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Date: 10.02.2021
Author: INDESTROOM

Is It Profitable To Be An Escape Room Owner?

The escape room business is never boring.
The escape room industry is relatively new. 15 years ago it emerged in Japan and made its way into the Western and Eastern markets in the early 2010s. It’s a form of community entertainment where a group of players gets “locked” in a series of separate spaces. The goal is to solve numerous puzzles and perform tasks built around a certain concept within an established timeframe.

Escape rooms business is creative, in times fascinating — and currently in demand.
• Its pros: can bring high profits and pay off quickly.
• Its cons: a high entry threshold, the need for a constant and competent advertising campaign, the never-ending search for new scenarios, special effects, details, and trends.
Common types
72% of the modern escape rooms in the US alone are located independently. Some can be found within malls, arcade centers, and theme parks. The latter is more common for the mobile escape rooms — the emerging business model using modified or specially constructed V-nose trailers. Successful companies can become a brand and grow into a franchise.

Market overview
The escape room market is saturated, but not overly so. Even the COVID-19 pandemic in 2020 didn’t affect it much. Only 4,3% of facilities were shut down permanently or temporarily (taking the US market as an example). There still was a 2% growth within the industry. The current estimated number of escape rooms worldwide exceeds 50,000 venues.

Costs Of Creating Escape Room Business

The three pillars to base the initial investments on:
• the region;
• the concept:
• the implementation.

How is it formed?
The idea behind an escape room usually depends on pop culture trends and concepts with a cult following. Examples:

• Harry Potter’s school of magic;
• Game of Thrones;
• Pirates of the Caribbean:
• Alice in Wonderland;
• Hannibal Lecter’s chambers;
• Cursed tombs of ancient civilizations;
• Cyberpunk, steampunk;
• Survival horror;
• Zombies, vampires, werewolves.
Profitable escape rooms reference popular culture.
The main expenses will be formed from:
• venue rent;
• preparation of the premises and design;
• renovation, electronics, surveillance, security system;
• equipment, decorations, and special effects purchase;
• legal and insurance fees;
• licensing;
• staff salaries;
• maintenance;
• promotion.

Based on this list, a minimum of €8,000 is required to get the startup off the ground.
Things to consider
The answer to “How to do an escape room correctly?” is not always what you would expect.

• It doesn’t have to be in the city center. Escape rooms are not grocery stores or movie theaters, the foot traffic isn’t the main factor here. The venue still should be accessible by car and public transportation.
• Opening in close proximity to another successful escape room venue can be beneficial.
• 2-6 rooms and 25-60 m² per facility is optimal;
• 2-12 players per team is ideal;
• Stick with a single game concept at the start.
• Investing in merch with your venue’s logo is a good strategy. It can be used as free souvenirs for the customers;
• Targeted advertising is a must.

Turnkey solutions
Creating an escape room micro-universe is an art. That doesn’t mean that ready-made options should be frowned upon. Purchasing one saves time, money, and adds to the newfound entrepreneur’s confidence.

So, how to buy an escape room? The common options are:
1. Purchasing a franchise;
2. Purchasing a turnkey project.

The difference? Number 1 can be limiting. Franchise agreements usually mean:
• diminished creativity: a detailed set of harsh rules;
• shared information and a lack of total control;
• decreased revenue;
• dependency on the brand’s reputation.

Number 2, or turnkey escape rooms, is a fixed yet flexible solution.
• comes with a vast catalog of concepts with proven success among the customers.
Each includes:
+ an established legend;
+ a targeted audience in mind (age groups, number of players);
+ a puzzle plan (number of sections&hours, number of riddles, types of riddles (electronics, mechanisms, wow-effects, etc.).

• has a pre-made installation project for every concept:
+ number of rooms;
+ estimated space;
+ construction time (usually several days).

• includes logistics and additional services:
+ props;
+ up to 12 months of warranty;
+ special effects (lights, 3D sound, etc.)

• has a total cost pre-calculated and fixed.

After purchasing a turnkey escape room, buyers can add their own vision to the meticulously constructed world. Everything is synchronized in order to achieve seamless results. Game masters, engineers, designers, painters, and researchers all come together to create authenticity.
Profitable escape rooms reference popular culture.

Owning And Maintaining Escape Room: Expenses

Fixed monthly costs are necessary for normal functioning. They include:
• rent;
• employee payroll;
• utility bills;
• phone&Internet bills;
• taxes;
• bank transaction fees;
• advertising;
• building maintenance (cleaning supplies, air fresheners, control room, vending machines, First Aid kits, fire safety, etc.).

Сosts mostly depend on the number of rooms in the escape room and local requirements for business owners. Some countries don’t have a specific licensing system for escape rooms, some do. Safety permits, marketing requirements, tolls, waivers, and fees also vary from place to place.
Escape room surveillance logistics is essential.
Tips for making escape room business profitable

To avoid any missteps, don’t forget to:
• …be engaging. Your escape room directors are not common managers who briefly introduce the players to the rules. They are there to set the intrigue, to motivate, to promise both unforgettable experience and exciting outcome.
• …check your equipment regularly. The must be no glitches, malfunctions, dubious safety. Props must be quality-looking and clean.
• …collect, analyze, and follow your customers’ feedback.
• …be sure they’ll be back and recommend your room. Give away discounts, bonuses, special offers for larger teams and families.
• …make booking easy. Booking from mobile devices is gaining rapid popularity. So make sure it’s a priority when it comes to reservations.
• …stay in touch. Social media presence is the best way to advertise an escape room in all its glory.
Make your escape room unforgettable for your customers.

Is Escape Room Business Profitable?

The escape rooms world is booming and there’s no reason to believe this will change in the next 5 years. We’ve already discussed an important part of escape rooms’ appeal: easy pop-cultural referencing. From classics like Lord of The Rings to the most recent phenomena like Among Us, they give people the opportunity to live through those worlds.

So, how much do escape room owners make? Market leaders show 75% profit margins in the first two years, followed by 50-60% each year after that. The average venue in the US and Europe brings around €250,000-300,000 annually. America’s first escape room ever, PuzzleBreak, switched from a $7,000 investment to a $600,000 revenue in just 2 years.

The main source of profit obviously comes from how much you charge your guests. Smaller escape rooms in Europe can start with a €7 hourly rate for a person, but successful rooms can easily charge €40 for an hour.
A well-thought escape room markets itself.
Keep in mind that every concept is different. Some games can allow you to have up to 10 sessions daily, with a 2-12-people team participating in each. With that in mind, you are looking at an approximately €40,000 per month scenario.

Escape rooms business can be tricky but rewarding. Constant diligence and passion are important, but quality is essential. Turnkey projects created by professional suppliers make an excellent start for an independently operated venue.
Date: 10.02.2021
Author: INDESTROOM

Rating: 4,3

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Do you currently own any escape rooms?
Yes
Not yet
Which themed Escape Rooms do you already own?
Size of the space avalible for the Escape Room
Which theme of ER are you interested in?
Adventures
family
fantasy
film
historical
horror
Where are your ER located?/ Where do you expect your ER to be located?
city centre
shopping mall
city outskirts
residential
Population number in your city
< 50k
50-100k
100-300k
300-500k
What is your budget for Escape Room?
< 10000 $
10000-20000 $
20000-30000 $
> 30000-50000 $
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