Lollipops rakes in the lolly

By LIBBY MIDDLEBROOK

Alan Grant has never had so much fun.

The 44-year-old Hamilton man has established a unique franchise operation over the past decade, but you are more likely to find him dangling from a jungle gym than crunching numbers behind a desk.

Mr Grant is the founder of Lollipops Playland, indoor playgrounds for children aged 2 to 11.

Since he opened the first one in New Plymouth nine years ago, more than 1.7 million children have charged into the enormous playgrounds, frolicking over merry-go-rounds, ball pits and bouncy inflatable castles.

"What could be more fun for a child than having a place that's just for play? It's that simple," said Mr Grant, who coordinates 14 New Zealand franchises and four in Australia.

"I'd visited places like McDonald's and started thinking about a large-scale playground that kids were prepared to pay to come into. It all started out of a willingness to take risks."

Before Lollipops Playlands started popping up around the country in the early 1990s, adventure parks such as Rainbows End in Auckland and Fantasy Land in Hastings made up the bulk of pay-for-play operations locally.

Mr Grant, who has a background in business management, wanted to set up an indoor playground that was as attractive to children as an adventure park, while offering a safe play environment that adults could also enjoy.

"That's what made us different from anyone else: we have really strict safety guidelines. Everything in the playground is designed at heights where parents can see their children from any place in the building.

"A child can only leave Lollipops with an adult who has a matching identification band, too."

Each day up to 700 children pay $5 to $8 (depending on age) for unlimited time at Lollipops Playlands, sited from Auckland to Wellington.

They are not childcare facilities, and parents are responsible for watching their children.

The annual turnover of New Zealand franchises ranges from $300,000 to $1 million, with a flat fee paid to Mr Grant each year. Setup costs are met by franchise-holders.

"We wouldn't have got to where we are today without the franchise system, but it comes at a price as you make mistakes and learn from them.

"We don't do percentage of turnover because it's simpler to just have a flat fee, but as more Lollipops open the initial royalty and flat fee increase."

So how did a 44-year-old with a background in fast food and building products end up running a chain of huge playgrounds?

Mr Grant started out his career at building products company Winstone Group after a business degree at Waikato University. He subsequently worked as a Lion Breweries export manager and eventually became a general manager at Winstone Glass at age 28.

Six years later he was running the New Zealand division of fast-food chain KFC, but wanted to leave the corporate world to spend more time with his family.

The Grants moved to New Plymouth and bought a Payless Shoes franchise.

"The prospect of semi-retirement always sounds appealing when you're really busy, but after about six months I started to feel a bit flat."

He dreamed up the Lollipops concept after visiting fast-food outlets such as McDonald's, where brightly coloured playing facilities are a magnet for children.

While the New Plymouth Lollipops attracted hundreds of youngsters during the 1991 Christmas holiday break, business dropped sharply when school resumed.

"In retrospect, it was a huge mistake starting Lollipops in New Plymouth because it didn't have the population base ... We probably lost about $250,000 during that exercise."

Mr Grant decided to set up Lollipops franchises, targeting regions such as the Waikato and Hawkes Bay with larger populations than Taranaki. Two franchisees set up in Hastings and Hamilton, but both businesses closed within a week of each other in November 1995.

"In Hamilton it was a funding issue - the franchise-holder had plenty of assets but not enough cash. In Hastings, we thought people would travel from Napier and Havelock North, but that wasn't the case.

"That taught us a few lessons about market research and funding, as well as our target market, which is actually parents."

The eventual success of the New Zealand franchise system, which was partly due to introducing cafes and adult music, led to approaches from Australia, where the four Lollipops now operating are about to be joined by two more.

Almost 70 per cent of business comes from birthday parties, while casual visitors make up the remainder.

Mr Grant, who has also started a New Zealand daycare franchise under the Lollipops brand, hopes to open at least 30 in Australia.

"There's a lot more potential in Australia than New Zealand, basically because of the size of the population. We can charge more because the cost of other activities like movies is higher. Profitability is stronger."

However, he is not planning to take the franchise any further overseas, other than offering consultancy services to people keen to open pay-for-play facilities.

"To be a successful franchise operation you've got to support your franchises, and I just couldn't if I were travelling overseas all the time.

"I got out of corporates because I didn't want to spend lots of time sitting on aeroplanes, but that hasn't really eventuated. I went to Australia 19 times last year."