Childrens’ Indoor Recreation Center

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Childrens’ Indoor Recreation Center









6700 West Smithers Rd.
Portage, Indiana 46368

Gerald Rekve

A new business concept exists to service children aged 13 and under with a supervised indoor exercise and recreation facility. Market research shows that children often do not get the required amount of exercise to maintain a healthy lifestyle. Interactive Garden facilities provide an outlet for active children during poor weather or when the temperature is too hot or cold for outdoor play. Furthermore, parents want an environment for their children to play without harsh language and an arcade atmosphere.


Interactive Garden will provide a safe, clean, and stimulating environment for physically active children aged 13 and under to play in and explore. Interactive Garden’s supervised, visually open play area will ensure children’s safety, while challenging them to reach, think, interact, explore, and have fun. The store will require approximately 11,000 square feet, consisting of a giant 5,000 square foot play structure for children over the age of 4, a smaller play area for toddlers under the age of 4, an area with several interactive skill games, a snack bar with seating to accommodate 100 to 125 persons at a time, and a merchandise and souvenir stand. Both play areas have soft indoor play park equipment with extensive padding and no sharp edges. Furthermore, the game area will not offer video games, pinball–type games or games with a violent theme. For family celebrations, such as birthdays and special occasions, Interactive Garden will offer private party rooms hosted by trained staff to provide a child everything he/she would want in a birthday—several hours of supervised fun on the play structures, cake and ice cream, prizes, food and beverage, and game tokens. Interactive Garden desires playtime to be as rewarding for the parents as it is for the children, as they spend time together.



Interactive Garden will be located in a recreation center on the west side of Portage, Indiana. Within a twenty–five mile drive from this location, there are at least 49,000 children at or under the age of 14, living in a household with average annual income exceeding $45,000. Furthermore, the Census Bureau expects the communities of Merrillville and Portage to be the fastest growing regions of Porter and Lake Counties over the next decade.

The nature and location of Interactive Garden’s business will support both destination and walk–in shopping. Since the majority of birthday parties are pre–planned events, the exact location of Interactive Garden with respect to major shopping centers is not as critical as it is in other retail businesses. However, parents who are shopping with their children may desire an outlet for their children in the form of indoor exercise and recreation. Once customers are aware of Interactive Garden’s location, they will return again and again. Figures from the corporate store indicate an average return rate of seven times per child per year. Our financial forecasts conservatively project 1/3 less. The awareness of our location will develop over several months due to advertising, word of mouth, and simple observation by shoppers in the area.

Interactive Garden will be located in Portage on West Smithers Road in the Copperwood Shopping Center. This shopping center consists of two separate buildings totaling 73,480 square feet of rental space and contains both destination and walk–by businesses. The center is primarily focused on providing family–related services to the local community. Within three miles of this location, census data indicates there are 9,854 children under the age of 14. Within five miles of this location, census data indicates there are 23,061 children under the age of 14. In addition, there are several elementary schools located in the proximity, a day care center directly behind the shopping center, and many other child–related businesses within a few blocks along West Smithers Rd. in either direction.

To better ensure Interactive Garden’s success, the franchisor, Sweet Childhoods USA, must approve the final location and subject it to their proprietary location requirements.

Management Summary

The business will be operated on a full–time basis by a manager, Allison Schafer, who has had over five years of restaurant management experience. In addition, all member–managers will actively assist in the management of the business on a part–time basis.


Start–Up Costs

The owners are requesting a loan to fund a portion of the start–up costs and inventory. They are also requesting a line of credit in the amount of $500,000. The owners are contributing $35,000 to the business venture and various investors are contributing another $40,000. The money will be needed in equal monthly installments commencing three months prior to opening and will be repaid in a steady manner from available operating cash flows. The loan will be entirely repaid within five years after opening with payments beginning three months after opening.


