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An Escape Room Franchise: The Pros and Cons at a Glance

by | Nov 29, 2019

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Self-employment might sound great, but how do you even go about it? Setting up an Escape Room Franchise can help you cut a lot of corners. However, setting one up is not as simple as it sounds.

What is a Franchise?

Franchising consists of 2 parties – a franchisor and a franchisee. The franchisor is usually a business owner who wants to expand. However, instead of opening new branches, they sell the right to use their concept to others – the franchisees. It’s possible to open branches under the already known name of the franchisor and remain largely independent.

We all know many franchise systems, but sometimes we do not even know that this is franchising. Did you know that the largest franchise system in the world is not – as many think – McDonald’s, but Subway? The sandwich chain has been operating its franchising concept for over 40 years and has brought it to more than 42,000 locations worldwide. Other big franchises include the beauty chain The Body Shop, supermarket chain Spar, and the Hertz car rental group.

There are also numerous franchise chains in the entertainment sector. The largest is Pokémon, which belongs to Nintendo and The Pokémon Company. In second place is Hello Kitty, followed by Winnie the Pooh, Mickey Mouse & Friends and Star Wars in 5th place.

The Pros of an Escape Room Franchise

If you decide to opt into an Escape Room franchise, the franchisor usually takes a lot of work off of you. You don’t have to worry about room layouts or puzzles; you can use the vendor’s space concepts, which have already proven their success. Depending on the franchise system, many other aspects are provided. The following may belong:

  • Design of company logos, business cards, the website and possibly uniforms
  • Design of advertising materials such as flyers, Facebook Ads, Google Ads, and Couponing
  • The digital systems used for operating the rooms and booking customers

Help with Setup: It’s quite common for the franchisor to help you build your Escape Room. Of course, not every franchisee has the same requirements. This starts with the size of your premises. Your business partner’s escape games must be adapted to your business. That’s where the help of the company’s experienced employees at your side. It’s important that your property complies with the regulations and permits to operate an Escape Room franchise – above all, you have to take care of the fire protection and emergency procedures.

Quick Start: When you consider the help and efficiency available in the points above, it’s relatively quick to get started with an Escape Room business. It’s inevitable that you’ll have a lot to do anyway, but just as you’re starting your company, a lot of weight will be taken off your shoulders by the franchisor.

Beam Effects: You benefit from the image of the franchisor – which can be very positive. If other sites have already received many positive reviews from Google, Facebook, TripAdvisor, or other review sites, that ends up being good for you too.

Large Support Network: Many franchisors also ensure that the various franchisees network with each other and exchange their experiences. From this, you benefit from the know-how of your colleagues. How do you deal with competitors in your environment? Which marketing measures work for you? Which of their rooms bring the most revenue? There are many aspects that can be shared and supported in an Escape Room franchise.

Cluetivity is not a franchise. Nevertheless, we attach great importance to networking with our partners. This is because we think that the exchange of experiences is good for everyone involved. So, if you want to start your own business or are looking for a meaningful additional offer for your Escape Room or your event company, a license for Cluetivity’s Outdoor Escape Games can be the ideal solution for you. Here we have summarized more information about our licensing model.

Credit Score: The topic of financing should not be underestimated. Whether you’re opening your own escape room or joining a franchise, you need some startup capital. Escape Room founders can’t always pay for everything out of their own pocket. In scenarios like this, taking out a loan is an option to consider. Although there are numerous platforms for loan applications, the path to money usually still leads through a bank or building society. The bank will check your credit score and analyse your business plan. With franchises, banks often take less of a risk than if you come up with your own escape room idea. This is simply because the business model of the franchisor has already proven to be sustainable.

Disadvantages of an Escape Room franchise

High Initial Investment: While the benefits of an Escape Room franchise are already very extensive, there are also factors that counteract these points. The first is that the costs to initialise your franchise are high. Usually there is an initial start-up fee, which you pay for the franchisees provided by the franchisor (brand building, know-how, territorial protection, etc.). Depending on the provider, this also includes your Escape Room’s installation.

Franchise Fees: For franchising, the franchisee must pay a fee or commission. Depending on the provider, this can range from a mid-single-digit percentage to a third of the Escape Room sales. A concrete value is difficult to name as it varies from system to system. Frequently, higher fees also result in more benefits or lower initial investment. Ultimately, you have to decide for yourself what is most important to you in your Escape Room franchise.

You’re Not Always in Control: If you really want to be able to work independently and have control over all aspects of the business, this isn’t possible as a franchisee. There are a lot of presets and rules that you must implement – whether you like it or not doesn’t matter. For example, this might be something as minor as the design of the website and advertising material, or it could extend up to regulations regarding your opening hours and influencing business planning.

Lack of Creative Control: In the Escape Room industry, there are usually two types of leaders. For some, there are those who mainly view the business as a business. For them, the concept of spaces is a means to an end – namely to achieve Return On Invest (ROI) as quickly as possible. Then there are those who are passionate about creating their own escape rooms. These people have already played dozens of exit games and collected lots of ideas for their own puzzles. If you are someone who enjoys craftsmanship and having input down to the minor details, you won’t be happy with an Escape Room franchise.

Possible Image Damage: Above, we described how you can benefit from a good image of your franchisor. However, if your franchise receives negative media attention, your business will undoubtedly suffer. If service is bad in one of your franchisee’s business, it can negatively impact the entire chain.

Conflicts of Interest: Different plans and views, or the feeling of not getting enough support; these can lead to problems between everyone involved. For example, if you want to expand your Escape Room, but you can’t get the right permissions from your franchisor, frustration will quickly ensue. The same can happen if you feel that the marketing materials provided do not fit your target audience, or if unrealistic goals are set from the headquarters, and so forth. It’s best to speak with other franchises to get a gist of their working life with the company.

Extend Your Escape Room with Cluetivity

Whether you already run an Escape Room company, or you’re still undecided as to whether or not this is the right industry for you, Cluetivity have a great solution for you. You’ll definitely have an exciting additional offer to add to your business, or even the opportunity to become self-employed. Our Outdoor Live Escape Games, Operation Mindfall and Magic Portal, are ideal for families, friends and team events. Each mission consists of its own story, jam-packed with a variety of puzzles. With our online toolkit, you can customise the games individually to your location. In addition to our game-ready City Adventures, we offer several entertaining indoor games, which can be used anywhere in the world with simply the click of a button.

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