pearls of wisdom from past columns,
essays & expert interviews on FECs, arcades & LBEs
Over the years, RePlay has published dozens of essays, opinion columns and interviews with and by industry experts on the subjects of FEC and LBE planning, management and philosophy. For the September 1997 "Fun Expo Showbook," we decided it was time to collect all that wisdom into one place. Accordingly, we've reviewed every FEC and LBE piece published in the magazine from 1994, '95 and '96. We have blended the pointers contained therein, into this single, integrated tool: RePlay Magazine's Ultimate FEC/LBE Checklist! Our thanks to the following experts (listed alphabetically) for their knowledge and advice...Jane Adkins, Dave Corriveau, Skip Doyle, Alan Foster, Mike Getlan, Joey Herd, Doug King, Dr. John Latta, Jerry & Sue Monday, George McAuliffe, Eric Schwartzman, Frank Seninsky and Art Warner.
Have you decided on a specific type of business with appropriate location, size, range of equipment and theme which are all carefully crafted and selected to appeal to a specific, targeted demographic?
Do you know what the word "demographic" means? (It means a group of people defined by multi-category approaches, usually including age and income, and often including percentage of gender in the mix, socio-cultural background educational levels, etc. Demographic analysis can also mean grouping your customers by category: shoppers who drop by on impulse; tourists and transients; occasional visitors; regulars; enrolled members; group package visitors; etc.).
Have you hired a professional FEC/LBE consultant?
Did you listen to your expert's advice?
Have you and your expert commissioned a feasibility study from a recognized expert? Have you budgeted $15-30,000 to pay for it? (It's the best investment you'll ever make.)
Did you heed the feasibility study's results and recommendations?
Have you thrown out your preconceived, dogmatic notions? (Such as "I insist on miniature golf no matter what my expert consultants say" or "I refuse to have kiddie rides; I personally don't like them.")
Do you know what size your market area is? Do you know how many people in that geographic area are potential customers?
Do you know how your customers will get to your center?
Do you know when customers will visit - i.e., can you predict traffic patterns on a daily, weekly, seasonal and yearly basis?
Have you established who is your (existing and likely future) competition, and mapped out a strategy to compete with them? Have you estimated how much money is already being spent on entertainment and leisure in your target geographic area?
Have you done a preliminary check of how the local civic authorities feel about the kind of facility you propose?
If you're going into a mall, is it one that's on the upswing...or at least stable...in terms of customer traffic and demographics? (Be suspicious of amazingly low rents.)
If you're going into a mall, is your site near the food court, movie theaters or other leisure attractions? (It had better be.)
Have you got enough parking spaces?
Will your site be a destination attraction in its own right? Or, will it depend on traffic from other, nearby retail businesses?
What planning & management strategy flows from that fact? (Hint: just because you spend lots of money on a concept doesn't mean it can generate enough traffic in its own right. Just ask the simulator center chain which recently decided to merge with a major LBE chain.)
Do you know the top three FEC attractions, according to an IAFEC survey? (Answer: on a nationwide basis, birthday parties are number one, with video and redemption about tied for the number two slot. Of course, there are many individual exceptions.)
Do you know the top LBE attraction, according to several industry experts? (Hint: it isn't games, which these experts call "impulse items." No, the top attraction in the most successful LBE's - as measured by amount of customer dollars spent - is food & drink. Which probably translates into "quality restaurant & bar menu items, plus desirable social climate.")
Have you established your per-capita target (how much money you want/need to make from each customer on each visit)?
Do you have a specific plan to achieve this per-capital earnings goal (as in, the average customer will spend $10 on food and drink, $8 on games and $2 on gift merchandise; therefore I need this type of food & drink, these types of games, and this type of merchandise.)
Do you have a plan which ties the average per-capita spending figure into the annual attendance to yield a projected yearly revenue? Does your capital budget have a sensible relationship to these projected revenues?
Have you devoted about the same percentage of floorspace to each attraction, as that demographic group makes up of your projected customer customer base? (That is, if 70% of your market will be families and 30% will be teens, then redemption or other family attractions should get up to 70% of floorspace and only 30% or less should be video.)
