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00:00Dave, good to have you on the program. You've got a great background. It includes Dunkin',
00:03McDonald's, and more. You have a history in franchise business as well. For those who
00:09haven't been to a Sky Zone, describe the experience and who it's for.
00:13Yeah. And look, we are the leader in active and social play. And like you said, we've got
00:19actually nearly 300 locations. We're focused on, and I don't know if people know this,
00:23but we're focused on kids 6 to 14. In a particular park, if you can kind of imagine this,
00:30just think they're 40,000 square foot boxes, so quite large. We'll have 20 to 25 attractions
00:36in that indoor park. And like you said, Tim, while we're known for trampolines, we've got
00:42everything in there now from dodgeball courts, which are amazing, ninja courses, multi-story
00:48mega slides, basketball and soccer courts, zip lines, you name it. We've got a lot going
00:54on in there. And really, our thesis here, or what we're trying to do is we're all about
00:59active and social play. And we feel both of those are important, social in today's environment,
01:04especially in a post-COVID world and everything that's going on with technology. We want to
01:08be the place where kids can come, build confidence, burn off energy with their friends. And so everything
01:14we're doing is about the power of play. Well, Dave, I can imagine that this must be one of the
01:19biggest seasons for you all, being that it's summer vacation season for all the students,
01:23all the kids. What's it been like for you all as of late? Yeah, I think, you know, as an
01:30operator
01:30for 30 plus years, as you mentioned up front, I think you're always looking for attention in the
01:37marketplace and how you can solve that tension for the consumer. And so, look, nothing new,
01:42just when you guys continue to report on here. The tension for our offering would be, you know,
01:49the consumer's wallet is under pressure. Yes, some prices have come down, but the family wallet is
01:54certainly under pressure. And so how do you make it easier for the families to use you and give the,
02:00you know, their son or daughter child the summer that they deserved? And so that's the tension that
02:06we've been trying to solve. We think we came up with something that works for us, and it's going to
02:11be
02:11an ongoing strategy for us. But this summer, we call it the, you know, summer of Sky Zone. It's
02:17anchored by our seasonal pass. And when I talk about the seasonal pass, it's, you know, that's one type
02:23of price point that we have. And to your previous guests, we want to be the leaders in affordability
02:29and accessibility. And again, that's if you draw that line in the sand, which we have, then there's
02:34other things that you can go down. But this summer pass, essentially, it started in April,
02:39but you can still buy it now. And if just think, if you buy it now, it's you pay one
02:45month,
02:45you get a second month free until the end of until the end of August. And so we think that's
02:49very compelling for for the family wallet. It's selling about 80% over last year. So I think
02:56that speaks to the tension, again, that's in the marketplace. And then the offer and how well this
03:00offer has been received. But it's not the only thing that we try to do there. We've got our obviously
03:04our monthly memberships, if you're jumping two times or more, and just think that's a dollar a
03:09day, which we think is a great investment in your child for a dollar a day, the annual pass. And
03:14then
03:14we pulse in things like this weekend, I'm really excited. We're doing a clever, cute little play on
03:21our 250th birthday, and it's red, white and bounce. We've got a price point dedicated to 1776. So it's
03:28$17.76, which for a two hour jump ticket, a one time jump ticket, that's probably one of the best
03:34price points in the industry. And we're giving away a bunch of tchotchkes and food and things like
03:38that at the same time. And, you know, as you move through July, we've always got these things where
03:43if you don't want to be a member, and you just want to come one time, world jump days coming
03:47up
03:48July 20. Just like National Donut Day back in the day. But world jump day is something we're going to
03:55do a takeover of. And so we're always on our calendar, we're always trying to pulse in things. So
04:00people will try us. I think when they try us, they like us, they love us, and they come back.
04:04You were, you know, a thing or two about donuts, because you were president of Dunkin U.S. from
04:082016 to 2018. And you've spent, you were also CEO at Dunkin from 2018 until it was sold to Inspire.
04:16So
04:16you know about Donut Day. Let's get back to trampolines, though. And about, I want to talk
04:21franchising here. Close to 300 locations in more than 40 states in the U.S. Are, are any of those
04:27owners owned and operated by SkyZone, or are they all franchise owned?
04:32No, we're 50% company owned, 50% franchise. I tend to move towards tipping that mix more into
04:39franchise. I've run both in my McDonald's and Dunkin days, as you know, but I am a believer in
04:45the franchise system and in working with small business owners. And look, I'm really proud this
04:51year we were named one of the top 10 investments by Franchise Times. So something, you know, is really
04:57resonating with our, our small business owners. And I think they do an amazing job on a company
05:01this size, getting into those communities and serving those communities really well.
05:05So who, who are your, uh, who's the typical franchise franchisee? Um, I, my, my dad was a,
05:12a franchisee of a, of a different company. So I, I know how this works. You know, you, you have
05:18the
05:18support of a, of a huge brand, you own and operate it yourself. Then let's say five, 10% of,
05:24of the top line ends up going back to the, the parent company. So just give me the profile of,
05:29of, of who the franchisee is, where the opportunities are geographically. And, and this
05:34seems, it seems like something that is capital intensive in terms of the size of a building
05:40and the actual equipment that you need. So how do you support franchisees with that?
