Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Dave Hoffman would certainly
Speaker 1: say that's those solution. He's the CEO of the indoor
Speaker 1: trampoline park Skyzone, hundreds of locations around the US, and
Speaker 1: they are growing. I'm building more. He joins us from Dallas. Dave,
Speaker 1: good to have you on the program. You've got a
Speaker 1: great background includes Duncan McDonald's and Moore. You have a
Speaker 1: history and franchise business as well. For those who haven't
Speaker 1: been to a sky Zone, describe the experience and who
Speaker 1: it's for.
Speaker 2: Yeah, and look, we are the leader inactive and social play,
Speaker 2: and like you said, we've got actually nearly three hundred
Speaker 2: locations we're focused on and I don't know if people
Speaker 2: know this, but we're focused on kids six to fourteen
Speaker 2: in a particular park. If you can kind of imagine this,
Speaker 2: just think they're forty thousand square foot boxes, so quite large.
Speaker 2: We'll have twenty to twenty five attractions in that indoor park.
Speaker 2: And like you said, Tim One, we're known for tramp
Speaker 2: We've got everything in there now, from dodgeball courts which
Speaker 2: are amazing, ninja courses, multi story megaslides, basketball and soccer courts,
Speaker 2: zip lines, you name it. We've got a lot going
Speaker 2: on in there. And really our thesis here or what
Speaker 2: we're trying to do is is we're all about active
Speaker 2: and social play and we feel both of those are
Speaker 2: important social in today's environment, especially in a post COVID
Speaker 2: world and everything that's going on with technology. We want
Speaker 2: to be the place where kids can come build confidence,
Speaker 2: burn off energy with their friends, and so everything we're
Speaker 2: doing is about the power of play.
Speaker 3: Well, Dave, I can imagine that this must be one
Speaker 3: of the biggest seasons for you all, being that it's
Speaker 3: summer vacation season for all the students, all the kids.
Speaker 3: What's it been like for you all as of late.
Speaker 2: Yeah, I think you know, as an operator for thirty
Speaker 2: plus years, as you mentioned upfront, I think you're always
Speaker 2: looking for at tension in the marketplace and how you
Speaker 2: can solve that tension for the consumer. And so look,
Speaker 2: nothing new, Just would you guys continue to report on here.
Speaker 2: The tension for our offering would be, you know, the
Speaker 2: consumer's wallet is under pressure. Yes, some prices have come down,
Speaker 2: but the family wallet is certainly under pressure, and so
Speaker 2: how do you make it easier for the families to
Speaker 2: use you and give the you know, their son or
Speaker 2: daughter child this summer that they deserved. And so that's
Speaker 2: the tension that we've been trying to solve. We think
Speaker 2: we came up with something that works for us, and
Speaker 2: it's going to be an ongoing strategy for us. But
Speaker 2: this summer we call it the you know Summer of
Speaker 2: Sky Zone. It's anchored by our seasonal Pass. And and
Speaker 2: when I talk about the seasonal Pass, it's you know,
Speaker 2: that's one type of price point that we have and
Speaker 2: to your previous guests, we want to be the leaders
Speaker 2: and affordability and accessibility. And again that's if you if
Speaker 2: you draw that line in the sand, which we have,
Speaker 2: then there's other things that you can go down. But
Speaker 2: this this summer Pass essentially it started in April, but
Speaker 2: you can still buy it now. And if just think,
Speaker 2: if you buy it now, you pay one month, you
Speaker 2: get a second month free until the end into the
Speaker 2: end of August. And so we think that's very compelling
Speaker 2: for the family wallet. It's selling about eighty percent over
Speaker 2: last year, So I think that speaks to the tension
Speaker 2: again that's in the marketplace. And then the offer and
Speaker 2: how will this offer has been received, but it's not
Speaker 2: the only thing that we try to do there. We've
Speaker 2: got our obviously, our monthly memberships if you're jumping two
Speaker 2: times or more and just think that's a dollar a day,
Speaker 2: which we think is a great investment in your child
Speaker 2: for a dollar a day. The annual past, and then
Speaker 2: we pulse in things like this weekend. I'm really excited.
Speaker 2: We're doing a clever, cute little play on our two
Speaker 2: hundred and fiftieth birthday and it's red, white and Bounce.
