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TOPIC: Starting out, do I have the right location?

Starting out, do I have the right location? 24 Feb 2007 04:42 #14490

  • HollywoodOz
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Hey all,

I'm in the final phases of my business plan for a single screen, and wanted some input on a few numbers that I'm looking at. I've read as many forum threads as I can find, but bottom line, I just need an opinion on two things - my lease, and my location.

Here's the skinny - I'm in a city of 180,000 people, with a 20 screen megaplex to the east about 12 miles away, and a rotting 6-screen to the north about 4 miles away that could close at any time, especially as it's owned by the same company that has the megaplex. Both play 1st run commercial flicks with the occasional arthouse crossover.

Where I'm thinking of setting up my single screen is in the southwest, in a tourist/fishing village of 25,000 people, all squished in within 1.5 square miles (god bless high rise condos). Another mile beyond that you've got the same number of people again, making a 50,000 squish within a three mile area.

The punchline? The nearest dedicated indie/arthouse screen is about 45 minutes away.

So right about now I'm feeling good about the potential of the area, and then I find what I think is the perfect location. It's an olllllllllllld church building, heritage-listed, been empty for a while and the landlord had been planning to knock all of it but the facade down to put up condos (damn you, condos!) - but I floated my concept past him and he's into it enough to put off his plans, and even offer me a 5-year lease with two 5-year options.

So now comes the tricky bit - the building needs some big repairwork, and he doesn't want to pay for all of it. It has no HVAC, no sprinklers, and a bow in the floor. I'd also have to expand the bathroom considerably. Structurally, however, it's sound. It's been about for 113 yrs, it ain't about to fall over now, even if every corner and straight line in the place is funkified, and down the line there's room to expand it (if I can get city council to forgive the lack of parking).

So the landlord wants me to take on a lease for $1 a sq. ft. per month (we're talking a 3500 sq. ft building). For context, about two blocks away, on the waterfront, similar sized buildings go for three times that.

Alternately, I can get the landlord to do all renovations himself, but he'll want to bump the rent up a grand per month, but at least my start-up costs would be smaller...

I figure I can get maybe 90 seats in the main part of the building, and because we have nice high ceilings and a spot to put a projection room that's nice and high off the ground, I don't think I have to worry about risers. Much.

So basically, I need to fork out for HVAC and sprinklers, do some mad drywalling and soundproofing, prop up the back several rows, install the audio/visual gear, seats and screen, and we're ready to go.

But here's the dilemma - is $3500 a month in rent likely to be tough for a 90-seater running 2-4wk old arthouse flicks to cover?

There's a definite need for the venue in this part of town, as the locals hate going into the downtown sprawl and don't bother if they can help it, and I've no doubt I'll do strong business due to the fact that the local tourists present good opportunities for daytime traffic, which most theaters don't get...

But what do you guys think? Is that rent going to hurt me? Should I maybe backload the lease and see if he'll agree to start the rent out low and rise it over five years?

Your information in other threads has been like a college course in Cinema Operation 101, so thanks for helping out. You've already saved me from making some huge mistakes.

I appreciate your time and opinion.
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Re: Starting out, do I have the right location? 24 Feb 2007 08:36 #14491

  • slapintheface
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1st Question would be what is the ticket price at the other 2 locations.......Are YOUgoing to run the place full time/
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Re: Starting out, do I have the right location? 24 Feb 2007 10:15 #14492

  • HollywoodOz
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The others charge $10.75 (the big one) and $8 (the 6-screen).

I'm planning on going for around $7.50 a ticket, with the obvious discounts for seniors and kids. I'm also planning on offering an expanded menu and outdoor films on the waterfront on weekends during certain times of year.

And yeah, I'll be there full time.
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Re: Starting out, do I have the right location? 24 Feb 2007 22:43 #14493

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lets say you can sell 500 seats a week at $7.5o that is=$3750 your take 30% 1,125 per week @4 weeks =$4500 month.....

thats 2000 people a month @1.75 per cap=$3,500 less codt of goods leaves you with about $2,600 mo

that leaves you with $7,100 a month
The question can you sell 500 seats a week on a 90 seat house which meansyou can only sell about 75 seats per show ....
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Re: Starting out, do I have the right location? 24 Feb 2007 22:45 #14494

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BEST case is break even to a small profit!

Sorry ....just MY OPINION!
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Re: Starting out, do I have the right location? 25 Feb 2007 00:32 #14495

  • Ken Layton
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Rent's too high for a single screen and your seating capacity is too small.

I don't see how you can make it.
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Re: Starting out, do I have the right location? 25 Feb 2007 01:05 #14496

  • jacker5
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Wow 90 seat single screen that is very small. Single screens are usually min. 200 seats. people originally buy a single screen in the hopes of someday splitting.
I think with all the competition and limited potential you should walk away from this and search elsewhere!
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Re: Starting out, do I have the right location? 25 Feb 2007 02:15 #14497

  • HollywoodOz
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Still negotiating the lease, so we'll see where the landlord can come down to.

Thanks for your input, guys. It's appreciated.
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Re: Starting out, do I have the right location? 01 Mar 2007 16:34 #14498

HollywoodOz - We have some wonderful seats for your theater. Check out our website and give me a call if you have any questions. www.centralseating.com
800-936-1433
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Dean Austin

[This message has been edited by Centralseating-Dean (edited March 01, 2007).]
Central Seating
a division of Wyngate Int'l
800-936-1433 Phone
866-443-0104 Fax
www.centralseating.com
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Re: Starting out, do I have the right location? 02 Mar 2007 12:53 #14499

  • Mike
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Sounds high rent to me. The 500 tiks per week should be no problem but one screen is always daunting. Don't forrget the goal is to make money. Room size is not too small at 90, there are plex-a-plenty with a 50 seater thrown in, but as your only screen it is too small because you'll sell out when remotely hot pics show up. More screens. Lower rent.

Michael Hurley
Impresario
Michael Hurley
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Re: Starting out, do I have the right location? 06 Mar 2007 02:48 #14500

  • HollywoodOz
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Not really bothered about the lower capacity so much, but the rent was a little on the high side. Basically we had the option of lower rent if we forked out for construction, or higher if we didn't and instead backloaded things.

But it was all moot in the end - a change in 'use' for the location triggered a range of inspections from various city departments that spotted a host of things the owner needed to upgrade to bring the building up to code. Instead, he's opted to knock it over and build condos.

Would have been a great location, but it wasn't meant to be.

Still, if there's one thing that always seems in plentiful supply, it's abandoned theaters...
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