Pumping up the play – pumping up the profits
It’s no secret that we love our birthdays. Why else would the Guinness Book of World Records list “Happy Birthday to You” as the most recognized song in the English language? And since we love our birthdays so much, it’s also reasonable to assume that we love our birthday parties. Why not? Birthday parties are meant to be fun – especially for kids. Of course, sometimes they can be stressful for parents, but that comes with the territory. Indeed, most American parents probably throw some kind of birthday party for their kids, almost every year – and they have the pictures and videos to prove it! Typically, in our culture birthday parties are private affairs, as opposed to public celebrations. The people attending them are always invitees, and most often, they are close family and friends. That’s the way most kids want it, and the way most parents require it; rarely is a birthday party open to strangers.
Fifteen years ago, in Northern California, those details seemed evident to two women entrepreneurs who had, according to Lee Knowlton, the CEO of Fun Brands, a national leader in the field of family entertainment, “a great passion for business, and kids, and birthday parties. . .and created this indoor, inflatable, private, birthday-party experience.” That combination of fun, themed party programming, stress-free option for parents, and privacy, became the business model for their company, which they christened: “Pump It Up.” It worked. Since 2000, Pump It Up has been the premier destination for private kids’ birthday parties, nationwide.
“That’s one of the big differentiators of Pump It Up,” says Knowlton. “It is a private party – it’s only your party, your guests, your kids going through the experience, celebrating a birthday, where most other celebration places are public. You may get a private room, but when you’re out playing or going through the experiences you’re with the general public.”
Today, Pump It Up, which has 140 stores across the country, is part of Fun Brands, which also owns BounceU and Fun Brands Carousels. According to Knowlton, BounceU was started in 2003, in Tempe Arizona. It was a company that was very similar to Pump It Up in that it, too, specialized in private birthday parties that included an assortment of inflatables. BounceU started as a competitor of Pump It Up, but it was acquired by Fun Brands in 2008. Today, there are about 50 BounceU stores, country-wide. In 2012, Fun Brands also got into the carousel business. “They’re double-decker, handmade carousels that are in 17 malls throughout the United States,” says Knowlton. “It’s that classic carousel experience that we all remember as a kid. And that fits in with the Fund Brand, family entertainment category.”
While Fun Brands Carousels may hearken back to an earlier time, Knowlton insists that the company’s two other operations have stayed ahead of the curve. “We’ve definitely evolved both brands dramatically,” he explains. “When I came on board in 2009, both were more focused just around birthdays and celebrations. We’ve expanded it to field trips for schools and camps for summer business. We celebrate special events throughout the year. We host Easter egg hunts, Memorial Day jumps, Fourth of July jumps, and a Black Friday jump, where you can drop off your kids and we watch them while you go shopping. We’ve added Parents’ Night Out on Friday nights, where, again, you can drop off your child, and we’ll watch them. They’re getting great exercise, having fun, and maybe doing crafts. So we’ve expanded to all the holidays throughout the year, and we’ve also opened our stores up more during the week for what we call ‘Open Jump Time,’ where you can bring in your child for an hour or two.”
Knowlton explains the differences between his company’s two brands: “Pump It Up focuses more on imaginative play. It has more than just inflatables. It has rock wall climbs, Motion-Mania, which is an interactive, audio-visual experience; we have imagination blocks which are like large legos to build stuff. And we encourage active use of a child’s imagination because we feel there’s an issue with that today with kids being on video games too much or on their phones. There’s too much electronic activity and not enough playground-type play. BounceU is more focused around birthday parties and birthday celebrations, with a lot more themed parties, where there are characters. It’s ‘Imagination’ on the Pump It Up side and ‘Crazy About Birthdays’ on the BounceU side.”
Clearly, these changes have been good for business. “In the last six years, our average unit volume has gone up every year, and four out of the last five years, our same-store sales have gone up every year because we’ve really focused on these other activities,” Knowlton says. Pump It Up and BounceU are both franchise operations. “On the Pump It Up side, we have two company-owned stores out of the 140, and on the BounceU side, we just sold our one company-owned store, so all 50 stores are franchised.” Knowlton adds that about 40 percent of the system is comprised of multiple-store operators. A typical store territory is one that is within a 20-minute drive-time radius and can service about 70 to 80 thousand kids.