Speaker 2: We've got a price point dedicated to seventeen seventy six,
Speaker 2: so it's seventeen dollars and seventy six cents, which for
Speaker 2: a two hour jump ticket, a one time jump ticket,
Speaker 2: that's probably one of the best price points in the industry.
Speaker 2: And we're giving away a bunch of choch keys and
Speaker 2: food and things like that at the same time. And
Speaker 2: you know, as you move through July, we've always got
Speaker 2: these things where if you don't want to be a
Speaker 2: member and you just want to come one time. World
Speaker 2: Jump Days coming up July twentieth. You knew Jump Day
Speaker 2: just like National Donut Day back in the day, but
Speaker 2: World Jump Day is something we're going to do and
Speaker 2: takeover of and so we're always on our calendar. We're
Speaker 2: always trying to pulse in things, so people will try us.
Speaker 2: I think when they try us, they like us, they
Speaker 2: love us, and they come back.
Speaker 1: You were you know a thing or two about donuts
Speaker 1: because you were president of Duncan US from twenty sixteen
Speaker 1: to twenty eighteen, and you've spent You were also CEO
Speaker 1: at Duncan from twenty eighteen until it was sold to Inspire,
Speaker 1: so you know about donut day. Let's get back to
Speaker 1: Trampoline's though, and about I want to talk franchising. Here
Speaker 1: close to three hundred locations in more than forty states
Speaker 1: in the US. Are are any of those owned and
Speaker 1: operated by skyz own or are they all franchise owned?
Speaker 2: No, we're fifty percent company owned, fifty percent franchise. I
Speaker 2: tend to move towards tipping that mix more into franchise.
Speaker 2: I've run both in my McDonald's and Duncan days, as
Speaker 2: you know. But I am a believer in the franchise
Speaker 2: system and working with small business owners. And look, I'm
Speaker 2: really proud. This year we were named one of the
Speaker 2: top ten investments by franchise time. So something you know
Speaker 2: is really resonating with our small business owners, and I
Speaker 2: think they do an amazing job on a company this
Speaker 2: size get into those communities and serving those communities really well.
Speaker 1: So who are your who's the typical franchise franchise e?
Speaker 1: My dad was a franchise e of a different company,
Speaker 1: So I know how this works. You know, you have
Speaker 1: the support of a huge brand, you own an operator yourself.
Speaker 1: Then let's say five ten percent of the top line
Speaker 1: ends up going back to the parent company. So just
Speaker 1: give me the profile of who the franchise e is,
Speaker 1: where the opportunities are geographically, and this seems it seems
Speaker 1: like something that is capital intensive in terms of the
Speaker 1: size of building and the actual equipment that you need.
Speaker 1: So how do you support franchisees with that?
Speaker 2: Yeah, it's a lot in their tim great question. You know,
Speaker 2: we've got a lot of single park franchisees in some
Speaker 2: of the smaller cities, so this isn't about opening up
Speaker 2: and I'm very sensitive to not building on top of franchisees.
Speaker 2: So if you run an amazing single park in your community,
Speaker 2: I want that I want that franchisee to be just
Speaker 2: as successful as somebody that has eight to ten. I
Speaker 2: think our largest franchise e is probably somewhere in the
Speaker 2: fifteen to twenty range right now. So it's a wide spectrum.
Speaker 2: And you know, look at these are people that have
Speaker 2: been in multi unit four wall in the past, and
Speaker 2: they identified this opportunity in terms of sort of the
Speaker 2: uniqueness of trampoline parks, and a big part of it
Speaker 2: is their belief and this is in total sincerity, their
Speaker 2: belief in active and social play, and so they really
Speaker 2: were running other businesses and they like this offering. The
Speaker 2: margins are incredible, so of course high fixed costs, as
Speaker 2: you said, Tim, so you have a high fixed cost build,
Speaker 2: but are you know our margin profile profiles out for
Speaker 2: a wall in the high thirties, low forty percent range.
Speaker 2: So again initial big investment because we take down some
Speaker 2: of these decayed, bankrupt big boxes. They're all snowflakes. You
Speaker 2: have to convert them into a sky zone. So it's
Speaker 2: a little bit like Tetris where you're going in and
Speaker 2: laying out these different attractions. You never know what you're
Speaker 2: gonna find behind the walls. So there's a lot it's
Speaker 2: not as cookie cunter as what I've done in the past,
Speaker 2: and so our teams, our development teams and franchises do
Speaker 2: an amazing job of taking these decayed bones in some
Speaker 2: of these communities and repurposing them. And you know, we
Speaker 2: could go through the list of some of these bankrupt
Speaker 2: big boxes, but I love what we're doing. And this
Speaker 2: is a story that never really quite gets out there,
Speaker 2: but how we're repurposing and I think improving the face
Speaker 2: of some of these decayed bones that are in these
Speaker 2: community and making them approachable again and accessible for those
Speaker 2: those particular communities.
