DailyFranchiseNews.com

Brew and View

Where can you go to see such classics like From Beer to Eternity and The Seven Beer Itch? Alamo Drafthouse Cinemas, of course! These are just a couple of the posters in the lobby at one of their locations. Alamo Drafthouse Cinemas, the nation’s oldest cinema-eatery concept showing first-run films, has had an impressive year and is in full expansion mode. Check out today’s Houston Chronicle to read one reporter’s take on his visit to Alamo.

For Your Viewing Pleasure

What’s better than dinner and a movie? Dinner and a movie under one amazing roof!

Nation’s Restaurant News reported that strong movie ticket sales and sliding real estate prices are turning cinema-eating venues like Alamo Drafthouse Cinemas into a business with blockbuster potential. “When executed properly, these are very profitable venues,” said Neil Billingsley-Michaelsen, president of Triple Tap Ventures LLC of Austin, which recently announced a franchise agreement with eight-unit Alamo Drafthouse to expand in Texas. “There can be a very good return on investment.” His partner in Triple Tap is Norman Abdallah, chief executive and president of Restaurants Unlimited Inc. and co-founder of Fired Up Inc., parent of Carino’s Italian. Abdallah said Alamo Drafthouse is one of the “strongest emerging brands in the unique ‘cinema eatery’ segment.”

The recession has fueled movie-going this year. Year-to-date statistics compiled by Hollywood.com’s Box Office tracker show ticket sales are up 7.94 percent from last year, as of Oct. 18, to nearly $8.3 billion. The number of people going to movies in the same period is up 4.02 percent, to 1.1 billion, even though the average ticket price has risen from $7.18 to $7.45. Cinema eating offers value to recession-weary consumers, said Billingsley-Michaelsen of Triple Tap Ventures, which bought two initial stores in Houston and plans to develop others in the West Texas cities of Amarillo, Lubbock and Midland-Odessa as well as San Marcos and Corpus Christi. Triple Tap is converting theaters, remodeling big-box retail stores and undertaking some new construction for its venues. Alamo’s first location outside Texas, a unit in Winchester, Va., opened in mid-October. The company’s ninth location will open in San Antonio in November.

“We’re looking for restaurateurs to be partners with us in franchising these theaters because they know how to run these high-volume restaurants and multiple units,” said John Martin, president and chief executive of Alamo Drafthouse Cinemas.

Alamo Drafthouse Opens First East Coast Theater

Good things come to those who wait but for residents in and around Virginia’s Shenandoah Valley, the wait is finally over.

Northern Virginia Daily reported Alamo Drafthouse Cinemas made its long-awaited debut yesterday in Winchester. This is the first Alamo location outside the state of Texas and offers a unique twist on "dinner and a movie," combining first-run films and specialty programming on eight big screens with a full-service restaurant.

Nick Nerangis Sr., a partner in the local franchise group N/L Entertainment LLC, hung the theater's first movie poster, "Where the Wild Things Are," during a brief ceremony outside the 38,000-square-foot facility while employees prepared for a full day of showings. Nerangis and his children -- sons Nick Jr. and Steve, and daughter Lisa Limoges, who discovered the chain while working in Dallas -- believe the concept will take hold in Winchester. "We think it's a great market for this concept and we're eager to show local residents what it's all about," Steve Nerangis said. "It's exciting. We think we've got a hit on our hands."

Derek Dodd, who helped bring the 130-member Winchester staff up to speed last week as director of training for Alamo Drafthouse Cinemas in Austin, Texas, predicts the Winchester location will be a big draw, even in a down economy. "The movie industry, in general, has done well, and we offer a truly unique experience," Dodd said.

Photo: Franchisee Steve Nerangis featuring selections from Alamo Drafthouse's extensive menu.

He Remembered the Alamo

Sometimes a seemingly innocent conversation can breed an amazing opportunity. Norman Abdallah knows this firsthand and now he’s about to embark upon a new business venture with Alamo Drafthouse Cinemas.

The Austin American-Statesman reported that about two years ago, Alamo Drafthouse came up in a conversation between Abdallah and his son, Geoffrey. Geoffrey was a big fan of the Austin-based cinema-eatery chain and encouraged his dad to look into it further. Abdallah didn’t realize it at the time but that conversation would lead him to grow the Alamo brand in six Texas markets in the coming years with entrepreneur Neil Billingsley-Michaelsen. The pair – who call their operation Triple Tap Ventures LLC – will assume ownership of company-owned locations in Houston and Katy and plan to add theaters in San Marcos, Houston, Corpus Christi and several West Texas communities.

