The ‘why’ of starting a business fuels the FEC operator. Aside from the money, what value are you expecting from starting an FEC business? Is it for the challenge of developing a thriving business? Is it to provide a venue to entertain families and friends for years? Is it to be at the center of fun while earning? The ‘why’ is usually tied to an individual’s passion and drive. This same passion, spirit, and energy will come across in everything you do and will inform every single business and operating decision you make, so it is imperative you are clear on ‘why’ you want to start an FEC and enter the industry of fun. 

In today’s digital age where mobile games and consoles compete for time and money, out-of-home entertainment venues like FECs should offer social connections through shared experiences with family and friends, with or without special occasions.  

The heart and goal of your business will be the main driver of loyal guests and customer returns. What makes your business unique? Guests can be entertained with the same offering someplace else, so it is the core (the ‘why’ you are in business) of a company that will inspire loyalty and returns.  

Having a well-defined business goal will help you envision what type of customers you want to cater to, what type of venue will make these customers participate actively, and what type of experience you want them to enjoy.  

Members of a family have different interests and are entertained for different reasons. Will your FEC focus on entertaining the family as a whole? Will it be for children only? Is it intended to be an amusement center for adults and teens? 

Identifying your target audience will give you ideas on what your FEC needs when it comes to theme, hardware and equipment, activities to add to the venue, and so on. 

By analysing the market population in the area where you intend to open the business, you can better determine the project’s profitability.  

Market population analysis factors: 

1. Local drive-times – The average distance people will travel within an urban or suburban primary market area to an FEC is about 15 to 20 minutes maximum.
   
   
2. Demographics (age and household) – Based on the findings on local drive-times and identified target areas therein, how many households and people are there? This information can be accessed at the local Chamber of Commerce, Community Business Office, or the city or state’s website.

From this data set, compute how much that will equate to gross revenue. To have an initial sense of this, derive from the IAAPA statistics presented on visits:

Conducting a market feasibility study is necessary to identify whether the business idea is appropriate, profitable, fundable, and in the right place and time. This will also help you pinpoint the risks and benefits of the business idea – whether to go for it now or shelve it for later. 

You are likely going to need to work with an FEC consultant to conduct the study. It can cost from $5,000 to $15,000 based on the level of complexity and locations being studied.  

A number of FECs are family-owned and operate at one location. There are also FECs that are operated by multiple location owners. As for tapping into other financial resources other than yours, funding is another crucial operational necessity.  

To secure funding, you need a business proposal covering your type of FEC, prospective location, your market feasibility study, financial feasibility study, and analytical report. Keep in mind that feasibility studies are written and conducted with prospective investors in mind.  

To get capital and funding, business proposals should…

• Project potential financial performance.
• Provide a good estimate of operating costs for the next 2-3 years.
• Identify a ballpark figure for development costs.
• Provide justification for total development costs needed to achieve return-on-investment (ROI) to investors.

If you’re looking for funding, here’s a list of 5 Proven Sources of Funding for an Arcade or FEC Business. 

Start-up investments are usually 20 to 30% personally funded. If this is over your capacity, there may be a need for equity investors. These professionals will provide investment dollars in exchange for a percentage of the business.

Market and financial feasibility studies are different from an FEC business plan. The former shows the potential performance of the business venture, taking into consideration that it is managed effectively.

The business plan is the ‘how’ of achieving optimal management and operations that will back the identified potential in the feasibility study. In simpler terms, the business plan is proof that you can make the dream happen. 

It is good to note that a positive feasibility study does not necessarily guarantee a successful business. A business plan, however, can help you determine the course of the business – from operations, management, and everything in between to make the possibility a success.

A business plan should include attendance projection, per capita spending, revenues, expenses, replacements, and cost estimates, among other things.

Depending on the type of FEC, scope, audience, and location, an initial design and concept development work is essential to wow prospective investors and lenders. This is generally required for FECs seeking an investment of $2 million dollars or more. For smaller businesses such as a simple indoor soft play, this may not be required in the proposal.

