Business Models Archives - Building a pickleball business

Is Chicken N Pickle a pickleball club?

I was dying to see this place because much has been written about it, and many of our clients reference it when planning their own clubs. Is it a pickleball club? I would say “sort of”. Yes it has pickleball, but really the business model is an extensive experience-driven bar and restaurant — that has pickleball but is not primarily a pickleball club.

They currently have 8 locations, and plans on the books for many more. I spent 3 hours there on a Wednesday night, and here’s our Pickleball Business Advisor summary of the business:

It’s immense. 12 pickleball courts, but that’s only a small percentage of a footprint that includes varied food offerings, restaurant seating areas, multiple bars, fire pits, foosball, shuffleboard, corn hole, roof decks and more. I would say it was easily over 100,000 square feet. Most courts were open air, many were covered, and a few look like they could be used in winter because they could be enclosed and heated.
It’s really a restaurant, family entertainment and event venue that has pickleball. NOT a pickleball club with a restaurant. I met people attending a company sales meetings that had 70 folks there. Many were using courts dedicated to their event and playing in street clothes. They were having a blast. P.S. the food was reasonably priced and very good (especially the chicken!). Note: My sister said order the craft beer because the wine was mediocre.
There is a morning open-play scene that attracts more serious players, but I am quite sure pickleball revenues are only a very small part of their overall financial picture.

This location was in Grand Prairie, Texas which is technically in the Dallas area, but from a practical standpoint is not accessible for regular play by Dallas folks because of traffic and distance. I’m quite sure one of the reasons it can’t be closer is the difficulty in finding suitably priced real estate closer into the city. It is stunning to me that there weren’t more dedicated Pickleball clubs in Metro Dallas. I’m sure that will change soon.

Conclusion

All in all Chicken N Pickle appears to be a successful restaurant and event business with a unique twist related to pickleball. It did not appear to be a serious fitness business where regular pickleball players would play, or that would create interesting programming to grow pickleball attendance and participation. Successful business, yes….Pickleball centric business, no.

Pickleball Business Advisors is brothers Bill and John Pryor. We provide a variety of consulting services based on extensive experience in fitness business development, and research into the fast growing pickleball marketplace. To initiate a feasibility assessment for your pickleball club, or for other consulting, contact us so we can learn about your project.

Choosing a Pickleball franchise (or not)

I’ve had extensive experience with stand-alone startups, AND with franchises. Should you buy a franchise or startup your own ? It depends on two things: First in depends on you, and what kind of business person you are. Secondly it depends on the experience and quality of the franchisor you are considering.

The 2 most important questions to ask a franchisor:

question mark on yellow background — Questions

Can you show me the financial results of any clubs in your system? (note: the longer the history the better but a full year’s results should be an absolute minimum).
Can I speak with any operators who have been open a full year? Talking to a real business owner with direct experience with a franchisor is invaluable.

If the answer is no to these questions, then you are considering buying into a business system with no track record. It doesn’t mean you won’t be successful, but it does mean you are being asked to pay a significant chunk of money (franchise fees and royalties) without strong evidence of the value.

Advantages and disadvantages of buying a pickleball franchise.

Traditional Franchise Advantages (in any industry)

Brand recognition: for most franchises (think McDonalds and Subway), there is value in the name. Brands are just beginning to emerge in pickleball.
Proven business model: If a franchise has a proven business model that has been tested and refined over time it can reduce the risk of failure for franchisees, as they are essentially following a blueprint for success.
Support from franchisor: Franchisors typically provide franchisees with a variety of support services, such as training, marketing, startup and operational assistance. It is important to understand very specifically what this is and to consider the value.

Franchise Disadvantages

High upfront costs: The initial investment required to purchase a franchise can be significant. Franchisees typically have to pay a franchise fee, as well as other miscellaneous costs.
Less control over business: Franchisees are required to follow the franchisor’s business model, which means they have less control over their business decisions than they would if they were starting their own business.
Royalty fees: Franchisees typically have to pay ongoing royalty fees to the franchisor. This can significantly reduce profit margins.

