1. Executive Summary – 46 % vs 29 % EBITDA
Activate Games franchise charges zero royalty; independent operators pay 20 % content revenue share to third-party studios. Net result: 46 % EBITDA under franchise vs 29 % indie – a 17-point spread that compounds to $374 k extra cash over 5 years on a single 4-station arena.
2. Investment Table – Apples-to-Apples
| Model | Upfront | Monthly Fees | Support |
|---|---|---|---|
| Franchise | $58,700 | $299 flat software | 24/7, quarterly content, POS, booking app |
| Independent | $52,800 | $0 + 20 % content share** | Self-support, own branding |
| **20 % on premium VR titles = ~$8,200/yr at median volume. |
3. 5-Year Cash-Flow Comparison (4-Station VR Arena)
| Year | Franchise Net | Indie Net | Delta |
|---|---|---|---|
| 1 | $232 k | $186 k | +$46 k |
| 5 cumulative | $1.21 M | $836 k | +$374 k |
| NPV (10 % discount): franchise $432 k higher | IRR: 98 % vs 67 %. |
Excel side-by-side model downloadable from Activate Games website.
4. Support Matrix – What Do You Actually Get?
Activate Games Franchise includes:
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Site selection AI – footfall, income, competitor GIS model
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White-label booking app – Apple/Google Play under your logo
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24/7 call center – English, Spanish, Arabic
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Quarterly content drops – no additional fee
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Dynamic pricing AI – surge +20 % weekends auto-applied
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Group purchasing – hardware 8 % cheaper than open market
Independent: self-source all above; 20 % content share never disappears.
5. Territory & Exclusivity
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Franchise: exclusive ZIP code (15-mile radius), no additional units without approval
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Independent: open anywhere, but loses bulk pricing and co-marketing
Example: Dallas buyer locks ZIP 75201; second franchisee blocked for 5 years.
6. Risk Matrix – Failure Scenarios Modeled
| Scenario | Franchise Cushion | Indie Exposure |
|---|---|---|
| Footfall −20 % | Still breakeven month 12 | Breakeven month 18 |
| Content price +50 % | $0 impact (flat license) | −$4,100/yr |
| Hardware recall | Hot-swap at factory cost | Parts at retail + 6-week ship |
Monte-Carlo file available on Activate Games investor portal.
7. Exit Value – Multiple on SDE
Activate Games Industey VR FECs sell at 3.2× SDE (seller discretionary earnings).
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Franchise SDE yr-3: $260 k → valuation $832 k
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Indie SDE yr-3: $205 k → valuation $656 k
Franchise premium: +$176 k on exit.
8. Technology Moat – Why the Gap Persists
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0.3 mm tracking → higher repeat rate → lower marketing cost
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OTA updates → fresh titles every quarter → no content revenue leak
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Bulk hardware buy → 8 % lower cap-ex → faster payback
All baked into Activate Games ecosystem.
9. Legal – FDD, Territory, Transfer Rights
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FDD Item 7: exact upfront cost table, no hidden fees
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Transfer fee: $5 k (vs $25 k royalty brands)
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Renewal: 5-year term, $0 renewal fee if KPI > 90 % uptime
Review attorney quote: average $2,200 vs $5 k+ for royalty brands.
10. Call to Action – Lock ZIP Before Competitor Does
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Download side-by-side 5-year cash-flow Excel (franchise vs indie)
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Book 30-min Zoom with franchise director (English/Spanish)
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Secure exclusive ZIP code; only one per 15-mile radius
