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Frightener
03-25-2012, 04:42 PM
Ok guys. Again, this is our first year. I found an old building, w/o going into detail, it's 9,000 square feet total. Inside of this is a still licensed kitchen / concession area and a small balcony on one side. Open floor plan.

The building owners are very interested, in fact, they want to sign papers tomorrow! However, the lady is like "AT A MINIMUM... we'll get 30%..." yada yada. Ok, this is off the top. A little history, they use to have a dance here and they always said 60/40. 60% for the band, 40% for them. However, they had to work the building, the door, concession etc.

Does this seem fair to you guys? Or is this way off of what's fair to us? We're investing $26k as of now. WITHOUT the loan that's in process. We're expecting a minimum of 2,000 and estimating 3,500. We can do well, but I just want to make sure this is something you pro's think would be fair.

The contract's written up, just needs printed and all that. CAN BE signed tomorrow, it's that done. But, if you guys say this is ridiculous, we'd like to know.

The building probably has at least 6,500 sq ft of usable space. 3 doors, a double attraction is possible.

What do you guys think?

ANY input is very much appreciated!

Thank you for taking time to read.

Dewayne

KaoTic Entertainment
03-25-2012, 06:13 PM
Ok man even if you did 3.500 people for the entire
season thats 35.000 bucks . And thats just for admission .
Not counting if you do concessions or up buys as well. Are they
entitled to your concession profits or t shirt sales .

In my opinion its way to much they are asking you will not even bring in your loan ammount money.
Which is over 27.000 correct . Then you still have to factor in water .and food utilities and Materials .fog fake blood paint excetra
i would counter offer them at 10% .
and you work your own front cashier and front door .

Hope this helps beleive me you will be sorry if you partner with them on their terms.

KaoTic Entertainment
03-25-2012, 06:15 PM
But we do wish you the best of luck at any rate

SCfearfarm
03-25-2012, 06:28 PM
Maybe you should ask them to do 10% the first year, 15% year 2, and 20% year 3. Just explain that most of your costs are first year and as you grow and gain more attendance their percentage is higher and they will make more too. It also depends on how long you get the building and how much they are willing to do as far as when repairs to the building and keeping everything up to code etc.

Frightener
03-25-2012, 07:47 PM
Must've not listed it all.

They want 30% at MINIMUM.
They do concessions. If we sell Tshirts or anything else, it's ours.
They pay for all utilities. Water and elect.

They have a lot of stuff in there and would take about 2 weeks to get it all out. not that big of a deal, but they want to store it somewhere. Which is why I'd say about 6,500 sq ft.


It sounds very high to me, BUT, it's the biggest building we have a shot at doing. It's easy to get to and in a very remote area.


Our gauranteed backup building is 2,800 tops. With about 25 parking spots on loc, 50 beside it and about 80 parking across the road. All of which we can probably use. The parking across the street is owned by our realtor's friend. She said he told her it wouldn't be a problem. He just bought it and doesn't have plans of selling the lot.

This backup place is $1,000 a month. It normally goes for much more than that. We pay utilities, and we pay the rent at end of season. If we end up needing 8 months, we just pay when we leave. We all know the owner and he's adventurous, and loves the idea.

Thanks for the wishes, btw.


Dewayne

scary bill
03-25-2012, 08:41 PM
I'm no expert, but it seems awful high. I would look at the back-up. If you get the 3500 people, they get $10,500 for rent. How long do you get the building? Plus concessions are a big money maker, and they get them also. So if you get the building for 2 months, look at the alternate. It is $1000/mo. For 2 months $2000, with about half the space. A first year haunt you may want to go less sq ft and concentrate on better sets. Plus you get concessions.
It is your decision, but IMO they want to much.

BrotherMysterio
03-25-2012, 08:48 PM
However, the lady is like "AT A MINIMUM... we'll get 30%..." yada yada. Ok, this is off the top. A little history, they use to have a dance here and they always said 60/40. 60% for the band, 40% for them. However, they had to work the building, the door, concession etc.

This sounds like a really lousy deal for you and a really great deal for them, from the get-go.

Maybe some more of those details are in order, cuz it sounds like you are about to pay these people $26K for the benefit of using their space. Do you rather mean you have invested $26K in operational expenses to build the Haunt as it is, and you are also looking at the fact that they will be taking an additional 30% to 40% off the top before you recoup your investment? I think there are some things that need to be made more clear here.

Either way, I see some red flags here.

To start with, the lady's frame of reference is running a rave or discotheque in the space before hand. There is a WORLD OF DIFFERENCE between a DJ or cheesy cover band coming in and blasting some tunes across a large dance floor or rave like environment with a few discotheque lights swirling in the background, vs. a pro Haunt Team like your own coming in and running a full out Haunted Attraction. One guy coming in and turning on a record player and shouting into a mic "hey, let's shake your booty!" is no where near the operational complexity - or cost - of running a successful Haunt.

A very serious question you get to ask yourself here is, "do your potential new 'partners' understand this distinction?"

