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Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
June 23, 2015
Abstract:
The Viera Family Entertainment, LLC contracted World Asset Assessment to perform a feasibility
analysis on the FUSION V entertainment center. The two story center located in Viera, Florida
will include a variety of recreational activities, food & beverages, and live events. The recreational
activities include an electronic arcade, laser tag, boutique bowling, and a childrens soft play area.
A sports bar is located on the first and second floor that keeps food and beverage readily available.
Our approach was to analyze how several external market dimensions and the management
team, in conjunction with the development schedule, would impact the projected financial
performance. Based on our analysis, the strongest quality of this opportunity is that it is located
in a relatively new planned community that lacks entertainment infrastructure. The citizens do
not currently have access to post-21st century entertainment aside from film.
We believe that the riskiest aspect of this investment is the market maturity and risk of market
adoption. The adoption of household electronics has reduced the demand for traditional
entertainment. We believe the risk is mitigated with the complex also offering an arcade and live
events with a full sports bar. The market performance of similar companies such as Dave &
Busters and Chuck E Cheeses continue to deliver strong y-o-y growth.
Approval:
Joe Yaron
Managing Member
Worldwide Asset Assessment
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Table of Contents
Executive Summary....................................................................................................................................... 5
Development Success Factors................................................................................................................... 6
Local Competitive Supply & Opportunity ................................................................................................. 8
Local Market ............................................................................................................................................. 8
Arcade, Food & Entertainment Complexes in the United States ............................................................. 8
Target Demographics Overview................................................................................................................ 9
Arcade, Food & Entertainment Complex Metrics ................................................................................... 10
Cost ......................................................................................................................................................... 12
Demand and Financial Projections ............................................................................................................. 13
Summary of Results ................................................................................................................................ 14
Financing Discussion ............................................................................................................................... 15
Revenue Stream Projections ................................................................................................................... 15
Site Analysis ............................................................................................................................................ 16
Economic & Demographic Analysis............................................................................................................. 18
Brevard County Analysis ......................................................................................................................... 19
Indian River County Analysis ................................................................................................................... 19
Volusia County Analysis .......................................................................................................................... 20
Regional Facility Profiles ............................................................................................................................. 21
Community Demand Forecast .................................................................................................................... 23
Arcade, Food & Entertainment Complex Trends ........................................................................................ 25
Facility Plans & Budget................................................................................................................................ 26
Budget ..................................................................................................................................................... 26
Site Analysis ................................................................................................................................................ 29
Location................................................................................................................................................... 29
Demand & Financial Projections ................................................................................................................. 30
Breakeven Analysis ................................................................................................................................. 35
Sensitivity Analysis .................................................................................................................................. 36
Financial Projection Methodology .......................................................................................................... 37
Appendices.................................................................................................................................................. 38
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Table of Figures
Figure 1: Decline and Growth of Bowling and Laser Tag Facilities ............................................................... 7
Figure 4: Percent of all 2011 Bowlers by Age Group (age 7+) .................................................................... 10
Figure 15: Demand Forecast for Brevard and Surrounding Counties ......................................................... 24
Figure 16: Arcade, Food & Entertainment Complex Revenue Bar Chart .................................................... 25
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Executive Summary
FUSION V is a new commercial development project based in Viera, Florida. It will include the
infrastructure for bowling, laser tag, arcade, and multi-purpose stage for regional events. Food
and beverage will also be sold on-site in the form of a sports bar. The purpose of this feasibility
analysis by Worldwide Asset Assessment is to analyze internal/external risks and overall
profitability of both family entertainment complexes and the overall industry landscape. The
primary aspects of this development project includes:
Family Entertainment
Infrastructure is being developed based on the site layout plan, which will feature designated
family entertainment related activities. The first floor will include the following amenities:
Laser Tag: A designated section for laser tag, a popular game amongst children.
Bowling Alley: (8) public lanes totaling 6,000 SF (4) private lanes totaling 3,120 SF
Arcade: 3,100 total SF that will include modern arcade style games.
Softplay: A play zone designed to be a safe locations for children to interact.
The sports bar also contains a small live events stage which can be viewed from all restaurant
seating areas including the second level mezzanine. A second small stage will be located outside
the building with additional terraced seating and additional tables. Local musicians, radio sports
shows, comedy performers, and other popular local acts will be featured at this location with
revenue sharing agreements formed for facility use.
The facility will include a two story sports bar with an 80 100 seat capacity and limited menu.
The sports bar will feature local and professional sport events on large televisions. A 1,260 SF
kitchen will be located on the first floor with 3,600 SF of space, with an additional 20 seats for
VIP seating. An additional 1,920 SF of seating will be available on the second floor.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Development Success Factors
Location & Site Profile: The attendance of venues and family events partially depends on
several factors relative to the location of the site. A complex should be located in a safe
neighborhood that offers nearby entertainment and easy accessibility near a highway or
interstate. It is also advantageous to be located nearby shopping outlets and/or areas
with heavy foot traffic. Locations that have high amounts of traffic congestion will directly
impact the visitation rates and profitability.
Macroeconomic Stability: The household consumption patterns will impact the success
of a facility. As consumption budgets retract, consumers will be more likely to avoid
spending money out of the home and invest in home entertainment products. Sites that
are located in new communities may be at risk of the new communitys development and
sustainability. An economic anchor that the community was previously structured around
with a deviation, could impact the population rate and consumption spending.
Management Expertise: A strong management team must have the capacity to not only
control the entertainment operations, but also understand restaurant management.
Management must also effectively generate awareness in the market and control the
cyclicality by balancing seasonal demand.
Based on our analysis, we have formed the following opinion regarding the risks and opportunities
relative to the facility success factors that have been identified:
The complex is located along a major interstate in the new planned city of Viera, Florida.
The interstate may enable rapid commute from visitors in the surrounding cities and
decrease surrounding traffic congestion. The new city will also create an increase in
population, but growth is not guaranteed given the recent developments of the location.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
The site will be impacted by national trends in consumption spending, but also the local
market dynamics within Brevard County. The county has a forecasted population change
of 3.16% by 2017, relative to the overall state at 5.73%. The median household income is
$48,039, compared to the $46,956 average for the entire state.
