Topgolf is an entertainment complex that is mainly a golf activity venue wherein you can either play golf solo or with friends. Rent is by the hour and the venue also offers food and drink. It’s an activity hub where you can bring the whole gang to enjoy a day out.
How much does it cost to open Topgolf? You’ll need an initial investment of $18 million dollars and in some cases as much as $50 million to open a Topgolf and entertainment bar. You read that right. This is one of the most expensive franchise opportunities you could join.
On the flip side, you could generate an enormous amount of income per year. Some Topgolf franchise owners have brought in more than $21 million annually from a single location. Topgolf has national and international expansion opportunities and are interested in expanding in the United States, Canada, UAE, and even Mexico,
If you’re not discouraged by the eye-popping financial requirements, this guide looks at the pros and cons of the Topgolf franchise opportunity and explain how to bring this entertainment complex to your area. Take our 7-minute franchise quiz to be matched with the right opportunity for you.
Financial Requirements and Fees
Since Topgolf has not disclosed any information as to how much it would be to franchise them, there have been estimates so many can prepare. According to the company, the average cost of putting up a Topgolf facility is $18 million. However, the total cost depends a lot on where you’ll plan to open the facility and real estate costs.
However, this probably depends on a lot of factors because the one in Las Vegas cost around $50 million while the one in Austin, Texas cost $15 million.
Average Sales / Revenue per Year
Topgolf reports generating $3.1 billion in revenue for the full year of 2021 which is a 97% increase from their numbers in 2020. No doubt the government shutdowns and restrictions slowed revenues during the 2020 time period.
Topgolf Franchise Facts
|Topgolf Entertainment Group
Topgolf was conceptualized back in 2000 by twin brothers Steve and Dave Jolliffe in London. The two were avid golfers and named the business “Target Oriented Practice Golf” wherein they placed RFID technology in the golf balls to measure the distance where the ball landed. This business garnered the attention of mostly non-golfers who found the activity as a game like playing darts. Eventually, the brothers added points to the game which made the activity enjoyed by many, even families.
In 2005, WestRiver Group invested and brought Topgolf to the United States where they opened their first location in Alexandria, Virginia. More companies invested in Topgolf and with a few upgrades and more locations opening, it became an entertainment venue with food, drink, more games, bays, and lounges.
Topgolf venues feature private bays for groups who can bring in their friends and families. The rent is by the hour and the rates depend on the day and time. There are several games you can choose from. Depending on the venues, you can also do more than just golf. Flagship venues like the ones in Las Vegas, Nashville, and Orlando have pools and a concert venue than can fit 900 people. Every venue also features food and drink.
As mentioned above, Topgolf seems to be open about franchising internationally rather than just in the United States. To franchise, you have to become one of their partners which you can apply for. The process first involves completing their International Franchisee Inquiry Form which can be filled up here.
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After submitting your inquiry and sending in your contact details, the Topgolf International team will start reviewing the form. They’ll go through all the necessary details and find out if you meet their requirements.
Once all that is settled, Topgolf’s Business Development team will then contact you through the email address you provided. Negotiations and meetings will then commence in which you can get to talk more about how to bring Topgolf to your location.
According to Aria Group Architects, Inc., an average Topgolf venue is 65,000 square feet that is 3 stories high with an indoor and outdoor venue. A Topgolf owner’s salary is also $58,000 per year according to one franchisee we spoke with. Of course, you could pay yourself more depending on the annual revenue numbers for the business.
Topgolf has won numerous awards for their services. They were awarded the US Best Managed Companies Program sponsored by Deloitte Private and The Wall Street Journal. They were also awarded as 2021 Diversity Jobs Top Employer. They’re also recognized by Forbes as one of the Best Large Employers.
Topgolf sees about 22 million guests annually. They’re also visited by non-golf players and golf players alike.
Currently, Topgolf is owned by Callaway Golf Company. Topgolf also has partners all over Australia, Mexico, Colombia, Central Europe, Greater China, South East Asia and the United Arab Emirates.
