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International Karting Industry Buyer's Guide

GO KARTING!
A Guide To The World's Most Popular Motorsport.

Kart Expo International

By Peter F. Olesen P.E.
 

There has been, and will continue to be a strong interest in the development of indoor karting facilities. A relatively small number of markets are capable of supporting a kart racing venue as a sole operation. Unfortunately, there are many proposed operations that will have a tough time surviving in marginal markets, unless they expand their concepts to include family karting and birthday party programs.

Regardless of the direction taken, unless the developer is independently wealthy and plans to operate the facility as a hobby, the facility must have a positive bottom line. This means that careful consideration must be given to making correct decisions at each step of the way. Think with your head, not your heart. Wanting success does not assure it. If compromises are required for success, they should be made, or perhaps the project should be dropped.

Location. Location. Location. - The three most important elements that can have a major impact on the potential success of any given project. Remember, each location in the statement means something different. Location means selecting the best site for customer exposure and access, and doing so at the right point in time. It also means locating the funding necessary to properly develop and open a facility.  These elements all play a part in every decision a developer will have to make in carrying his plans to fruition.

Indoor operations sound like a no-brainer, but if the experience of others is taken into consideration, some so-called “sure-fire” operations have been dismal failures. Some failed because of bad location, others because of poor facilities, and still others because of poor management and marketing.

Each of the “Location” definitions can be the subject of an entire article. Rather than discussing them, his article is targeted toward the admonition, “Keep Your Options Open”. This is especially true for all but “drop dead” successful markets and locations.

This article assumes that a developer has taken the time to establish that the demographics of a target market meet the basic requirements for potential revenues. It also assumes that a building is in a good location and the rent or purchase costs fall within the projected proforma.

While the above items are important, there are many variables that can rise up to create “waves”. Some can be addressed by better marketing, zeroing in on specific market segments, creating leagues, driving schools and corporate packages, and other steps that have been successful for other facilities.

In other instances, the circumstances that arise may not be overcome as easily. The market is, has been, and will always be fickle for almost every type of venture. In some cases, this may come about because of new and more exciting venues being developed in the community. In others, economic downturns and other localized occurrences may drive down attendance. 

To survive under such circumstances, it is important to at least consider alternatives that could provide future viability of an indoor facility and the underlying investment in terms of both time and money. In many instances, the easiest step to take may be modifying an “adults only” operation catering to the indoor racing concept to include family operations in one format or another. If a site is victim of reduced attendance, it should not be difficult to include family operations as well. 

Having the opportunity to serve both the adult and the family markets expands the total market potential, as their combined appeal reaches a much broader demographic segment. While the initial intent for a facility may have been to serve the adult racing elements of a local market, ultimate attendance figures may not justify continuing in that direction. Unless the adult racing market has been defined as strong enough to survive a test of time, a wise person would have other options available to avoid failure if the market doesn’t produce as expected.

The reality also exists that each venue can serve to generate additional attendance at another. Parents bringing their children into a facility for the family venue may be exposed to the adult racing concept for the first time, and become future participants. Conversely, kart racers may see the benefits of the family venue and bring their families in. At the same time, both venues will benefit from the development of future repeat business.

Some of the major differences in operating family operations, as opposed to adult racing venues, center around the geometrics of the tracks themselves, the speeds at which the karts operate, and the relative competitiveness of the drivers. Obviously, it isn’t possible to successfully mix the groups on the track at the same time and satisfy anyone. However, if operations are scheduled for different days of the week or different time periods during the day, it is possible to use the same karts for single drivers with lower governor settings to reduce speeds.

The above assumption is that the karts are equipped with seat belts and roll bars. Without those provisions, it wouldn’t be possible to operate a family-oriented track in many states due to current or pending operating standards and/or rules. (Note: Our firm will not design tracks where karts are not equipped with seat belts and roll bars.)

Proper planning at the beginning can often result in a track configuration that can serve both venues without taking away the high performance demands of adult indoor kart racing. When our firm designs an indoor operation for adult kart racing, we attempt to create a track configuration that provides excitement and a competitive environment on the track without having to resort to high and potentially dangerous speeds.

Should you be fortunate to have a facility large enough, the creation of both an adult racing track and a separate family track makes good economic sense, unless of course, the demographics don’t justify it. In such a facility, creating separate staging areas for diverse age groups (adult and family), carefully setting up food services and meeting/party rooms, arcade areas and supplemental attractions to insulate each venue from the other, are important for their continued success. Marketing programs should also be carefully developed to maximize the impact for each venue.

This article seeks to identify and discuss some of the specific terms each developer should consider prior to making major decisions, some of which may be difficult to change at a later date. There may be other issues that we have not identified that are location-specific. Once you have reviewed the comments in this article, you should sit down and determine whether any of the issues apply to your specific project.

The following are specific questions we suggest new developers of indoor kart racing facilities take into consideration in finalizing their plans.
 

Facility Exclusively Targeted To the Adult Market

1.  Will corporate group outings be a major target in the marketing scheme that is to be followed?
2.  Are racing leagues to be established?
3.  Will walk-ins be encouraged in the marketing program?
4.  Will the proposed racing take the form of short heats or will the primary focus be on longer events/
5.  Will a timing system and a kart shut-off system be installed?
6.  Are karts to be electric, gasoline, methanol or propane powered?
7.  How will the karts be fueled, stored and maintained? Has a separate area been established and does it meet applicable codes and/or regulations?
8.  What specific building and/or HVAC elements will have to be incorporated to accommodate the type of karts to be used?
9.  Will alcohol and/or food services be a part of the package? If alcohol is to be served, are effective controls in place to avoid “driving under the influence” on the track?
10.  Will additional attractions be added to the project? Can they be effectively incorporated into the facility to be profitable?

Since alternative uses for a building vary depending on the project locality, existing real estate environment and other issues, any question in this area should be considered with real estate experts having a strong knowledge of the site area in question.
 

Keeping Options Open For Dual Operations
Where a dual approach is to be followed, there are additional decisions that should be resolved, including:

1.  Will one kart be used for both markets? If so, how will the relative maximum speeds be set and controlled on the individual karts?
2.  If two sets of karts are to be used, how will the pits be configured?
3.  Will there be specific times and dates set for each venue? How will this be handled in advertising?
4.  Will additional attractions be part of the total mix at the facility? If so, will they be targeted to one or both venues?
5.  Will the ultimate configuration create sufficient separation to satisfy guests of both venues?
6.  Have the ramifications of dual operations been discussed with the insurance carrier?

All of the above questions should be considered before a developer enters the indoor kart racing arena, and there are many more to be considered. No matter which direction is chosen, we hope that proper consideration is given to selecting a good location, developing a sound business plan, selecting good karts and getting a good design for your track. Good luck and may you be successful.

About the author: A registered Professional Engineer in eight states, Peter F. Olesen is president of Peter F. Olesen and Associates, Inc., 500 West Central Road, Suite 205, Mount Prospect, Illinois 60056 USA. The firm provides consulting services to concession go-kart and family entertainment center clients. Projects span 31 states, Puerto Rico, Canada and Brunei. Services range from preliminary site evaluations, feasibility studies, concept development, master planning, design and construction engineering services for project that include concession go-kart tracks, miniature golf courses, indoor and outdoor family entertainment centers and theme parks.  These services apply to new facilities as well as renovations or expansion of existing facilities. Olesen has written many magazine articles on the industry and has made presentations at industry trade shows.
 

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