The site is located within walking distance to The Avenue, an open-air, pedestrian
friendly shopping destination featuring national retailers, local merchants and
restaurants. This is likely to result in heavy foot traffic from the nearby target consumer
looking to spend their discretionary consumption budget.
The demand for family style entertainment must remain constant or continue to increase.
Hutchinson Research shows that 51.6 million, or 19.1 percent of people age 6 and older
bowled in 2007, which is only a slight reduction from 52.6 million in 1999. The number of
occasional bowlers has actually increased during that period, while the number of
frequent bowlers who are bowling 25 or more days a year has decreased. The decrease
in league bowlers is the predominate reason there has been a 14 percent decline in the
annual number of bowling participation days, or attendance at bowling centers in 2007,
compared to 1999.
The demand for laser tag centers continues to increase and may soon overtake bowling
in demand. Indoor arcades and sports bars continue to increase, with the comparable
firm Dave & Busters having increased revenue by 14.9% in 2014.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Local Competitive Supply & Opportunity
There are currently a limited number of entertainment facilities within Brevard County, with one
comparable family entertainment center. However, it is located approx. 24 miles away from Viera
and is an outdated facility compared to the planned development of FUSION V. Additional
regional competitors include Chuck E Cheese, Skating rinks, and indoor golf. The closest Dave &
Busters facility is approximately 53 miles away.
Local Market
Viera is located in Brevard County, spanning approximately 1,015.66 square miles with a
population of 556,885 according to 2014 US Census estimates. The per capita income of $27,009
is slightly higher than the overall state average of $26,236. An estimated 26.3% of the
demographics have a bachelors degree or higher, aligned with the target demographics for
family entertainment facilities. Viera is a planned community bordering 8 miles along Interstate
95, encompassing 14,500 acres, consisting of 58 neighborhoods in two areas.
This industry includes businesses that primarily operate video game arcades and game focused
family entertainment centers, which typically sell food and beverages. Industry operators rent or
purchase debit card or coin operated arcade games that customers play for a fee. Establishments
that primarily focus on gambling games, billiards, miniature golf, and other larger-scale or
outdoor amusements are not included in this industry.
The number of establishments has grown 7.4% from 2007 to 2012 with total revenue of $1,740
(millions) in 2012. Most entertainment complexes have 1 4 employees, implying that the
market consists of a few large players and is then fractured into smaller arcades. Complexes are
broken into two competing categories of franchises and privately owned operations. The
franchises include Chuck E Cheese, Dave and Busters, and Bullwinkle Family Fun Center.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Figure 2: Distribution of Similar Companies in United States
The complex will draw diverse demographics with the expected concentration divided between
families with young children and young adults ages 21 35 with a middle to upper class
socioeconomic status. Bowling, the sports bar, entertainment venue, and arcade will attract the
young professional demographic. However, the amenities will also target young families from a
middle to upper class socioeconomic background.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Figure 3: 2011 Bowlers by Household Income
Family entertainment complexes continue to be constructed across the United States. Revenue
has also been increasing, particularly among the highest concentrated arcade and sports bar
franchises. The number of establishments grey 7.40% from 1997 to 2012 with revenue growing
5.20% during the period. Each establishment averaged 13 according to US Census Data.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
1997 2002 2007 2012 % Chg
Number of establishments 2,737 2,571 2,677 2,875 7.40%
Receipts/Revenue
1,247 1,269 1,654 1,740 5.20%
($ Millions)
Annual payroll ($ Millions) 271 331 411 457 11.20%
Total employment 28,141 29,586 33,631 39,461 17.30%
Receipts/Revenue per establishment
456 494 618 605 -2.00%
($1,000)
Receipts/Revenue per employee
44 43 49 44 -10.30%
($1,000)
Receipts/Revenue per $ of payroll ($) 4.59 3.83 4.03 3.81 -5.40%
Payroll per employee ($) 9,647 11,190 12,211 11,569 -5.30%
Employees per establishment 10.28 11.51 12.56 13.73 9.30%
Receipts/Revenue per capita ($) 5 4 5 6 1.00%
Population per establishment 99,615 111,873 112,526 109,187 -3.00%
Table 2: Industry Financial Performance
World Asset Assessment analyzed comparable companies within the amusement and recreation
industries that had an asset class of $1 500 million in the United States. Financial ratios were
gathered to better understand the proposed financial structure and operating margins of a
company operating within this sector, excluding large franchises that may have a different
operating structure. We found that many companies had a gross profit margin between 55 75%
and a net profit margin between 4 9%, averaging at 7.51%.
Many companies within this industry have heavy investments in fixed assets and ROA is an
important financial metric. The average return on asset for the industry was 33.61% for
companies of comparable size. Aside from revenue from entertainment assets, many franchises
attribute approximately 50% of their total sales to food & beverage products. The nature of this
industry requires constant demand given the heavy investments in assets and overhead expenses.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Amusement, gambling and recreation industries (Asset Class: 1-500)
Comparable Ratios
Sales 100.00%
Cost of Sales 34.03%
Gross Profit 65.97%
Officers Comp. 5.49%
Salary-Wages 11.38%
Rent 10.02%
Taxes 2.53%
Advertising 1.35%
Benefits-Pension 0.61%
Repairs 1.44%
Bad debts 0.01%
Other SG&A Exp. 24.68%
Amort. & Dep. 0.00%
Interest Earned 0.01%
Interest Expense 0.34%
Other Income 1.39%
Net Profit 7.51%
Table 3: Amusement, Gambling, and Recreation Industry Financial Ratios
Cost
World Asset Assessment analyzed comparable facilities in order to determine the construction
cost. However, the overall location, site layout, and many other factors will determine the actual
cost. Therefore, World Asset Assessment generated a variance based on a sample population
across the United States. A small comparable Chuck E. Cheeses in Port Orange, FL has estimated
development costs of $1,600,000. However, large franchises have the infrastructure to reduce
overhead.
According to Dave & Busters annual report, the development of new locations ranges from
$6,000,000 to $8,250,000. The specific costs depend on the location, but deals with suppliers are
likely to drive down overhead costs and a systematic layout plan enables greater cost consistency.
