The Entertainment Offering
The V is a 45,000 square foot multi-attraction entertainment complex targeting families, corporations and young adults. Amusement attractions offered by The V will include a 16 lane open play bowling center, 4 lane upscale private bowling lounge, 120 player station amusement arcade, rock climbing, mini-bowling, laser tag arena, multi-player game attractions, billiards, darts and shuffleboard. The V will also offer a casual dining and catering experience and provide dedicated private meeting space for corporations and groups and party rooms available to host family parties.
 
Location
Research indicates the Southwest Omaha corridor is well suited for a large format multi-attraction entertainment center. We intend to locate The V along the West Center Road corridor (defined as 120th to 168th street) in southwest Omaha. Recent re-locations of national retailers and one bankruptcy has produced an over-supply of large retail bays in the West Center Road Corridor thus creating an attractive opportunity for The V to locate within this high traffic retail trade area. The FEC's intended placement within this corridor will offer above-average accessibility to both local and regional residents, many of whom will visit retail establishments and cinema complexes in the corridor.  The intended placement is meant to take advantage of consumers already visiting or familiar with the trade area.
 
Demographics
The West Center Road Corridor and surrounding locale is extensively developed with a blending of residential, retail, commercial, medical, research, and office uses. A sizable and stable population and employment base and availability of high-speed road networks enhance project economics.   Approximately 242,000 people live within 5 miles of 132nd and West Center Road with an eight year historical population growth of just under 18%. Income levels are strong with median family household income of $82,000 in the 5 mile radius.[1] Furthermore, recent enhancements to road networks substantially increase The V’s market reach.
 
Business Plan
Ultimately the key to the success of multi-attraction entertainment facilities is strong guest service, high perceived value, and a willingness to constantly improve the entertainment offering. A well thought out business plan has been developed around these important goals.  A detailed development plan has been established with experienced firms selected to provide various pre-opening design and development services. The pre-development budget has been established at $400,000 prior to financial close. The pre-opening work plan will gear up six months prior to opening and is budgeted at $578,000.  
 
ESM Entertainment has developed a business plan that addressess the key areas including staffing, marketing, advertising, pricing, guest service and operating plans for food and beverage, amusement center and event/party center. The main element of the plan is the ability to attract experienced and motivated managers who will further develop the plans incorporated herein. Ultimately, 80 positions will be staffed by over 100 full and part-time employees.  The business plan is available upon request.
 
Critical Success Factors
The rationale for this investment opportunity is simple. A multi-attraction entertainment facility is positioned to attract a wider variety of guests and higher level of spending than a single offering entertainment format (e.g. bowling, movie, casual dining or water-park). The key ingredients for success in the FEC business exist with this opportunity:
 

1. Excellent location – The V will be surrounded by a strong demographic make-up and is easily accessible. The V is projected[2] to attract 240,000 consumers annually. 
2. Strong market position - The V will have a strong market position due to lack of direct competitive threats and significant barriers to entry including: high capital costs, limited real estate availability and complex development skills required.
3. Hot entertainment concept - The V entertainment concept is the hottest entertainment concept in the market. Facilities much like The V are being constructed in many places across the US. People want to be associated with this type of entertainment.
4. Unique design – A unique venue design is positioned to differentiate The V from other entertainment venues in the region.
5. Experienced development team – The development team is top notch - experienced in all aspects of planning, development and design.
6. Plan ready for execution - A detailed plan has been prepared by experienced professionals to develop, finance and operate the facility.

Due Diligence
Mr. Mike Zabawa is the project sponsor and equity investor. Mr. Zabawa has completed significant due diligence in development of this business opportunity. In addition to an investment grade feasibility study completed in 2007 by Amusement Entertainment Management[3], Mr. Zabawa has toured over twenty new large format entertainment venues including 5 Lucky Strikes, 3 Main Events and 16 independent boutique bowling lounges and FECs and interviewed the owners or general managers of eight of these facilities.  Mr. Zabawa attended three tradeshows (BowlExpo 2006/2009, IAAPA 2006/2007) since the evolution of this business opportunity in April 2006 and has conducted significant product research on the major equipment and software required. Mr. Zabawa has personally met with representatives of Brunswick, Qubica/AMF and US Bowling and the major redemption software manufacturers to discuss The V and the potential purchase of equipment and software from these firms. Further site visits are planned to tour the bowling equipment manufacturing plants located here in North America.
 
Capital Requirements
The V will require $6.7 million in capital to fund the development, construction, equipment and start-up costs. $2.4 million for tenant improvements and $3.1 million in machinery and equipment make up the bulk of the required capital, $978,000 of development and start-up costs previously mentioned and a $200,000 cash reserve.
 
Financial Highlights
240,000 visits are conservatively projected in year 1 at a per visit spending level of $18.05 resulting in $4.3m in revenue. Market penetration and per capita spending levels are considered conservative as similar facilities situated in comparable locales are generating higher penetration and spending levels[4]. Other than direct cost of goods, compensation and rent represent the largest expense items. Margins are expected to increase over time due to expected increases in market share and the high level of fixed costs in large format entertainment projects such as this.   Large format entertainment concepts have a relatively diversified revenue stream. Bowling center, amusement operations and food / beverage represent 27%, 34% and 39% respectively of projected annual revenue. 
 
Financing Plan
The plan is to finance the facility using commercial bank debt, landlord tenant improvement allowance, an unsecured subordinated debt issuance and equity. We plan to utilize the U.S. Small Business Administration (“SBA”) 7(a) and CDC 504 loan guarantee programs in connection with the commercial bank debt[5]. Where possible, vendor financing will be used to limit the amount of commercial bank debt.  Debt is conservatively assumed to be 60% of total capital requirements of $6.7m and is assumed to cost 7% amortized over 10 years. A $1.5m subordinated debt issuance and $1.2m in equity provide the remaining capital.  
 
Summary
The V is an exciting twist to a well established entertainment concept that is new to the Omaha market. The opportunity is here and now to bring this concept to a vibrant, exciting location in the Omaha market.

[1] Claritas SiteReports Demographics Report – Dated November 7, 2008

[2] Amusement Entertainment Management Market Feasibility Report completed June 2007, updated 2009.

[3] Amusement Entertainment Management Market Feasibility Report completed June 2007, updated 2009.

[4] Ibid.

[5] More information about the SBA loan programs is provided in more detail in Exhibit 4 to the business plan.