By BRIAN DIGGELMANN
Think about the necessary steps that go into opening most businesses: finding a location, paying rent, ordering products, managing inventory, hiring and training staff. Add that to the stress of finding financing for all of it and you have a full plate before you even start worrying about customers.
What if there was a franchise opportunity with none of those hassles and a price tag under $200,000? Mobile video game theater franchises offer that and more in a sector that has exploded over the past four years.
If the concept doesn’t ring a bell, you may be more familiar with the name GameTruck. Founded in 2006 by Disney alum and video game creator Scott Novis, GameTruck has become the Xerox of mobile video game theater companies.
“Scott went from ‘I hope people like this’ to ‘everyone is copying me’,” said Mike Watorski, GameTruck’s Senior Vice President of Franchising.
When you consider the business model, it’s easy to see why others were quick to adopt the concept.
Watorski explains that, as a game designer, Novis was intimately familiar with the void in birthday entertainment for boys in the 12 and up age range. They were too old for the bouncy castles and arcades were a tired model, so Novis turned to the success of LAN parties and built a mobile trailer packed video games then brought the venue to the party instead of the other way around.
“He thought if he could bring the LAN party to someone and make it as easy as possible for them to enjoy, it would be a great idea,” says Watorski. “Even better, moms could facilitate an awesome event where everyone was happy but didn’t have to lift a finger or worry about the house.
With startup costs between $100,000 and $150,000, GameTruck quickly caught on with entrepreneurs and the brand added about 20 franchises a year despite launching in one of the worst economic climates of all time.
“Revenue continued to grow because even in tough economic times, people still want to give their child a momentous occasion,” says Watorski.
Much of that revenue was reinvested into the company to strengthen systems and add on marketing and PR firms.
“In our fifth year, we resemble a franchise that’s been around for 20 years with our back office support,” says Watorski.
A growing market
Novis wisely applied for a patent to cover his brainchild, which he was later awarded in October 2011, but by then competitors had already moved in on the blossoming market.
One such concept is Rolling Video Games, which founder Chris Hampton says spun off from a party supplies business. Unlike GameTruck and many of the other brands in the sector, Rolling Video Games doesn’t stick to the traditional franchising model.
“We don’t require franchise fees, don’t take a portion of profits and or have set rules for our owners,” says Hampton. “All we ask is that they call themselves Rolling Video Games and run a clean business.”
The stripped-down setup means entrepreneurs can get into business for less—about $60,000 plus the cost of a truck. The model is well-suited for DIY business owners but, with no royalties, doesn’t offer the support found in structured franchise brands.
“We don’t seek out complications,” says Hampton. “It’s very simple to operate and more profitable.”
Beyond the birthday
Other than rising gas prices, the biggest problem the mobile video game theater sector faces is generating business during the week.
“A lot of what we do and the justification for a franchise is the support that comes with it, because after the birthday party, what do you have?” says Watorski. “If you’re only doing five parties a month, at some point it becomes irrelevant.”
To help their franchisees find revenue on weekdays, Watorski says GameTruck has partnered with the NASA Education Resource Center and Arizona State University School of Earth and Space Exploration to develop an education panel. Now, GameTruck franchisees are able to bring a mobile education center to schools covering topics like science, technology and engineering.
“Schools aren’t doing field trips like they used to, so we bring on-site field trips to the schools,” he says. “GameTrucks act as a station where kids get to participate in this experiential process where they’re having fun and learning at the same time. If we can capture some excitement about science or technology, that is going to drive them to continue to learn.”
As video games continue to develop both in mainstream popularity and technological achievement, it will be interesting to see what new heights these franchises can achieve.
As the Rolling Video Games website says: Two things aren’t going away: video games and parties.