Can you point to any other successful FEC or LBE that is based on a concept similar to yours? If not, can you point to a fun center that (at the very least) successfully uses major elements which are similar to your own plan?
Do you have enough capital to "open big" and "do it right"? (A multi-acre pocket park costs $4-8 million, plus land costs; a 100,000 sq. ft. indoor theme park costs $25-30 million; a 50-80,000 sq. ft. LBE can cost $3-10 million; an 8-50,000 sq. ft. FEC can easily cost up to $115 per square foot; arcades can cost $40-150 psf).
Do you have enough capital reserves to upgrade attractions or do at least some promotions and advertising after the first 6-12 months?
Have you planned for a 50% drop in asset value (game resale value) after one year?
Have you budgeted $4,000 per play station for your redemption area?
Have you balanced your initial capital budget outlays and maintenance/upgrade/ operating budgets so as to pay off your investment in 12-36 months? Do you have a specific target date for paying off the loan and getting into profit?
Have you created a detailed financial plan that can help you get bank financing? (Or, do you have a rich aunt?)
FEC/LBE LAYOUT & THEMING CHECKLIST
Did you hire an architect? (They can work cheap, they can save you money on materials, and they love the chance to do outrageous and creative projects like FECs and LBEs.)
For an FEC, have you chosen a bright, cheerful color scheme? Do you have a cute mascot who appears in your ads, signs, menus, etc.? If not, get one!
For an LBE, have you chosen a subtler color scheme? Do you have a cute mascot? If so, get rid of it!
Have you created a family-appealing fantasy environment for your FEC, with an appropriate theme (pirates, clowns, treehouses, jungles, zoos, etc.)?
Have you created a environment that's appealing to grown-ups for your LBE, with an appropriate theme (racing cars, upscale bar or shopping mall, exclusive club, '50s or '60s nostalgia, etc.)?
Does your environment give visitors a chance to "lose themselves" - and lose track of their time and money - in your center's fantasy world?
For an average 20,000 sq. ft. FEC, have you and your consultant based your equipment mix and center size on the following "national average" projections of earnings per square foot? If your projections are significantly different from those charted here, have you got good solid reasons why? (See chart at left reprinted from the September 1995 article by Jerry Monday in RePlay Magazine.)
For LBE's, have you targeted an amusement machine mix in the range of 50% simulators, 40% redemption and 10% standard video?
Do you have sufficiently bright - but not painfully glaring - light levels? (Incandescent track lighting is versatile and inexpensive).
Have you made creative use of flexible theming materials - paint, scenic treatments, graphics, special effects lighting, audio? Have you made minimal but effective use of construction, plaster, costly props, neon, etc.?
Have you thought about how to present every major experience as a "story" or adventure in itself, complete with a beginning, middle and end?
Have you paid attention to sound levels, resonance, and echoes?
Is there a "quiet zone" for parents or adults who want to sit and talk?
Are you a professional amusement machine operator? If not, have you hired or consulted one to design/run your games operations?
For FECs, have you planned an area for little kids? Does it have rides, soft modular play, simple (and small) skill games? Is this area physically separated from the area for teens?
Does the kiddie area have enough kid-oriented games and attractions - up to 7% in larger FECs, or up to 25% in smaller children's centers - to keep the kiddies busy during the average time of the whole family's stay?
Did you plan your soft modular play attraction on a "start small, add more later, keep it fresh" basis?
Do you have kiddie-oriented merchandise in your prize counter?
For mainly kiddie-oriented centers, have you got some games and attractions to keep the adults occupied?
Have you budgeted 50-100 sq. ft. per player position in the games area?
Does your redemption area have an adequate and balanced mix of classic games, skill games, entertainment games and fast-token games?
Does your redemption area have well-designed and well-lit prize displays on all height levels - kiddie's eye level, adults' eye level, and overhead (maybe high on the walls...visible well above the crowd)?
Can customers see the redemption prize area as soon as they walk in the front door? Can they see the prize counter from the redemption game area?
Is a gift shop appropriate for your site? Is it located near the exit? Do you have a wide range of items with your logo for sale - from pencils to fancy jackets?