Also, your operating costs are worlds apart as well, between your haunting and their "hotdogging". A hotdog out the door, with wiener, bun, napkin, and condiments, is, what, $0.09? The same one that just sold for $2? How about popcorn or fountain drinks? That's something like a 90% markup or more in many cases. Almost pure profit. If they are running concessions, are they expecting to keep that profit? Even if they don't, do they automatically scoop that up with their 30% to 40% off the top?

Also, is this a permanent location, or are you contracting to set up your haunt there each year, while they run it as a rave for the rest of the year? If the latter, then you just lost whatever advantage you thought you had with having a permanent location. Otherwise, where would you store it? Where would you house your year-round workshop to work on the haunt in the off season?

Can you imagine having a good run, doing well financially and just breaking even, and thinking to yourself "wow, that was great! Now, I'll come in next week and start working on those changes I wanted to make, and we'll start setting some other things up," only to have her walk up to you and say, "hey, that was great, when can you be out of here? We have a rave for New Years we need to set up for."

:shock::sad::confused::shock:

Also, just to put some dollar signs to your numbers, minimally and at our most conservative estimation - assuming a $15 ticket for a two element haunt as you suggest (which seems a standard starting point for an average size show) - you are looking at ($15 x 2000 tickets) - 30% commission for your "partners" = $21K sub-gross. Remember, that's not "net". Gross is total ticket sales. Net is what's left over after expenses have come off the top. You haven't even considered expenses yet, and you're already $9K behind. Whether she even sold one hotdog, or even bothered showing up at all, she just walked off with a minimum (based on your numbers) of $9K. (Nice work if you can get it.)

So, now you're looking at $21K of actual gross. Well, you are already $5K in the hole in terms of recouping your initial $26K investment.

So, next comes the operating expenses, which are what are normally taken off the top. So, to wit . . .

What about utilities?
What about actors?
What about crew?
What about security?
What about incidentals?
What about supplies (fog juice, so on)?
What about bringing the haunt up to code?
What about the costs of jumping thru hoops to make the building inspector happy?
What about the costs of jumping thru hoops to make the Fire Marshal happy, such as having a fire truck out front each night?
. . . not to mention . . .
WHAT ABOUT MARKETING!?!?! (That can be $10K at least right there!)


Remember, we haven't even listed the cost of one wall panel, strobe light, or pneumatic clown pop-up. We haven't talked about one goodie from TransWorld. Those are all strictly costs of running a basic haunt and making all the right people happy.

At this point, conservatively speaking, you are operating at a loss. This is why usually the only thing that should be coming off of the top in this is expenses for everything, and then you do your split. That's how most partnerships that I see seem to operate.

Now, what if you do clear 3500 tickets, and your "investing partners" get the more likely 40% they'll push for?

($15 x 3500 tickets) - 40% commission for your "partners" = $31.5K sub-gross; $31.5K sub-gross - $26K initial investment = $5.5K

So at least you have a little leftover after your initial investment . . . or do you? Remember, you still have to account for all those costs.

So, best case scenario, you make an almost guaranteed $0 profit this year.

Your "investing partners"?

They walk away with $9000 to $21000 without lifting a finger.

Now, all that said, if they are the landlords, and their participation in this venture is just that, then the deal is whatever it is, take it or leave it. If you can renegotiate, great, but usually whatever you work out with the landlords is what you work out.

If, however, they are talking like they are going to be business partners with you, this doesn't sound very equitable. You do all the work, they take most of the profit - 30% or more off the top - just leaving you to make bank after expenses and operating costs, and all they have to do is work a few nights in October selling hotdogs. You're working your assets off year 'round for peanuts, and they cash in every October.

Also, who actually owns the haunt? Are all the properties yours, or do they have equity in it? That might be an important question if you decide things aren't working out and you want to take your show somewhere else.

Also, "double attraction"!?! Are we sure? An ideal space for one element ("haunt", "maze", "house", "attraction", whatever) is approximately 4000sq'. You can go down to 3200sq', maybe, but that's tight, and might be pushing it. Especially for only one or two elements. Anything smaller and people will start wondering, "why did I just drive an hour and pay $20 to get in here? So I could pay $3 for a cold hot dog?" (You definitely want to over-deliver while still not breaking the bank, especially since this initial word of mouth will help build up attendance for your attraction for next year.)

And remember, if this is in a remote location as you mention, then people will definitely be driving, so this Haunt better over deliver and be worth the trip. If they pass two or three other haunts along the way (not an uncommon occurrence here in TX) then they might be having second thoughts before they get to your location.

If you are serving concessions, where are your patrons going to eat said concessions? In the Haunt? In line? Most likely, they are going to have to have some sort of proper food area. Well, that just ate into your 6.5Ksq' of functional square footage you mentioned. What about actor areas, operations areas, behind the scenes or backstage type areas? That just ate into your available square footage even more.

Selling t-shirts and swag? Great money maker, but you just ate up more square footage.

