Originally posted on FranchiseTimes.com
Like most brands that require large indoor spaces to operate, a tight and competitive commercial real estate market forced Urban Air Adventure Park to rethink its development strategy.
With 14 new parks opened this year and another five expected to open by the end of the year, the new strategy seems to be working.
Urban Air, ranked No. 135 on the Franchise Times Top 400, a list that ranks the largest domestic-based brands by systemwide sales, is anticipating having 200 open parks by the end of 2024.
“Obviously, the real estate landscape has been incredibly difficult and it required us to adjust some things. But we’re continuing to build momentum by being a little bit more scrappy with how we’re sourcing real estate,” said Ryan Slemons, the chief development officer for Unleashed Brands, the youth enrichment portfolio company that owns Urban Air.
New parks are coming to Arlington Heights, Illinois; Valparaiso, Indiana; Grand Rapids, Michigan; Nashua, New Hampshire; Henrietta, New York; Sioux Falls, South Dakota; Odessa, Texas; Short Pump-Glenn Allen, Virginia; Tukwila, Washington and Everett, Washington. The locations in Nashua and Sioux Falls will be the first in their respective states.
Slemons said Urban Air, which for the most part abandoned building parks in empty lots, looks for existing buildings between 25,000 and 50,000 square feet. But with a limited supply of big box space available in malls and outdoor shopping centers on the market, the competition to land those leased spaces is fierce, he said.
“We know that clean big box spaces are going to be tough to find now, so we’re being more flexible on the design front and how we fit our parks into tighter spaces,” Slemons said. “A good example of that would be ceiling clearance. We’re open now to taking over spaces with lower heights and have other constraints and redesigning some of our attractions to accommodate those spaces.”
Urban Air, which bills itself as “not just a trampoline park,” offers children and their families an assortment of other activities including indoor skydiving, go-karts, climbing walls, bumper cars, mini golf, bowling and laser tag.
The brand operates in 38 states as well as in Canada and Europe and generated $582 million in sales in 2023 when it opened 18 new parks and finished the year with 184 locations.
Urban Air is the largest brand owned by Unleashed Brands, a multi-concept youth sports platform company owned by Michael Browning Jr. that also includes Snapology, The Little Gym, XP League, Class 101 and Premier Martial Arts.
In its first acquisition since being purchased by private equity firm Seidler Equity in 2023, Unleashed Brands bought youth education provider Sylvan Learning in February.
Franchisees at five of Unleashed’s brands issued complaints against the franchisor, claiming Browning and Seidler Equity has ambitious growth plans for the parent company that are negatively impacting operators.
With an investment range of $3.6 million to over $5.6 million, Urban Air is one of the more expensive franchises to buy. Average unit volumes for the parks, depending on their size and location, is between $2.7 million and $4.4 million, according to the company’s franchise disclosure document.
Slemons, who previously worked the real estate development side of the business for retail giants GameStop, Amazon and Starbucks, said finding qualified franchisees is the easy part when compared to the challenges of securing prime locations to open new parks, said Slemons.
“With Bed Bath & Beyond in bankruptcy and Macy’s and other big box retailers closing locations, there is a lot of second-gen space opening up out there. But with new construction coming to a halt and a lot of people out there competing for available space, it’s become an extremely tough market,” Slemons said.
“The differentiator for us is we offer a strong proposition value to landlords because they know we can drive a lot families and foot traffic to their locations,” he said. “That more than anything has given us the leverage to win real estate bids and that’s allowed us to keep opening new parks.”