Are your video games grouped in non-thematic blocks (i.e., don't put all the gun games together)?
Are newer games and attractions scattered throughout the facility, in order to keep drawing customers deeper into the location?
Do you have a couple (but not all) of your new pieces visible from the entrance?
For FECs, is a kiddie ride or carousel visible from the entrance? (It's like a huge billboard to parents, saying "families welcome here.")
Did you take advantage of available free publicity?
Did you make sure you have some cheap, classic games and attractions on hand at the opening...leaving "room" for you to easily upgrade to newer, flashier attractions later? (As one expert said, "On opening day, Pac Man would have excited our customers.")
Did you take photo s of everything - from the outside of the location, to individual games, prizes and customer areas - on opening day? (You'll find these pictures are invaluable reference tools for "maintenance standards" later on.)
FEC/LBE ONGOING OPERATIONS CHECKLIST
Are you a professional amusement machine operator? If not, have you hired or consulted one to design/run your games operations?
Do you have a computer program that generates key statistics like sales, overhead, productivity, expenses vs. revenue on individual machines, longterm ROI on individual machines?
Do you, or someone on your staff, know how to use these statistics to achieve the most effective operating management?
Do you test machines before buying them?
Do you get out from behind the desk and walk around to see what's happening in your center?
Do you talk to customers?
Do you understand the difference between "giving away" prizes and "awarding" them...and how to achieve this difference? (The latter represents a fair exchange of value which means satisfaction for customers, and profit for fun centers. Under this retail-type system, you want the customer to win as much as possible so that you earn as much as possible.)
Do you reward higher ticket or token payouts for non-skill or non-entertainment redemption games?
Is your prize merchandise priced fairly competitively with retail?
Does your redemption zone operate on a 30% payout of gross revenue - or lower, considering ticket shrinkage? That is, do you give away about 30 cents' worth of merchandise for every dollar you take in? (You should.)
Do you offer a balance of prize values (low, middle and high-end goods) in a family-oriented location?
Do you offer mostly high-end "grownup toys" in LBE type locations? (Sharper Image catalog items, autographed sports memorabilia, fancy jackets, etc.)
Do you offer enough high-end redemption prizes to justify return visits and repeat play?
Do you rotate and upgrade redemption merchandise regularly?
Have you selected your laser tag arena with an eye toward breakage, safety, theming and built-in promotional issues and capabilities?
FEC/LBE UPKEEP & MAINTENANCE CHECKLIST
Do you change some of your equipment and/or vary machine layout and groupings every so often, to keep the place feeling fresh?
Do you have any high-visibility, changeable signage or decor elements which can be varied from month to month and season to season?
Do you have a set percentage of income put aside to buy new equipment each month, each quarter, each year?
Do the tracer lights or nets on your basketball game need replacing?
Do you have spare basketballs in stock?
Is it time for new carpet at the entrance?
Are your prize display lights still working?
Do your redemption games still give the right percentage? Do you check the percentaging regularly?
Do you have daily maintenance schedules for each employ to follow - dusting, cleaning, polishing, replacing decals?
FEC/LBE CUSTOMER RELATIONS CHECKLIST
Do your employees know how to play the games? Can they explain gameplay to customers?
If your motto isn't "The customer is always right," can you at least adopt a motto of "The customer must be satisfied"?
Have you trained your staff never to say, "I'm sorry, we can't do anything about that"? (The correct phrase is, "I'm sure we can something to fix the situation, sir.")
Have you trained your staff never to say, "I don't make the rules, I just work here"? (The correct phrase is, "Let me check with the manager; would you wait right here one moment please?")
Is a manager available - physically on site, or at least via the telephone - every minute that your location is open?
Are redemption games clearly marked as to gameplay instructions, and achievements/scores required to win tickets?
Is redemption merchandise clearly marked as to number of tickets or tokens required to win them?
Does your redemption counter staff announce the number of tickets to the customer before disposal?
Do you have a fast way to count tickets, to ensure that customers only spend a short amount of time waiting in line at the prize counter? (A separate "counting kiosk" may help here.)
