‘Gold Rush Mentality’ Heats Up Competition in Pickleball Space | Franchise News








Pickleball

Ace Pickleball Club, Crush Yard, Dill Dinkers, Pickleball Kingdom, PickleRage, PKL, The Pickle Pad and The Pickrl debuted franchise systems in 2023. Together they’re projecting adding more than 1,000 units by the end of 2025.


The race to the top in the rapidly growing pickleball space heated up in 2024 for franchisors looking to capitalize on the country’s fastest growing participation sport. But it’s still too early in the game to declare winners and losers with brands actively signing development deals and projecting massive growth in the next few years.

Pickleball franchisors and their financial backers agree there is plenty of space in the industry for everyone to grow and prosper even as they compete for prime real estate locations and members.  







Joe Sexton

Joe Sexton is the founder and president of Ace Pickleball Club.


“There’s a gold rush mentality going on right now with a lot of different brands jumping in and competing for space,” said Ace Pickleball founder and president Joe Sexton. “It reminds me of the early days of the trampoline park world when a bunch of brands entered the frenzy.”

Pickleball’s rapid ascent in popularity and the emerging brands hoping to tap into the phenomenon were highlighted in a FranData analysis published in June. The franchise-focused research and advisory firm reported that since the COVID-19 pandemic, “the sport has witnessed a massive upsurge in popularity with an 85.7 percent year-over-year increase and a staggering 264 percent rise in the number of players since 2014.”

The study found that more than 13.6 million people in the United States played pickleball in 2023 and that number will rise significantly this year.

Meanwhile, eight pickleball brands debuted franchise systems in 2023: Ace, Crush Yard, Dill Dinkers, Pickleball Kingdom, PickleRage, PKL, The Pickle Pad and The Pickrl. Together they’re projecting adding more than 1,000 units by the end of 2025. Six of the eight brands claim to have sold more than 100 units each with Dill Dinkers and Pickleball Kingdom reporting they have  over 400 units in development. The Picklr, Dill Dinkers and Pickleball Kingdom are already eyeing international expansion.

How fast franchisees can actually open facilities in a tight real estate market and how profitable those units can be have yet to be determined.

“Pickleball is a fun social sport that really anyone can play, no matter their age or skill level,” said Martina Kochli, a former professional player who now runs a pickleball coaching and real estate consulting business. She recently became a brand ambassador for Dill Dinkers. “That’s what’s really driving the incredible growth. The thing that’s holding the sport back now is there are just not enough courts available, especially good-quality indoor courts, to accommodate all the players.”

That lack of pickleball playing space is what led to so many significant development deals among brands and a race to form partnerships with professional pickleball leagues and their top players, Kochli said.







Martina Kochli

Martina Kochli, a former professional player who now runs a pickleball coaching and real estate consulting business, recently became a brand ambassador for Dill Dinkers.


“The ones that have the best programming and court reservation systems in place, along with a real solid real estate plan are the ones that are going to do the best. The ones that don’t are going to struggle,” Kochli said.

Two business models

As noted by FranData, the eight pickleball brands actively franchising are using two primary business models.

The court-focused model drives revenue primarily by court occupancy that’s supported by memberships and pay-per-use. Ace and Picklr use these models. Pickleball Kingdom, Dill Dinkers and PickleRage—which is owned by private equity firm GreenPeak Venture Partners, a sister company to First National Realty Partners—are emphasizing the fitness approach but offer limited food and beverage options.

PKL, Crush Yard and Pickle Pad are operating entertainment-driven models, noted FranData, by focusing less on fitness and more on creating a dining and entertainment experience for the entire family.

“Their diversified revenue streams normally require larger real estate to accommodate extensive kitchen setups and dining areas,” according to the report.

With the exception of PKC, all the brands are focused on opening indoor facilities for year-round play.

“We opened our first Pickle Pad and Crave Social Eatery location in June in Tallahassee, Florida, with phenomenal early reviews,” said Mike Rotondo, CEO of Indoor Action Brands, which also franchises Altitude Trampoline Park. He said it signed nine franchise agreements for Pickle Pad and is awaiting signatures on 10 more agreements.







Mike Rotondo

Mike Rotondo is the CEO of Indoor Action Brands, which franchises the Pickle Pad and Altitude Trampoline Parks.


“Yes, we wanted to get in on this pickleball craze, but at the same time wanted to provide a full family entertainment and eatery destination with an area inside devoted to other fun activities like cornhole, foosball and darts. We feel this provides multiple revenue streams for our operators,” Rotondo said.

The big unknown in the pickleball space is not only how fast franchisors can grow but how profitable they can be. As FranData pointed out, only four of the eight of the active pickleball brands publicly have disclosed full revenue results in franchise disclosure documents. PKL reports an average unit volume of $4.4 million, according to FranData, followed by Pickleball Kingdom at $1.7 million, Ace at $1.3 million and Picklr at $601,347.

Pricey startup costs

The initial investment for the indoor pickleball brands starts at $328,961 and rises to over $6 million, depending on the size, location and amenities offered.

Membership to the clubs, which are typically tiered, generally start at between $50 and $100 per month. Clubs also generate revenue from individual and group instruction and hosting leagues and tournaments along with events.

The Picklr, which was co-founded by Jorge Barragan and Austin Wood, currently has the most clubs open with 17 locations. The company has sold 405 units to franchisees, including an agreement with former NFL great Drew Brees to become a brand ambassador and open his own locations. It also signed a 60-unit deal with Elbee Sports Inc., said Wood.







Austin Wood

Austin Wood founded The Picklr with Jorge Barragan.


“We opened our first corporate location back in 2021 and followed that with six other company-owned locations so we can really understand the industry and what we needed to do to franchise the brand right,” Wood said. “We feel we have the experience and understanding now to grow fast and expand into Canada, Australia and New Zealand.”

No brand has likely set more lofty goals than Pickleball Kingdom, however. Founder and CEO Ace Rodrigues said the company projected opening 100 locations by next year and is targeting 500-plus units in the next few years.







Ace Rodrigues

Ace Rodrigues is the founder and CEO of Pickleball Kingdom. 


“We look forward to being in every country in the world within five years,” said Rodrigues, who expects to start international expansion in India and United Arab Emirates.

Unlike most of the other brands, Ace Pickleball is choosing a more slow and deliberate approach to development. It currently has five company-owned locations and four franchise locations and has sold 120 units with two dozen experienced multi-unit operators.

“Unlike some other brands that may be looking to grow too fast and paying way too much for lease spaced, we’re taking a very careful and thoughtful approach to development,” Sexton said. “We’re in this for the long game and we want to set up our operators with the best chance for success.”



Source link