Playtime For Kids At Monkey Joe's

Parent of Moe's Southwest Grill looks for revenue bounce with stake

(Wednesday, September 20, 2006) - When you think Raving Brands, you think food, fast-casual, sitting down to eat at Moe's Southwest Grill, Boneheads and now Flying Biscuit.

So what in the world is Monkey Joe's — a place where kids bounce endlessly on inflatable indoor playgrounds and parents amuse themselves on nearby widescreen TVs — doing in the company's portfolio?

Giving Raving's franchisees a choice beyond its core food business, says Steve LaMastra, the company's president and chief operating officer. As Raving tries to grow nationally, it has found that Monkey Joe's is an attractive alternative for investors who may want some diversity in their holdings.

"It's a much lower-cost-investment concept and the fact that it is not a food service business appeals to our franchisees," LaMastra said.

Raving Brands bought 50 percent of Monkey Joe's last year from founders Joe Wilen and Mel Silverman. Wilen and Silverman own the other half of the business.

Wilen said there's another reason Raving Brands' interest in his business was piqued: return on investment at Monkey Joe's ranges from 18 percent to 20 percent.

"The ROI is very reasonable and very attainable," he said with pride.

And it's in a field that has room to grow, franchising experts said. Outside of the big amusement parks like Six Flags Over Georgia or Chuck E. Cheese, the national chain known for its pizza parties and high-decibel, kid-friendly atmosphere, there are few places like Monkey Joe's.

"I've always liked this segment because nobody owns it," said Tim Mescon, dean of the Coles College of Business at Kennesaw State University. "I'm always asking, 'Who is going to have the big concept that becomes the national leader?' "

Locally, Monkey Joe's competes against both mom-and-pop start-ups and small chains such as Kangazoom, Jumpin' Jamboree and Bounce-n-Bob's. Its biggest competitor, though, may be Pump It Up out of Pleasanton, Calif., which has 100 stores or so, including several in metro Atlanta.

To challenge Pump It Up, the plan of Monkey Joe's is to get into high-visibility retail centers, Wilen said. And that is where partnering with Raving will really come into play, he said. Raving, under founder Martin Sprock, is good at finding commercial real estate.

"We think being in the retail environment will cost a little bit more, but we'll make it up in revenue," he said.

At eight stores, Monkey Joe's has some work to do to be a national player. Started just a year ago with a store on Collier Road in Atlanta, the plan is to have at least 100 locations in the next two years, Wilen said.

The big target is the Northeast and Midwest, where Raving officials think the cold weather will make an indoor playground especially popular.

"We think there is great potential for growth there," LaMastra said.

Wilen and Silverman opened the first Monkey Joe's last year as Crazy 2, a reference to the chance both were taking on the business.

Designed as a fun environment away from the heat that could also hold birthday parties, Monkey Joe's is filled with color and lots of inflatable beach balls, palm trees and animals. Kids play on slides, in forts and through tunnels.

They also exercise something Wilen said he strongly believes in.

"Our core interest is the development of the child," he said. "We are giving them a way to burn off energy."

Sprock bought only half of Monkey Joe's because neither he nor Wilen nor Silverman were quite sure how the chain fit in with Raving Brands.

"In the very beginning we didn't know what we had," Wilen said. "And since we are not in [Sprock's] core competency, we agreed to a different strategy than he had with other businesses."

Wilen said he, Silverman and Sprock will take a look at how the business develops to see whether there is interest in making it wholly owned by Raving or selling it to another company.

In the meantime, they are thinking of ways to improve the business and make it stand out, like cross-promoting its offerings with other Raving Brands and increasing revenue streams with new activities like face painting.

"The best thing we need to do every single days is never quit running, because if you do, somebody is going to catch you," Wilen said.

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