05:44Yeah, it's a lot in there, Tim. Great question. Uh, you know, we've got a lot of, uh, single park
05:52franchisees in some of the smaller cities. So this isn't about opening up and I'm very
05:56sensitive to not building on top of franchisees. So if you run an amazing single park in your
06:01community, I want that, I want that franchisee to be just as successful as somebody that has
06:07eight to 10. I think our largest franchisee is probably somewhere in the 15 to 20 range
06:11right now. So it's a, it's a wide spectrum. Um, and, and, you know, look, uh, these are people
06:17that have, um, been in multi-unit four wall in the past and, uh, they, they identified this
06:24opportunity in terms of sort of the uniqueness of, uh, trampoline parks. And, and a big part of
06:30it is, uh, their belief in, and this is in total sincerity, their belief in active, uh, and social
06:37play. And so they really, uh, were running other businesses and they liked this offering. Um,
06:42the margins are incredible. So of course, high fixed costs, as you said, Tim, um, so the, the,
06:48you, you have a high fixed cost build, but our, uh, you know, our margin profile profiles out for
06:54wall in the high thirties, low 40% range. So again, initial big investment because we take down
07:00some of these, uh, decayed bankrupt big boxes. They're all snowflakes. You have to convert them
07:06into a sky zone. So it's a little bit like Tetris where you're going in and laying out these
07:10different attractions. Uh, you never know what you're going to find behind the wall. So
07:14there's a lot, it's not as cookie cutter as what I've done in the past. And so, uh, our
07:19teams, our development teams and franchisees do an amazing job of taking these decayed bones
07:24in some of these communities and repurposing them. And, you know, you, we could go through
07:28the list of some of these bankrupt big boxes, but I love what we're doing. Uh, and this is a
07:33story that never really quite gets out there, but how we're repurposing and I think improving
07:37the face of, uh, some of these decayed bones that are in these communities and making, making
07:42them approachable again and accessible for those, those particular communities.
07:47Wow. Dave, we talked a bit about the deals that you all are offering at sky zone. I'm curious
07:52as we continue to talk about franchisees, what have you been hearing from, uh, different people
07:57leading some specific locations across the nation? What has been their sentiment about consumer
08:04traffic and, um, and the brand really? Yeah. Well, and, and you know, this well, Nora, like
08:11anytime you get into live entertainment, there's always going to be, you're always going to be
08:15fighting on a frequency game. And, and so for us, um, not only has everyone embraced the price point
08:22and this idea that, you know, um, affordability and accessibility. And again, if you put that as a
08:28strategic pillar and that's been one of my pillars for my 30 plus years, then you start opening up
08:33your creativity and say, okay, how do I think differently about just a binary? You're a member,
08:38or you've got a jump ticket and how do you open it up and give people optionality? And so that
08:43is one
08:43of the things we've got, uh, um, a group within our franchise community. I love it. It's our franchise
08:48advisory committee, and we work closely with them on, on the pricing construct and how we ought to be
08:54thinking about this, the marketing deals, how we pulse that in. But the other piece that is really
08:59super important is programming. And so you can have great attractions, you can have great price points,
09:03but the kids and the parents want programming. And so our glow parties, um, on Friday and Saturday night
09:10have been fan favorites. Uh, they're running all summer long, uh, fan favorites for the older kids. We're
09:15running sky cup in parallel, uh, to world cup right now. So you've got great three on three soccer matches
09:21inside viewing parties, all kinds of soccer, uh, football takeover, uh, within the parks, uh, as
09:28well. Birthday, like a boss is a new upgraded birthday experience that we've introduced. So
09:34besides just compelling price points, great variety, you have got to, in order to get frequency, you've
09:40got to have really good programming, uh, to get the kids excited about coming back over and over again.
09:46And so that's been a big push for us as well is to, uh, make it, make the programming more
09:52different.
09:52And then I think if I could just one last thing is, um, you know, one of the things that
09:57I focused
09:58on in my, again, over my career is kind of operating with a healthy paranoia around your brand. And so
10:04how do you keep evolving? And I've always loved the, the, the saying, Hey, if you don't, uh, like
10:09change, you're going to like irrelevance even less. And so how do you keep evolving your offering?
10:14And so we've introduced Sky Labs in our company. It's our innovation arm. It's a dedicated team
10:18with franchisees on how do we evolve the power of play, uh, in our parks. And some of this is
10:24you don't want to get away from your knitting, which is, you know, active play, but how do you
10:28bring wearables, uh, other types of gamification in there that complements, um, you know, active
10:34play. And so that's a big part of, you're going to see us continue to peel things off. We're
10:39working with PhDs and childhood development on all of this. And so, uh, again, I'm really,
10:45I think all of that is how we're going to continue to evolve this offering for, for our guests going
10:50forward. All right. Next time, join us, Dave, from, uh, maybe the ball pit at one of the Sky
10:55Zones. Absolutely. We'll do.
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