEC attractions provideentertainment capacity for parties and groups, including aserious corporate component.

With many bowling centers in their fourth and fifth year ofredemption operation, we have a track record to examine.There are two models to draw comparisons: (1) newconstruction, ground-up bowling FECs and (2) traditionalbowling centers that convert existing space into familyentertainment. Because the market is mostly from the secondcategory, let’s focus on the traditional center thatadds/converts space to family entertainment.

The Game MixEach center is personalized for its market, but today’s

numbers often reflect a game mix of roughly 80% redemption(including cranes and merchandisers), 10% video and 10%miscellaneous novelty pieces like photobooths, air hockeyand others. Within that mix, we create sub-sections of gamecategories to serve different age groups. Our objective is todraw the whole family, both together as a unit and separatelyas individual members. A good attraction mix will expandappeal which helps to eliminate “veto votes” and gets thewhole family in the car for a visit to the local FEC.

Investment LevelsBoth new and traditional centers have similar economic

considerations. The process starts with space allocation and“right sizing” the gameroom. Many bowling proprietorsmake a common error in building the wrong size game room,often too large. Sales volume does not necessarily equate tonumber of games. For example, a center might reach$800,000 in annual sales in a 1,200 square foot game roomwith only 25 games. “Right sizing,” which takes into accountthe center’s overall traffic, maximizes the return on investment.

The game mix dictates the game investment, and this is

where a professional would be helpful. By knowing thegames that will perform best at the lowest cost will give thegreatest value to proprietors. With this game performanceknowledge, the proprietor can choose the most cost efficientgame, ie. Game A which may cost $5,000 and should average$300 per week, vs. Game B with the same sales productionat a cost of $10,000. Including good used games fromtrusted sources to average down the overall game cost is asmart move for proprietors. With the mix of new andrefurbished games, the cost generally averages about $6,500per game. With a gaming professional, the proprietor canmaximize the “player-station-to-game-cabinet” ratio,maximizing player capacity with the selected games.

Operating EconomicsIllustrated in the example below is the arcade size in

comparison to bowling lanes. Excess lanes can be convertedto arcade space, and this chart help create some perspective.Here’s a snapshot estimate P&L for a 2,400 square footredemption game room:

Economic Analysis: A bowling lane consumes 690 squarefeet; four lanes equals space for 40 games. A state-of-the artselection of 40 games plus other items such as a debit cardsystem, merchandise inventory and other consumablesshould be just north of $310,000. Sales per game per weekcould be as high as $200 or more, but this illustration usesa realistic number of $150. That yields a little over $300,000

The Bowling FEC 101: How to Begin

B

BEC/FEC BASICS By George McAuliffe

Investment –– 2,400 sq. ft.�# Lanes Displaced(690 SF per Lane).............................................................4# Games .............................................................................40GameCost ($6500)..................................................$260,000Other .........................................................................$50,000Total Investment ................................................$310,000Sales at $150 Game per Week ...........................$312,000

Merchandise Cost of Sales (15%).............................$46,800Other Cost of Sales (3%)..............................................$9,360Direct Labor (15%).....................................................$46,800Parts & Service ($100 per Game/Year) ......................$4,000Total Expenses ........................................................$106,960Gross Profit .............................................................$205,040Less Reinvestment in New Games

(5% Year) ...................................................................$30,000Net Income From Games...................................$175,040Cash On Cash Return ................................................56%

in sales. Using operational economics,the games should be able to deliver$175K in net income (gross profit lessthe cost of new games), a healthyreturn on investment.

Reinvestment in new games is oftenoverlooked but is a key to maintainingrevenues at a high level over time.The recommended budgeting is 5% ofannual sales (net of trade in). Adiversified bowling center deliversadditional revenues and benefits.Multiple attractions draw more peopleto the site where they bowl, eat, drinkand play games. The center tends todo business in more day parts. Pricepackaging allows for delivering morevalue and fun. When that happens,people stay longer and come backmore often. Parties and groups areattracted to the wide appeal.