Advantages of Starting a Business on Your Own

More control: In a startup you have complete control over all aspects of the business. This can be appealing to entrepreneurs who want to be their own boss and have the freedom to pursue their own vision.
Keep all profits: As a business owner, you keep all of the profits that your business generates. This is not the case with franchises, where franchisees have to pay royalty fees to the franchisor.
Greater potential for reward: If your business is successful, you can potentially earn a significant return on your investment. This is not always the case with franchises, as the franchisor takes a share of the profits.

Disadvantages of Starting a Business on Your Own

Theoretically higher risk…IF compared to a well established franchise. The current reality in our market is there is no well-established franchise, so I don’t believe the risk is significantly different.
More work. Either way you do it, starting and running a business will be a lot of work. A good franchisor can save you time on startup, especially real estate and construction if they are experienced in those areas.
Less support: When you start your own business, you are on your own. There is no franchisor to provide you with training, marketing, or operational assistance. This can be a challenge, especially for entrepreneurs who are new to business ownership. Finding mentors and advisors is important.

Which approach is right for you?

The decision of whether to buy a franchise or start your own business is a highly personal one. If you are looking for a business opportunity with less risk and more support, then buying the right franchise may be a good option for you. However, if you are looking for a business opportunity where you have more control and the potential for greater reward, then starting your own business may be a better choice.

Ultimately, the best way to decide which approach is right for you is to do your research and talk to other entrepreneurs who have experience in both franchises and startups.

Cool new Pickleball clubs

Austin, Texas and North Kingstown, Rhode Island. In our never ending quest to unearth (and play at) the coolest pickleball spots in America, we found a couple winners this month. My wife and I celebrated a huge wedding anniversary by spending 4 days is Austin, Texas. I planted her in a Spa one morning and then headed out to find a game (clever strategy don’t you think?). She was on to my plan but it worked for her too.

Austin Pickle Ranch

Austin Pickle Ranch, West 6th St

This is a cleverly constructed 7-court complex on the roof of a parking garage in West Austin. Murals cover various walls, and a cool airstream trailer serves as the check in desk. Nifty viewing areas feature Astro turf and Adirondack chairs. The court quality is outstanding, the nets perfect. I was there on a mild morning in October and I asked their front desk guy about rain….he said “thats not much of an issue around here, we’re more concerned about HEAT”. This is why I feel indoors is the way to go— but this place had a great charm, and from a business stand point, I’m sure leasing the roof of a parking garage is a hell of a lot cheaper than retail space on the first floor. I stepped in to a great game…..my partner was bare-chested and tattooed, which concerned me at first, but he tuned out to be a nice guy and a quality player.

Lil’ Rhody

Rhode Island is the smallest state, but they’ve got a thriving pickleball culture that was mostly outside (including a re-claimed military air strip) until recently. Several spots have opened, and I recently stopped in to play at Lil Rhody.

Located in a nondescript strip mall off of route 1, Lil Rhody features 5 courts, each named after a cool Rhode Island town. The surface is slightly cushioned which is really nice and the lighting is good. I did hit the ceiling once, but the ceilings are plenty high for regular play. When I saw pictures and video on the website, I was concerned about tightness…..courts had more room around than I thought (still a bit tight on the sides though). They have a nice system for corralling errant balls.

Interesting model — 5 courts, low cost membership, some open play is free for members, other sessions require a small fee. I don’t know what they pay for rent, but probably not huge given the area. P.S. this location serves a handful of small towns in Rhode Island, not the city (Providence), and not high end suburbs.

One impressive part of the experience was that our advanced group was one short so the young lady working the front desk jumped in. She was an awesome player and a joy to play with. This is the kind of staff necessary for that “vibe” a good Pickleball club will have.

Creating a pickleball club experience

The reason (many) pickleball players will pay to play at a cool pickleball club is because it offers more than what they get at the local public courts or the gym at the YMCA. Successful pickleball clubs don’t just provide courts for play, they provide an experience. Stated another way, this is not a simple court-rental business, this is an experience business. Different clubs are creating different types of experiences, the ones that do it best will build player loyalty and financial success as a result.