Is there a bench near the prize counter where tired parents can sit and rest (and keep an eye on their children) while the kids stare at the prizes and/or wait in line?
Does your prize counter staff know the "art of suggestive selling" for kids who can't make up their minds about what prize to get?
Do you have a program to ensure the bathrooms are cleaned and re-cleaned as often as needed? (Dave & Buster's does light bathroom maintenance every hour.)
Have you measured your average customer length of stay and average per capita expenditure? Does it meet or exceed the goal you established in your planning phase? Are you giving a good entertainment value for the customer's money?
Do you give tokens to customers who report out-of-order games?
Do you or your personnel ask customers, as they are leaving, if they had a good time...and why or why not?
Do you ask customers questions like "Would you do it again? Can it be better? When was the last time you tried it?"
Do you have written "guest comment" programs? Is there a small incentive for guests to participate?
FEC/LBE SECURITY & SAFETY CHECKLIST
Do you have rules posted?
Do your rules cover dress, language, age, smoking?
Do you train your staff in security issues and procedures? Do you have separate security personnel?
Do you have security video cameras? (They require only a small investment and can save you hundreds of thousands of dollars in legal costs from frivolous or fraudulent lawsuits.)
Do you have an entry policy? (i.e., clothing restrictions; customers must pay, or get their hand stamped, or leave an ID card, etc.?)
Do you have an exit policy? (i.e., once you leave, you can't return without paying another admission.)
If you charge an entry fee, can cheaters get around it?
Do you check adult ID's when they drop off (& especially when they pick up) kids from your center?
Do you have locks on prize counters?
Do you use ticket shredders?
Do you have strict inventory controls?
Have you checked with your landlord about security concerns, rules & resources?
Do you have liability insurance? Do the manufacturers of your games have it?
Have your machines been UL-listed and city-approved?
Have you eliminated or restricted access to open electrical sockets, trip-happy power cords, slick floors and other obvious hazards?
FEC/LBE COMPETITION, MARKETING & PROMOTION CHECKLIST
Have you identified your competition? (Remember, it's not just the FEC down the street or the LBE across town...it's any nearby public entertainment choice.)
Have you identified your key competitive advantage? (For some, it will be "We're the biggest"; for others, "We're first with new games"; for others, "We've got the broadest appeal to everybody in the family"; for others, "We're the only ones with a certain attraction"...etc.).
Have you got a plan to build on that key competitive strength with advertising and/or marketing?
Have you considered joint, cross-promotional programs in cooperation with competitors (movie theaters, perhaps) and/or with non-competitors (record stores, pizza parlors, etc.)?
Do you have a mechanism in place to get your customers' names and addresses? Can you use this data to generate a good mailing list?
Do you send regular promotional mail to your mailing list?
Do you reward customers for repeat visits?
Do you have a membership program with benefits?
Do you have cooperative promotional and goodwill programs with local schools, PTAs, Boy and Girl Scouts, police, firemen, or other community groups? (This could be anything from free tokens for "A's" on report cards, to free-play nights exclusively for the Policeman's Fraternal Organization, etc.)
Do you have strategic plans for slow months?
Do you plan special events to bring in patrons during off days?
Do you know what kind of new attractions can be offered with minimal investment to keep customers coming back? (The list of possibilities includes live performances, contests, this year's hot kiddie character as a "mascot" or guest at birthday parties, and many more.)
FEC/LBE MANAGEMENT PHILOSOPHY CHECKLIST
How do you think of your patrons - as customers? Honored guests? Chumps? Meal tickets? Warm bodies? Friends? Brats? Your neighbors?
Do you think of yourself as in the entertainment business? Is there a little "show biz" in your blood?
Have you got a company mission statement? Does the word or concept "fun" appear in it?
Have you asked yourself: "What did Walt Disney do right...and how can I adopt that lesson to my own operation?"
Do you put customer satisfaction first? Are you also aiming at long-term, repeat business?
Can you explain the difference between "squeezing the maximum possible income from each customer, on each visit" and "killing the goose that lays the golden eggs"? (Hint: there isn't any.)
Would you be proud to show your location to someone you admire?
Would you take your own family to your FEC or LBE site?
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