Interactive Garden is a diversified destination family entertainment center combining recreation, entertainment, and restaurant facilities that creates substantial drawing power. Interactive Garden’s basic focus is children’s play and fitness for 1 to 13 year old children. At Interactive Garden, these activities have been packaged into a safe, clean, climate–controlled, supervised environment for children aged 13 and under to exercise and have fun while stimulating their imagination and challenging them physically. The indoor playpark is based on the premise that if you set a large number of children inside a safe, yet challenging, imaginative soft recreation facility area, they are going to have fun. They are also going to develop basic motor skills, social skills, muscle tone, and self–confidence. Furthermore, the parents can enjoy hours of close interaction with their children in a safe, secure, and stimulating environment.

Currently, there are no other indoor children playgrounds in the Western Indiana area. In addition, there are relatively few alternatives for children’s birthday parties. Interactive Garden will be able to immediately fill this void in the market by providing extensive recreation, entertainment, and restaurant facilities for children to play in and explore. Within 1 year, Interactive Garden will be known as the primary recreation facility for children aged 1 to 13 and the destination of choice for children to enjoy birthday parties with friends. Interactive Garden’s safe, secure, and clean environment will reassure parents while providing opportunities for their children to have fun in a stimulating environment.

Interactive Garden will base its appeal on providing a stimulating indoor environment for children to play in, while adhering to the strictest quality control standards emphasizing excellence in service, safety, security, food quality and value, sanitation, cleanliness, and creativity. Furthermore, Interactive Garden is dedicated to the continual development of creative themes and interactive designs that have entertainment and educational value that will ensure Interactive Garden’s competitiveness and success in the family entertainment market years into the future.


Interactive Garden Indoor Recreation facilities serve an increasing need in our society. Studies show that American children are less active and less fit than they were even five years ago, probably due to increasing time in front of television sets and high–calorie/high–fat diets. Studies have also shown that less active children are more likely to be overweight, and overweight children have a greater propensity to become overweight adults. As people have become more aware of the healthy aspects of their lifestyles, enrollment in adult health clubs, aerobic exercise, recreational activities, and attention to nutrition has increased dramatically. This trend will continue as parents attempt to provide a healthier lifestyle for their children. Another area of parental concern is their children’s safety. Nationally, as well as locally, concern for the physical well–being of children has created a further need for a safe play environment. This concern shows no sign of diminishing.

While it is difficult to determine the size of the Interactive Garden Indoor Recreation facility industry, there are currently about 49 million children 12 years old or younger in the United States and this figure is expected to rise to 51 million by the year 2000, according to the Bureau of Census. There are approximately 26 million households with children younger than 18 years of age, who spend about $1,800 per year on family entertainment or $46 billion annually. Per–capita expenditures on children’s activities are likely to rise as families with children spend a larger percentage of their income on recreation. Children aged 4–12 spent, from their own income, $6 billion in 1989, up 41 percent from 1984. This increase in discretionary income is coming from several factors. First, the increase in dual income families has provided for more discretionary income to be spent on children. Second, women are having children later as evidenced by the rising birth rate among women in their thirties. Third, per–capita family income is increasing and families are choosing to take wealth increases in the form of leisure. Last, grandparents are living longer and spending more on their grandchildren. Based on these demographics, industry analysts believe that there is room for about 600 store locations in primary markets throughout the United States and an additional 200–300 in secondary markets.


With the recent concerns over child safety on outdoor recreation facility equipment, many schools have elected to remove their recreation facility equipment entirely. Parents are more aware than ever before over the safety and security of their children’s play areas. Consequently, a safe, supervised indoor play area will enable parents to relax while their children enjoy playing in and exploring the soft indoor play park.

Interactive Garden will target children aged 13 and under within a 25–minute drive of Portage, comprising about 250,000 people of which at least 49,000 are under the age of 13. Within a five–mile radius of Portage, census information indicates there are approximately 23,000 children aged 13 and under, living in a household with an average annual income exceeding $55,000. These customers will form Interactive Garden’s primary market base. Interactive Garden will also target children in the outlying regions of Porter County.