It is likely that an entirely new operation will cost more than the development of another chain
location of comparable size.
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Demand and Financial Projections
The revenue and demand projections are based upon market data in combination with the
projections provided by the owner and the following assumptions.
Food & Beverage sales are expected to contribute 50 60% of the total for the company
revenue, y-o-y. The revenue projections have separated by the specific category in the
full revenue projections section. Revenue is expected to grow in-line with the population
growth at 3.0% per year, varying by 1 3% across product lines.
Profit margins are estimated to average 25%, with a standard deviation of 1%. The cost
of goods sold (COGS) is also estimated to be 19%, compared to the aggregate industry
average for companies with an asset class less than $1.0 M at 34.03%.
Total operating expenses, excluding payroll related, are estimated to be 20-24% of sales.
The largest expense categories will be variable credit card charges, advertising fees,
janitorial services, and insurance. Repair services are expected to be much smaller than
average during the first 12 months, rising relative to average machine life with advertising
expenses being greater than average during the first 12 months.
Tax expenditures assume at taxation of $2.00 per SF with the financing structure based
on $5.0 M at 7.5% interest with total occupancy expenses amounting to $764,830 in the
first year. The remainder of expenses will be packaged into payroll and wages related.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Type Location Cost
Chuck E. Cheese's Diversified $ 1,600,000
Dave & Buster's (Large) Diversified $ 8,250,000
Dave & Buster's (Small) Diversified $ 6,000,000
GameWorks Diversified $ 2,400,000
Discovery Zone Lenexa, Kansas $ 1,840,000
Kids Quest Diversified $ 2,100,000
Table 4: Comparison of Construction Costs for Similar Companies
Summary of Results
The table below shows a summary of the revenue, expenses, and overall financial position to the
year 2020, the full breakdown of revenue/demand by category is provided in the Demand &
Financial Projections section:
$5,000,000
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
Year 1 Year 2 Year 3 Year 4 Year 5
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
We believe the revenue projection growth rate is fairly conservative, but the profit margin may
be slightly optimistic given comparable profit margins to the industry. The revenue forecasts do
not also assume cyclicality or variance in profitability by revenue stream. However, we have
assumed a variance in the profit margin and growth rates in a scenario analysis to ensure that a
reasonable coverage ratio was sustainable under varying conditions. Full projections are available
in the Appendices section of the feasibility study.
Financing Discussion
The financing arrangement has been structured at 65% LTC Debt and 30% LTC Equity by
Commercial Lenders of America to cover the total $8,174,000 of closing costs requested based
by total collateral of $8,471,000.
The Table below provides an overview of the revenue streams for each category the projections
have been based on the housing demand forecasts, build schedules, and housing. A full
breakdown of the schedule of revenue and allocation for each build structure is provided in the
Demand & Financial Projections section.
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
Year 1 Year 2 Year 3 Year 4 Year 5
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Five Year Revenue Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Total Food Revenue $1,705,000 $1,808,400 $1,896,740 $1,971,538 $2,030,685
Total Beverage Revenue $1,555,000 $1,647,200 $1,726,336 $1,793,729 $1,847,541
Total Recreation Revenue $1,668,000 $1,734,720 $1,786,762 $1,840,364 $1,895,575
Total Revenue $4,928,000 $5,190,320 $5,409,838 $5,605,632 $5,773,801
Site Analysis
The site will include two stories with a total of 23,100 SF, 2,100 SF of which will be reserved for
the Mezzanine. The complex is constructed with a two floor layout. The section below outlines
the structure of each floor and accompanying layout.
The first floor includes the laser tag, the sports bar, the live entertainment stage, and the
childrens soft play area. The outdoor area is terraced down from the building elevation to the
lake behind the building. That outdoor area includes 4 bocce courts, terraced outdoor seating,
and an outdoor stage.
The second floor is a mezzanine that overlooks the sports bar, stage, bowling center and arcade
area. It contains additional seating, billiard tables, and a self-serve wine bar. The second floor
opens to an outdoor balcony that overlooks the terraced seating areas and the outdoor stage.
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FUSION V | Feasibility Study Page 17
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Economic & Demographic Analysis
Brevard County is located in the state of Florida.
As of the 2010 census, the population was 543,
376. The official county seat has been located in
Titusville since 1894. Brevard County comprises
the Palm BayMelbourneTitusville, FL
Metropolitan Statistical Area. It is located along
the east Florida coast along the Atlantic Ocean.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Brevard County Analysis
According to US Census data, the
population of Brevard County covers
an area of 1,557 mi with a population
of 556,885, an increase from 551,440
in 2013. There are a total of 220,277
households with an average of 2.44
households per unit.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Volusia County Analysis
According to US Census data, the
population of Volusia County covers
an area of 1,432 mi with a population
of 507,531, an increase from 501,201
in 2013. There are a total of 220,277
households with an average of 2.44
households per unit.
The specific counties surrounding Viera will be impacted by the overall economic performance
of the state. The 2014 population estimate was 19,893,297 growing from 19,600,311 in 2013.
