Funworld March 2011

Good food makes family entertainment center (FEC) guests happy, plain and simple. Not only that, customers with full bellies will likely stay longer at your facility and, in turn, spend more money.

To raise the quality of eats, a growing number of FECs have gone into agreements with powerful restaurant chains or local restaurants. The resulting partnerships can lead to a boom in business, but some managers urge caution when signing such deals.

Brand Power
Since Fiesta Village Family Fun Park in Colton, California, added a Dairy Queen/Orange Julius franchise in 2008, food sales have tripled, says owner Michelle Kapuscinski. It also accounts for roughly 80 percent of current food sales.

She attributes much of its success to the brand recognition. “If we opened up Michelle’s Ice Cream Parlor it wouldn’t have the same sense of credibility as Dairy Queen,” Kapuscinski notes. “People know the product, know the standards.”

The Dairy Queen/Orange Julius combo helps to bring in customers who haven’t visited the facility before, or at least haven’t stopped by in years, Kapuscinski believes. The franchises help to enhance group and birthday offerings, as well.

“Now we have real treats and birthday cakes that we can sell,” she says. Plus, as part of the franchise agreement the parent company takes care of a lot of the advertising. “They have commercials on the big TV stations that we obviously couldn’t afford.”

FEC giant Palace Entertainment, headquartered in Newport Beach, California, also sees the benefits of working with a popular name. A fan from his previous job, Albert L. Cabuco, vice president of food and beverage, has a licensing agreement with Pizza Hut Express.

Twenty-five percent of annual food sales in four Palace spots (three FECs and one theme park) are attributed to their Pizza Hut Expresses, he says. Based on this success, Cabuco plans to add Jamba Juice and Johnny Rockets to locations this year.

“People know what to expect when they see a brand,” he says. “They know it will taste the same inside the park as it does outside.”

Food Finds
Not all FECs work on such a large scale with their food partners. For example, Transylvania Indoor Blacklight Mini golf in Waitakere City, New Zealand, uses a local pizza place to supply the food for group bookings and birthday parties exclusively, says owner Stephen Hanham. The FEC doesn’t extend the option to individual customers wanting a couple slices for logistical reasons.

The restaurant, about a three-minute drive away, delivers the pizza, and the FEC just adds the cost of the product into the package. Once a month, the two businesses square up the finances.

With the setup, Transylvania doesn’t have to worry about hiring extra food prep staff, and it also profits by the cross promotion, he says. The restaurant puts out the FEC’s flyers and sells summer passes.

“In effect, there is no direct cost to us,” says Hanham, who otherwise only sells on-site coffee, cold drinks, and ice cream. “We get increased patronage by offering something different and of good quality without the cost of making it.”

Track Family Fun Park in Branson, Missouri, outsources food services, as well, explains controller Jim Braatz. A restaurant selling pizza, sandwiches, and frozen custard leases a building in front of the FEC property. The food, available to individuals and groups, keeps guests around during dinnertime, and they usually hang out after eating, he says. The restaurant operates independently, so customers come from all over the area—not just the FEC.As a result, the mutually beneficial agreement lets both parties focus on their strengths.

“We do what we do best: providing entertainment,” Braatz says, “and they do what they do best: making pizza.”

Things to Consider
Unfortunately, a glowing review doesn’t always come when working with outside restaurants. Mountasia Family Fun Center in SantaClarita, California, and McDonald’s Express ended a three-year contract as neither side wanted to renew, says Courtney Bourdas Henn, the FEC’s executive director.

The restaurant didn’t make the money it expected. For the FEC, most of the problems stemmed from the lack of control, she says. The McDonald’s didn’t feature the same specials as “outside” franchises, the hours differed from the FEC’s, and the fast-food venue’s prices were more in line with that of a theme park, not a community family fun center. “You can’t charge $4 for a 32-ounce soda here,” Henn says.

All those negative experiences attached to McDonald’s reflected poorly on Mountasia, she explains, even though “they were more or less a tenant in our building.” The misplaced blame caused a lot of headaches for the FEC staff.

The bottom line: Do your homework before signing any agreements, she says. Experts provide a few other observations:

Be prepared for requests from the parent company if you own a franchise. “We just received a memo that said we have to sell another product, which requires us to buy another oven,” Kapuscinski says. “It’s going to be good for us because it expands our menu, but it is a requirement.”

You’ll also likely have to go through the franchise’s main suppliers. “They want consistency through all their restaurants; however, they negotiate a lower price for us than we could get on our own,” Kapuscinski says.

Don’t feel pressured to snag a big restaurant name. If you already have solid food sales and little outside competition, the venture may not be worth it, Cabuco says. Kapuscinski adds: “You don’t want to bring in something that’s going to compete with your already successful food operations.”

Contact Contributing Editor Mike Bederka at mbederka@IAAPA.org.