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    Tommy Higham

    Managing Partner at Stanford Franchise Pros

    Urban Air Adventure Parks, Sky Zone's biggest competitor in the trampoline park space, made news yesterday with an announcement that it will introduce "Adventure Slides" in their parks. The trampoline park world is really fascinating. The unit economics are 🔥 (there's a reason all of the trampoline park Franchisors share their franchisees' profitability data, contrary to many industries and franchisors). It's what really drew me to Sky Zone over nominally "better" job opportunities (in terms of title and pay). What makes a trampoline park franchise a great business? 1. Limited competition, as the need for liability insurance functions as a barrier to entry for "mom and pops". While it may seem scary, the cost of general liability insurance coverage with a large franchise system ends up being a manageable ~5% of revenue, with the benefit of a system wide safety and compliance system and strategic use of captive insurance. 2. In the SAAS world, proof of value (“POV”) trials for enterprise customer are typically necessary but provided for free (at a loss for the tech company)! With trampoline parks, Birthday Parties function as a paid POV for many kids and families (who invariably have a blast!). 3. The "product" is something you can feel fantastic about, getting kids off of their screens, moving around and having active fun! Cannot put a price on kids’ smiles galore :) 4. It is an evolving, "fresh" industry. Tom Brady already had a few SB rings by the time the first trampoline park was even created (brought to market in 2004 by Jeff Platt, original CEO of Sky Zone)! With the need to periodically update attractions (just like theme parks), this industry will be continually evolving. I'm grateful for my time at Sky Zone and obviously biased, so would not presume to recommend one or the other of the two leading concepts. There are some significant differences to note between the two. Urban Air (“UA”) seeks to offer a wider range of attractions, and as a result the initial investment is much higher. UA has focused almost exclusively on franchised growth (only 4 out of 183 UA parks were corporate owned as of YE 2023), while Sky Zone also operated 71 corporate parks as of Feb. 2024. As the primary drafter for Sky Zone's current Item 19, I can vouch for the integrity and accuracy of its financial performance representations, which speak for itself. Ultimately, there is PLENTY of white space (and demand) out there still to support a lot more trampoline parks! And Trampoline Parks in general offer a great opportunity for sophisticated, multi-unit franchisees, since units produce ample profit to support incentivizing top GM’s to run the business. I'd be remiss mentioning slides to not give a shout out to Slick City Action Park which pioneered the concept of inventive, "next level" slide attractions. I'll have more to say about Slick City in a coming post, as it is my #1 ROI pick among all "emerging franchisors"!

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Cathy Weiling Duan

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