Where is everyone going to stand in line? Outside in the cold? Outside in the heat? In the North it gets frigid cold. Here in TX, it's hot and muggy. What exactly was the point of getting such a big building if everyone can't be inside? Ergo, you'll need to factor waiting lines into the use of the available square footage. And remember, two elements = two queue lines.

So, if you can't effectively do two elements in your haunt, and you are stuck to just doing one this season (not having adequate room for the other one), then you only have the one element. And unless you can get more than 10 minutes out of it, you are looking at $10 a ticket instead of $15.

($10 x 2000 tickets) - 30% to 40% commission for your "partners" = $12K to $14K sub-gross; $12K to $14K sub-gross - $26K initial investment = $12K to $14K in the hole.

And, again, your "partners" walk away with $6000 to $8000 without lifting a finger.

(btw, did we consider what happens if next October gets rained out . . .)

Dark Scares
03-26-2012, 12:02 AM
In my opinion it is pretty high especially if they are getting concessions.

Frightener
03-26-2012, 05:41 AM
Thanks guys. I literally woke up an hour ago and instantly thought "WTF??" She's too greedy. I mean, the building is in rough shape. It has leaks. There's NO WAY they can turn that building into a dance ..or anything again w/o spending thousands fixing the leaks.

The building hasn't been occupied by more than ghosts and fleamarket left overs for at least 5 years or more. It is huge, but yeah, after sleeping on it, I'm more pissed than anything.

Thanks for the input guys, a great response so far.

I got all week to finish thoughts on it. I'll run more numbers and see.



Thanks again,


Dewayne


So if we get them to deal with 30% of PROFITs, allowing us to pull most / all of our investment, what do you think then? Deal maker or no? I'm only wanting to retrieve $15,000 of the $20 of savings, and pay the first year's payment of the loan. If possible. I'm not really expecting to make profit until year 2 or 3. EVERYTHING is ours. I have 2 pneumatic props, 8 fog machines, a snow machine, 9 static props, tons of body parts, 40 masks etc... all of this is mine. No one owns a bloody thing but me! (pun intended) and yes, we're buying a LOT more stuff :P

The remote part, lets put it this way. It's in the middle of a town that's like 400 people. If you drive literally 8 minutes west, you hit 5,600 people. Drive 9 minutes south, 75,000 people. Go back to the haunt / building, drive 14 minutes north, 29,000 people. Another 15 minutes you pass another 45-50k people. (these are a lot of small towns accumulative) The way the towns are, make them all circles. But them together you got a space in between, right? Well, that's where this place is, smack dab in the gray area between all the towns. But a very short distance to any real population. You have to see the map to understand how it's laid out.

Just reread your big post Brothermysterio. Thanks for all the insight. It's very helpful. Around here, most haunts start at 1,000sq foot. They're the bologna n gravy haunts, if you will. But, they still get the lines! I was thinking 2 , 2,500 sq ft haunts. So do you recommend us doing one large one?

BrotherMysterio
03-26-2012, 06:57 AM
I got all week to finish thoughts on it. I'll run more numbers and see.

Well, definitely consider the numbers I gave you. Those were merely "broad brushstroke" numbers and already you were in the hole a considerable amount, while she walks away with a guaranteed profit every single time, no matter how you run the numbers.

Also, where is the money coming from to renovate the place, and how is that going to eat into your production time? You want to be building no later than June or July at least! Much earlier if you can manage. You need the building inspectors and fire marshals doing their thing early on, so you don't have any last minute surprises. How exactly do you explain that your haunt won't be ready for the building inspector to insure safety cuz the entire building needs to be renovated to be brought up to code. I can't imagine that a leaky roof, for instance, would meet code to start with, or be safe for that matter.

Also, I don't necessarily think that the lady was being greedy (tho she may very well be). I just think she is was woefully misguided in understanding just exactly what the business model was that you guys were considering. Be careful not to vilify her because of her ignorance. If she was sincere, on the up and up, and had wished to operate above board, this could prove to be a valuable learning opportunity for her, and a good business opportunity as well.

Consider her original arrangement: she had a large, empty building with a light amount of decor and theatrical lighting, with the DJ's turntable on one end of this empty building, and her concessions area on the other side. She's busy working in the kitchen, cranking out hotdogs and whatnot. He's on the other side, standing there, running a CD player or some vinyl, saying "shake your booty!" every 10 minutes or so. Exactly how much harder was his job than hers?

Also, the 40% "off the top" part is a total misnomer. In the original DJ/concessions scenario, there was no "off the top", cuz there was no "overhead". Apart from utilities, and paying a small amount of staff, what overhead was there? A bunch of ravers show up and dance for 5 hours in an otherwise empty building? Where's the cost in that? That's the total polar opposite of what a Haunt is.

So in that scenario, a 40/60 split makes sense. In this haunt scenario, it doesn't. Not by a long shot.

What would make sense is something like this. You invested $26K for your stuff, right? And she owns the building, right? Then she gets to invest her own $26K or such in renovating the building, independent of you. It is her building, afterall, not yours, and you shouldn't be responsible for her property, nor should you be expected to fix it up for her either.

