Would you like to earn over $800,000 in annualized profit while experience the joy of watching people struggle with mind-bending puzzles? You’re not alone.
Similar to Charlotte’s brewery explosion, you’re seeing the early stages of Charlotte’s escape room explosion. Why? It’s a heart-pounding, scary-fun business model (high margins, low startup costs).
Need proof? An escape room concept in Seattle called Puzzle Break started with $7,000 in investment from its founder Nate Martin and is now on track to generate over $600,000 in gross income this year.
What is an escape room?
It’s like the movie SAW, but without having to dismember yourself. You go with family, friends or coworkers and get put in a room with a complex puzzle. You have one hour to figure it out.
I love the concept. It was born in Japan and arrived in the U.S. in 2012. It’s nerdy, different and attractive to a wide market – friend groups, families, couples, corporate teams, etc. I’m bullish on experiences.
I’m not the only one who loves escape rooms.
MarketWatch recently reported that world-wide escape rooms concepts have grown from zero to over 2,800 within the past few years. There are 13 escape room concepts in the state of North Carolina and 5 now open in Charlotte.
Here are the Charlotte escape room concepts and how much they charge
Cost is $25 per player and there are 2 room options.
- Bio Hazard – Contagion has swept the country and people are counting on your team to find a cure.
- Aztec Ruins – Navigate the challenges of these ancient mysteries.
Cost is $28 per player and there are 3 room options.
- South End Psycho – Discover the next victim of this serial killer before it’s too late!
- Cell Block 704 – You and your team of secret agents have been arrested and now need to escape from prison.
- Trade Street Epidemic – Save Charlotte before a crazy lab assistant releases a deadly virus.
Cost is $25 per player and there are 7 room options.
- The 70’s – Old school game where all you have to do is find the key.
- Cabin in the Woods – Get out of this abandoned cabin, late night in the woods.
- Murder Mystery – Who committed the crime at the Sleepy Haven Motel?
- Queen City Heist – Do you have the robbery skills to break into the Queen City Bank and get past their state-of-the-art security system?
- Lost in Space – The space mission went wrong, and your team must repair the shuttle before you run out of oxygen.
- The Forgotten – The Canary Mining Company closed this mine in 1908, now your team is in charge of investigating why.
- The Final Sacrifice – Don’t let this church sacrifice humans (aka your team).
Cost is $25 per player and there are 2 rooms options.
- Detective’s Office – Crack the case on a series of thefts.
- The Dollhouse – Your team stumbles upon a quiet house in suburbia and you didn’t realize there’s a serial killer lurking around.
Cost is either $25 or $28 per player and there are 3 room options.
- Shipwrecked – A race to recover a supernatural relic on a sunken ship.
- The Residents – Investigation of a sinister haunting in an attic.
- Lucidity – A mind-bending alternate dream world in a pharmaceutical lab.
Back of the napkin math
Let’s take a look at a weekly P&L.
Revenue assumptions: 3 escape rooms. Each escape room is booked by 3 groups per weekday and 7 groups on Friday, Saturday and Sunday. Each group consists of 8 players paying $25 each. That’s a total of $19,800 in weekly revenue.
Expense assumptions: The location is in operation for 8 hours (Monday – Thursday) and 10 hours (Friday – Sunday). 124 hours of labor for two employees. Assuming $15/hr, you have a total weekly labor expense of $1,860. Additionally, weekly rent is $500, utilities are $200 and payment processing/tech is $500 (roughly 2.5% of revenue). That’s a total of $3,060 in expenses each week.
Bottom line: $16,740 in weekly profit. Annualized profit (before other expenses), $870,480.
That’s fun money, right? Kinda.
I didn’t factor in initial concept design costs, construction up-fit, costs for new puzzles, bookkeeping, insurance, janitorial – but, you get the point – these escape rooms can be huge cash cows. On the revenue side, I also didn’t factor in opportunities like merchandise and concessions.
But the big expense I didn’t factor is advertising. Because these concepts only have a set amount of game rooms and these rooms don’t change at great frequency, owners are forced to acquire new customers, constantly. In order to generate serious cash, you’ve got to escape high customer acquisition costs (pun intended). That’s why you see a focus on “corporate team building” – being the team building destination for all teams at Bank of America would be huge.
I’ve also noticed that all of the Charlotte escape room concepts use Bookeo.com as their online reservation software. Is this the company we should be investing in? Being the shovel salesmen during the gold rush wasn’t a bad gig.