Financing the InvestmentThere are three basic ways to

finance the state-of-the-art redemptiongame room:

1. Center owns: cash or classic loanthrough bank or game-asset-basedlenders. If the center is willing to learnthis new business segment and providequality management time andattention, this is the most profitableapproach.

2. Center owns/leases: essentiallysame as the first option except thefinancing is structured as a lease(much like a car lease).

3. Contract with a third-party gameoperator: A game operator providesgames and service. If a center owner

49IBI May 2012

does not have the capital or is not willing to invest in learning game operationsup front and commit to managing the game room, then an outside operatorcan be the best choice.

There are pros and cons to all three approaches, and a goodprofessional on the proprietor’s team can help the proprietor decidewhat will work best for each project.

ConclusionCertain businesses, those that are capital intensive with mostly fixed costs,

qualify for the term “top line businesses.” With the up front investment in games,a predictable labor cost to staff the room, constant rent or occupancy costs, anda formula reserve for new games, most redemption game rooms are top line

businesses. Once breakeven is achieved, a huge percentage of each additional salesdollar flows to net profit.

The percentage cost of merchandise sold is what determines the value equationfor the customers, or better known as players. Once merchandise is “right sized”for the game mix and the operation, it should be treated as a fixed expense andleft alone. Once the cost of sales is zeroed in, a great redemption operator’s focusshifts to driving the top-line sales.

We commonly plan for the player’s redemption games to pay out tickets witha merchandise value equal to about 18% to 20% of their sales. Since there is a naturalfloat in tickets paid out but not redeemed (tickets are taken home and saved, lost,etc.), the value of tickets actually redeemed to equal about 15% to 18% of theredemption sales.

This means that once the breakeven is attained, for every $1 in sales the playerspends, they receive back 15 cents in wholesale merchandise cost. IF the job is doneright, the player will be happy with their winnings, and the proprietor will be happywith the profits.

Doing the job right involves having a good system to pull together the many movingparts required to create a high-perceived value experience in the arcade. ❖

By George McAuliffe, President of Pinnacle Entertainment Advisors

The redemption area at the new Lucky Jack's in Traverse City, MI.

50 IBI May 2012

1. So, tell me about Grand Pix New YorkGPNY is a 120,000 square foot family and corporate

entertainment complex in Mount Kisco, New York, that hasindoor go-kart racing, bowling, arcade and carnival area, afull restaurant & bar, and finally, a large event space for200+ people.

2. How did you get into the business?We decided to build a premier indoor go-kart facility with

a focus on corporate events. We are located in WestchesterCounty, New York, and Fairfield County, Connecticut is rightnext door. Both are affluent counties with strong corporatepresences, plus we are located within 30 miles of New YorkCity, and we felt that there was an opportunity to cater to theregional demand for entertainment based event space.

3. You have a beautiful bowling boutique. How did thatcome about?

Racing was successful, but we quickly saw that social eventswere a much bigger part of our business than we originallyexpected. We felt that we could increase revenues further bybroadening the product mix and becoming a more familyfocused facility. We added bowling, and now the arcade andcarnival areas. We use Brunswick for the bowling alley and theyhave proven to be a truly fantastic partner.

4. So you are actively evolving your business. Whatdrives your thought process in considering addingcomplimentary attractions?

We’re looking at how the potential product mix will driverevenues across our different customer bases. Two thirds ofour business is made up of either corporate or social events,and the balance is walk in business. So we are constantlytrying to refine the mix in order to drive revenues across eachof those segments.

5. You opened a redemption game room in April of thisyear; tell us a little more about the thought process specificto the game room.

One on One with Bill Diamondof Grand Prix New York

ENGAGING INTERVIEW

George McAuliffe spent a few minutes with Bill to ask somebasic questions about his FEC business.