How Much Does Topgolf Make in Profit?
According to the Making of a Millionaire, a Topgolf venue can return around $21.5 million yearly. An estimated 50% of business revenue is generated through food, drink, and alcohol sales. The other 50% of revenue comes from renting out bays at $30 – $50 per hour to guests.
Advantages of a Topgolf Franchise
What advantages can you expect when you franchise Topgolf? Here are a few of them.
For All Ages
Think of it as a bowling center where people of all ages can come together and have fun. Topgolf is that entertainment venue where everyone can bring all their friends and family and enjoy a day out just playing golf. There’s food and drinks served and the facility is climate controlled so it’s always a nice day out whenever you’re at Topgolf.
To be able to franchise Topgolf and bring it to a location near you offers up an additional entertainment facility for people to hang out in your area.
According to company projections, Topgolf estimates they will increase to 165 locations by 2025. This more than doubles the current number of locations. More than 24 million individuals play golf each year. If the popularity of the sport was to increase, you could see the number of locations even further.
Affluent Customer Base
It takes money to golf. You need to buy clubs, balls, clothing, and other equipment to just get on the course before paying for fees. You might also sign up for training or classes. You may eat a meal and enjoy a couple beers while on the course.
Customers pay between $30 and $50 per hour just to rent a golf bay at the facility. According to reports, the average income of a serious golfer is more than $80,000 per year. This is much higher than the median income of the average individual at $31,133 according to the United States Census Bureau.
Customers don’t just play regular golf at Topgolf. The facility has different golf games to choose from that make hanging out with them more entertaining and fun. Some venues also have a pool that can appeal to families. And who knows maybe in the near future, since Topgolf is all about innovating and creating a live experience. This is a destination experience that goes way beyond just golf.
Topgolf isn’t only well known in the United States. They also have locations in Mexico, Australia, United Kingdom, United Arab Emirates, and Germany. They’re also soon to open in China and Thailand. The expansion and locations that are already present in certain countries goes to show how strong Topgolf is in making their brand known.
Challenges of a Topgolf Franchise
As a business that does things on a global scale, you can expect that there are challenges.
Not for Professional Players
You would think that a facility that’s catered to golf would be suited for professional players. It’s not. According to this user on Reddit, if you go to Topgolf to practice, it can be quite “useless” as the range is short.
It’s still a great place to hang out with friends and have fun. But as a place to work on your skills and develop into a professional golfer this may not be the place to spend your time. Topgolf is more like an amusement park designed to appeal to individuals that aren’t serious about the game.
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The same user on Reddit mentioned that Topgolf is just an expensive place to hang out. Even if you split the costs with your friends, it can still be quite expensive. Even the food has a premium price tag associated with it of more than $10 per menu item. The menu includes Asian sesame wings, flat bread pizza, and donut holes.
One review from Trip Advisor claims that Topgolf has bad service. The customer complained and was never given a response. The customer also emailed them but did not receive any update or feedback.
Is the Topgolf Franchise Right For You?
If you have the financial capacity to bring Topgolf near you then you might want to give it a try. It’s a high-tech facility that has room to grow and add more features in the coming years. Despite a limited number of bad reviews regarding food and service, these can be amended with the proper training. Also, the reality is that even the best restaurants and service businesses in the world have the occasional bad review.
What is an alternative Topgolf franchise?
One golf facility you can franchise is BigShots Golf. The venue also has games you can play with friends and family or you can enjoy just a classic golf game if you wish. They’re currently open in the United States and United Kingdom.
To franchise BigShots Golf, expect the investments to be around $8,560,250 to $12,037,604. Another option, of course, would be to open a golf course with a restaurant and bar. Again, you’ll be looking at a steep financial investment of at least $25 – $100 million or more depending on the price of the land to open a traditional golf course.
I hope this guide helps give you information you need on whether or not to take the next steps and file and application to become a Topgolf franchise operator.