Colonial Bowling and Entertainment, located in Lawrenceville, N.J, underwent a transformation recently, from a traditional center to a Family Entertainment Center. WWII Veteran, Charlie Hock, opened Colonial Lanes in 1949. War-time friend Stanley Sheft Sr. took a passive interest in the center initially but became more actively involved over the years. The center grew from 12 to 64 lanes and took on several investment partners. Business flourished for quite a while, but as the operation entered the late 90s, the center experienced a rapid decline in league play.
Sheft’s son Peter became involved in the operation of the center after graduating college in the early 90s. Only a decade later, and after a loss of over 1,200 league bowlers, he realized that if they did not make some immediate changes, Colonial would have to close up shop or sell. It was at this time that Peter began talking with US Bowling’s Glenn Keenan, who made him aware of Pinz, an entertainment destination in Milford, Mass., that was transformed from a roller skating rink into a very successful bowling-anchored entertainment center. After visiting the facility, Peter concluded that he was in the right demographic location to make the same type of transition. Plus, he felt it was the only way that the center could survive.
Four years later, Peter and brothers Stan and Mike purchased the entire interest in Colonial Lanes and began the process of transforming this traditional bowling center into an entertainment destination, complete with an arcade and redemption center, laser tag, VIP rooms, full-scale restaurant and full-service bar.
An extensive amount of due diligence and research took place between 2004 and 2010. The Shefts would be investing a large amount of money and knew that they could not afford to make mistakes. Amusement Entertainment Management (AEM) was brought on board during this time, with Jerry Merola serving as the project’s development liaison. Within six months, Merola and the AEM team had a working strategy in place that included a plan for financing the project and a method by which to capture the target market.
The following five development steps were an essential part of the strategy and were critical in launching a Family Entertainment Center project:
1. THE COMMISSIONING OF A MARKET FEASIBILITY STUDY
The Sheft family recognized that they were venturing into entirely new territory, with a format vastly different from their 50-year operation. They were ultimately looking to understand not only the potential of the marketplace but whether they could reasonably complete a transformation with many of their existing assets. The modification would involve a tremendous amount of advanced planning, as it was imperative that the existing operation continues to remain open as long as possible to preserve cash flow. In addition, Colonial needed to make sure that its league schedules would not be negatively impacted by a short-term closure. Finally, the team wanted to ensure that the final formatting of the business continues to meet the mission and goals of its founders, Charlie Hock and Dr. Stanley Sheft, Sr.
With the recession still looming, securing bank financing would be both challenging and intense. The team devised a plan in which Colonial’s existing lender, along with the Small Business Administration, would recast and substantially increase borrowings to the entity to permit redevelopment of the site. Given the significant departure from its historical business format, Merola spent a significant amount of time with the client’s lender in an effort to provide data relating to industry benchmarks and current performance metrics, and even coordinated the bankers’ visit to a similar out-of-area venue to provide a more visual explanation of the proposed transformation.
3. MODIFICATION OF THE EXISTING STRUCTURE
The original bowling center spanned over 64,000 square feet. Recognizing the new operating model would require substantially fewer lanes, the team began investigating how the existing structure might be reduced in size to a more efficient 38,000 square feet. There were several design challenges in doing so, as the structure’s roof was not originally designed to match a smaller building envelope. A collaboration of architects, engineers, and designers produced a solution that permitted a portion of the building to be re-orientated on the site, saving almost $1.5 million in new construction expenses. The solution also permitted the construction phase to move forward without the typical “red tape” issues common to Northeast construction projects, as the project was ultimately labeled as a “renovation”.
4. SEEKING A BOWLING PARTNER
In an effort to further reduce cost, Colonial began working with US Bowling to determine how to best salvage existing pinsetters, ball return hardware, and “back-of-house” ancillary equipment used in the original operation. By doing so, the project’s capital budget was reduced significantly, allowing dollars to be redirected toward additional profit center attractions.
5. SETTING THE STAGE
The Sheft family recognized that the development of a hybrid center was a significant departure from their core business formula. In making the change, the family opted to augment their own skills by bringing in a management team specifically focused on day-to-day operations, with a particular eye towards large scale and event-based business. In addition, the development of Colonial’s fast casual restaurant would require a skilled food and beverage manager as well as a small team of marketing and sales professionals to launch the brand into the marketplace. The sourcing of an operating team has permitted the Shefts to focus their time on executive management duties, including further penetration into their target markets, fine tuning of labor and expense controls, and management of their other New Jersey-based businesses.
Since reopening, revenue has quadrupled, according to Peter Sheft. Bowling remains the highest source of revenue, but birthday parties are responsible for about 25% of the sales now. The complete remodel, including additional land purchased, cost about $8 million and took just over nine months to complete. Colonial was able to retain its core league structure while keeping weekends open for free play, birthday parties and group events.
“The entire process, from initial concept to final township approval, was very long,” said Peter. “But once we had our team of experts together and started the feasibility process, everything came together in an organized fashion that produced the results we needed. We have created new jobs and are a viable part of the community again. Our success is a direct result of having the right group of people behind us and the determination to reinvent ourselves in spite of the challenges presented.”
Tracy Sarris – Director of Marketing & Communications, Alpha-Omega Amusements & Sales
Bowling Center Management – Entertainment Center News – Winter 2012