Then the two of you run the Haunt together, with her and her team running concessions and basic operations, such as ticket taking, selling swag, parking lot security, and all that; and you and your team running the Haunt operations, such as actor management, inside haunt security, cast and crew operations, all the usual stuff.

You would also want to stipulate that you assume and maintain full artistic discretion, and that no one on her team, including her, can start dictating production parameters or changes to the show. All decisions pass thru you. (Of course, she shouldn't have a problem with this if you take a non-offensive, scary-not-gory approach. Iow, no dead baby corpses hanging from the walls, or torture p0rn.)

After that, once you have your gross for the season, all expenses come off the top FIRST, then you divide the net, and anyway you work it is fine, be it 30/70, 40/60, or even 50/50. I think that even 50/50 would be fair, cuz she would have as much of an investment in this Haunt's success as you; you with your goodies, and her with the roof over your heads. This would also be a much more fair and partnership-driven split, and would reflect the true division of labor involved.

Or, you could work it separately, with her handling and keeping concession and swag monies, and you handling and keeping ticket receipts. Ergo, food/swag represents her profits, and tickets represent your profits. That way there are no feelings of dipping into each other's pocket. Of course, that only works if she makes money. If she doesn't net as much as you, then she might want to boost her earnings with "rent". It would be best to probably treat it all on the same books and be in this thing together.


The remote part, lets put it this way. It's in the middle of a town that's like 400 people. If you drive literally 8 minutes west, you hit 5,600 people. Drive 9 minutes south, 75,000 people. Go back to the haunt / building, drive 14 minutes north, 29,000 people. Another 15 minutes you pass another 45-50k people. (these are a lot of small towns accumulative) The way the towns are, make them all circles. But them together you got a space in between, right? Well, that's where this place is, smack dab in the gray area between all the towns. But a very short distance to any real population. You have to see the map to understand how it's laid out.

No, actually, that makes a lot of sense. So, basically you wouldn't be remote; just not in the midst of a densely populated area, even tho you have several population centers all around you. That would make for an ideal location. It would be cool if this could work out for you, just not the way the lady had it first set up. What I outlined above would be a better start.


Just reread your big post Brothermysterio. Thanks for all the insight. It's very helpful. Around here, most haunts start at 1,000sq foot. They're the bologna n gravy haunts, if you will. But, they still get the lines! I was thinking 2 , 2,500 sq ft haunts. So do you recommend us doing one large one?

Well, if that's the case, you are doubly blessed, and have a lot working to your advantage. As far as recommending doing a large one vs. two small ones, well, by definition, for your area, you would be doing a large haunt . . . two, in fact. Also, if you could work in some triangular grid, then you would be packing a lot more haunt into the same amount of space, which would carry things even further. In fact, if most haunts are working at 1000sq', I wouldn't push it to 4000sq', cuz that would probably be too long for most of your patrons, at least at first. Take advantage of the smaller economies of scale for your area and just do one that's a bit larger, such as your aforementioned 2500sq' vs. the more common 1000sq'.

Another possibility for doing two elements while not doing two actual elements is to look at a triangular mirror maze. No staff, no props, no nothing, except just the walls and mirror panels, and yet it can prove to be a very hot item. Incidentally, while mirror mazes look infinite (which is their appeal), you would be surprised at how small they can be. The one Rocky Point used for a few seasons was only 500sq', and yet you'd think you just walked into an infinite dimension, like something out of World of Warcraft or something. One guy in England is the acknowledged master of triangular mirror mazes, and he's done scenarios like Arthurian Legend, with finding Excalibur and the Holy Grail and whatnot.

Not bad for a 500sq' element with no staff or props, save a sword in a stone and a gold goblet, both behind some two-way glass with a light on a timer.

If not something like that, then consider other simpler add-ons that fit your theme and that don't require a full haunt staff to run. A full haunt may be more than enough to chew on for the first season, but if simple add-ons can round out the picture, like carnival games or a monster photo booth, then that's something to consider.

Chris

Frightener
03-26-2012, 08:32 AM
*bow*

Thank you so much for taking your time to help us out. It means a great deal to us.

After doing some talking, we think they're on the right track of thinking 'Off profit' splits. Meaning anything after our initial investment / first year loan's payment pulled out.

I think the building is safe. I think you're right, we should shrink down to one nice haunt and have a few addons inside. We were planning on having a photo op with actors / statues and a last ride as well.

I think it's down to the point we need to retalk things over. The bad thing is, he talks so much about past "ghost" stories with the building and can't stay on topic. A 15 minute business discussion will take us an hour. :(

Thanks again.

Dewayne

BrotherMysterio
03-26-2012, 08:59 AM
I think you're right, we should shrink down to one nice haunt

One nice BIG haunt of 2500ish sq' (based on what's customary and reasonable to your area).


and have a few addons inside. We were planning on having a photo op with actors / statues

Have one or two dedicated models to do the photos in a specifically staged scene, and so on, at the photo kiosk. Charge $1 or $2 for the customer to use their own camera, or $3 to $4 to take the photo and have it go in a nice frame or mat (with your marketing information on it, of course). A local photographer might be able to come in and set it up, and he could get a cut, or however you want to work it. Leave your line actors to work the line, and not get bogged down in the photo kiosk.

