🍟 1/23/2023 – The Pickleball Franchise Set To Take Over America

DEEP DIVE 

The Pickleball Franchise Set To Take Over America

I’ve been waiting months to be able to make this announcement, but before diving in, I want to make it clear that via Workweek Capital, I HAVE FINANCIAL UPSIDE in the potential future success of Ace Pickleball Club. 

Everything I say below shouldn’t be construed as investment advice. Given this investment, I am definitionally a biased resource. 

Now of course, I invested because I believe in the team, the timing, and what they’re building, which is what I’ll explain below. 

But if you explore buying an Ace Pickleball Club franchise – do your own research, speak to their team, evaluate the FDD, etc. Again, NOTHING below should be taken as investment advice.

Now, onto what Ace Pickelball Club is, starting with the state of Pickleball in the United States today…

Note: If you’re an emerging franchisor reading this and are interested in a capital investment or advisory partnership with The Wolf, feel free to reply to this email and we can chat!

Pickleball is HOT 🔥

Starting roughly 24 months ago, Pickleball started showing up on the radar of mainstream media. That flurry of activity has since EXPLODED in the last ~6 months, and it’s transformed into a full on frenzy today.

Pickleball is officially the fastest growing sport in America, with a whopping 36.5 million people having played at least once in 2022. It’s meteoric rise has been covered in media outlets from Sports Illustrated, to CNBC.

Investments have poured in as well, from famous entrepreneurs and athletes like Lebron James, Naomi Osaka, Tom Brady, Kevin Durant, Marc Cuban, Gary Vee, and more; all having bought pickleball teams and/or invested in pickleball leagues.

Is The Hype Real?

There’s clearly tons of hype around Pickleball right now. Hype creates noise, which can make it difficult to separate signal from the noise. But given the most recent data, Pickleball is growing faster than even the biggest pickleball bulls anticipated. 

36.5 million people played Pickleball in 2022, up from what is now a measly 5 million in 2021 (a casual 700% increase). For context, 36.5 million is approximately 15% of adult Americans, or the population of California 🤯. 

Not only that, ~25% of that number played Pickleball 8x or more in 2022, and 45% of the 36.5M intends to play more often in the next 6 months. 

In short, the sport is likely to keep on growing and bring in even more players. 

The kicker? Pickleball’s total addressable market is MASSIVE. 

For the uninitiated, the sport itself has barely *any* learning curve. Other than the rule of “don’t go in the kitchen”, the rest is incredibly intuitive assuming you’ve played/watched ping-pong or tennis just once in your life. 

Not only is the game simple to learn, it’s a skill sport that allows anyone from age 8 to age 80 to participate. And yes, I’ve heard from men & women in fantastic shape getting their a**es kicked by folks over 70. This makes the game unpredictable and fun for everyone!

There’s simply not that many sports (if any) that have that combination of fun X easy to play X a wide age-range. Golf almost fits the bill, but then again it’s not easy to play and it’s expensive

The Problem

If you’re with me to this point, you understand that:

  1. Pickleball is a hot space
  2. It could have some serious staying power

But the rise of pickleball’s popularity has made one thing clear: there’s too many pickleball players, and not enough facilities for them to get their game on!

This has led to tennis courts being invaded, as well as basketball courts and even loading docks being converted into makeshift pickleball courts. 

Not only has this created an intense rivalry within the tennis community, it’s demonstrated that pickleball players don’t have a place to call home…

The Pickleball Landscape

Using tennis courts or basketball courts doesn’t just lead to fights with the people who want to use those courts for what they were built for, it also leads to a less than ideal environment to play pickleball in. 

Outdoor courts aren’t usable or enjoyable in the majority of states during peak winter and summer months, and have suffered severe limitations on operating hours or been forced to shut down due to noise complaints from nearby residents.

Additionally, the makeshift courts don’t account for extra space beyond boundary lines, and have proper fencing to avoid game interruption in other courts.

The current way isn’t sustainable for pickleball to survive, let alone thrive.

Bolt-On Competitors

While the majority of the country is operating with makeshift options, there are companies getting in on the action by adding pickleball courts to their existing business.

