Golf Simulator Lounge Timeline and Lease Checklist

TL;DR

Cliff Stevens, founder of ForeFront Simulator Solutions, says the build for an indoor golf simulator lounge typically runs six to eight weeks, maybe twelve, and ForeFront’s part takes two to five weeks. He advises owners to allow at least twelve months once site selection, design, permitting and leasing are included, because slow landlords can add three to eighteen months. A prepared owner with a reasonable landlord can finish in two or three months. Before signing a lease, owners should understand the personal guarantee, start preselling memberships and confirm alcohol and insurance terms.

• The construction phase of a golf simulator lounge is typically six to eight weeks, possibly twelve, and ForeFront’s simulator installation portion runs about two to five weeks.
• Cliff Stevens recommends allowing at least twelve months from initial idea to opening to cover site selection, planning, design and permitting.
• Slow commercial landlords and corporate legal review can add three, six, twelve or even eighteen months to the timeline.
• When the owner already has a good space and a reasonable landlord, the whole process can take as little as two or three months, and a three-bay facility can be installed in a couple of weeks.
• Commercial leases often carry personal guarantees and terms of five years or longer. Stevens has seen one proposed at ten years.
• Before signing, owners should confirm whether the lease allows alcohol sales, what licensing costs in their jurisdiction (sometimes hundreds of thousands of dollars), and how alcohol affects insurance costs.

How long does it take to build a golf simulator lounge?

Cliff Stevens: The actual build isn’t bad. The actual build is probably six to eight weeks, twelve weeks maybe. If we’re coming into a preexisting commercial space, the general contractor is going to do some of the demo, drywall type work. Our part is probably in the two to five week range where we come in, put the simulator bays in, configure everything, teach you how to use it.

But you’re going to hear a theme. I go back to the planning. From initial idea to finding the right space, you shouldn’t just see one commercial space and say that’s it. You should probably look at six or eight or 10 or 50 commercial spaces before you commit to one to find the one that’s right for you. Then you get into the planning, the permitting, the design, the architecture, the engineering, the construction. If I were going to say I want to start one soon, I would probably give myself at least a year to work through the site selection, the planning, the design, the permitting.

Why do commercial leases delay golf lounge openings?

Cliff Stevens: We have a client who signed a deal with us. It was probably July of last year. We already had the design. They knew what they wanted to do. They had the space picked out. But the big corporate entity that owns this commercial space is very slow to respond, and they have all the corporate red tape, the bureaucracy that you can imagine. We’ve been going on almost a year trying to get them to approve the designs, approve the plans, approve all the permitting and stuff that has to happen. Now it’s with their legal team and all the corporate leasing wording and red lining of contracts that we’re having to go through. And we’ll go a month or two between sending wording changes to hearing back.

That’s the other thing to think about. Not only is this space good for me as a business and where my customers are going to want to be, but who am I dealing with on the leasing side? Because that could add, we’ve seen, three, six, twelve, eighteen months to your timeline. That’s a huge impediment to getting revenue flowing in the door, getting open, getting customers. And if you’ve presold memberships to customers and now it’s another twelve months before you even put a shovel in the dirt, it’s causing disruption to your business.

I would give at least twelve months, but then realize there could be significant hurdles with leasing and commercial real estate type things that have to happen to get your business open.

What is the fastest realistic timeline to open a golf lounge?

Cliff Stevens: We’ve done them in as little as two or three months. The person’s probably had the space. They’ve already done some space assessments. They’ve gone through a couple that didn’t work out. They brought us in. You can easily do the whole process in two or three months. That’s assuming you find a good space, the landlord’s reasonable to deal with. And our part, we can do a three bay facility in a couple weeks.

It can be way shorter than that. I’m giving the worst case scenario of plan for it. It could take a long time. So either end of the spectrum: it could be super quick, two or three months, start to finish, or you could be looking at twelve to eighteen months and some headaches on red tape.

What should owners plan before signing a golf lounge lease?

Cliff Stevens: I think it’s really important, one, understanding, and I’ve mentioned it a couple times, there are personal guarantees on these things. You’ve got to realize you are signing up for a significant investment of money to commit to say this space is going to be mine for five years or however long. We saw one recently. It was ten years. They fought back on that. I think they won. So one, understanding this is a big commitment.

Two, the more successful owners we’ve seen, they start the sales and marketing engine before the place is open. We’ve seen people presell founding memberships to friends and family and people local around the business or their people at the local country club. There’s one opening up near us here in Marietta, and they have full renderings. They have the bar menu already published, and it’s a stick frame building right now. It’s not even done. And they have things out there in the social media world and other websites that are already super exciting and enticing customers. They’re preselling memberships. They’re getting interest ahead of time.

That’s one thing I’ve seen people struggle with: they wait to market the facility until it’s almost open. You should be doing that well, well ahead. When we were talking about opening one at one point, we were going to premarket it and presell founding memberships before we even had a lease signed and a location picked. You’re proving there might be a market here. If I need to have 80 members to sustain this business, can I sell 20 or 30 before we even put a shovel in the ground? Those kinds of things are really important.

What lease questions matter for alcohol and insurance?

Cliff Stevens: There’s a lot, and I’ve seen it through some of these legal back and forth. For example, if you’re going to sell alcohol, there are specific stipulations in a lease that either allow or disallow that. There’s the licensing, getting an alcohol permit or alcohol license in your jurisdiction. Can you do that? Is it feasible? Some places charge hundreds of thousands of dollars for an alcohol license. That goes back into some of the costs people may not think about.

And then also, what insurance is required? You’re going to have very specific insurance requirements for selling alcohol. And your general liability type insurance may be more expensive because you’re combining golf clubs with alcohol. Those are all things I would want to chase down: talk to a lawyer, talk to a commercial real estate attorney, talk to insurance agents, understand, is it feasible? Am I going to run into issues? Can I make it happen? And then what are my costs going to be?

Because you may say, my general liability is going to be $5,000 a month. But now that we add an alcohol policy for $2,000 a month, your $5,000 policy might be $10,000. I don’t know all that, but I’m saying as you add certain aspects of the business, it may have significant impacts on cost, profitability, all that kind of stuff downstream that you’re not thinking about and aren’t in your model. And then all of a sudden, your 20% operating income you’re planning on is 7%, and that’s a very different story. There’s tons more, but it’s probably a decent starting point.

Edited for length and clarity from a recorded conversation with Cliff Stevens.