Unique Market Characteristics

Weekly Usage Patterns

With 60 to 65 percent of the costs fixed and only 35 to 40 percent variable, even small increases in capacity utilization can have a major impact on profitability. With a projected 60 percent of revenue coming from Friday through Sunday, it will be important to effectively utilize capacity on weekdays. Interactive Garden will provide the following services to increase customer usage during this period: group discounts to day care centers, churches, community groups, schools, etc., a frequent user card to encourage repeat customer visits, nutritious food to attract health–conscious families, and promoting birthday parties during the week.


The winter months are usually the strongest, and the beginning of spring and the beginning of the school year are usually the weakest periods. On a quarterly basis, Interactive Garden’s best quarter should be the first, followed by the third, second, and fourth quarters. To manage this seasonal variation in customer demand, management will actively monitor weekly sales volume and maintain a flexible staffing arrangement.

Threat of a Fad Product

There is a risk that children may tire of the concept of indoor padded playgrounds. To keep the concept fresh, Interactive Garden will strive to introduce new play equipment, skill games, and/or new marketing concepts annually. In addition, the franchisor is committed to ongoing research and development in the area of child interaction and stimulation through consultation with staff child psychologists.

Safety/Liability Concerns

To reduce the potential for injuries and lawsuits, Interactive Garden will employ every means possible to protect children from hurting themselves on the play equipment. Interactive Garden will only utilize the softest and most extensively–padded equipment in the industry. Furthermore, Interactive Garden will employ trained staff to continuously monitor each play area and enforce the rules of the playpark. The playpark will be designed to provide parental viewing on all sides and at all times. Parents will also be encouraged to play in the equipment with their children (knee pads will be available for a nominal charge.) In addition, security wristbands will be issued to each person upon entering to ensure the child’s safety and prohibit stranger abduction of children. Strict security measures will be observed at all times. Interactive Garden will carry a $1 million per occurrence liability insurance policy in the event of lawsuit.


Interactive Garden is geared for children 13 years old or younger who desire an imaginative, challenging, and fun environment in which to exercise, play, and explore. For safety, children must be accompanied by an adult in order to be admitted and adults are not permitted to enter without a child. Furthermore, each person admitted to the play park will receive a color–coded wristband identifying him/her with rest of the party. To further promote security, each person’s wristband will only be removed when the entire party is present together at the exit desk. Trained staff will supervise the play areas at all times to ensure adherence to the play park rules while assisting the children to maximize their enjoyment of the facilities.

There will be several play areas within Interactive Garden; the largest, a 5,000 square foot structure targeting children aged 4 and over, will be comprised of a series of colorful tubes, slides, ball baths, climbing structures, air and water trampolines, obstacle courses, ramps, and stairs. A smaller play area will cater to toddlers and consist of cushions, ramps, a small ball bin, and toys. To encourage active participation by parents, all play areas will have a visually open design with comfortable rest areas in full view of the play structures.

Interactive Garden will also be equipped with a smaller area of interactive games designed to promote eye and hand coordination. This area will include the “Magic Keyboard”, a unique piece of musical play equipment specifically designed for Interactive Garden parents. Children can also play several games of skill to win tickets redeemable for prizes. There will also be a snack bar with seating for 100 to 125 customers at a time. It will serve food and beverages that appeal to children and parents such as pizza, hot dogs, salads, sandwiches, popcorn, pop, fruit juice, cappuccino, cake, and ice cream. In addition, Interactive Garden will have a merchandise counter with small souvenirs emblazoned with the Interactive Garden logo such as T–shirts, sweaters, and hats.

Interactive Garden will have six private party rooms and will offer packages for birthdays and other special occasions hosted by staff members, significantly reducing the hassle and mess for parents. The design of the rooms will allow for groups as large as 30 children at a time. For family celebrations, Interactive Garden will offer three birthday packages for parties of 8 of more, consisting of a two hour limited time of play, birthday cake and ice cream, free game tokens, and, depending on the type of package, pizza or hot dogs, party favors for the guests, and a special gift for the birthday child.

Interactive Garden will strive to appeal to value–oriented customers who desire hours of entertainment for their children at reasonable prices. Interactive Garden will be competitively priced at $4.95 for unlimited play which is comparable to other forms of entertainment. However, the distinguishing feature of Interactive Garden will be its clean, safe, secure environment for children to play in while parents can either relax or participate in their child’s activities.