What kind of club do you want to build?

The type of club you want, your “vision” will directly impact key decisions made during the planning process. Decisions about space design, amenities, staffing and other expenses will flow from your vision, so it will be important to define things in advance —- knowing of course that things can evolve and change based on market conditions. Things to consider:

Food & Beverage. If this is a part of your business, how extensive will it be and what role will it play in your operation?
Amenities. Are you a cushy club, simple and basic, or something in between? This decision impacts a number of factors including pricing.
Community. By this I mean the community vibe within your club, but also how your business interacts with the nearby community.
Programming. If you’ve rooted around in this blog, you’ve seen a bunch on this critical topic. Good, creative programming guided by passionate, energetic staff is key thing missing from outdoor open-play, and a thing that will a) make players return and b) get them to pay.
Serving niches. Somewhere in your strategic thinking is the idea of addressing a variety of niches: men, women, all ages, athletes, non-athletes, etc.
Events. How important are (or should be) events to your business. For some club owners, this has emerged as a key revenue stream whether planned for or not. If events are important, how does this impact your plan, your marketing, your staffing?

Market differentiation matters

No matter where you are, you can be sure multiple pickleball clubs are in process if not already open. God Bless America and our capitalist, entrepreneurial spirit. “First-in” can certainly be helpful, but in our opinion, this whole area of “experience creation” is what will differentiate pickleball clubs and ultimately determine which clubs are the most successful.

Pickleball clubs: a variety of approaches are emerging

Over the past 6 months we have fielded dozens of inquiries, and engaged a number of entrepreneurs to consult around their planning and startup. We are struck by their energy and passion — but also by the wide range of strategies and visions we’ve encountered.

Locations

As an example, we have brainstormed the pluses, minuses and issues around a variety of potential locations

Standalone former retail buildings
Former movie theaters
Common areas of indoor malls that have withered
Industrial park warehouses
Airplane hangars
Building from scratch in parking lots
Re-structured office space
Purpose built from scratch
Indoor/Outdoor combined concepts

Scale

One of the first decisions is the scale of the operation. Some are considering 4 courts with almost no amenities, a stripped down mode. More commonly, we are working on plans for 8, 10 or 12 courts. We’ve also discussed 18-24 court models and the issues around that scale

Another key discussion related to scale is how much square footage and energy will be devoted to off-court activity. Notably food & beverage, but also common areas, retail, and ancillary activities.

Revenue and pricing

There is quite a divergence in approaches relative to revenue. Some folks are “all in” on recurring revenue in the form of memberships. They have players paying monthly dues for unlimited play and benefits. Others have determined “pay as you go” is a better model. We’ve analyzed both these approaches and a number of combined approaches as well. What we recommend depends on a number of factors: competition, demographics, personal vision and more.

Another issue related to revenue is the development of multiple revenue streams. We believe the more offerings you have, the more likely you are to optimize your sales and net income. We’ve done a lot of thinking about how to weave this approach into an overall business plan.

The wild wild west

The reality in this market is that it is early days. Hundreds or even thousands of new pickleball clubs will be opening in the next few years. Because it is early, there aren’t yet clear-cut, proven operating models. Innovative entrepreneurs are creating the market as we speak. As in any business, the operators that listen to their customers, adapt to their desires, and execute effectively will thrive. For true entrepreneurs this is gonna be a fun ride.

Considering profit in a pickleball business: two models.

How much revenue (and profit) should you project from a pickleball club? That depends. In the business plan for a pickleball club or center, different assumptions on the type of facility can result in dramatically different projections. There are multiple potential business models for this type of business. Here are two examples, one is a business driven by one primary success factor: filling courts. Another option is a large pickleball center where court revenue and court occupancy is one part of a larger concept involving multiple activities, often major food and beverage. Bigger is not necessarily better, there are pluses and minuses to each approach.

