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How to Open a Topgolf Franchise?

Updated: 4 days ago



Topgolf Venue Sketch

Topgolf has revolutionized the golfing experience, combining cutting-edge technology with entertainment and socializing. If you're passionate about golf and looking to invest in a lucrative business opportunity, opening a Topgolf franchise could be the perfect fit for you.






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What is Topgolf?


Topgolf is an innovative entertainment concept that has transformed the traditional golfing experience. It offers a dynamic environment where players can enjoy a fusion of golf, technology, and socializing all in one place.


At a Topgolf venue, guests can tee off from climate-controlled hitting bays equipped with state-of-the-art technology that tracks the accuracy and distance of their shots. Beyond golf, Topgolf venues typically feature a variety of food and beverage options, music, and games, creating a vibrant atmosphere that appeals to a diverse audience. Whether you're a seasoned golfer or a complete beginner, Topgolf offers an engaging and inclusive experience for individuals, groups, and families


So Topgolf is an entertainment venue that combines elements of golf, technology, and socializing to create a unique experience for players of all skill levels.





How to Select the Perfect Location for Topgolf Venue?


Choosing the perfect location for a Topgolf venue involves considering several key factors to ensure its success:


Demographics


Analyze the demographics of the area to understand if there's a sufficient target market for Topgolf. Look for areas with a mix of families, young adults, and corporate groups who are likely to visit and enjoy the venue.


Accessibility


Choose a location that is easily accessible by major roads or highways, with ample parking space. Accessibility via public transportation can also be a plus, especially in urban areas.


Population density


Consider areas with a high population density or significant foot traffic to ensure a steady flow of customers. Locations near popular shopping centers, entertainment districts, or tourist attractions can be ideal.


Visibility & Exposure


Select a location that offers high visibility and exposure to passing traffic. A prominent location with good signage can attract attention and draw in potential customers.


Space requirements


Assess the space requirements for a Topgolf venue, including the size of the property needed for the driving range, parking, and additional amenities such as dining areas and event spaces.


Economic factors


Consider the economic stability and growth potential of the area. Look for locations in thriving communities with strong local economies and disposable income.


Opening a Topgolf franchise is a rewarding opportunity for entrepreneurs passionate about golf and entertainment. With comprehensive support from the franchisor and a proven business model, you can embark on a fulfilling journey toward business ownership and success.


Meeting Topgolf Requirements


While Topgolf doesn't provide specific requirements for locations in the United States because they are taking care of the operations part (See next chapter), they do outline specific requirements for international Topgolf venues.


According to Topgolf for International Investors, the minimum requirements for franchise developers include, but are not limited to, the following:


  • Ability and willingness to open 5+ Topgolf venues

  • Strong financial backing (access to $150M+ in capital)

  • Experience in entertainment, F&B, and/or hospitality

  • Success in bringing other USA/UK brands to your territory

  • Experience with large-scale commercial real estate development

  • Strong local market knowledge and connections


Topgolf Franchise Costs & ROI


Topgolf offers two venue types depending on cost: Small-Medium and Medium-Large. The primary difference lies in the number of hitting bays, though larger venues may also provide additional space for events. The Medium size category can lean towards either the smaller or larger end, so dividing them into three distinct sizes helps better illustrate the differences.


Here's how Topgolf measures venue sizes:


Large Venue


  • Target population of >1 million in a 25-minute catchment

  • 100+ bays across three floors

  • Example: Las Vegas, NV


Medium Venue


  • Target population of 500K-1MM in a 25-minute catchment

  • 70-100 bays across 2-3 floors

  • Example: Baton Rouge, LA


Small Venue


  • Target population of 200K-500K in a 25-minute catchment

  • 30-60 bays on a single level powered by Toptracer

  • Example: Chattanooga, TN


The majority of Topgolf venues are categorized as large. Small venue costs typically range from $20-27 million, while large venue expenses can start at $30 million and reach up to $40 million. However, these costs can vary significantly depending on the location, as land in cities like Los Angeles or Las Vegas is notably more expensive than in Tennessee.

According to Topgolf Callaway Corp, the estimated payback period is 2.5 years, making it a highly favorable investment.


Understanding the Franchise Model in United States


Understanding the mechanics of Topgolf franchising in the United States is crucial. It's worth noting that Topgolf manages the venue operations so franchisees won't be involved in that aspect. That mean in United States you can be the landlord of Topgolf and not the owner of the operations.


The franchise concept operates with a unique dynamic: Topgolf manages day-to-day operations, while the tenant (Topgolf) covers all taxes, maintenance, and additional expenses. Lease agreements play a crucial role, dictating duration and terms. You have the opportunity to secure a six-percent annual return on your investment, along with various tax benefits. Additionally, you'll enjoy what seasoned real estate investors refer to as "WUM"—wake-up money that materializes regardless of whether you choose to change out of your sweatpants in the morning. An intriguing story in Golf Digest delves into this topic, particularly in Baltimore.


Another significant development is that Topgolf has requested incentives to construct venues in certain cities, such as Monroe County. This adds a layer of expense for those interested in becoming Topgolf landlords.




Conclusion


Opening a Topgolf franchise is a rewarding opportunity for entrepreneurs passionate about golf and entertainment. With comprehensive support from the franchisor and a proven business model, you can start your journey towards business ownership and success.


Get Consulting Services


If you require consultancy for the establishment of a new Topgolf venue or an EATertainment concept, feel free to reach out to us.


As a full-time Strategy and Management consultant, I offer comprehensive consulting services, providing valuable insights, market research, and strategic guidance to ensure the success of your venture.


Feel free to utilize the contact form on this website, and your inquiries will be directed to me promptly.






FAQs about Topgolf Franchise


How much does it cost to open a Topgolf franchise?


The cost to open a Topgolf franchise varies depending on location and size, but it typically ranges from $20 to $50 million.


What kind of training and support do Topgolf franchisees receive?


Topgolf franchisees receive comprehensive training and ongoing support in various aspects of operations, including marketing, technology, and customer service.


Can I choose my own location for a Topgolf franchise?


Yes, franchisees have the opportunity to choose their own location for a Topgolf franchise, subject to approval from the franchisor and meeting specific criteria.


Are there financing options available for potential franchisees?


Financing options may be available for potential Topgolf franchisees through third-party lenders or financial institutions. However, specific details would need to be discussed with the franchisor or a financial advisor.


How long does it take to recoup the initial investment in a Topgolf franchise?


The time it takes to recoup the initial investment in a Topgolf franchise can vary based on factors such as location, market demand, and operational efficiency. On average, franchisees may expect to recoup their investment within 2,5 - 3 years according to Topgolf Callaway Company.

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