Business Resources - Strategic Planning - April 2018

FUNSPOT

Bob Lawton, controlling owner of Funspot. (Credit: Funspot)

All in the Family

There’s no one perfect solution for succession planning at family-owned attractions

by Keith Miller

Family-owned attractions must all grapple with the often-sensitive issues surrounding who will eventually succeed their current owners and operators—and how these successions will take place. 

The question can involve myriad issues, like which family members are interested in owning an attraction, which demonstrate a penchant for the business, and which are available to be actively involved for an extended period. There are also questions concerning which family members are to hold operational positions within the business.

To help answer these questions, Funworld looks at how two longtime family-owned attractions deal with these matters—Funspot (www.funspotnh.com), a family entertainment center (FEC) in Laconia, New Hampshire, and Tomahawk Lake Water Park (www.tomahawklake.com) in Sparta, New Jersey.

Funspot: 65 Years and Counting

Many family-owned attractions contacted during the research phase of this story say they don’t have detailed plans in writing—drawn up by attorneys or otherwise—stipulating how succession, management, and operations are to be handled. Instead, issues are addressed by “tradition” and involve verbal agreements and/or handwritten instructions. Situations are discussed and handled within the families as they arise. 

Notably, when attraction facilities are created, succession is often not on the minds of the founders. Frequently, the founders are relatively young and have controlling interest in these businesses, so there are few concerns about, or thoughts given to, who is in charge and who will succeed them. 

Such was the case when Bob Lawton, controlling owner of Funspot, started the operation in 1952. At age 87, Lawton still works at Funspot each day and has controlling interest in the business. Succession is something he’s willing to discuss today, but it wasn’t on his mind in 1952.

“I started this when I was just 21 and had no money,” recalls Lawton, “so I borrowed $750 from my grandmother, and my brother John helped me build a mini-golf [course]. I took him on as a partner, and he helped me until he died in 2003. It was 60 percent mine and 40 percent John’s. It was shares of private stock and the official name of the business is the Weirs Sports Center Inc. I called it that in the 1960s because I didn’t know what to name it!”

Ownership remained that way for more than 50 years, until John Lawton’s death. His 40 percent interest in Funspot passed to his sons, Steve and Randy Lawton, who each received 20 percent. Today, the sons are actively involved in the operation, with Steve serving as business manager and Randy as chief technician. 

Lawton says Funspot has grown enormously the past nine years, and the FEC now gives out more than 80 million redemption prize tickets annually. Regarding his 60 percent share, at this time, his daughter, Sandra, who has been his assistant at Funspot, would inherit it. Beyond that, he says he’s not certain what would happen to his daughter’s shares if she passed away, but notes she has a daughter who is Funspot’s tavern manager. 

Lawton observes that within family-owned attractions, things change as additional relatives become involved in operations and also due to the health of family members: “Sandra has had health issues, and if I died, I just don’t know if she’d be able to take over. My son, David, runs The Weirs Times newspaper and takes care of the craft beer in our bar, and I think he’ll end up with some shares and he will be involved in the business.”  

With regard to persons outside the family being brought in to run aspects of the operation, Lawton says, “Our plan has Chris Ferguson, who is not family, as operations manager. You need to bring in the right people from the outside in certain situations.”  

As to whether there are any family members who do not wish to be involved in Funspot at all, Lawton says he’s not aware of any but admits it’s hard to say for certain. He then adds, “We will go another six or seven years with me in charge. I work 65 hours a week now, and I love it. I’ll go on into my 90s—I’m not going into a rest home!”

When asked how he feels about Funspot’s future in his family, Lawton says, “We have peace here, but that’s not to say there aren’t problems. But I’ve heard many stories from people in our business about family members doing things like stealing profits, so you can’t always say that because people are family, they’re fine. But we don’t have any problems like that here.”

TOMAHAWK LAKE WATER PARK

FROM LEFT: Chester, June, and Mark Wallace, along with Mark Wallace's aunt, Doris Miller, at IAAPA Attractions Expo 1999. (Credit: Tomahawk Lake Water Park)

Tomahawk Lake Water Park: The Sharing of Shares … and Operations

In Sparta, New Jersey, 50 miles from New York City, sits a water park harkening back to the old-style “swimmin’ holes” that delighted swimmers before the era of the concrete pools of water parks. Tomahawk Lake Water Park features numerous slides and rides, most of which have spilled out into a 20-acre lake ever since the park was founded in the early 1950s by Chester J. Wallace. Wallace died in 2014 at age 92, but his family still operates the park, including his wife, June.

Fun Valley Inc., a New Jersey corporation since 1967, has 150 shares of stock in the park and owns the park’s land and buildings, with June serving as its current president. Tomahawk Lake Inc. was formed in 1986 and is the operating corporation that runs the park. Its current president is Lynne Wallace Gallo, daughter of June and Chester.

Chester created the family’s succession plan. Like Funspot in New Hampshire, Tomahawk Lake has been operated by the first-generation founders for decades, but changes have occurred the past few years. Mark Wallace, Chester’s and June’s son who is vice president of Tomahawk Lake Inc. and secretary of Fun Valley Inc., and Wendy Wallace, their daughter who serves various roles for the park, both spoke to Funworld about the operation. 

“My brother, Mark, was always interested in taking over the park, and I wasn’t,” says Wendy, “so I just threw myself into it when help was needed. That’s what I feel we more or less do. So when my mom was doing so much work as manager/president and started to have issues, I helped her, and then my sister Lynne came in to help.” 

She adds that the family talks things out and lets members take a break from the business if they want: “We have sort of a goose flight formation where if someone drops out, then someone else comes in and fills in. My father and mother originally ran the park, and us kids had irons in other fires. But we’ve come back to help whenever needed.” 

Mark says Chester annually gifted shares of the company to family members using the unified tax credit, stipulated by the U.S. Internal Revenue Service, of $10,000 per year to any one individual (as of 2018, it is $15,000) and had no shares upon his death in 2014. “Chester gave one share of stock each year to his wife June, son Mark, and daughters Wendy and Lynne,” reveals Mark, “[and] later to granddaughter Meredith. June and I later re-gifted their shares to Meredith and continue to do so.” Mark says Wendy retired in 2017, and his daughter Meredith, who is 25, will be CEO of Tomahawk Lake in the future. Regarding advice for privately owned attractions that are addressing the question of succession, Mark suggests, “Do whatever works for you, but put it in writing.”