To Good to Be True – Family Golf Centers, Inc

One can not discuss the nineties and the golf range industry without talking about Family Golf Centers, Inc. In the roaring nineties, a company popped up out of nowhere went public and set out to become the largest operator and owner of "family entertainment facilities in North America. The company was known as Family Golf Centers, Inc. and was traded under the symbol "FGCI." At its peak, Family Golf owned or operated more than one hundred and fifty facilities. its portfolio included golf ranges, ranges with domes, pro shops, food service, miniature golf and batting cages. Additionally, they owned or operated several golf courses and more than thirty skating rinks.

Family Golf built quite a few facilities from scratch but acquired most of their properties by buying out existing owners and operators. There typical deal was to offer the owner a substantial amount of cash, even more in stock in FGCI and allow the owner to take back an exorbitant lease on the property. Many range owners succumbed to these alluring offers. The effect on the industry was to drive up pricing for anyone else trying to get into the business. Publicly Family Golf's projections for revenue artificially inflated expectations of anyone getting into the industry.

For us folks in the golf range equipment business we all sought to grasp that brass ring of gaining exclusive supplier status from Family Golf. Many of us were able to do quite a bit of business with the company and even get paid most of the time. Some of us were able to grow our businesses to new levels with the help of Family Golf. All of us did our best to get near the decision makers for the company. What many of us saw very early on was a complete lack of focus on the operation of facilities. There was this positive always-optimistic public image of the company and then there was a totally disorganized, always frantic, and never quite achieving objectives operational side of the company. An example of this frenetic operation was the construction of an outdoor range and dome facility in western upstate New York. The dome facility had a projected opening date, the project manager was promised a ridiculous bonus for getting the facility open on time and on budget. To save time and money he forced the artificial turf installers to place the turf on an ill-prepared base with no drainage. The result was that the dome opened on time, FGCI got its press release and the manager got his bonus. That spring the artificial turf was swimming in drainage because of unprepared base. Lost revenue, expensive repairs and no one held accountable.

At the end of the greatest golf decade in history all that remained of Family Golf Centers, Inc. were broken down facilities, class-action lawsuits, a bankruptcy sale of proportions never seen in the golf industry and thousands of people whole lost money. Multimillion-dollar facilities sold for less than fifty thousand dollars.

Family Golf Centers typified the avarice and excesses of the nineties. It benefited from the intensity of the golf business, optimistic investors that wanted to own a piece of golf and the availability of cash in the nineties. Let's hope for the sake of this industry we never have a repeat of this debacle.

Source by Paul Ciminelli

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