The population has grown much higher than the national average of 3.3% at 5.8% per year. The
per capital income for the state of Florida is slightly lower than the national average of $28,155
at $26,236 annually. There is a slight demographic shift towards an older population in Florida
where citizens over 65 occurred nearly 4.0% more than the state average.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
People QuickFacts Volusia Indian River Brevard County Florida Total
Population, 2014 estimate 507,531 144,755 556,885 19,893,297
Population, 2013 estimate 501,201 142,021 551,440 19,600,311
Population, 2010 (April 1) estimates base 494,597 138,028 543,378 18,804,623
Persons under 18 years, percent, 2013 18.2% 18.0% 18.9% 20.6%
Living in same house 1 year & over, percent, 2009-2013 85.6% 84.3% 85.4% 83.7%
Foreign born persons, percent, 2009-2013 7.0% 10.4% 8.7% 19.4%
Language other than English spoken at home, pct age 5+, 2009-2013 12.7% 14.3% 10.1% 27.4%
High school graduate or higher, percent of persons age 25+, 2009-2013 87.6% 87.0% 90.2% 86.1%
Bachelor's degree or higher, percent of persons age 25+, 2009-2013 20.8% 26.6% 26.3% 26.4%
Veterans, 2009-2013 54,343 15,463 68,817 1,569,406
Mean travel time to work (minutes), workers age 16+, 2009-2013 25.4 21.8 23.7 25.9
Median value of owner-occupied housing units, 2009-2013 $142,800 $157,400 $144,900 $160,200
Households, 2009-2013 195,907 58,038 220,277 7,158,980
Persons per household, 2009-2013 2.47 2.37 2.44 2.61
Per capita money income in past 12 months (2013 dollars), 2009-2013 $23,973 $30,532 $27,009 $26,236
Median household income, 2009-2013 $42,457 $44,772 $48,039 $46,956
Persons below poverty level, percent, 2009-2013 16.8% 15.1% 13.5% 16.3%
Franchise Level
At the franchise level, Chuck E. Cheeses and Dave & Busters are the main competitors. There
may also be competition from popular sports bar franchises such as Buffalo Wild Wings. The Dave
& Busters is est. 55.3 miles, or a 57 minute drive to Viera, Florida. The distance to the closest
Chuck E. Cheeses is 56.8 miles, or 58 minutes away from Viera, Florida.
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Figure 11: Franchise Level Competitors
While there are competing entertainment facilities within 20 miles of Viera, we do not perceive
these complexes as a considerable threat. Franchises invest more heavily in updating
infrastructure and managing operations to reduce costs. They are also not within a convenient
distance compared to an entertainment complex located within Viera, Florida.
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Community Demand Forecast
In order to estimate the total market potential and the current market share, we have performed
a sensitivity analysis where the primary drivers are conversion rate and percent of the region that
falls within the target demographics. We applied a 10% step on the conversion rate and target
demographics proportion. The target demographic has been defined as the proportion of the
total population that may be likely to attend the Family Entertainment Center.
We have assumed that any reasonable competitor is one located with a distribution of 0.50
from the median driving distance to work assuming that this median distance to work was a
time that citizens were comfortable commuting. The closest major entertainment center was
located in Orlando, which is an approximately a 45 65 minute drive from Brevard County.
We also performed a distribution of the conversions, meaning people within the target
demographic that may attend a family fun center. The actual conversion rate will depend upon
investments in market awareness, customer retention policies, and the overall business model.
The variance for the conversions have been compared against the target demographic rate for
Brevard, Indian River, and Volusia counties.
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Brevard County Indian River County Volusia County
Projected Population 556,885 144,755 507,531
Target Demographics (%) 80.0% 80.0% 80.0%
Target Population 445,508 115,804 406,025
Conversion Rate 45.0% 45.0% 45.0%
Conversion 200,479 52,112 182,711
Total Customers 200,479 52,112 182,711
Figure 13: Demand Forecast for Brevard and Surrounding Counties
40% 22,275 44,551 66,826 89,102 111,377 133,652 155,928 178,203 200,479 222,754
50% 27,844 55,689 83,533 111,377 139,221 167,066 194,910 222,754 250,598 278,443
60% 33,413 66,826 100,239 133,652 167,066 200,479 233,892 267,305 300,718 334,131
70% 38,982 77,964 116,946 155,928 194,910 233,892 272,874 311,856 350,838 389,820
80% 44,551 89,102 133,652 178,203 222,754 267,305 311,856 356,406 400,957 445,508
90% 50,120 100,239 150,359 200,479 250,598 300,718 350,838 400,957 451,077 501,197
100% 55,689 111,377 167,066 222,754 278,443 334,131 389,820 445,508 501,197 556,885
40% 5,790 11,580 17,371 23,161 28,951 34,741 40,531 46,322 52,112 57,902
50% 7,238 14,476 21,713 28,951 36,189 43,427 50,664 57,902 65,140 72,378
60% 8,685 17,371 26,056 34,741 43,427 52,112 60,797 69,482 78,168 86,853
70% 10,133 20,266 30,399 40,531 50,664 60,797 70,930 81,063 91,196 101,329
80% 11,580 23,161 34,741 46,322 57,902 69,482 81,063 92,643 104,224 115,804
90% 13,028 26,056 39,084 52,112 65,140 78,168 91,196 104,224 117,252 130,280
100% 14,476 28,951 43,427 57,902 72,378 86,853 101,329 115,804 130,280 144,755
40% 20,301 40,602 60,904 81,205 101,506 121,807 142,109 162,410 182,711 203,012
50% 25,377 50,753 76,130 101,506 126,883 152,259 177,636 203,012 228,389 253,766
60% 30,452 60,904 91,356 121,807 152,259 182,711 213,163 243,615 274,067 304,519
70% 35,527 71,054 106,582 142,109 177,636 213,163 248,690 284,217 319,745 355,272
80% 40,602 81,205 121,807 162,410 203,012 243,615 284,217 324,820 365,422 406,025
90% 45,678 91,356 137,033 182,711 228,389 274,067 319,745 365,422 411,100 456,778
100% 50,753 101,506 152,259 203,012 253,766 304,519 355,272 406,025 456,778 507,531
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Arcade, Food & Entertainment Complex Trends
The FUSION V synthetizes many separate industries across the food & beverage sector, bowling,
laser tag, and video games. The entire restaurant industry has grown 3.8% in real terms.
However, the growth for the industry has slowed overall as established market players continue
to maintain their market dominance.
2.08
2.06
2.04
2.02
1.98
1.96
1.94
2008 2009 2010 2011 2012 2013
Figure 14: Arcade, Food & Entertainment Complex Revenue Bar Chart
Florida is the largest market for companies in this sector with 1,030 establishments employing a
total of 7,529 within the industry. While it less likely that FUSION V will attract heavy tourism
traffic, the high concentration of companies competing for the demographic leaves and absence
of entertainment centers in Viera and the surrounding area. The following table shows a
breakdown of the top states for the sector:
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Facility Plans & Budget
Budget
The construction budget has been separated into three categories consisting of
design/construction costs, soft costs, and recreational equipment. The total project is estimated
to cost $8,365,431. The majority of which will be allocated to the design and construction cost.
