Sandobx VR has 50 units open in six countries, with 18 of them in 18 states. It sold 1.2 million tickets in 2023 and is projecting a 33 percent year-over-year increase in 2024 ticket sales.
Rob Cooper and his team at LOL Entertainment are not intimidated taking on technology-driven brands that create fun and immersive virtual reality experiences.
In fact, they embrace them.
LOL Entertainment, one of the largest Museum of Illusions operators in North America with a fifth location scheduled to open in November next to Boston’s iconic Faneuil Hall Marketplace, signed on with location-based virtual reality brand Sandbox VR. Its agreement is to open four locations in Baltimore, Boston, Philadelphia and Washington, DC, with the option of expanding development in those markets.
Rob Cooper is the CEO of LOL Entertainment.
“What started as a kind of side gig and a passion project for us has morphed into something much bigger and greater,” said Cooper, the CEO of LOL Entertainment. “With Sandbox VR we feel we can build off of what we’re already doing with Museum of Illusions, which is providing guests super fun and unique virtual experiences, only this time with a social gaming experience coupled with VR.”
Cooper and his group are looking to piggyback on the success of Sandbox VR, a San Francisco-based company that was started by Steve Zhano in 2016 and has experienced rapid growth the last two years. The brand currently has 54 units in six countries, 37 of them of them being corporate owned and 18 locations in 18 states. It sold 1.2 million tickets in 2023 and is projecting a 33 percent year-over-year increase in 2024 ticket sales.
Sandbox VR, which began the year with 46 locations, is anticipating opening 280 franchise locations in the next four years. It ranked No. 415 on the Franchise Times Top 400, which ranks the largest United States-based franchises, with just over $57 million in systemwide sales in 2023.
Average unit volume for stores opened prior to 2023 is $1.9 million, according to its franchise disclosure document. Its latest round of fundraising raised over $37 million from investors. Individual investors include Justin Timberlake, Katy Perry, Kevin Durant and Will Smith, according to a spokesperson for the brand.
Steve Zhano is the founder and CEO of Sandbox VR.
“Things are moving extremely fast here and we’re real excited to have signed LOL Entertainment,” Zhano said during an interview from Shanghai, where he’s in talks with potential operators to expand the brand’s presence in Asia. Sandbox VR is headquartered in San Francisco with offices in Hong Kong and Vancouver, Canada.
Sandbox franchisees are reporting success worldwide. VR Entertainment Group, Sandbox VR operators in the UK and Ireland, report surpassing $10 million revenue for its first two locations in London and Birmingham, England.
With a pair of franchise partners in Germany, Sandbox VR anticipates expanding its presence there to six locations next month with an opening in Berlin. NextLevel Erlebnisee GmbH, which currently operates four locations there, expanded its agreement this year to open 12 units across western Germany in 2026. The franchisee group Royal Casino DHS GmbH signed a 12-unit agreement in April to open Sandbox VR locations across Northern and Eastern Germany.
Additionally, Dubai, United Arab Emirates-based Apparel Group signed a 25-unit deal in May in the Middle East.
Related: Sandbox VR Announces U.S. Franchise Initiative and International Deal
Meanwhile, LOL Entertainment is going to help boost Sandbox VR’s domestic presence in four major cities on the East Coast.
“What we really like about LOL Entertainment is they are a multi-unit operator and they have experience running another (virtual reality) brand that, like us, opened before COVID, survived all that and are now thriving coming out of it,” Zhano said.
Cooper said LOL Entertainment, which includes co-founder and chief operating officer Jason Mitchell and nearly 100 employees, is looking to build off of the success it’s had as Museum of Illusions operators. LOL Entertainment signed its initial agreement with the brand, which features “a visual, sensory and educational experience designed to engage your sense of wonder and shift your perspective through the science behind optical illusions,” in 2019. It opened its first location in Chicago in 2020.
According to its website, Museum of Illusions has over 50 locations open in 25 countries, including 24 in North America. The franchise is owned by Invera Equity Partners which is based in Zagreb, Croatia.
Like Museum of Illusions, which has an initial investment that tops out at $3.7 million or more, opening a Sandbox VR comes with hefty startup costs. Its FDD states that the initial investment range is $1.4 million and $2.9 million.
The pricy investment in Sandbox VR and the challenge of finding 5,000 square feet or larger retail spaces in urban centers does not deter Cooper.
“It does take money to build these fun, interactive experiences,” he said. “But it’s like the old adage that you get what you pay for, and we love being in this space now.”