SKY ZONE

Sky Zone's initial franchise fee sits at $75,000, but total investment varies widely based on park size (16,000-50,000 sq ft), with Item 7 likely outlining build-out costs that demand serious capital—SBA records show 72 loans averaging $1.84 million each, though a 9.7% default rate signals not every leap pays off. Ongoing fees include 6% royalty, 2% brand/ad fund, plus a $1,480 monthly technology surcharge, eating into margins. Item 19 shines here: average gross revenue clocks $2,238,859 and median $2,184,637 across units, but that 0% EBITDA margin underscores razor-thin profitability after expenses, parties, concessions, and merch sales.

System health shows mixed jumps—126 locations in 2023 shrank to 120 in 2024 (-5% growth), with just 1 non-renewal but 30 transfers suggesting owner shuffling, and 11 projected new units tempering optimism. Litigation notes reveal tensions: an affiliate brand sparked unfair competition claims, confidential info misuse, and a franchise termination over direct rivalry. For buyers eyeing entertainment plays, Sky Zone packs revenue punch in a family rec niche, but stagnant margins and brand friction mean scrutinizing local competition and ops expertise before suiting up.