That said, shots with lot actors with people standing in line should be free. That's free marketing. The only time a lot actor should be in the photo kiosk is by special request.

To that end, consider having your icon characters readily available for the photo kiosk. That's one of the functions of an icon character. More on that later.

Incidentally, it's vital that your lot actors never break character, especially when taking photos. If you have a non-verbal "Lurch" type character wandering, and he's approached for a photo op, then he can meander into the photo and naturally pose as if it was incidental, but he should never break character - i.e., never stop "lurching" - and pose for the photo. It has to be seamless.


and a last ride as well.

"Last ride"?


I think it's down to the point we need to retalk things over. The bad thing is, he talks so much about past "ghost" stories with the building and can't stay on topic. A 15 minute business discussion will take us an hour. :(

Use his verbosity to your advantage.

All those great ghost stories with the building that he talks about can serve as the basis of your backstory. As a first time haunt, you don't have a history or any past successes to build on, but you do have all those wonderful ghost stories, so use them. If the local paper wants to come out and do a story on you guys (again, more free marketing), things will get real boring real fast if all you have to talk about is how you have a nifty haunt with all sorts of cool props in it. BORING!

Instead, talk about how your haunt recreates some part of that history, or ties into it in some way. Talk about how the workers, while building the haunt, have heard strange things. Perhaps it was just the foundation settling, or perhaps the wind blowing across the roof, but you never know. Perhaps a local ghost expert or historian for your small town knows a story or two. Papers eat that sort of thing up, and it makes for a much more interesting story than "boy, we just got back from TransWorld, and we have all sorts of new, whizzbang cool stuff!" That kind of comment is usually met with the response of "'Trans' what?"

Also, if there are any particularly colorful characters from those ghost stories, they could serve as the basis of your icon characters. If you can have up to three, then all the better. Icon characters aren't just lot actors. They serve as your mascots, spokespeople, on camera personalities, and are considerably more charismatic than any managerial type you could put on camera, who invariably comes off as someone's weird or nerdy uncle. "Boy, this is a nifty haunt and we put a lot of swell work into it." Zzzzzzzzzzzzzz . . . .

Icon characters also make for great graphics for your advertising materials. And if they are suitably enigmatic, you can even have kids wanting their autographs and whatnot, in addition to photos. That's a lot of pop for what essentially is a made up name and an interesting costume.

Consider: George Lucas built a huge multimedia empire by simply taking all the of the extras in his movies - all dressed in interesting costumes - and giving them a name and an interesting backstory.

Chris

Greg Chrise
03-26-2012, 09:23 AM
First year out n nowheresville Arkansas you have no idea how many people are going to attend. I have exactly the same location type numbers you describe. A few haunts have been right on this highway, a few other events have been on the highway all within a 3 mile area that go such a gathering it was considered unsafe as cars began parking on the highway. The parking lots not thought out. Plus the big attraction is that is isn't really a city although it claims to be.

The actual numbers for a haunted house have been 7500, 420, 800, 4600, 1600, completely depending on advertising. How long you have been at one location is important too. The same 7500 haunt in the town of 95,000 in the ghetto went from 4,000 to going independent and 7500 to 10,000 to 11,400.

In the over all picture, your outward appearence is going to be oh, that old lady at that crappy dance hall is at it again I'm not going there. What if you see 400 people. If we are talking 30% total deal, not rent plus 30% then it is on. Just the shear amount of work required in an unknown rural location, I would only do one 2500 SF haunt and the location proved to deserve more than that. It is going to be a little hard to take advice from another town and expect your location is going to do the same thing.

Now, condemable buildings in the middle of nowhere can be groovy. They should be cheap, it got that way because there is no building inspector. It is creepy and no one can say you are the one that screwed it up.

But, nothing wrong with setting up a few years and learning all the motions. The ultimate goal is to get into the 75,000 population city into the older industrial areas, hashtag ghetto.

I can think of another haunt in East Texas, can picture an old dance hall even a mile from them that even has dances every saturday. They started out at 800 and years later climbed to 8,000. Years later. 13 years later they turned a profit on a very large trail and seperate 3500 SF haunt.

Plus it might only be 7 miles away but in todays brains that is a 14 mile trip at 20 miles per gallon, at $4 a gallon that is $4 to just do a drive through and see if it is a dukes of hazzard haunt, or a grandma haunt or what. Oh hell it isn't worth it, we'll wait until we hear others have gone there. Which turns out to be the next year or 3 years in.


