Curt Skallerup had sold Altitude Trampoline Park, a brand he founded with Jeffrey Rutten and scaled to 96 units in six years, and began writing a book. One of his common principles, which he admits many don’t agree with, is he’d rather make 10 percent on $100 million than 50 percent on $1 million. Instead of chasing higher margins, Skallerup looks to cash, profit, and EBITDA as the avenues to make money. Simply, he’d prefer to be priced properly and get a flood of guests than have “11 and charge them $1,000 apiece.”
This was on his mind during Altitude’s growth spurt, when the company vaulted into the market’s second spot behind Sky Zone. It was a $3 million investment where partners had to have $1 million to get one open. Skallerup would meet with 100 people and be lucky if two could afford the franchise opportunity. So during that stretch, Skallerup began reaching out to less-pricey outlets. The sale to NRD Capital came in 2018. But legal back-and-forth didn’t settle until 2022. By January 2023, however, Skallerup was free from a non-compete and other agreements, and, in turn, could start exploring how he might materialize that vision.
Could he create an “eatertainment franchise” that bucked historic realities in this capital-intensive space? One, develop a “modular” approach where operators bought a franchise in a box, so to speak, and one capable of flexing to markets and needs, whether that meant 15,000 or 30,000 square feet, putting or shuffleboard? And by doing, lower the barrier to entry for a category that’s simply doesn’t generally franchise? Dave & Buster’s doesn’t in the U.S. Either do concepts like Topgolf or PopStroke.
Additionally, on the end-user side, Skallerup wanted to offer an experience that didn’t break the bank for consumers. Altitude, when he sold it, appreciated guest frequency of 1.3 trips per year. “So think about the pull through and the core competency of anything we’re trying to build is volume, volume, volume,” Skallerup says.
His answer was “Larks Entertainment,” which has since opened three locations—Kansas City; Cleveland; and Fairview, Texas (two corporate and one franchised), with Nashville; San Antonio; San Diego; St. Petersburg, Florida; Boston; and Atlanta on deck.
Three are currently in construction and pre-build stages, and Skallerup hopes another six will get there by year’s-end. Going forward, openings will heavily lean franchised.
To the earlier note, though, what’s made Skallerup’s latest project unique is its tailored approach. Each Larks includes a restaurant, choice of full bar or beer and wine, signature “Larkade,” and then franchisees can customize attractions. So far, there’s shuffleboard, putting, “Nexus by Gel Blaster” (biodegradable gellets that burst on impact, kind of like a milder paintball), “Obstacle Adventure,” and more-standard options like billiards, corn hole, Jenga/Connect 4, and darts.
The “franchising in a box” also applies to support. Skallerup says he wants operators to get recruiting, onboarding, and scheduling help as part of the deal so they’re not left to fend for their investment like some other franchises. Larks offers two-week training courses prior to opening, monthly visits after, and weekly calls with management. It helps with SBA lending. There’s construction resources. Real estate. “Everything you need,” he says.
“We found that that was a big gaping wound in the market is that nobody helped anybody get into property. They said do you want to buy our franchise, if not, go somewhere else. So we were trying to be much more helpful and make it much more affordable to get into markets.”
From a broader sense, Skallerup explains, the goal was to “serve the Dave & Buster’s world at a less expensive price.”
This strategy, he feels, presents Larks unique entry points: It can target smaller and tertiary markets (30,000 to 60,000 populations) since CapEx and startup costs don’t require massive windfalls of foot traffic to survive. The total investment needed to begin operation of a Larks franchise ranges widely from $1.36 million to $4.255 million, per its FDD. That includes $72,500 paid to the franchisor or affiliate.
This “modular franchising” strategy also means if there’s a Bismark, North Dakota, lead that doesn’t want to try shuffleboard, it can go with miniature golf. It can look at the demographic and competitive data and react accordingly. And on top of entertainment, Skallerup hoped to branch out from the kid-focused niche of trampolines. He often fielded questions in those days about where parents could get drinks? “And that probably wasn’t a great mix … drinking and trampolines,” he jokes.
Larks aims for $2 million, $3 million volumes at 25–30 percent returns. And it’ll get there, Skallerup says, by serving kids and adults with food, drinks, and a variety of activities.
Like Altitude, Skallerup believes Larks has the potential to scale quickly due to these levers, namely the fact it’s franchising. Brands like Topgolf, he says, aren’t franchisable due to their mammoth investments and how much business they need to flow through. Larks wants instead to lean on membership models, accessible pricing, and, again, the ability to fit itself into local areas so each store fills a specific void. Going into smaller towns, he says, puts the brand in a category of one. A location being plotted in Pullman, Washington, near Washington State University, for instance, has a historic bowling alley nearby. That’s pretty much it.
Because of this point, Larks must remain price sensitive so a family showing up, hoping to spend $150, doesn’t end up paying $250 and deciding to never come back.
“We want to be cognizant of that,” Skallerup says. “There are a lot more people who have $150 in their pocket they’ll spend every week on their family than $500 … That’s not our game. We want it to be a very uplifting and fun space where you can go.”
The company is pushing groups, birthday parties, and a well-priced alternative to competitors. Points range from $6–$14 on items like shareables and quesadillas, based on the market.
Skallerup doesn’t consider Larks a restaurant (too saturated a category). It’s an entertainment spot first that includes food and drinks. It encourages frequency through affordability and the aforementioned league angle. Those take some time to build, Skallerup says, but once they get going, they drive community beyond trial.
Compared to some of the large eatertainment concepts out there, which cost millions and pay back investment as they scale through corporate development, Larks wants to expand on partnerships through its franchise system. It works with “30 or 40 banks” to provide resources to operators looking to make a living, one store or beyond.
Larks, three units in, has spread across the map and will continue to do os. Skallerup says this scattered approach is a deliberate one intended to make a case for why it can work in North Dakota just as it would in New Mexico. Smaller markets, he adds, keep rent down, have easier hiring and HR issues, and offer the valve to speed growth through opportunity.
Operators also don’t need to bring in as much business to justify their investment; $150,000, $200,000 incomes look a lot different in a 30,000-population area than, say, Los Angeles. “Our goal is to create something where a family can make a very good income with payroll and the rest of it,” he says, “yet drive home some salaries. And in bigger markets, they can make a ton of money.”
The idea of opening on the fringes of massive DMAs isn’t new. It’s something chains from Texas Roadhouse to Chipotle have promoted in recent years. But Larks is, for starters, sliding into an eatertainment arena that hasn’t had as much success doing so (Dave & Buster’s a few years ago did try to go forward with a smaller-box strategy), and it’s ensuring enough agility in its offerings that operators aren’t going to try to fit Larks into the market as much as they can wrap the offerings around. That and the backend support, Skallerup says, will enable it to turn the growth spigot on and keep pushing.
“We want to make sure that the juice there to squeeze and the risk is worth the reward,” he says.