• Once funding and permits are secured, you can start building the FEC from the ground up. Running any business requires significant paperwork, and there are specific licenses and permits needed to operate an FEC. These depend on location, nature and scope of FEC, among others:  

  • Zoning approval 
  • Health permit 
  • Environmental permit 
  • Fire department permit 
  • Special state licenses (for businesses that serve alcohol)

The FEC industry has been heavily impacted by advances in technology in a span of years. Advancements in home video game console technology in the 80s caused a great decline in the ‘Golden Age of Arcades,’ resulting to a huge gap in revenue from $8B in 1981 to $2.1B in 1991.  

Since then, almost every touchpoint of the business has been automated. Those that fail to jump on the wagon and follow tech trends cease to continue because they have become irrelevant. However, arcades can now be supercharged with hardware solutions that bring even retro games to the digital age.   

Technology is considered a business essential in this digital day and age. Consumers will not tolerate a poor guest experience due to a low-tech business. This is why you need to stay up to date if you want consumers to come over; otherwise, it will lead to poor customer reviews and negative advocacy.  

Websites account for 23% of overall ticket sales,  according to IAAPA’s 2025 Benchmark Series. Tech-driven ticket distribution channels like this can be adopted early in your operational year to leverage guest preference for cashless means to pay and play.  

When used strategically, business operations and management can be conveniently integrated in a way that reduces operating, labour, and maintenance costs. Most of all, the guest experience is enhanced.  

Selecting the right hardware and software for your FEC is just as important as picking the best people for the business. With the right combination of hardware and software, these technological business solutions can already stand as your 24/7 employees.  

FEC software should collect data, pinpoint problems, and generate results and notifications in real-time to reduce costs while increasing profitability. In short, the software should simplify the backend of the business. At the same time, it should be backed up with a reliable tech provider, or solutions powered by the world’s best tech partners like Amazon Web Services, Google, or Apple.   

From a customer standpoint, consumers desire seamless, personalised, socially shareable, and convenient tools that keep them immersed in the experience with little to no disruptions. The speed and immediacy of the experience are critical to your success. In the fast-paced world today, guests are intolerant of wasting time waiting in long lines and outdated or no technology to ease transactions that should be seamless.  

Depending on the nature of your FEC business, here are some of the hardware and software solutions worth your consideration: 

Hiring the first team for a new business can make or break its success. The number of employees needed to run an FEC can differ from one business to another. It will also vary depending on the business size and location.  

In the 2025 Entertainment Center Benchmark Report by IAAPA, it was found that employee payroll remains the biggest expense for FECs, accounting to 29% of a facility’s budget, the highest among all expense categories. This is one of the reasons why business owners must invest in the correct people. Manpower is an asset; wrong hires are liabilities. 

At the same time, retaining a strong team is more ideal than repeatedly hiring and developing new people. Don’t forget to include regular training programmes for your new-hires and regular staff to boost operational efficiency and increase sales. 

Embed offers FREE GoTrain™ Express virtual training to educate FEC staff on tips and tricks to driving faster adoption, more guest sign-ups, and higher reload value with the Mobile Wallet. This type of programme enables staff to increase sales and develop new guest engagement techniques. 

For more insider tips like this, check out this FREE essential guide to your’s transformational growth: the FEC Blueprint for Success. 

To lead you to the right people for your new FEC’s vacancies, you can also discover the necessary steps in this FREE how to hire the Right GM for your FEC guide. 

As with any new business, developing the branding and marketing plan is crucial to creating top-of-mind awareness of customers. Most FEC owner-operators become too focused on operations, especially family-run, single location FECs; any marketing efforts is done in reactive mode versus proactive mode. This stunts business success. It is also good to note that the average spend operators allocate annually for family entertainment center marketing accounts for 4% of a facility’s budget, according to the same IAAPA benchmark report above.  

Create a brand bible.

This is the go-to reference for all things pertaining to your FEC such as the logo, brand colors, slogan, brand tone and voice, and other indicators of your business. While it is best to have this done by a professional marketer, you can always do it in-house to get started. 

Check out more family entertainment center marketing strategies here. 

Now that the business is all set, it’s time to open the doors. The grand opening itself must be a statement of what your business promises. Here’s a quick checklist of what you need to prepare for this launch day: 

To run operations smoothly, you need an effective family entertainment center management system—an integrated platform that unifies different touchpoints and aspects of your business. 

What are the core modules of a modern FEC management system? 

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