FunZone Arcade will be attached to 60 Pizza Ranch restaurants at the end of 2022, after opening 18 throughout the year. Of that figure, about 30 are retrofits or additions to existing stores. It’s a massive jump from 2018, when there were just seven FunZone Arcades. In 2023, there should be between 15-18 arcade debuts.
Going forward, all new Pizza Ranch stores will automatically include a FunZone Arcade. But there’s a lot of demand among franchisees to add games to current stores, too. Souba wouldn’t call it a tricky process to tack on a FunZone Arcade, but the company does consider a lot of variables. For the most part, Pizza Ranch is either constructing an addition to the building or taking adjacent leased space in a strip center. A typical situation is a Pizza Ranch with 5,000 square feet, folding in a FunZone Arcade at 1,500 square feet. Because of lower labor and overhead costs associated with amusement, margins are quite favorable, making it an attractive investment for franchisees, Souba says.
“It drives traffic not only to the arcade, so we're picking up additional revenue there, but it's also driving traffic to the restaurant,” he says. “So we're seeing a nice lift in our overall business.”
In light of rising construction costs, Pizza Ranch is looking to rightsize its real estate footprint, but that doesn’t necessarily mean less square footage, Souba says. It could mean going with smaller dining rooms in favor of a larger arcade section.
The innovation is an example of what keeps Pizza Ranch growing, despite downward economic cycles. Adrie Groeneweg, who founded the concept in 1981 in Hull, Iowa, told FSR in April that he wants the company to reach 500 locations before he retires. That calls for a pace of about 25 annual net openings in the next decade, a mark Pizza Ranch would have to work its way up to.
But the foundation is being laid. Souba notes that Pizza Ranch opened its first location in Tennessee late in 2021, and the company is looking at several new projects in the state. In addition, the brand signed new franchise agreements in Oklahoma, which will be a new market for the chain.
“Growth is definitely on the horizon for us, and we’ll continue to be a growth concept,” Souba says.