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Author: CastlePass Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 401  
Subject: Re: Repurchase Date: 9/5/1999 12:15 AM
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rbbeatie - In response to games model and restaurant model -

You are right about your games model being simplistic but a good model is difficult. Since DAB uses a debit card pricing for each game is flexible. Games cost less for VIP's and parties get unlimited play for a specific time frame for a fixed price. Each game is also priced differently and the cost goes down when you purchase a debit card of higher value (ie $20 or more)

I also have been to several locations and most do not have 300 games more likely 150 to 225. The end result of your calculation is most likely right with most locations doing 4.8M to 5.2M in game sales. DAB's own financials report almost 50% revenue coming from games.

A model for the restaurant industry is just as impossible to create. Most projections I have done and seen done rely on sales patterns of existing stores or operations modified by the number of seats availble. More seats mean more throughput at peak times and thus more (theoretically) revenue. This has to be balanced with the higher investment cost for the space.

The upper limit of Food & Beverage sales will vary by the size of each location.

Here's a fact for you: Worry more about the game side and the bar. Food cost is typically 30-38% for a dining establishment of this type with liqour cost being about 18-20% and the cost of operating the games is much lower than that. Food keeps them coming, liquor makes them happy and games make the profit!

As for DAB II, It should be more profitable (percentage wise) than the larger scale model and fits into more markets than could support the larger facilities.


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