We already had a few gamessprinkled around the facility, whichwere always busy, and we realizedthat the arcade area could becomea much larger attraction for thefacility. Racing is labor intensive,and there is often a wait to race, and so two things that we’recompelling about increasing our arcade focus was that this areahas a much lower labor cost, and also gives our customerssomething additional to do while they wait to race. Also, byusing an Embed card solution, rather than tokens, we will beable to tie the cards into the entire facility, enabling ourmarketing team to come up with a wide range of packagesand offerings.

6. Is food and beverage a significant part of the mix, orjust an amenity to existing traffic?

Food and beverage has always been very significant in thecontext of our event business. Restaurant sales were not assignificant when we were a racing-only facility, but since weadded bowling the restaurant volume has tripled. Having a topquality restaurant means that our customers can linger longerin the facility.

7. Where do you see GPNY in five years?We believe that the recent addition of bowling and the

expanded arcade will help position GPNY as a true destinationfor family and corporate entertainment for years to come.

8. Any other wisdom you care to share for our readersadding other attractions to their business?

We were surprised by the amount of revenue we couldgenerate with the arcade and redemption games. We feel thatadding this sort of a product mix for a bowling alley is almosta ‘no brainer’. And we try to focus a great deal on evaluatingour product mix and customer base, to make sure that at theend of the day our ‘product’ fits the market. Also, utilizing acard system for payment instead of tokens allows for expandedflexibility with promotions and offerings. ❖

Bill Diamond in his MountKisco, NY, office.

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ometimes, the opportunity is right in front of us andwe can’t see it. All the signs are there, and yet all ofour experience and our beliefs blind us from

seeing the real opportunities that are before us. Howmany of you read the title of this article and saw thewords “Opportunity is nowhere?” If that is what youare convinced that you read, you arecorrect. The interesting thing aboutthe title is that if you take anotherlook at it and with a little guidanceyou will see that the title of this articleis “Opportunity is now here.” I wouldlike to think the latter statement istrue for the bowling industry. It is upto each of us in this industry to seizethe opportunity and redefine thedirection by truly understanding whatour customers really value and take aclose look at our options to providethat opportunity to them.

Apply new and innovativetechnology to attract newcustomers.

Most centers already have thelatest and greatest in bowlingtechnology to make the experienceuser-friendly, but now it is time tolook elsewhere in your center tocreate tailored experiences thatcustomers will pay incremental moneyfor. Believe it or not, vending is on the cuttingedge of modern technology by creating specialty,state-of-the art and user-friendly machines.

Offer a wide variety of options. We all know of the variety of attractions that can be

incorporated into a bowling center, but have you everconsidered that a vending machine could offer a fun

experience for a customer? An example of sucha machine is the Cotton Candy Factory byVendever. With cotton candy being an item thatcannot be picked up at the store, people get

excited seeing the novelty treat createdright in front of them.

Create value for both yourcustomer and YOU.

The sweet spot for you as a proprietoris offering your customers somethingthat they perceive as having a value butalso something that has a high marginand ROI. The sweetest part for operatorsof the Cotton Candy Factory is a productcost of 10 cents and a selling price of$3.00. Quick math will show a 96% grossprofit margin. WOW!

The “Opportunity is Now Here”and it is up to you to redefineyour future.

The fully automated "COTTONCANDY FACTORY" produces the finestcotton candy. The candy is servedperfectly shaped, dry, fluffy and non-sticky in less than a minute. Usingordinary table sugar, it is easy to clean

andmaintain with no cheap plastics to break, discoloror need to be replaced over time. With gross profit marginsat 96%, operators not only pay off the machine faster thanother vending machines, they create the ongoing customerimpulse buy and also add incremental cash sales. ❖

Rick Leffke is CEO of VendEver, LLC.

“OPPORTUNITYISNOWHERE”

S

EDUMARKETING By Rick Leffke

IBI May 2012

WWW.VENDEVER.COM(888) 586-5368 • sales@vendever.com

– FINANCING AVAILABLE –