What type of person becomes a Fun Brands franchisee? “Our typical franchisee is almost always a fan of the brand,” says Knowlton. “They’ve hosted a birthday party, or they’ve been invited to a birthday party, or their relatives have been to a party and they’ve talked about how amazing it is, so they instantly have a passion for it. They’re usually an entrepreneur at heart who has a passion for kids. We’re fortunate that the majority of our franchisees come from within the system – they’re fans of the brand.
“We have a portal where they can submit their information. We do the basic vetting as far as the territory that they’re interested in: background check, references, credit checks, the basic net worth requirements. Then we take them through seven stages of our software that educates them on the entire brand. We want to make sure they understand the challenges and the opportunities. If they get to the seventh stage and they’re successful, we schedule a ‘discovery day’ where they come to our home office. We meet them personally, talk about the business, and they meet the entire team. If we feel it’s a great fit, they sign the franchise agreement.
“The training is seven days here in the home office and then two weeks in their store. Of course there’s a lot that goes on before that – site selection, real estate, etc. We support them all along the way. We have an incredible home office team that has real estate, construction, training, and development experience. We assign them an operations person who works with them to open their store, who’s at the store for the grand opening, and who supports them along the way.”
Over the past 15 years, Fun Brands franchisees have hosted more than 2.5 million birthday parties and have welcomed more than 80 million kids. And the company continues to expand. “We’ll have eight to ten new openings by the end of the year,” says Knowlton. “Half of those are with current franchisees opening their second or third location. We’re in 40 states between the two brands. And we host between nine to ten million kids per year, among the three businesses.”
By the end of this year, Pump It Up will have expanded internationally, when it opens its first store in Monterrey, Mexico, the largest city in the northeastern state of Nuevo León. This new Pump It Up will be an 11,000-square feet, two-story building with spectacular views. The location will also have an outdoor soccer field and an expansive parents’ lounge, making it a truly one-of-a-kind experience. The two franchise owners have 20-plus years of experience in business ownership with a strong background in children/family enterprises. Three more Pump It Up stores are being planned for the Monterrey territory over the next four years. “We’re on a nice little growth run as a company,” Knowlton declares.
Knowlton agrees that “there are certainly a lot of different concepts in the family entertainment category, but we differentiate ourselves in a couple of different ways. One – the private party is huge. It’s something that our customers really like. The vast majority of our competitors do not offer, or cannot offer it. You can have your kid, their friends, and your adult friends in our facility going throughout the entire experience, enjoying themselves as a family and not having to worry about interacting with other kids or parents.
“Secondarily is the uniqueness of our experiences – the huge inflatables, our staffing, our safety record. Parents come to know that we’re going to be well-staffed; the kids are going to be safe; they’re going to have fun; they’re going to be watched the whole time. It’s a quality environment, and a clean environment. And in the summertime, it’s a cool, air-conditioned place to go to, to have some exercise and have fun. And for a birthday party celebration, we feel that nobody does it better than us. We can customize it for your child, your theme, your event, what you’re looking for. You can have ten kids, you can have fifty kids. It can be one hour; it can be three hours. We can do all the food, gifts, and goody bags. It’s a stress-free, party experience for the parents. You get the kids to the store and we’ll take it from there.”
With these proven ingredients all working together, it’s no wonder that Fun Brands has become a leader in the family entertainment field. And in the end, Knowlton admits that working for Fun Brands, or being a Pump It Up or BounceU franchisee, certainly has one obvious advantage over many other types of enterprises: “Our customers always come in happy! So it’s a real fun business to be passionate about.” That must be because we all love our birthdays.
AT A GLANCE
WHO: Pump it Up (Fun Brands)
WHAT: A premier destination for private kids’ birthday parties and celebrations
WHERE: Headquarters in Tempe, Arizona