Construction Budget
Land Acquisition & Leasehold Improvement
Acquisition Cost 1,666,431
Total $ 1,666,431.00
Design & Construction Cost
Interior Design 15,000
Topographic Survey -
Architectural Design 90,000
Civil Engineering 40,000
Site Prep 50,000
Building Contract 2,430,000
Patio 100,000
Mezzanine and Deck cost 105,000
Site Construction 145,000
Parking Lot 200,000
Contingency 100,000
Total $ 3,275,000.00
Soft Costs
Liquor License 15,000
Title/PA/Funding Legal Fees 75,000
Project Management 100,000
Msc Impact Fees - Sewage. Traffic, offsite 25,000
Traffic Study 15,000
Venue Design 40,000
Total $ 270,000.00
Recreational Equiptment Package
12 lanes bowling/46" monitors/furn pkg 600,000
Boccee 10,000
Arcade (60 units @ $6,500) 390,000
Laser Tag 250,000
Exterior Ameities 50,000
Soft Play Zone 240,000
Food & Beverage Equiptment 560,000
Total $ 2,100,000.00
Operating Costs
General Equiptment 289,000
Administrative Costs 765,000
Total $ 1,054,000.00
Construction Budget Total $ 8,365,431
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Infrastructure is being developed based on the site layout plan, which will feature designated
family entertainment related activities. The first floor will include the bowling alley, arcade, and
laser tag.
Laser tag: A designation section for laser tag, a popular game amongst children.
Bowling Alley: (8) public lanes totaling 6,000 SF (4) private lanes totaling 3,120 SF
Arcade: 3,100 total SF that will include modern arcade style games.
The sports bar also contains a small live events stage which can be viewed from all restaurant
seating areas including the second level mezzanine. A second small stage will be located outside
the building with additional terraced seating and additional tables. Local musicians, radio sports
shows, comedy performers, and other popular local acts will be featured at this location with
revenue sharing agreements formed for facility use.
Located in the heart of the boutique bowling area, will be a hip and cool high-energy lobby bar.
This sports bar and grill is an area where adults can escape and socialize in an environment filled
with great music videos and sporting events televised on 60 inch plasma televisions. DJs on the
weekend with that occasional live entertainment group or comedy club, and during the week you
can participate in line dancing, karaoke or live entertainment. The corporate program will
provide for a buffet service including appetizer buffet, hot and cold buffets and of course a desert
buffet. The bar and restaurant will seat 180 people plus 75 outdoor seating. Banquet rooms
provide an additional 120 seats.
This environment provides a Cheers style place for sports enthusiasts to congregate and enjoy
beverages while watching and supporting their favorite teams. The initial concept for FUSION V
provides a gastro-bub style menu serving a variety of pub fares at a wide variety of price points.
Since the facility is an easy walking distance to the areas 21 screen theater, guests should feel
welcome to stop in before or after seeing a movie. This provides an additional source of
entertainment interested patrons above and beyond the entertainment options readily available
within FUSION V.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Good assortment of very cold beer selections
Full assortment of wine and mixed drinks
Limited sports bar menu
Sports on bar screens at all times
Banquet Facility Food and Beverage
Management will maintain a price point comparative to other restaurants in the market while
creating a signature hors d oeuvres and weekend specials. We recommend 75-100 seats for
outdoor seating. The menu price point typically ranges from $6.00 - $16.00 with an average of
$11.50. Quality food with excellent service is critical to the success of the facility.
Gaming
A high-tech arcade space will be created. Interactive game concepts, video games, sporting
games, gaming pods and interactive games for the children. The arcade area will be set up so
that the children can have their redemption games to one side so as not be so as not be overrun
by older children. There will be plenty of games to entertain the teen agers and of course our
very competitive adult games. Video game spending will average from $3.50 to $5.00.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
The typical arcade is 4,000 SF (60 games @ 55 SF per game) (income guideline is $200.00 per
week per game) (typical per capital spending is $3.00 per game) (the budget to purchase 60
games is $6,500 per game) (plus 10% for utility items such as token dispensers, ticket centers,
and merchandise) (total game revenue should average 35% of the facility revenue). Due to
limited space this facility will utilize between 35 - 40 games.
Laser Tag
There is no laser tag competition in the marketplace. There are two levels of laser tag arenas and
equipment designed for the average market and the more sophisticated market. The size and
scope of the arena is determined by the size and sophistication of the market. This facility will
provide a state of the art two story arena.
Site Analysis
Location
The site is located in Viera, Florida along I-95, a major interstate connecting to Orlando and
running along the East side of the state. Being located along a major interstate may help to
increase the radius that the complex may target, making the median commute time shorter for
longer distances. It will also decrease traffic congestion for local live music events or parties,
when the site may reach capacity. Viera is a master planned community located in the central
coastal region of Brevard County, Florida. It is part of an unincorporated section adjacent to the
Melbourne, Florida area. The site is located within walking distance to The Avenue, an open-air,
pedestrian friendly shopping destination featuring national retailers, local merchants and
restaurants. This is likely to result in heavy foot traffic from the nearby target consumer looking
to spend their discretionary consumption budget.
At the 2010 census, Viera East had a population of 10,757, while Viera West had a population of
6,641. The Viera area borders 8 miles (13 km) along Interstate 95 starting at exit 195 and
extending south 3 miles (5 km) beyond exit 191. It encompasses 14,500 acres. About half of this
has been set aside for conservation. The community consists of 58 neighborhoods in two areas
named Viera East (33) and Central Viera (25). Included are three adult communities, Brennity at
Melbourne, Grand Isle, and Heritage Isle, along with a military retirement community, Indian
River Colony Club.
FUSION V | Feasibility Study Page 29
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Figure 16: Arial Photograph of Site Location
We have broken down the financial projections over a five year period, the first year has been
divided into a twelve month projection including a detailed analysis of revenue streams and
expenditures. A sensitivity analysis has been performed for the financial projections, to analyze
how a deviation in the financial performance will impact the coverage ratio.