This is just a reality check. On the other hand any gain what so ever is progress in those types of locations. The trick is to not over spend and thus be dissappointed. Or if you do spend you know it isn't the haunt, it is the advertising or the gas prices or people in Arkansas don't like dancehalls anymore or something but, not the haunt. Try not to put yourself in the situation that if they don't turn out you are screwed. Or do have a paln B to pay loans and such. There is no shame in having to work the other 10 months of the year to pay that loan to get what you really want in the end. That is what business is. Doing what it takes. Maybe the other half of the building is intentionally left open for zombie dance hall events held every month or once every 3 months.


I have seen former advertising guys that did that for a living every day for a few years hack away and see 7500 right out of the box but, I doubt they could sell a remote location as well as being in a town of heavier population. They grouped with independent film makers for their videos, hacked out web sites and social marketing and quite really got lucky. The market had already been developed for something more and they came with that something more. The market had only been in development for 25 years when they stepped it up. Yet it sounds like they were marketing geniuses and first year saw 7500.


Everyone has to start somewhere. I probably spent $20,000 in real money and twice that in sweat equity. Never had a loan due date on that much money. Not sure if that would be possible in a small town.


I'm not really bothered by the 30% deal. They are going to have to deal with the building not being up to standard if that comes up and insure themselves. Plus it is going to be a temporary deal where after 3 years it steps up and moves to the big city.

Greg Chrise
03-26-2012, 09:55 AM
I really need to go to work but, I have seen haunts set up at high dollar locations with populations of 240,000 and see 800 people all season and I have seen some real retards spend 3 years building and get over 4,000 people their first open season.

So I have been wandering around trying to train my IQ down and wondering, what would a retard do. You have to slow way down. Actually have a haunt. Actually attempt to advertise without spending alot of money any way imaginable you can do yourself. Surround yourself with people that want to see something happen even if it means no money. Just to figure out how things are going to work. Is there some kind of opportunity for them to try things out. Is there some carrot like it could easily be a million dollar business in 10 years and we don't get paid until then?

Times have always been tough and I routinely came with the haunt, the props and equipment, masks and costumes and all the knowledge and only demanded 20% of the ticket revenue. If you have 70% to do something with a cash flow, you are still in great territory. You are dealing with a business that has to kick ass only one month a year. It does not conform to monthly payment formulas that a year round business would consider. If the money doesn't come from the customers, it comes from you over and over until it works or you break your spine from carrying walls.

rwrussom
03-26-2012, 12:08 PM
I quick comment before I offer you my thoughts. I have been lurking around these boards for about 4 years now. I started with the same goal you have and there is a lot of good information here. There are people who lay low on these boards who have really experienced a lot, I mean some really experienced guys who are involved with some of the biggest shows in the nation. They are not the ones answering questions typically. Most of the the new content for newbies is put up by other newbies with no real experience. This is a complex game with many pieces, most of it comes from getting out there and doing it. I throw this out because Greg is one of the few experienced people who try to help even though the same question is asked every couple of months going back a decade. He has been giving advice here for a decade and he was one of a couple people who was able to tell me what the first year was going to look like (even if I didn't like what he said). My point is that there is wisdom here, search the boards and listen when a guy with experience offers up a thought or two. Ignore the guys with a lot to say and little experience to justify it.

That being said, the big question for me is if your building agreement is for a long term permanent location. If its set up and tear down, then I would guess there are a lot of options for that kind of money. If you don't have to tear down, then it may not be a bad deal. If you hit a home run, then yeah you may over pay, but if you don't then you can better contain your losses. In effect they have the asset and are taking the risk, so with that comes better rewards. That is how the game is played. You really don't know the answer until you are our there doing it. A 2500 - 3000 sf haunt is a great place to start. Manageable for a first time but large enough to be very entertaining if done well. Remember, we are sitting in basically at April 1st. That is really not a lot of time to go from nothing to a show. You would be better served by producing one high quality show and two week ones. Spend the extra time and money on elevating your product and on promotion. Those will serve you over time much better than being able to tell people you have a larger haunt.

I suppose with my initial comments, I should let you know where I came from although my story is on the boards. I started with nothing. Not a home haunter, really no great interest in the whole gore thing. Got a hold of a 5000 sf building for two seasons, about 18 months, for essentially free. Built the whole thing out of pocket. Did all the graphics, web design, advertising, permits, etc myself. Had a show built in 5 months. Ended up a little in the whole. Improved the show and ran again in 2010. At the end of 2 years I had put a few dollars in our pocket, worked my ass off an went from having nothing to having all the parts and pieces for a 4000 sf haunt completely paid for. So that was my profit. For a variety of personal reasons, we did not run in 2011. I have just signed a three year lease to start the show this year. This time it is a paid for location, but I am going in knowing a base line attendance expectation, not from hoping and guessing, but from experience. I know what can be done in the area, have the local price pressure points are, and what it will take to properly advertize. Additionally, I have a large, enthusiastic labor base to tap. All these pieces that come from experience make this go round entirely different.

Frightener
03-26-2012, 12:09 PM
Yeah, that's 30% total deal. No rent. I carry our insurance for the haunt. Basically it's all my deal, they give us a key, leave us alone (once they get their flea market type items out of the building) and we build. Then they get to run the concession stand and that's all them. Other than that, we just pay them 30%. Our contract we have started, right now says " will pay 30% of total profits for rent on the building..." yada yada.


