Editor’s note: WOODALLSCM.com (WCM) attended a number of national conferences this fall and in an effort to share some of the educational information gleaned at these conferences WCM is going to be featuring articles on the topics discussed.
Parks that are affiliated with the Yogi Bear’s Jellystone Park Camp-Resort franchise network are in high demand from investors.
“We get calls all the time. We’re in demand,” said Jim Westover, Leisure Systems Inc.’s (LSI) vice president of product development and sales, who led a seminar on succession planning during LSI’s annual Symposium in early November in Covington, Ky.
LSI is the franchisor of more than 75 Jellystone Parks throughout North America.
To underscore his point, Westover told workshop attendees that he had just received a call from an investor attending the National Association of RV Parks and Campgrounds’ Outdoor Hospitality Conference and Expo — which was held at the same time — who wanted to meet with him to discuss potentially purchasing “a portfolio of parks.”
But park operators who want to sell their businesses need to be prepared. Lenders will want to review three years’ worth of profit and loss statements. “They will check revenue by site night to see where you are, and they will check those figures against other figures and against our figures,” Westover said, adding that it behooves park operators to “be transparent.”
“Reach out to me on comps,” Westover said. “We do provide information to the bank so they can do their due diligence on you. Our values tend to run higher. We’re getting more dollars per campsite (than other campgrounds outside the Jellystone Park network). We have those matrixes for them.”
LSI’s matrixes include a “recession performance grid,” which tracks the annual revenues of 24 parks from 2006 to the present.
Park operators thinking of selling their parks in the future need to make their plans now, outlining their specific goals and as well as their exit strategy.
Investments in new amenities and additional RV sites or rental accommodations will increase a park’s value. Sometimes $100,000 in improvements can boost a sales price by as much as $500,000, noted Westover. Even investments in entitlements to facilitate park expansions can increase a potential selling price.
Many Jellystone Park operators are also expanding their ranger stations so they can increase the amount of Yogi Bear-themed merchandise they sell in their camp stores. “We call it a profit center for a reason, whether it’s food, beverage or having more merchandise to sell,” Westover said, adding, “At some point, you are going to create a memory, and that memory will be monetized with that bear.”
Overall, Westover said, park operators need to develop their long-range plans.
“Where am I currently? What’s my goal? What’s my exit strategy?” These, Westover said, are among the questions park operators should be asking themselves.