Speaker 3: Well, Dave, we talked a bit about the deals that
Speaker 3: you all are offering at sky Zone. I'm curious as
Speaker 3: we continue to talk about franchise ease, what have you
Speaker 3: been hearing from different people leading some specific locations across
Speaker 3: the nation. What has been their sentiment about consumer traffic
Speaker 3: and the brand Really?
Speaker 2: Yeah, well, and you know this will Nora, Like anytime
Speaker 2: you get into live entertainment, there's always going to be
Speaker 2: you're always going to be fighting on a frequency game.
Speaker 2: And so for us, not only has everyone embraced the
Speaker 2: price point and this idea that you know, affordability and accessibility,
Speaker 2: and again, if you put that as a strategic pillar
Speaker 2: and that's been one of my pillars for my thirty
Speaker 2: plus years. Then you start opening up your creativity to say, okay,
Speaker 2: how do I think differently about just a binary you're
Speaker 2: a member or you've got a jump ticket, and how
Speaker 2: do you open it up and give people optionality? And
Speaker 2: so that is one of the things. We've got a
Speaker 2: group within our franchise community. I love it. It's our
Speaker 2: Franchise Advisory Committee and we work closely with them on
Speaker 2: the pricing construct and how we ought to be thinking
Speaker 2: about this, the marketing deals, how we pulls that in.
Speaker 2: But the other piece that is really super important is programming.
Speaker 2: And so you can have great attractions, you can have
Speaker 2: great price points, but the kids and the parents went programming.
Speaker 2: And so our glob parties on Friday and Saturday night
Speaker 2: have been fan favorites. They're running all summer long fan favorites.
Speaker 2: For the older kids. We're running Sky Cup in parallel
Speaker 2: to World Cup right now. So we've got great three
Speaker 2: on three soccer matches inside viewing parties. All kinds of
Speaker 2: soccer football takeover within the parks as well. Birthday Like
Speaker 2: a Boss is a new, upgraded birthday experience that we've introduced.
Speaker 2: So besides just compelling price points, great variety, you have
Speaker 2: got in order to get frequency, you've got to have
Speaker 2: really good programming to get the kids excited about coming
Speaker 2: back over and over again. And so that's been a
Speaker 2: big push for us as well, is to make the
Speaker 2: programming more different. And then I think if I could
Speaker 2: just one last thing is you know, one of the
Speaker 2: things that I focused on in my again over my
Speaker 2: career is kind of operating with the healthy paranoia around
Speaker 2: your brand and so how do you keep evolving? And
Speaker 2: I've always loved the saying, hey, if you don't like change,
Speaker 2: you're going to like irrelevance even less. And so how
Speaker 2: do you keep evolving your offering? And so we've introduced
Speaker 2: sky Labs in our company, it's our innovation arm. It's
Speaker 2: a dedicated team with franchises on how do we evolve
Speaker 2: the power of play in our parks. And some of
Speaker 2: this is you don't want to get away from your knitting,
Speaker 2: which is you know, active play, but how do you
Speaker 2: bring wearables other types of gamification in there that complements
Speaker 2: you know, active play. And so that's a big part
Speaker 2: of you're going to see us continue to peel things off.
Speaker 2: We're working with PhDs in childhood Development on all of this,
Speaker 2: and so again I'm really I think all of that
Speaker 2: is how we're going to continue to evolve this offering
Speaker 2: for our guests going forward.
Speaker 1: All right, next time, join us Dave from maybe the
Speaker 1: ballpit at one of the sky Zones.
Speaker 2: Absolutely, we'll do.
Speaker 1: All right, Dave Hoffman, have a great long weekend. Appreciate
Speaker 1: you taking the time and joining us on Bloomberg Business
Speaker 1: Week Daily. He's the CEO of sky Zone, joining us
Speaker 1: from Dallas, formerly of Duncan McDonald's and more.