Dewayne

Greg Chrise
03-26-2012, 04:13 PM
30% is the rent = great opportunity. RWRussom hinted at those resources that need to be cultivated that are worth more than money. A bunch of intrested people that can do things when they have to be done. I have had charities tell me September 15th yeah we are going to do it for the last two weeks in October. With a completely disassembled haunt all screwed together, moved in, set up wired and so on and 17 rooms tricked out in 19 days and on TV the wednesday befor opening. The fire hall guys after a few years got where I would lay out the floor and the whole 3,000 SF triangular grid was completely up in 3 hours.

I kind of stalk people and find many of these newbies have been doing things secretly for also more than a decade. These forums are kind of a give and take. Many people have not had the opportnity to communicate what they sort of already know and are working it out. Great credit should be given, even if slightly wrong, or different that another's situation, what is being offered is some times genius and they don't know it.

I kind of grew tired of the forums for a while because so many would not answer any questions. It takes too much energy apparently. It is so easy to just say buy someone's book or you suck. I don't think those are really answers to questions. The other one that takes no thought is don't even think about starting a haunt unless you have $150,000 cash. Yet that is not what they did and if that is what it really took they wouldn't have a haunt today. The people that have followed this advice seem to be in debt for $150,000 they may never see again. It is so much better to build and pay as you go, actually own something outright and know what it can do, matching the number of patrons it serves and not expanding until the customers sort of deserve it. There is no reason to have two haunts until you are backed up too much 300 people deep in line the whole last week. Only then is it good to funnel multiple customers.

Conversely you want to hold the lines back where there is some amount of waiting so the more monied will buy a speed pass for their group and everyone else experiences some anticipation. That anticipation and que line entertainment is part of the show. I don't recommend it but some of our shows, there were monsters in your car when you got out and ready to leave or chasing 9 little kids around inside a suburban. Chasing kids around the parking lot. So many people get hung up on exact square foot or how to build walls. Or the ever popular crap known as a business plan. There is no business plan, you go to work, you make money. You aren't getting some corporation to fund you product that will be mass produced by some chinese village and has a proprietary something or other.

Everything you need to know is already common sense and in your head and you just need to do it. Or you can be a fancy pants and pay other people $150,000 to do all of these things. The fancy pants doesn't necessarily know how or why something works, they just paid some guy for something that sounded okay.

Darkblood
03-26-2012, 05:15 PM
My advice and the way I've always done it is to start small (2500+ sq. ft.) and grow from there...
Don't get in over your head...avoid the temptation of overspending...focus on your show and you'll be much happier!
It would've been easy for us to go get a big loan and get 10,000 sq. ft. but then see an attendance that doesn't
meet our expectations and be over our heads in debt.
Instead we've taken 2 years to negotiate deals that worked for us, reinvested, and this year are buying ourselves a
location! No more moving around!
It's around 3500-4000 sq. ft. and a great reward after tearing down/moving every year!
Best of luck to you!

Kirk

Frightener
04-12-2012, 02:01 PM
*Update*

Thought I'd let you wonderful people know. We shredded the contract! The lady wouldn't even speak to us personally, talked through her husband, on the phone. She said we won't give her what she deserves, which was:

45% off the top, they do concessions, they take care of the tickets and handle all monies and take 45% of our giftshop!! My wife told them to get bent. She didn't even have the nerve to tell us face to face, or even on the phone and had her husband do it. Told them they wasted a month of our time. I bet what happened is her "friend" said "ohh honey you need to get paid more than that" ... they're line always was "We use to get $800 a night for letting folks do a dance". So we told them "good luck making $10,000 with your redneck junk auction. (they have a ton of crap the want to start auctioning off. Badly stained clothes, old broken toys, etc.) Not meaning to sound so rude about it, but it just ticks me off.

We have a backup location. Will be zoned next month C3, which is what we need and is 6,400 sq ft. 5,500 usable. 90% of all of the rooms are connected with 2 different entry /exits. 150ish parking spots, a huge industry parking lot next to it. However, it's $2,000 a month!

They agreed to let us pay $1,000 a month, and the rest after our event. The place is big and has a house that needs plumbing and windows (someone broke in and stole the copper plumbing... while the water was on)

This is about average for a building this size or bigger, but I just don't know if it's feasable to try with owing up to $14k at the end. Or, we could look at paying the $6-7,000 as building costs, but that's not the right way to look at it.

Opinions? I can throw a link on here if you guys want, so you can see the place. It's up on a real estate site.

BTW: Here's the listing. If this is against rules, please let me know.

http://www.trulia.com/property/3073075987-100-E-Scott-St-Paragould-AR-72450

Dewayne

Karl Berger
04-12-2012, 08:27 PM
I dont know where your located but did you think about using a tent. Im also looking for a location and running into the same issues. I have the capital but the building owners are asking way too much for rent. Its almost like they are trying to recoup money lost when the real state market tanked. Im currently talking to a few business owners and FFC about setting up on there property.