We have listed the drivers to our assumptions below for the financial projections. Because of the
lack of operating history, industry benchmarks and comparable operations were used with a
sensitivity analysis performed. Figures deviating from industry benchmarks have been derived
from additional assumptions for the company outlined in the section below.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Assumptions
Viera, Florida is a relatively new planned development community that will continue to
grow at a faster pace than the average US market.
The financial performance will not be as highly impacted by seasonality as other locations,
due to the climate of Florida. The seasonality of tourism may drive variance for financial
performance, but not being located in a top tourist destination suppresses this factor.
The market for (NAICS 71312) will continue to mature as a whole with growth of new
entities slowing and competition increasing. However, we believe the market growth
decline is due to the high concentration of adoption rates. Viera is a relatively new market
where no comparable facilities exist.
The demographics of Florida are slightly skewed towards elder demographics. The actual
impact on profitability and market demand is difficult to determine due to tourism
fluctuation and families visiting the elderly, potentially balance the impact. Therefore, we
have not selected the population demographics as a deviation from the national average
as a major driver for the assumptions.
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Consolidated Proforma Income Statement (Year 1)
Revenue
Food 1,705,000
Beverage 1,555,000
Recreation 1,668,000
Total Revenue 4,928,000
31% 3.57 4.65 5.73 6.81 7.90 8.98 10.06 11.14 12.22 13.30
41% 3.33 4.41 5.49 6.57 7.65 8.73 9.81 10.89 11.97 13.06
51% 3.09 4.17 5.25 6.33 7.41 8.49 9.57 10.65 11.73 12.81
61% 2.84 3.92 5.00 6.08 7.17 8.25 9.33 10.41 11.49 12.57
71% 2.60 3.68 4.76 5.84 6.92 8.00 9.08 10.16 11.25 12.33
81% 2.36 3.44 4.52 5.60 6.68 7.76 8.84 9.92 11.00 12.08
91% 2.11 3.19 4.27 5.36 6.44 7.52 8.60 9.68 10.76 11.84
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Misc. Operating Expenses By Size
Expense Total Total (%)
Credit Card Charges 98,560 1.50%
Security 95,000 1.00%
Janitorial Contract 60,000 2.70%
Insurance 55,000 1.20%
Advertising 48,000 3.00%
Utilities/Electric 40,000 5.00%
Janitorial Supplies 36,000 1.00%
Bar Supplies 30,000 1.00%
Bldg.-Grounds Maint 28,000 2.00%
Repair-Supplies Equip 26,000 1.00%
Bowling Supplies 26,000 1.00%
Promotions 25,000 0.05%
Meals-Lodging-Travel 25,000 0.10%
HVAC Maintenance 24,000 1.00%
Refuse Removal 24,000 0.50%
Telephone/cable/TV 24,000 0.70%
Utilities/Gas 20,000 5.00%
Web Site-Facebook 12,000 1.00%
Technical Services 12,000 0.50%
Office Supplies 12,000 0.50%
Uniforms 12,000 0.20%
Taxes & Licenses 10,000 0.05%
Pest control 9,000 0.20%
Postage & Shipping 5,500 0.20%
POS Maintenance/Bowling 5,000 0.20%
POS Maintenance/Restaurant and Bar 4,000 0.20%
Bank Charges-Arm Car 3,300 0.50%
Dues & subscriptions 2,500 0.10%
Total Expenses $ 771,860 31.40%
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Five Year Financial Projections
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Food
Food Bar/Grille 1,450,000 1,537,000 1,613,850 1,678,404 1,728,756
Outdoor Venue 100,000 104,000 107,120 110,334 113,644
Food Private Parties 155,000 167,400 175,770 182,801 188,285
Total Food Revenue $ 1,705,000 $ 1,808,400 $ 1,896,740 $ 1,971,538 $ 2,030,685
Beverage
Beverage Bar/Grille 1,300,000 1,378,000 1,446,900 1,504,776 1,549,919
Outdoor Venue 155,000 161,200 166,036 171,017 176,148
Beverage Private Parties 100,000 108,000 113,400 117,936 121,474
Total Beverage Revenue $ 1,555,000 $ 1,647,200 $ 1,726,336 $ 1,793,729 $ 1,847,541
Recreation
Arcade Games 468,000 486,720 501,322 516,361 531,852
Laser Tag 250,000 260,000 267,800 275,834 284,109
League Bowling Income 85,000 88,400 91,052 93,784 96,597
Private Party Bowling 90,000 93,600 96,408 99,300 102,279
Recreational Bowling 325,000 338,000 348,140 358,584 369,342
Bowling Shoe Rental 150,000 156,000 160,680 165,500 170,465
Live Entertainment Venue 100,000 104,000 107,120 110,334 113,644
Soft Play Revenue 200,000 208,000 214,240 220,667 227,287
Total Recreation Revenue 1,668,000 1,734,720 1,786,762 1,840,364 1,895,575
Total Revenue $ 4,928,000 $ 5,190,320 $ 5,409,838 $ 5,605,632 $ 5,773,801
Cost of Goods Sold
Food 511,500 542,520 569,022 591,462 609,205
Beverage 388,750 428,272 448,847 466,370 480,361
Games/redemp/repairs 85,000 93,500 102,850 113,135 124,449
Live Entertainment Venue 55,000 58,300 61,215 64,276 67,490
Private Parties 68,450 70,504 72,619 74,797 77,041
Total Cost of Goods Sold 1,108,700 1,193,096 1,254,553 1,310,039 1,358,545
Gross Profit $ 3,819,300 $ 3,997,225 $ 4,155,285 $ 4,295,593 $ 4,415,256
77%
$6,000,000
77%
$5,000,000
77%
$4,000,000 77%
$3,000,000 77%
76%
$2,000,000
76%
$1,000,000
76%
$- 76%
Year 1 Year 2 Year 3 Year 4 Year 5
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Breakeven Analysis
We have performed a breakeven analysis on the number of customers needed to cover fixed
costs for the first year. An average customer ticket price used for the calculation was $60.