Pricing & Profitability

Interactive Garden will derive its sales revenues from admissions, games of skill, restaurant/snack bar operations, birthday party packages, and gift shop and souvenir sales.

Admissions and Games

Admission fees will be $1.99 per child (ages 1–15) which includes unlimited play in all of the play areas. Adults will be admitted free of charge and encouraged to play in the play areas with their children. This price compares favorably to other forms of family entertainment such as movies where both adults and children must pay admission. The goal of Interactive Garden is for a visit to the play park to become a regular family event. Reflecting this goal, a frequent user card will enable a customer to receive discounts off future admissions to Interactive Garden after a specified number of paid admissions to the playpark. Statistics from the corporate location show the average child returning seven times per year. In addition, Interactive Garden will offer group discounts for groups of 12 or more at $3.35 per person to encourage day care centers, youth group activities, and summer camps to visit the playpark. For larger groups of 30 or more children, Interactive Garden offers a special package at $5.00 per child that includes unlimited play in the playpark, two game tokens per child, a slice of pizza or a hot dog, and a beverage.


Interactive Garden will reach its target customers through such advertising media as local newspapers, local television, and direct mail campaigns. Local television advertising has been found to be very effective in reaching the target market segment of children 13 and under, so we will focus our efforts here. The advertising and promotion campaign will be funded through operating cash flows and will build upon the close proximity of the store to the corporate location. In addition, the franchisor will assist its franchisees through regional advertising programs to obtain synergy among all franchisees within the region. Interactive Garden will initially promote its concept through a Grand Opening advertisement campaign employing an invitation–only free evening for local business and government leaders and their children as well as local radio coverage. The franchisor will assist in the preparation of initial advertising and scheduling of promotions.


Competition in the children’s recreation and entertainment industry consists of a highly diverse group of children’s activities, including television, libraries, YMCAs, health clubs, parks and other recreation centers, movies, the zoo, and related activities. All of these activities provide for enjoyment by both the parents and the children. However, an Interactive Garden indoor recreation facility offers a safe, clean indoor environment for physical activity that is specifically designed for children. It provides children with the security and the skill development opportunities parents desire. Presently, there are no indoor children’s playgrounds operating in the Portage area. Within a 25–minute drive from Portage are three primary competitors. After reviewing the characteristics and environment of each of these competitors, we believe that Interactive Garden offers several advantages over the existing competitors. First, Interactive Garden offers the lowest admission price, charging $4.95 per child, of any establishment dedicated to providing an extensive indoor recreation facility. Second, Interactive Garden encourages parents to participate in their children’s recreational activities through a careful layout of the play park which ensures high–visibility of the play areas and close proximity for the parents. Third, Interactive Garden is the only indoor recreation facility that provides such unique play equipment as the Magic Keyboard, an air mattress, and games of skill that are specifically designed to promote child development. Fourth, Interactive Garden goes to extra lengths to ensure the safety and security of the environment by providing such extras as CPR certification for all employees of a certain level, video monitors of the entire play park, and strictly controlling the entrances and exits to Interactive Garden. Lastly, with the corporate Sweet Childhood USA location being so close to Chicago, name recognition should be high, as many of the potential customers have already been to the existing Interactive Garden location.

The other Interactive Garden’s primary focus is on an extensive array of video games, mini–rides, interactive skill games, a puppet show, and food. Although it has a small play park area for toddlers, this location is primarily dedicated to food service and games. Consequently, it serves as a destination business for pre–planned visits, centered around its food service for family outings and birthday parties. It is an open layout with more windows than other children’s entertainment centers and has the atmosphere of a large noisy cafeteria. It charges no entry fee, but maintains high prices for its pizza, ice cream, and beverages. Catering more to parents, it allows smoking and serves alcoholic beverages along with pizza, hot dogs, and nachos. It does not instill a sense of security for the parents, nor does it provide the challenging and stimulating environment that children desire.

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Childrens’ Indoor Recreation Center

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