The move marks the first major development in expansion hopes for Alamo. Today, Alamo Drafthouse has seven locations, with two franchise locations slated to open later this year in San Antonio and Winchester, Va., the first out-of-state Alamo. While there are other movie-and-dinner theaters, Alamo is still quite popular and the longest running of its kind: John Martin, president and CEO of Alamo Drafthouse Cinemas, said revenue grew 8 percent last year, the best in the 12-year-old company's history. "For years, we've been out franchising, and trying to find a good fit for the franchise families," Martin said. "Norman Abdallah of Triple Tap definitely fit that mold."

Abdallah, chairman of Triple Tap, has homes in Austin and Seattle and said he would largely run the venture from his West Coast home. Billingsley-Michaelsen, who is the company's president, will run day-to-day operations from Austin. "We want this to be a big success," said Billingsley-Michaelsen, who has worked in corporate finance. "We are in it for the long run." The new group will not add locations in Austin. Today, Alamo Drafthouse expects to open 30 theaters by the end of next year, and 50 within five years, in markets such as Texas, Georgia, Florida, Oklahoma, Arizona and the East Coast.

Photos from top right: John Martin, president and CEO of Alamo Drafthouse Cinemas; Norman Abdallah of Triple Tap Ventures LLC; Neil Billingsley-Michaelsen of Triple Tap Ventures LLC.

Expansion on Tap at Alamo Drafthouse Cinemas

Texans know that once you’ve been to an Alamo Drafthouse Cinema, it’s nearly impossible see a movie anywhere else again. Not from Texas? Don’t fret: Alamo has some big plans for a town near you.

Film Journal International reported that in addition to three corporate locations (one in Austin and two in the Houston, Texas area), Alamo has three Drafthouse Cinema franchises operating in Austin and one in San Antonio. On the horizon, and an agreement with a “well-known multi-unit operator and restaurant group” which is “taking down the rest of Texas” and building out the state beyond already confirmed Alamo locations, according to John Martin, Alamo’s president and CEO. The latter encompass two more locations in San Antonio (scheduled for October 2009 and fall 2010, respectively) as well as Austin #5 (summer 2010) and, coming this fall, the franchise’s first venture outside of Texas: an eight-screen, 40,000 square-foot facility for Winchester, Virginia.

Consumer response to the brand has been enthusiastic. “We’ve had the best year in our history,” says Martin. He “absolutely” believes that the “Dinner at the Movies” concept offers a particularly strong value proposition to the consumer in this time of economic difficulty. “2008 was up 8.7 percent at Alamo. People are definitely going out to enjoy dinner, drinks, movies and popcorn. No matter what age you are and no matter where else you go, during those two-and-a-half hours everybody is still getting the best bang for their buck at our place. We have not seen a dip on the customer counts and people still want to see the movies and eat out,” Martin said.

As for future development, Alamo expects to have ten theatres open nationwide by the end of 2010 and 30 locations within five years. Martin encourages anyone interested in owning an Alamo Drafthouse Cinema to come to Austin so he can show them how the brand has developed over the course of the company history. The majority of franchise growth is expected to be generated by multi-unit area developers who have the resources and capability to open, own and operate five to ten locations in an exclusive territory in a three- to five-year period. Because of its unique niche as a cinema-eatery, the Alamo Drafthouse concept is particularly well-suited for individuals or investment groups who have prior or current experience owning/operating multi-unit restaurant concepts as well as those with prior or current theatre experience.

The Ultimate Cinema Experience

Fact: There should be more to one’s movie-going experience than just bag of popcorn and box of Junior Mints. John Martin knows this better than most.

Martin, the president and CEO of Austin-based Alamo Drafthouse Cinemas, recently sat down with EclipseMagazine to discuss what sets his theatres apart from the competition, the concept’s future growth plans and why the economy is nothing to worry about. Here are a few highlights from his interview, which can be viewed in its entirety here.

