Everyone knows Dave and Busters. It’s a rare destination for good food, drinks, and of course dozens of video games and games of skill like basketball or Skee-Ball. This is also one of those rare destinations beloved by adults, teenagers, and kids alike.
How much does it cost to open Dave and Busters? You’ll need to be able to finance between $4 million to $6 million per location to open a Dave and Busters. Dave and Busters is open for franchising but there is a catch: you can’t franchise them in the United States and Canada at the time of writing. However, you can still open a Dave and Busters in other countries.
Still interested in understanding the startup costs and fees associated with Dave and Busters? Then read on as I break down the pros and cons of this business. Take our 7-minute quiz to find out if this franchise is right for you.
- Financial Requirements and Fees
- Average Sales / Revenue per Year
- Dave and Busters Franchise Facts
- How Much Does Dave and Busters Make in Profit?
- Advantages of a Dave and Busters Franchise
- Challenges of a Dave and Busters Franchise
- Is the Dave and Busters Franchise Right For You?
Financial Requirements and Fees
As mentioned above, Dave and Busters is open for franchising but not in the United States and Canada. To franchise, you must be able to finance between $4 million and $6 million per store location. Other requirements include presenting a detailed business plan, a market analysis, and a profit and loss statement. You’ll also need to sign sign a disclosure form and formal application form.
Average Sales / Revenue per Year
The total revenue for Dave and Busters that were generated in 2021 was $0.44 billion. There is a 67% decrease compared to the previous year’s revenue of $1.35 billion due to the number of store closures because of the pandemic. But with government lockdowns easing around the world, Dave and Busters should see bounce backs in revenue over the next 2 years.
As an added indicator of longterm believe in the companies financial performance, Dave and Buster’s announced a $100 million dollar share buy-back program. A share buy-back is an event when a company purchases a certain number of its own shares on the open market. In this case, the company is purchasing shares of ticker symbol PLAY on the Nasdaq Exchange.
Generally speaking, if a company is buying back their own shares, it means management feels like their company is undervalued. This is a positive indicator of the companies future revenue and profits.
Dave and Busters Franchise Facts
|Incorporated Name||Dave and Busters Inc.|
|Industry||Arcade and Restaurant|
|Subsector||Food and Beverage|
In the 1970s, James “Buster” Corley had a restaurant in Little Rock, Arkansas. Right next to it was a game parlor known as Cash McCool’s owned by David Corriveau. Both business owners noticed how their customers would shift back and forth their establishment, enjoying some games and then going back to Busters for drinks. It was then that they decided to merge the two businesses. After a coin toss that decided whose name goes first, the first official Dave and Busters opened in 1982 in Dallas, Texas.
In the beginning, Dave and Buster’s operated just like any arcade game with the use of coins. But as the years progressed, so did their technology. Coins were replaced with the use of power cards that enables customers to use play their games. Power cards are essentially credit card that can be used to play games inside Dave and Buster’s. Games range from the classic arcade ones like Pac-Man, Skee-Ball to billiards, bowling, and virtual reality ones.
Dave and Buster’s also has an extensive food and beverage menu. They have appetizers to entrees, desserts and even booze-free beverages for kids. They also have Happy Hours for adults with their hours varying for every location. Alcoholic drinks range from cocktails, draft beers, and wine by the glass or bottle.
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You can also watch your favorite sports game at Dave and Busters. A huge TV screen at the venue lets customers watch their favorite scheduled sports games. You can check out their schedule of events here.
Dave and Busters is also open to cater to events such as kids’ birthday parties, company events, and team building. They also offer rewards cards so you can use that to receive special deals with them.
To franchise a Dave and Busters, you must fill up their franchise questionnaire here. The approval process can take up to six weeks while the timeline from receiving the application to signing of the final contract can take up to 20 weeks. You will also be assisted throughout the build-out process.