Starting a small community pickleball club based on filling courts

SCENARIO A
8-12 dedicated courts with creative emphasis on play. This is a small court-driven model with limited retail and food and beverage. In this model, the total monthly revenue can be projected by assessing a number of variables around court occupancy and pricing. Important note: creative programming can dramatically impact the revenue driven from courts. This is an area of considerable research by our team.

Court Rental factors:
X courts available X hours per day
X% occupancy rate
Other court usages and fees
Average hourly court rental fee
Other programming fees

Membership factors:
X members paying $XX per month
Levels of membership?
Benefits of membership?
Policies for cancel and change

Other Revenue Streams?
These could be critical especially if the court rental and membership fees don’t reliably cover your costs. Several owners have described surprising sources of revenue that weren’t in the origin plan. We’ve researched them and identified them.

A larger ‘lifestyle’ pickleball club

SCENARIO B
10-20 courts as part of complex with food & beverage and other activities. A large court and entertainment-driven model with significant other amenities: This model is driven more by food and beverage sales than by innovative Pickleball programming.

In this model, pickleball may play 2nd fiddle to the true driver of the business: revenues from food & alcohol surrounding an experience. This is less about fitness and more about dining, entertainment and significant non-court activity.

Profitability for different types of pickleball centers

Projecting pickleball revenue is one piece of the puzzle. In the end it is about profit. In the smaller, court-driven community pickleball center outlined above, the revenue is low, but so are expenses. It is also a much simpler business to run. Real estate costs and staffing costs, the 2 largest expense areas are much lower than operating a large facility to accommodate courts plus a full bar and restaurant. Net operating profit for the small center might be 20-35% of revenue….granted on a very small revenue base.

The larger pickleball / restaurant complex outlined above would expect much higher revenue, but also higher overhead, more staff, and the complexities of running a food and beverage operation. Profit potential here is more in the 15% to 20% range, but on a much larger revenue base.

To be successful with either model (or any model in between) still requires strong execution — Projecting revenue is one step….how to actually drive that revenue is the main operating strategy. Our specialty here is how to maximize revenue from courts, we believe strong niche fitness businesses can be built without the complexity of restaurant operations.

For updates on new blog posts and new ideas for pickleball club development:

Pickleball Programming

Throughout this blog you’ll see references to “programming” as a critical success factor in pickleball clubs. We’re developing a full handbook on this topic, but here are 7 reasons we feel strongly it will impact business success if you’re considering a pickleball club.

Programming allows ‘court optimization’, the usage of your most precious asset: available court hours
Programming is a powerful tool for indoctrinating new players, the lifeblood of your business
Programming is one of the main ways to promote player interaction and nurture the community vibe that drives player loyalty
Programming as a way to infuse variety into the player experience
Programming helps accommodate players with different goals, abilities and expectations regarding pickleball
Effective programming will create a unique position and competitive advantage for your pickleball club
Programming can create important ancillary revenue streams to help your overall business.

Any Pickleball club business plan without a thoughtful approach to programming is ignoring an absolutely critical success factor.

Pickleball Paradise, we’ve seen it

I have seen the future of pickleball…it is here now. A few blocks from the beach off a non-descript commercial strip in Holly Hill, Florida lies absolute paradise if pickleball is your passion. It’s called “Pictona”, in a nod to nearby Daytona Beach.

Like most of us, I discovered pickleball on converted tennis courts, community center gyms, and random splotches of asphalt where someone painted lines and threw up temporary nets. The conditions were not optimal, but the appeal of the game shone through anyway. What I longed for, without really knowing it, was an environment dedicated solely to every aspect of the pickleball experience. Pictona is exactly that. Close your eyes and make a wish list of what you’d like, it’s there:

Pickleball perfection

49, yes 49 courts where there is some kind of play going on all day, every day
Virtually endless open play to accommodate anyone’s schedule
Covered as well as outdoor play on pristine surfaces with permanent nets
Fencing around each and every court assuring uninterrupted play
Optimal lighting and extensive viewing and mingling areas for between games
A world-class “championship court” that can seat over 1000
Cool retail products and paddle-demo options
A “Kitchen” that serves good food as well as beer and wine
Court-programming to accommodate any level of play
Tournaments, ladders, mixers and various events for all levels
Youth, beginner and teacher training programs
Corporate, team-building and event facilities
A cordial and highly social vibe and environment

I could go on and on. Pictona is the vision of Rainer and Julie Martens, who worked with the town of Holly Hill, and largely funded the effort as a gift to the community and to the pickleball universe. The facility was built in two phases with the most recent 24 courts coming on line just one year ago. Membership options vary and members are the lifeblood of the facility, but there are lots of options for visitors. The unique quality and scale of Pictona have made it ideal for events and amateur and professional tournaments that are increasingly discovering it.

My brother and I spent 2 days at Pictona exploring, researching, learning….and of course playing pickleball! We wanted to understand what’s working and how to best organize and promote a local pickleball center. Ownership and the team at Pictona are clearly on the very cutting edge of where pickleball is going, their model continues to evolve —- but we’ve seen what they have now, it is truly pickleball paradise. Contact us anytime to brainstorm building your own pickleball paradise.

Pickleball club economics. How to project revenue.

If you want a pickleball club in your neighborhood, and if you are considering the “court driven” model, let’s get down to the nitty gritty and consider what will drive revenue, expense and ultimately profit. These are the critical success factors in your pickleball center business plan.

REVENUE STREAMS

Pickleball Business Advisor has developed a flexible tool for assessing the revenue potential of a pickleball club or center. In this worksheet, we consider the multiple revenue streams that are likely to flow from court usage. There are many—and they are interwoven. This tool allows you to run a variety of “what if” scenarios on your business.

VARIABLES IMPACTING REVENUE

In our “feasibility assessment”, we have identified 15 variables. These are the things you will want to consider, and each has an impact on revenue. One small example would be anticipated tournaments, tournament entrants and tournament entry fees. Tournament revenue is just one of several revenue streams but their contribution to overall revenue can be significant.

Other questions that a feasibility assessment can address:

How many courts make sense? How does # of courts impact revenue?
What level of debt service can the business effectively support?
What level of monthly rent can the the business effectively support
How important are ancillary revenue streams to overall model?

Building an experience-driven pickleball club

Enhancing your court facility with amenities like seating areas, food and bar, retail and other games can dramatically enhance the business potential.

At one end of the spectrum is the “court-driven” model. A pickleball business focused primarily on court rental, memberships, lessons and related services. At the other end of the spectrum is the “lifestyle megaplex” where pickleball is at the core of an ‘eater-tainment’ business that includes, courts, restaurants, bars, other entertainment, retail shopping, community events and more. There are of course multiple variations between these two extremes.

Founders of the court-driven model are often turned off by the complexity and perceived risks of food and beverage. “I don’t want to get into the restaurant business” is a common refrain. This is somewhat understandable, especially if you can generate a nice profit using creative programming.

On the other hand, this position could also limit the business potential. A successful pickleball club with a well-run bar and restaurant gets several interwoven benefits:

A more diverse revenue stream
A more diverse customer base (pickleball players AND non-players)
An experience-driven environment that drives customer loyalty
As a result of the above, a much bigger potential profit
HOWEVER…at a larger financial risk and a more complex operation

Ask any microbrewery business (a similar explosive craze business) about the profit margins of creating an experience driven business, and about the profit margins in selling alcohol. Craft breweries are an interesting parallel to pickleball centers. They’ve exploded on the scene, they build community and they’re experience driven. Pickleball clubs have the same appeal, but are centered around exercise, AND attract a broader customer base in terms of age.

Successful Pickleball businesses are using the core product of court-play as the center of a complementary family of diversified offerings.

The quintessential customer pays a monthly membership fee, buys court time, joins friends for drinks, grabs a quick meal, buys the latest gear, and rents the venue for his wife’s birthday party.