For the most part, this has been country clubs, hotel resorts, and even gyms (the founder of Lifetime Gym loves the sport so much, he’s expanding many locations to include pickleball courts).

While this alleviates some of the demand, it’s not a permanent place for your regular pickleball player to call home.

Eatertainment

A few concepts (namely Smash Park and Chicken N Pickle) have popped up that look to be replicating the Top Golf model, but for pickleball. Just like Top Golf, the sport is a fun attraction, while the core monetization is food and alcohol. They are more of a restaurant & entertainment center than a pickleball facility. 

Not only that, the investments are quite large, running from $2.5M on the lowest end, and up to $15M on the high end. Due to the high capital investment, which is likely taking place on a new ground-up build, these concepts are significantly more difficult to scale fast.

Facilities being built fast is what pickleball needs right now. And those facilities need to be places that players can go to regularly, not just as a happy hour destination.

The Solution – Ace Pickleball Club

Ace Pickleball Club is just that: a facility where you can go to play pickleball

The first location is currently being built in Roswell, Georgia, and will feature 14 courts in a ~36,000 square foot facility (a typical Ace aims to be 8-16 courts in 25k-40K square feet).

They’ll offer pre-packaged food options such as gatorades and power bars, and merchandise + equipment in their pro shop; but make no mistake, Ace is a dedicated pickleball club where both new and experienced pickleball players can always get a game in optimal playing conditions.

Members that want to play with a specific group will have an easy to use online booking experience to reserve courts, while members without a group can utilize “open play” to play a match with other members.

Every facility will be climate controlled, equipped with glow in the dark tech for social events, feature on-court technology for instant replays and recording gameplay,  and will host tournaments and league play.

They welcome all age groups and skill levels, and offer individual memberships as well as family options.

Ace Pickleball Club appears to be just what Pickleball needs right now.

Perfect for Franchising

Franchising is a beautiful model that outsources capital to the franchisees, leading to rapid growth potential for brick and mortar businesses. 

Said differently, franchising is a great strategy to scale, and even better strategy when speed to market matters.

Given the state of pickleball today, there’s a true land grab opportunity where speed to market is indeed critical – and a potential winner take-most opportunity awaits the brand that can get locations up and running to satisfy the demand.

And unlike the eatertainment pickleball companies mentioned earlier, an Ace Pickleball Club initial investment is expected to be up to $1.5M on the high end of the investment range (please note there are limits to what I can share given that I am an investor and the concept is so new).

This lower barrier to build should allow for quicker expansion via franchisees. 

It’s also worth noting that I view the “eatertainment” options as friendly competition to Ace, as they provide a fun experience that will increase the exposure of the sport to new players. 

When those players get hooked, they’ll need a facility to play at regularly…

The Team

The founding team of Ace Pickleball Club are franchising veterans that have grown numerous brands to 100+ locations.

The two co-founders, Jay Diederich and Joe Sexton, were key team members at Sky Zone, the indoor trampoline park franchise whom they helped reach a massive acquisition in 2018 (undisclosed amount, but similar transactions have been over 9-figures).

Jay in particular led real estate development for Sky Zone for the past 10+ years, in which he directly secured 185 big box retail and flex locations, the exact type of facilities that Ace franchisees will be looking to secure.

Put simply, this is the right team to build this concept. They’ve also put together a strategic cap table that includes Doug Birer, a 20+ location owner of OrangeTheory, Kidstrong, and PetWellClinic. 

Not only is Doug an investor, but he’s also planning to build his own Ace Pickleball Clubs as a franchisee. I love this move because it means Ace has a direct feedback loop via Doug on what is working at the franchisee level.

After all, franchisors only become successful if they can create successful franchisees, and Ace knows this! 

The End Goal

It’s early days of course, but the team at Ace had a clear vision from the first conversation I had with them: to be the brand where pickleball lives.

Whether you’re a casual player who wants to guarantee time on the court with friends, an aspiring competitive athlete, or an existing professional player, Ace Pickleball Club is where you can play consistently, year round, in optimal playing conditions.

It’s not often that the right team is matched up with the right concept at the right time, but I believe Ace Pickleball Club could be just that. Time will tell…

If you’re a franchisee that wants to learn more, get in touch with Ace Pickleball Club today.


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