If you would like to do business with Dave and Busters other than opening a franchise, they’re also open to real estate business. If you have a lot that you’re willing to sell or lease to them and can fit their requirements, you can contact their development team. At present, Dave and Busters is headed by CEO Brian Jenkins and they’re headquartered in Dallas, Texas.
How Much Does Dave and Buster’s Make in Profit?
For the third quarter of 2021, Dave and Busters have reported a net income of $10.6 million. These are strong results compared to the previous Q3 2020 results that handed the company a net-loss of $48 million.
Fortunately, Dave and Buster’s management sees traffic and revenue strengthening. The company is also anticipating opening 1 – 2 more stores over the next 12 months. Any positive news like this after a difficult 2020 is welcome.
Advantages of a Dave and Busters Franchise
There are many advantages when it comes to running a Dave and Busters franchise in your area. Here are some you can expect:
Dave and Busters caters to a wide range of customers. You can bring kids in there (provided there is a legal guardian for every 6 underage persons) and host birthday parties. You can have young adults and even older folks to either enjoy the games or the drinks. It’s like a hub for everyone and that’s one of the biggest advantages in franchising Dave and Busters. You get to attract a lot of age groups in there.
Dave and Busters may be popularly known as a restaurant and arcade but it’s also sports bar. There aren’t a lot of venues that can house all 3 at once. This helps you attract customers who want the vibe of attending a live sports event without having to travel. It’s a lot cheaper to visit Dave and Buster’s than buy a ticket, pay for parking and buy food at at a sports arena. As a result, a short trip to the neighborhood Dave and Buster’s is viewed by many consumers as a value play.
Dave and Busters are considered a classic. They’ve been around since the 80s and 90s and it looks like they’re just continuing to evolve adding more new games and getting in more customers. They’re also well-known so it’s not difficult to bring in customers to your location.
But don’t worry, Dave and Buster’s isn’t just resting on nostalgia. They’ve made some modern adjustments that help improve the companies bottom line further in ways you wouldn’t expect. One example is with the traditional printed tickets that were rewarded to players that could be redeemed for toys, stuffed animals, and candy. At the time of writing, all Dave and Buster’s locations have moved to digital tickets instead.
Challenges of a Dave and Busters Franchise
Businesses, even those that have been operating for a long time, have their own set of challenges. Here are a few to prepare for when you franchise with them.
It’s true that Dave and Buster’s has adapted well to changes over the past few decades. But the challenge would have to be keeping up with the consumer trends so the business doesn’t get left behind. This includes being updated constantly with what’s new in the gaming industry to be able to include new arcade games to have customers coming back for more.
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Franchising Not Available in the United States
It’s kind of a bummer that Dave and Busters isn’t available for franchising in the United States. You may still bring the franchise outside of the country but that can be quite a hassle since not all countries allow a foreigners to open a business without partnering with a citizen of that country. You would also need to find an economically stable country to open the business.
Is the Dave and Buster’s Franchise Right For You?
If you’re planning to open Dave and Buster’s outside of the United States and you have the financial means to do so, then it’s probably a good idea provided you check out the factors that affect your revenue such as competition and location. You’ve also got to find a country with an appealing location. Some countries that come to mind include the United Arab Emirates, United Kingdom, or even Mexico.
I also suggests reviewing the quarterly revenue and sales figures for Dave and Buster’s to ensure they emerge out of the recent pandemic strong. With so much going on with the typical consumers financial situations, global economic events, and changes in technology, it could make sense to see how things play out with the business.
What is an alternative Dave and Busters franchise?
One entertainment, food and beverage business you can franchise is Topgolf. While Topgolf may not have the same number of video games, but they providing tons of different golf games to players. They also have a restaurant / bar, you can book the place for an event such as watching favorite sports game with friends.
At the moment, Topgolf is open for franchise internationally. No official cost has been released but expect the financing to reach $18 million (at least) to open a single location. As you can see, the investment level is significantly higher at Topgolf. Are you ready to open your Dave and Busters? I hope this guide helps you make an informed decision.