Game Truck Franchise - Not Turnkey- an Overly Saturated Market

Here is a recent Q&A with an Entrepreneurial Magazine.

EA: How are you?
ME: I'm great! Thx for having me.

EA: Now you have sold 30 units in the video game truck industry. Were those franchises?

ME: No, not at all. I mean, this industry doesn't require that. If buying some food chain, I would understand. But, not for this. Anybody can replicate this or imitate it. A simple carpenter can copy this in his back yard with a used trailer. You can't be exclusive so why bother with a franchise?

EA: Recently you have not only pulled out of selling gaming trucks, but you're choosing to be vocal about why.
ME: I am vocal, yes. I can't believe the lack of transparency in the industry and this is true of all builders, non franchise included. The industry isn't all it's cracked up to be. As the owner of multiple units, I can tell you that this is a job. First and foremost, it's work. It's not as easy as builders make it out to be.

EA: What makes it tough?
ME: Marketing for starters. It's very expensive to market. You will rely on google. But with new trucks entering the industry the cost of marketing will continue to increase. Google works like eBay. Companies bid to be at the top. With competition that cost can go up 300 percent. Example, i used to pay 88 cents for a website visit in 2011. The boom happened and forced up the price. Now I'm more than 3.00 per visit.

EA: Wow, that's a huge jump.
ME: Yes, it is. What's worse is the cost parents expect to pay for a party has come down. So the revenue is lower and the marketing is higher. Also the market is shrinking.

EA: How's that?
ME: Because kids have been there and done this. Our market is between 5 and 12 years of age. You get very few teens or team building or corporate parties. This is a birthday party business. Period. 99 percent of all bookings are birthday parties. Builders lie and tell you about school events, team building, corporate events and all sorts of other events that never happen. This business is for kids ages 5-12 mostly. And once they have a party and each friend has had the same party, they are done. Others will say kids turn 5 all the time, but that's not enough to sustain this. The market is shrinking each year. If that's happening in counties with millions of people in them, then it's happening everywhere. The market can't sustain itself.

EA: Why have so many joined this if the revenue isn't there?
ME: Well it used to be. Most are being misled about that. If you look at the gross potential of 8.3k per month this business sounds great. But not all months gross that much. Expenses also add up. Take out storage, pay a game coach/driver, pay google, yahoo and bing and two types of insurance, LLC tax, state and fed, city license, city permits, and then see what you have left. Oh and GAS! 8 miles a gallon at over $3.00 a gallon. I see a minimum of 850.00 in gas per unit, per month.

EA: What's the estimated profit?
ME: Best case? 6,000.00 gross; taxes still owed; Maintenance not accounted for. That's 72000.00 a year if it were sustainable for 12 months, which it isn't. If you have a driver, you might pocket $3500.00 on a good month. Good months are 8 months a year. Nobody tells you that either. Jan, Feb, July and Aug are horrible months. You make a fraction of what you make other months. Parents don't like to throw parties after Christmas and in summer months too many kids are traveling. So, you really only have 8 months a year to maximize your profits. I know owners all over the country and they have all confirmed this.

EA: We get people asking about this all the time. If you could tell a person something, who is determined to become a game truck franchise owner, what would you say?
ME:

1. Be prepared to work. You might be escaping a horrific job, but not only is this a job, it's a full time job. You will put in far more hours with this than anything you've done before. Booking events happens all hours of the day, 7 days a week. You can't go to dinner or to a movie without missing calls. You can't so much as shower. Somebody has to cover the phone all the time. Weekends are the same. Even with a driver working your events on weekends, you still have to work. Parents want to work with you, not your driver, so you have to be available. You worry all weekend and take calls from parents then too. I'm serious when I say this, when owning a game truck business, you literally never get a day off.

2. Are you determined to join us? Buy used for a fraction of the cost. I know 2 owners who have done that. Plenty of game truck owners are jumping ship and cutting their losses. Save 30k and buy a used one.

3. Learn about customer care. It's your lifeline. If you've never done it, you're in for a ride. Customers want everything. They're very demanding and it's a big day for the kids. They are stressed. Don't breakdown and never get sick. There are no sick days and you must perform each and every time. Anything less is met with unbelievable aggravation. Again, it's a big day to them and nothing can go wrong. Yet, there is so much that does go wrong! Generators break. Tires go flat. Trucks fail to start. TVs go out. Consoles stop working. Disks get scratched and fail. There are so many things that can and will go wrong. Yet, the parents want perfection and will threaten you with poor Yelp and Google reviews if you miss one step. It's very stressful as an owner to meet expectations day in and day out.

4. Be prepared to buy more than one. I feel for single owners. They take it the hardest during slow months. They can't afford to market at all so they don't. With the cost of marketing going up each year, multiple units are very helpful.

5. Bypass it all. Skip the franchises and the non franchise new builders. Franchises take 7 percent for doing nothing. New builders make 30K to build you a trailer with a bunch of fluff. That's what I call it. Fluff. They give you a thick manual about nothing and make you feel like you need them. You don't. You just need a little common sense. Never buy a new trailer. Buy a used one instead.

EA: Thanks so much for you time! That's so different from the information out there today.

ME: Absolutely! You're welcome.