BrotherMysterio
04-15-2012, 12:03 AM
45% off the top, they do concessions, they take care of the tickets and handle all monies and take 45% of our giftshop!! My wife told them to get bent. She didn't even have the nerve to tell us face to face, or even on the phone and had her husband do it. Told them they wasted a month of our time. I bet what happened is her "friend" said "ohh honey you need to get paid more than that" ... they're line always was "We use to get $800 a night for letting folks do a dance". So we told them "good luck making $10,000 with your redneck junk auction. (they have a ton of crap the want to start auctioning off. Badly stained clothes, old broken toys, etc.) Not meaning to sound so rude about it, but it just ticks me off.

Yeah, that was precisely the eventuality I was going on about before.

Like I said, if you get a deal with a landlord, it is what it is, and if it works out for you, then that's fine. That penultimately proved to be the case at the then agreed upon 30% off the top, per the original contract, which Greg astutely pointed out as a great opportunity.

What I took major umbrage with, which in fact was what 95% of my posts were about, was what ultimately ended up happening, that this lady was suddenly talking up all this "partner talk", using terms and suggesting arrangements and conditions that only an equitable partner with an equal investment should have any right to suggest, or expect. Only someone who treated you as an equal partner in this should ever talk about large precentages and overseeing half of the operation and so on.

To that end, it all sounded fishy from the very start, and, as it happens, it was.


I dont know where your located but did you think about using a tent.

I've priced tents, and I found it cheaper, and more effective, to build a raised deck and a roof. JB outlines that approach very thoroughly in his books.

C.

BigT
04-15-2012, 06:33 PM
I agree with a lot of the others here that this is not a good deal for you, but I wanted to add one more thing. This is not an unusual financial model in the concert business. My wife runs such an operation here in NC, and the way it works is the promoter rents the building for a set fee, and brings in the talent. Promoter gets the door, owner gets the rent plus 100% of bar/concession sales, and they try and get 25% of merch. They also get 25% off the taco truck parked in the parking lot.

Promoter is also responsible for things like event insurance (the building owner is as well), security, and production (sound and lights). The production costs for the promoter are not much - usually around $2500 to $3500 since these venues cannot usually support really big tours. They pay around $600 for security and other personnel so their real cost is in the band ($25K for a big name). They can then turn around and sell tickets at $50+ and make a great profit provided they have big ticket sales. Cost is relatively low for them other than the band.

Now look at our (the industries) business model. We spend a lot in production ($75k+), and a lot more in personnel, insurance, and other miscellaneous. Our ticket prices are much lower so we need to run many more nights to recoup our expenses. Rent is our biggest expense.

Business right now is really slow for these venue operators because there are not a lot of bands touring anymore so the years of running 45 to 50 shows a year has dwindled down to very few, and none of them very profitable. This means they have to get creative and find other uses for their buildings, but they do not understand our business model.

BrotherMysterio
04-15-2012, 08:02 PM
I agree with a lot of the others here that this is not a good deal for you, but I wanted to add one more thing. This is not an unusual financial model in the concert business . . . This means they have to get creative and find other uses for their buildings, but they do not understand our business model.

Yeah, but this lady doesn't understand business, either. You make an excellent point, and provide an excellent analysis, however, the venue in question is a crappy little dance hall in Nowheresville, Arkansas that hasn't seen a dime, nor a Texas Two-Step, in literally seven years. It's just been sitting there, leaking, rotting, collecting dust and junk, for seven years. Ergo, Frightener and "Dance Hall Lady" were literally godsends to each other. He gets a great building to run his first year, and she gets to turn a profit on a building that could be on it's way to being condemned if she doesn't start taking care of it and doing something with it.

And then she decided to get all podunk and greedy, and start trying to stick him for almost 50% upfront, plus a huge chunk of everything else.

Basically, she did him a huge favor. She pulled these shenanigans while they were still talking, well before they got in bed together. Now he has other options and she is stuck with the same crappy building, and no shot of seeing another dime.

C.

Frightener
04-15-2012, 10:08 PM
He's right. We're not moving into our #1 backup building. $2k rent but we pay $1k each month and the other half in a lump sum at end of event, to help us get going.
The property also has a 1,900 sq ft home on it. We can rent to own, with proper papers and all, save 45k from listing price and the lump sums have 0 interest, meaning the lump sum of $12,000 gets taken off the... principle? i think, what we actually owe for the property.

We plan to use the front part of the lot for a "Park and Sell" for vehicles, fixing the house for rent, and all said and done, we only have to pay about $1,200 rent on our building. Of course this is the projected PLAN and we all know how "plans" sometimes go.

We've got 60% of the planning done, trying hard to design rooms w/ no help of animated props to keep costs down and put that money into marketing. We've decided to add to our marketing budget as well.

We should be getting power hooked up in the next week, we'll try to post pics of the place and any progress, if you fellas are interested.