Total
Customers Worst Best Most Likely Fixed Costs Variable Costs Total
Expenses
- $ - $ - $ - $3,839,556 $0 $3,839,556 -$3,839,556
10,000 $ 388,800 $ 583,200 $ 486,000 $3,839,556 $114,000 $3,953,556 -$3,467,556
20,000 $ 777,600 $ 1,166,400 $ 972,000 $3,839,556 $228,000 $4,067,556 -$3,095,556
30,000 $ 1,166,400 $ 1,749,600 $ 1,458,000 $3,839,556 $342,000 $4,181,556 -$2,723,556
40,000 $ 1,555,200 $ 2,332,800 $ 1,944,000 $3,839,556 $456,000 $4,295,556 -$2,351,556
50,000 $ 1,944,000 $ 2,916,000 $ 2,430,000 $3,839,556 $570,000 $4,409,556 -$1,979,556
60,000 $ 2,332,800 $ 3,499,200 $ 2,916,000 $3,839,556 $684,000 $4,523,556 -$1,607,556
70,000 $ 2,721,600 $ 4,082,400 $ 3,402,000 $3,839,556 $798,000 $4,637,556 -$1,235,556
80,000 $ 3,110,400 $ 4,665,600 $ 3,888,000 $3,839,556 $912,000 $4,751,556 -$863,556
90,000 $ 3,499,200 $ 5,248,800 $ 4,374,000 $3,839,556 $1,026,000 $4,865,556 -$491,556
100,000 $ 3,888,000 $ 5,832,000 $ 4,860,000 $3,839,556 $1,140,000 $4,979,556 -$119,556
110,000 $ 4,276,800 $ 6,415,200 $ 5,346,000 $3,839,556 $1,254,000 $5,093,556 $252,444
120,000 $ 4,665,600 $ 6,998,400 $ 5,832,000 $3,839,556 $1,368,000 $5,207,556 $624,444
130,000 $ 5,054,400 $ 7,581,600 $ 6,318,000 $3,839,556 $1,482,000 $5,321,556 $996,444
140,000 $ 5,443,200 $ 8,164,800 $ 6,804,000 $3,839,556 $1,596,000 $5,435,556 $1,368,444
150,000 $ 5,832,000 $ 8,748,000 $ 7,290,000 $3,839,556 $1,710,000 $5,549,556 $1,740,444
160,000 $ 6,220,800 $ 9,331,200 $ 7,776,000 $3,839,556 $1,824,000 $5,663,556 $2,112,444
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Sensitivity Analysis
The sensitivity analysis has been performed over the five year Proforma projection period to
adjust for the long-term market changes that may impact the business. These drivers include
macroeconomic factors including the growth impact of the new development of Viera,
discounted by the risk associated with a new community. We also sought to better understand
the impact of popular competing franchising being within a two hour driving distance. Therefore,
we estimated a range to factor in the competitive landscape. The study included two
independent scenarios including cost of goods sold increasing with revenue and a negative
scenario of decreasing revenue at a time of increasing costs.
The first scenario shows the spread of revenue increasing per year on the vertical axis and cost
of goods sold on the horizontal axis. The cost of goods sold have not been calculated as a
percentage of sales in this instance, as expenses have been factored in that varied in their
contribution.
Sensitivity Analysis on Five Year Total Gross Profit
Cost of Goods Sold Increase Per Year
19,612,463 3% 4% 5% 6% 7% 8% 9% 10% 11% 12%
3% 19,612,463 13,257,708 13,257,708 13,257,708 13,257,708 13,257,708 13,257,708 13,257,708 13,257,708 13,257,708
4% 19,612,463 13,586,236 13,586,236 13,586,236 13,586,236 13,586,236 13,586,236 13,586,236 13,586,236 13,586,236
Revenue Increase Per Year
5% 19,612,463 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267
6% 19,612,463 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897
7% 19,612,463 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222
8% 19,612,463 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339
9% 19,612,463 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345
10% 19,612,463 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339
11% 19,612,463 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419
12% 19,612,463 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684
13% 19,612,463 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237
Table 9: Sensitivity Analysis for COGS and Revenue on Total Project Profit (Neutral)
-30% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
-40% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
-50% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
-60% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
-70% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
-80% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
-90% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
-100% 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463 19,612,463
Table 10: Sensitivity Analysis for COGS and Revenue on Total Project Profit (Worst Case)
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Financial Projection Methodology
Group Sales
Avg # youth 15 per cap $18.00
Avg # Adult 15 per Cap $25.00
Avg # Corporate 30 per Cap $35.00
Revenue projections will vary based on the operating hours of the laser tag attraction in the
entertainment facility. For this document, we have made some assumptions:
1. Based on 20 vests.
2. Average hours open per week year round is 46.25 hours.
3. Number of games per hour is three.
4. Price per game is $7.00 before discounts and average price per game is $6.42 after
discounts and promotional pricing.
5. Average length of game is 10-12 minutes; though larger arenas should have longer play
times.
6. Average utilization is traditionally 35%. Based on the lack of laser facilities in the
market we have calculated the utilization at 60%.
