$2 Million of Fun: Big Margins in Play Centers

Was it, was it, you know, these five locations not performing anything like the business that you bought, I assume? Yeah, they were, if I recall correctly, they were closer to the 35 to 40% range. Still amazing, still pretty great for, for this world.

But they weren't performing at the same level of top line as this location. So that's why the margin wasn't as high as what you see in my location. Wow. A bunch of just follow up questions to ask about the business.

But just, just talk to us about what it looks like to, to, to, to maintain the Capex. You know, I was actually quite surprised of how modest the maintenance capex was in the prior few years. Granted, it's a new, it was a new playground.

Yeah. But I mean they weren't spending more than like five grand a year on maintenance capex on the playground.

And so just super reasonable and modest. You know, it likely will increase a little bit as the playground gets older and just gets more beat up and worn. However, the, this business, this type of business is very Capex upfront heavy.

It's the initial Capex is what's really costly. The, you know, the, on the low end to open up a new location like this, you're looking at like 1.2 million and, and up to like one and a half million all in construction equipment, everything and so in the license.

But, but you know, once you've done that, made that investment, it comes back down to what I was mentioning, like, it's the lease payment, it's your, your payroll, and then like your insurance payment, like, which are the primarily pri. The primary fixed costs that are large. Everything else is kind of also pretty very predictable.

And on a monthly basis, it's pretty consistent. If you can get that top line up where, you know, to a certain level, you can start to see some significant EBITDA margins, the million bucks that.

Goes into building one of these out from scratch, at some point, your equipment won't just need to be maintained. It'll probably be obsolete. Now that could be a whole decade from now.

But, you know, playgrounds, like, you know, outdoor playgrounds at schools get refreshed completely every. I don't know how long, maybe 15 years. I just know that my childhood playground doesn't look anything like it did back then.

So do you expect when that time comes, that you can kind of do it incrementally? Kind of. Because. Because I. As I mentioned earlier, these systems are kind of modular in this interesting way, or do you have to wholesale knock it out and install an entirely new system basically and spend a million bucks to do so? It's the former. It's exactly what you described.