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VETERAN OPERATOR OFFERS TIPS ON INDOOR KART FACILITIES
By Paul Zellar

Editor note: At Fun Expo in Las Vegas, Nevada, Terry McLachlan was a featured speaker at a popular seminar titled, “Go-Kart Operations For The Future”. Here is a synopsis of his presentation. Consultant Paul Zellar covered the seminar for e-KMI.

Terry McLachlan of Indoor Grand Prix, Incorporated started in the indoor go kart business in New Zealand in 1988 and developed 12 centers there before bringing his product to the USA in 1993. He has been involved with more than 20 indoor karting facilities. He expressed that this is a great time to get into the indoor karting business in the United States, as momentum is building in getting more and more center operating successfully. Here are the major points of McLachlan’s presentation on the keys to being successful in the indoor go-kart business.

LOCATION
McLachlan stated that factors such as visibility, access, traffic count, demographics and affordable rent and taxes are the main ingredient for success. He said the ideal location is a commercial environment with retail exposure, such as a Home Depot-type of location where you don’t have to pay an expensive retail lease. He also stated that about one third of the business is from walk-in patrons, which makes location critical, with the remainder of the business generated from word-of-mouth and conventional advertising. McLachlan continued to say that you should look for demographics with slightly higher than normal income with a balance of white collar and blue collar, children and teens. A strong corporate market is also essential!

RACING KARTS AND TRACKS
Go-karts and tracks must be fun to drive at speeds up to 26 MPH for a facility to be successful. McLachlan stated that the go-karts must be durable and well maintained, because if they look damaged and run down, it makes the facility look bad and makes it more difficult to enforce the rules. Terry also advises operators to purchase enough go-karts so that you can rotate them in and out of operation for proper maintenance.

He recommends the use of electric karts since they are so much cleaner to operate. He said that they enable more facilities to be in retail locations and that they are more acceptable to women, who demand cleaner facilities. Many corporate decision-makers are now women and may not want to book events at facilities with excessive exhaust fumes, noise and petroleum products. The downside is that a double fleet of electric karts is required, with a much higher cost per unit.

In his presentation, Mr. McLachlan continued to say that go karts that are used in Europe and the rest of the world should be modified for the U.S. market, not only for the way Americans drive, but also for the size of the drivers. He said that (many) other countries have a “race at your risk” policy for go kart tracks and that personal injury lawsuits are nearly unheard of. These tracks race safely at speeds of 35-40 MPH with open-wheeled karts, with drivers delighting in clean over-taking maneuvers without contact with between karts. They have respect for the open wheels and know that they may go airborne with kart-to-kart contact, since most of the professional races in their countries are with open-wheeled racing cars.

His experience with American drivers is that they will nearly always hit each other intentionally as the pass, since the mentality here is more like the (so-called) stock car “rubbing is racing” mentality. He said that he opened his first U.S. facility like a “lamb to the slaughter” with open-wheeled karts and had one kart riding over another, creating a high risk for driver injuries, even though drivers had a lot of fun. Terry enclosed the wheels on his go-karts and reduced his maintenance costs and increased track safety.

Race equipment: McLachlan stated that racing suits in New Zealand were a maximum size 10, while drivers in the U.S. require suits as big as size 15. Other things like helmets and seats of the karts were also too small and had to be enlarged to accommodate U.S. drivers.

A MARKETING STRATEGY FOR FAMILIES AND ADULTS
Terry suggested that facilities must accommodate families, teens and adults in a balancing act that allows competitive racing while not turning away parents and children. He said that facilities need to cater to birthday parties and other family events, with karts that run at slower speeds while still allowing teens and adults to race competitively. Some indoor facilities are now combining go-kart tracks with laser tag, bowling alleys, movie theaters, etc. for the family market. He said that some facilities may even have separate entrances and tracks for families and adults to keep them both happy.

Corporate groups are very important for business, especially in the off-peak days of the week. Indoor kart racing is great for team building, especially the team relays where they have to work together to compete. Terry said that tracks should be able to handle a 200-person group in 3-4 hours, which can be very profitable. A good electronic timing and scoring system that has event software that includes team racing and Grand Prix-style racing, league development and “arrive and drive” systems for instant feedback is important for repeat business, especially for corporate groups. He also spoke of professional corporate party planners that book events for corporate clients as be a good resource for business.

OTHER ESSENTIALS
McLachlan recommended a strong hands-on management team that is willing to work long hours and has good people skills and training. He also spoke of a strong relationship with your insurance carrier and having at least $2 million in general liability coverage. Terry also recommended getting the insurance company’s inspector on-site before opening a new facility to evaluate it for potential hazard. Another essential ingredient for success is an adequate amount of working capital to see you through the seasonal changes in cash flow while getting your facility established. Last but not least, you must be able to modify and improve your facility to keep it fresh and exciting, and keep customers back year after year.

About the author: Texas-based Paul Zellar is a consultant for the FEC industry and also provides risk management services. He can be reached at 972-355-1967.

Please note that the views represented in the above article are those of Terry McLachlan and/or Paul Zellar and do not necessarily represent those of e-KMI.

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