7. Our income assumption is $250,000 based on a 20 player system.
There are no competitive laser tag arenas in the market. This is a conservative income number
based on the number of leagues from the hospitality, health care and industrial segments we
project
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Appendices
Five Year Financial Projections
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Food
Food Bar/Grille 1,450,000 1,537,000 1,613,850 1,678,404 1,728,756
Outdoor Venue 100,000 104,000 107,120 110,334 113,644
Food Private Parties 155,000 167,400 175,770 182,801 188,285
Total Food Revenue $ 1,705,000 $ 1,808,400 $ 1,896,740 $ 1,971,538 $ 2,030,685
Beverage
Beverage Bar/Grille 1,300,000 1,378,000 1,446,900 1,504,776 1,549,919
Outdoor Venue 155,000 161,200 166,036 171,017 176,148
Beverage Private Parties 100,000 108,000 113,400 117,936 121,474
Total Beverage Revenue $ 1,555,000 $ 1,647,200 $ 1,726,336 $ 1,793,729 $ 1,847,541
Recreation
Arcade Games 468,000 486,720 501,322 516,361 531,852
Laser Tag 250,000 260,000 267,800 275,834 284,109
League Bowling Income 85,000 88,400 91,052 93,784 96,597
Private Party Bowling 90,000 93,600 96,408 99,300 102,279
Recreational Bowling 325,000 338,000 348,140 358,584 369,342
Bowling Shoe Rental 150,000 156,000 160,680 165,500 170,465
Live Entertainment Venue 100,000 104,000 107,120 110,334 113,644
Soft Play Revenue 200,000 208,000 214,240 220,667 227,287
Total Recreation Revenue 1,668,000 1,734,720 1,786,762 1,840,364 1,895,575
Total Revenue $ 4,928,000 $ 5,190,320 $ 5,409,838 $ 5,605,632 $ 5,773,801
Cost of Goods Sold
Food 511,500 542,520 569,022 591,462 609,205
Beverage 388,750 428,272 448,847 466,370 480,361
Games/redemp/repairs 85,000 93,500 102,850 113,135 124,449
Live Entertainment Venue 55,000 58,300 61,215 64,276 67,490
Private Parties 68,450 70,504 72,619 74,797 77,041
Total Cost of Goods Sold 1,108,700 1,193,096 1,254,553 1,310,039 1,358,545
Gross Profit $ 3,819,300 $ 3,997,225 $ 4,155,285 $ 4,295,593 $ 4,415,256
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
12 Month Financial Projections
1 2 3 4 5 6 7 8 9 10 11 12
Revenue
Food
Food Bar/Grille 132,917 126,875 126,875 120,833 120,833 108,750 102,708 102,708 114,792 126,875 126,875 138,958
Outdoor Venue 9,167 8,750 8,750 8,333 8,333 7,500 7,083 7,083 7,917 8,750 8,750 9,583
Food Private Parties 14,208 13,563 13,563 12,917 12,917 11,625 10,979 10,979 12,271 13,563 13,563 14,854
Total Food Revenue $ 156,292 $ 149,188 $ 149,188 $ 142,083 $ 142,083 $ 127,875 $ 120,771 $ 120,771 $ 134,979 $ 149,188 $ 149,188 $ 163,396
Beverage
Beverage Bar/Grille 119,167 113,750 113,750 108,333 108,333 97,500 92,083 92,083 102,917 113,750 113,750 124,583
Outdoor Venue 14,208 13,563 13,563 12,917 12,917 11,625 10,979 10,979 12,271 13,563 13,563 14,854
Beverage Private Parties 9,167 8,750 8,750 8,333 8,333 7,500 7,083 7,083 7,917 8,750 8,750 9,583
Total Beverage Revenue $ 142,542 $ 136,063 $ 136,063 $ 129,583 $ 129,583 $ 116,625 $ 110,146 $ 110,146 $ 123,104 $ 136,063 $ 136,063 $ 149,021
Recreation
Arcade Games 39,000 35,100 33,150 37,050 40,950 42,900 42,900 39,000 40,950 35,100 39,000 42,900
Laser Tag 20,833 18,750 17,708 19,792 21,875 22,917 22,917 20,833 21,875 18,750 20,833 22,917
League Bowling Income 7,083 6,375 6,021 6,729 7,438 7,792 7,792 7,083 7,438 6,375 7,083 7,792
Private Party Bowling 7,500 6,750 6,375 7,125 7,875 8,250 8,250 7,500 7,875 6,750 7,500 8,250
Recreational Bowling 27,083 24,375 23,021 25,729 28,438 29,792 29,792 27,083 28,438 24,375 27,083 29,792
Bowling Shoe Rental 12,500 11,250 10,625 11,875 13,125 13,750 13,750 12,500 13,125 11,250 12,500 13,750
Live Entertainment Venue 8,333 7,500 7,083 7,917 8,750 9,167 9,167 8,333 8,750 7,500 8,333 9,167
Soft Play Revenue 16,667 15,000 14,167 15,833 17,500 18,333 18,333 16,667 17,500 15,000 16,667 18,333
Total Recreation Revenue 139,000 125,100 118,150 132,050 145,950 152,900 152,900 139,000 145,950 125,100 139,000 152,900
Total Revenue $ 437,833 $ 410,350 $ 403,400 $ 403,717 $ 417,617 $ 397,400 $ 383,817 $ 369,917 $ 404,033 $ 410,350 $ 424,250 $ 465,317
Cost of Goods Sold
Food 46,888 44,756 44,756 42,625 42,625 38,363 36,231 36,231 40,494 44,756 44,756 49,019
Beverage 35,635 34,016 34,016 32,396 32,396 29,156 27,536 27,536 30,776 34,016 34,016 37,255
Games/redemp/repairs 7,083 7,083 7,083 7,083 7,083 7,083 7,083 7,083 7,083 7,083 7,083 7,083
Live Entertainment Venue 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583
Private Parties 5,704 5,704 5,704 5,704 5,704 5,704 5,704 5,704 5,704 5,704 5,704 5,704
Total Cost of Goods Sold 99,894 96,143 96,143 92,392 92,392 84,890 81,139 81,139 88,641 96,143 96,143 103,645
Gross Profit $ 337,940 $ 314,207 $ 307,257 $ 311,325 $ 325,225 $ 312,510 $ 302,678 $ 288,778 $ 315,393 $ 314,207 $ 328,107 $ 361,672
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
FUSION V | Feasibility Study Page 40
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
Sensitivity Analysis on Five Year Total Gross Profit
Cost of Goods Sold Increase Per Year
15,993,163 3% 13% 23% 33% 43% 53% 63% 73% 83% 93%
-10% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-20% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
Revenue Increase Per Year
-30% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-40% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-50% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-60% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-70% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-80% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-90% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
-100% 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163 15,993,163
5% 15,993,163 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267 13,921,267
6% 15,993,163 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897 14,262,897
7% 15,993,163 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222 14,611,222
8% 15,993,163 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339 14,966,339
9% 15,993,163 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345 15,328,345
10% 15,993,163 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339 15,697,339
11% 15,993,163 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419 16,073,419
12% 15,993,163 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684 16,456,684
13% 15,993,163 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237 16,847,237
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
FUSION V | Feasibility Study Page 42
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)
FUSION V | Feasibility Study Page 43
Prepared by: Worldwide Asset Assessment 420 Lexington Ave New York, NY 10170 (212 999 6240) (www.waacompany.com)