EM: Can you start by telling us a little bit about your role at the Alamo Drafthouse?
JM: As chief executive officer, my role has been that of overseer of creative DNA for the Alamos, promoter of specialty events with celebrities, ambassador for independent filmmakers, and creator of expansion opportunities for Alamo Drafthouse Cinemas in new markets. I have big plans for Alamo Drafthouse Cinemas over the next 12 months and beyond. Alamo will expand beyond its home state of Texas for the first time this fall by opening an eight-screen theatre in Virginia and will continue growth in Texas with three theatres – two franchisee-owned locations in McAllen and San Antonio, set to open by the end of 2009, and one corporate-owned location in Austin opening early next year. I am also in the process of qualifying potential franchisees for a theatre in San Marcos, Texas for an early 2010 opening. Also, in addition to continuing Alamo’s commitment to first-run blockbusters as well as independent films, I plan to unveil a number of programs designed to appeal to a wider variety of guests.

EM: What makes The Alamo unique?
JM: Alamo Drafthouse Cinemas is the nation’s oldest cinema-eatery concept that shows first-run films, as well as the only franchised movie theater chain and the only franchise concept that offers the unique combination of theater and restaurant, with the best first-run and independent films and other one-of-a-kind special events plus a fun, exciting menu of great food and beverages. Alamo Drafthouse Cinemas range in size from two to nine screens and resemble traditional movie theaters except rows of seats alternate with bench-style tables. Once seated, customers order from the menu and the friendly wait staff brings the food to their seats. Customers can continue to order during the movie by writing their request on paper and attaching it to clips on each table. All tabs are closed before the film ends. We also go the extra thousand miles to create a movie-going experience that you cannot find anywhere else. Our love of film and food is shown, and our Alamo guests routinely tell us that they don’t go anywhere else to see a movie. Plus, our menu of craft beers is phenomenal.

EM: In this down economy it seems like the film industry is rolling on like gangbusters, why do you think this is?
JM: We are the shelter in the storm. In traditional market downturns, people want to get out and escape from reality, just like during the Great Depression when people frequented nickelodeons. Alamo represents a wonderful opportunity to bring people together for a memorable evening in these trying economic times and I have no doubt that the success we’ve experienced will continue throughout 2009.

More Expansion for Alamo

Last week, news broke that Alamo Drafthouse Cinemas would be expanding in its hometown of Austin. Now, the country’s oldest cinema-eatery has announced its expansion plans for the Dallas-Fort Worth market.

The Fort Worth Business Press reported that Alamo has plans to open six new locations in the Dallas-Fort Worth area during the next three years. Alamo, which currently has seven locations in Texas and three more in development including its first location outside the Lone Star State, is the only franchised movie theater chain and the only franchise concept that offers the combination of theater and restaurant.

“After nearly 12 years of multi-unit operations across Texas, we feel that Dallas-Fort Worth is an excellent market to expand our concept into,” said John Martin, Alamo’s president and CEO. “As we celebrate our best year to date, I'm excited to continue Alamo Drafthouse Cinemas' expansion into new markets. Alamo represents a wonderful opportunity to bring people together for a memorable evening in these trying times and I have no doubt that the success we’ve experienced will continue with the numerous theaters we have planned for the Dallas-Fort Worth area over the next three years.”

More Alamo in Austin

Need more entertainment in your life? If you live in Austin, it's on the way!

The Austin Business Journal reported Alamo Drafthouse Cinemas plans to bring a new $5 million theater to Austin’s Circle C Ranch next year. The roughly 35,000-square-foot proposed theater will be a model for future theaters moving forward, said John Martin, president and CEO of Alamo Drafthouse. The Circle C location, slated to open in 2009, will have at least eight screens and will be the largest corporate-owned unit for the movie theater company. Martin also said the theater will boast digital projectors, the latest sound system and equipment to show 3-D movies, which appear to be making a big comeback.

Alamo Drafthouse, which has won over legions of admirers with its cinema-eatery concept and movie-related events, is enjoying brisk sales despite the tough year, Martin said. “The Alamo as a system is having its best year in our almost 12-year history,” he said.

Besides the Circle C location, the theater chain plans to open in three locations by the end of 2010: San Antonio, McAllen and Winchester, Virginia. Not all will be corporate-owned. Martin said a big reason Alamo Drafthouse is going to Circle C is that area residents asked for it. “It’s a great market, and they pursued us for quite some time. We believe the market is ready,” Martin said.