60-Second Business Plan: Bye-Bye, Bogey
60-Second Business Plan
THE PITCH: Every year two million people try out the game of golf, according to the National Golf Foundation. But about just as many end up flinging down their irons because the game's too pricey, they can't find the time, or they can't hit the dang ball straight. Enter Parmasters president Tom Matzen, who aims to lead a whole new generation of duffers onto the greens -- or at least into his new national franchise of golf training centers.
He and his partners, including Scott Hazledine, a Class A PGA pro, contend that Parmasters' focus on teaching gives it a big leg up. They're even offering Tiger Woods wanna-bes a secret driving weapon -- the so-called straight-line swing inspired by physicist-turned-golfer Jack Kuykendall -- along with a money-back guarantee that Parmasters grads will see a 25% drop in their handicaps. "There are thousands of driving ranges and all kinds of courses, but no one's tackling the training side. There's no dominant player," says Matzen, a former consultant for Puckmasters, a Canadian franchise of hockey training camps.
The five-employee company -- Parmasters Golf Training Centers LLC -- incorporated in Vancouver, Canada, a year ago and has already sold regional franchising rights on the West Coast and in the Midwest. The first Parmasters center is slated to open in Pittsburgh early this fall, with at least 10 more clubs expected to be up and running or under construction by year-end 2003. On the outside the 10,000-square-foot centers will look like traditional clubhouses. Inside they'll feature a short-game practice area, driving nets, and virtual-reality golf booths where Parmasters players can pretend to putt at prestigious courses like Pebble Beach. Afterward, members can grab a bite at the center's snack bar or check out the latest golf guru's advice books in the pro shop.
Matzen is counting on the sale of charter memberships to avid golfers to supply a big slice of revenues. The charter package, which will be priced at $995 for a single membership, includes unlimited access to the driving nets and practice area, plus discounts on lessons and pro-shop and cafÉ purchases. Novice duffers, meanwhile, can sign up for an eight-hour Straight Line golf clinic for $249 or a 24-lesson series for $750. And for enterprising types, Parmasters clubs will be offering a $295 group workshop on the art of doing business on the golf course. All told, Matzen is projecting that the typical Parmasters franchise will bring in $2 million in annual gross revenues by its third year, 8% of which will be paid out in ongoing royalties to the parent company and regional franchise owners.
But will true golfers really want to pitch their chip shots indoors on clear summer days, when they could be out on the greens? Matzen hopes that the clubby yet affordable feel of the Parmasters centers will attract crowds year-round. "Golfers love a sense of community," he says. "If we provide that, that's a real significant opportunity."
The Quick Once-Over
Formal Projections: $225,725 in revenues, $20,548 net profit in 2001; $643,750 in revenues, $228,250 net profit in 2002; $1.4 million in revenues, $717,000 net profit in 2003
Long-Term Goals: 720 centers with combined revenues of $387 million by 2011
Total Capital Raised: $600,000, including $200,000 from cofounder Tod Wilcock and $400,000 from other private investors
Total First-Year Expenses: $205,177
Biggest First-Year Expense: Salaries and consulting fees
The Weigh-in: Our Panel Rates the Plan
Straight Shot or Slice?
WHO: Jim Holtgrieve, former CEO of a manufacturer's rep company in St. Louis and now a pro golfer on the Senior PGA Tour
RATING: 4.5 (on a scale of 1 to 10, with 10 being the highest)
"People who really love the game and who are very intense about the game will probably go to these places and use them to practice in the winter and do some chipping, but I don't envision the growth that they're talking about in five years. I don't see how they're going to get the general public to come into these places, particularly year-round.
"Inside, you don't experience the beauty of being outdoors -- you don't experience the elements. You go play golf to get outside. They're also going to try to teach this straight-line way of playing golf. I just don't think you can teach one specific way. Successful teachers adapt to people's physical capabilities, and they make the players work within themselves to perfect their swing."
WHO: Drew Sawyer, an avid 11-handicap golfer and partner at Parthenon Capital, a private-equity firm in Boston that manages $1.1 billion in assets
"This is a retail-based concept, and success or failure in retail is often attributable to location, location, location. If you're talking about being in an office area, where people could get in a quick practice session, that could be a good idea. But I can't see this working in Arizona. You never have any rain there, so why would you want to be inside? It looks as if they haven't spent a lot of time thinking about location.
"Everyone expected this boom in golf, but while more golfers joined the game, more left, and many players ended up playing fewer rounds. Why? People are too damn busy. I think this concept helps address how you get a club into the hands of a busy person. But they need to set up a bunch of these sites as company-owned stores and prove the concept."
WHO: Michael Seid, founder of franchise consulting company Michael H. Seid & Associates and coauthor (with the late Dave Thomas of Wendy's) of Franchising for Dummies
"Any time there's a market with the passion that there is for golf, there's an opportunity. And there is likely to be a market among people who want to play golf better. But there's no substance in the plan that justifies a national branded approach as opposed to a local approach -- in other words, going to the local pro to get trained.
"They acknowledge that one of their weaknesses is that they don't have an organization yet. Well, go develop one. As a franchisee, I don't want to be a guinea pig. Not only do I want you to have an organization up and running, but I want you to have several of them. The benefit of franchising is that the franchisor has done it, and he's done it more than once. They have to build some locations in a couple of markets and prove the concept."
WHO: Charley Biggs, cofounder and chief operating officer of eCamps, which operates 60 lacrosse camps nationwide and a Web-site portal for a variety of camps
"Trying to implement one learning concept across hundreds and hundreds of golf centers will be very, very challenging. The people taking the lessons are going to want a Class A professional. To get that many golf pros to teach the same methodology is going to be very difficult.
"I think Parmasters is probably going to do better in locations where it isn't competing with year-round play, but I think there's a market for it across the country if it targets the right people. The customer who will drive 75% to 80% of the revenues is going to be the avid golfer. The person who plays one to five rounds of golf a year isn't going to be a real revenue stream."
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60-Second Business Plan: Bye-Bye, Bogey
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