We are talking with Scott Sanders of F1 Race Factory in Phoenix, AZ, F1 Race Factory is the hosting track of the 2010 IKWC World Championship
Scott, what was your first exposure to indoor karting and what was your initial
impression of the sport?
My first experience with indoor karting was in Southern California in 2000. I have always loved racing in virtually any form and the concept and accessibility of indoor karting to the general public made an immediate positive impact on me and got my wheels turning.
After seeing indoor karting and knowing how few tracks were in the U.S.
did you immediately feel like this was something you wanted to invest your time and money in?
No, from my first exposure to actively pursuing the creation of F1 Race Factory was many months in the making. I believed in the concept but relied heavily on first hand research of 20+ tracks in Europe and the US before moving to the business planning and fund raising stage of making F1 Race Factory a reality.
Having seen some European tracks did you feel like indoor karting would
translate to the American public without a lot of changes?
I think minus the disco music the majority of karting tracks in Europe translate well into the U.S. market. I also know that like the United States, European tracks run the gamut from high end big tracks like Schumacher’s in Germany to smaller more basic models.
Were there things about the European model that you thought would not fit
in the U.S. market?
Other than the disco music (just kidding) – I feel that the majority of tracks in the EU would fit into the US market.
The track you started F1 Race Factory ( www.f1racefactory.com ) has
been open for five years, what has been the biggest surprise to you?
How much work it takes to keep a multi-facet entertainment venue running on all cylinders. We operate two tracks, a restaurant, arcade, billiards room, rockwall and a conference center capable of handling groups up to 1,000 and it truly takes a tremendous amount of organization and relentless attention to execution to ensure we get it right each day for our more than 100,000+ customers each year. It is a lot of work but I have enjoyed the opportunity to create a great racing experience for our customers and have met some quality (and some famous) people along the way.
F1 Race Factory is over 100,000 square feet, two quarter mile tracks with large conferencing areas, video gaming area with Bar / Grill, do you feel like this combination is right for all location or is it population and demographic driven as to the facility offering?
I believe the product mix has to be the right fit for the location and realistic demographic of the area. We are not in a one size fits all business and what works in one market or location may or may not work in another. A facility like ours would not be viable in a smaller market but a derivative of our concept could be adapted to meet most market opportunities.
Do you feel like every facility needs corporate business, or is there
a place for the "arrive and drive” facility to exist on its own?
I believe “arrive and drive” venues can be profitable without significant corporate business as long as the location is in good proximity to dense middle and upper income housing and that the facility has been designed to run with minimal staff (low overhead). You must know your market and have a clear vision of how to design the facility to best meet your target audience.
When I talk to track owners all across the country everyone has an idea
of what the proper balance is for "arrive and drive" versus corporate
and party business, do you thoughts on that percentage?
I think the “perfect” percentage is whatever maximizes your profits. At F1 we strive for a 60/40 mix of corporate to arrive and drive traffic but ultimately are driving towards a 75/25 mix over time. Corporate business is more manageable from an execution standpoint but does require additional overhead. I believe the perfect mix does differ from facility to facility and is heavily dependent upon location. We are very centrally located to multiple business “hot spots” in the metro Phoenix area so we are designed and targeted toward leveraging corporate business. We still draw a large number of arrive and drive traffic and will continue to market and cater to this clientele as their business is also very important to our success.
When F1 opened its doors there were only 28 indoor tracks in the U.S.,
now there are over 100, what do you attribute that growth to?
Indoor kart racing is a phenomenal way for the general public (like myself) to experience the thrill of racing first hand. NASCAR is at a zenith in popularity and has the attention of the masses. Who doesn’t want to try their hand at what it feels like to be Jeff Gordon or Jimmy Johnson? I have always been an open wheel fan myself so analogies to Emerson Fittipaldi and Michael Schumacher are more my style but you get the idea. Indoor kart racing gives accessibility to virtually anyone that wants to feel the rush of adrenaline that comes with racing. It is a great experience and that is what keeps so many individuals and companies coming back for more.
Do you see continued growth in the market or are we close to saturation?
I believe there are still significant growth possibilities for quality indoor karting concepts. We will probably continue to see some failures and consolidation in the industry as would be the norm in any growth industry but quality concepts will remain as viable business operations. There has yet to be any dominate player in the industry and this too will likely change as the industry matures. I believe the demand for indoor karting will continue to grow over the next 5 to 10 years.
The Southern California market has been extremely hot lately, what do you
attribute that to, population density?
The SoCal market has a tremendous population and countless race fans. It is also fairly spread out and as traffic challenges continue to increase the distances customers will drive to race decreases leaving opportunities for new comers.
F1 Race Factory was host to the first three Indoor Kart World Championships,
that must have given you pleasure that something like that got started at F1.
We have been a proud supporter and host track for the past 3 years of the Indoor Kart World Championships. The European and South American presence has been strong from year 1 and it is a logical next step to take the Championship to other countries in a rotation to continue to build upon our momentum.
What are your thoughts about the future of competitive indoor kart racing?
I think that competitive indoor karting is in its infancy. It is a viable concept but will likely take the involvement of multiple strong sponsors including media support to help take it to the next level. The possibilities are there but there will need to be a quantum adjustment in the expectation of the cost of racing if the series is to truly be consistently competitive. For a track to be serious about competitive indoor karting they would truly need to dedicate a fleet of karts solely to that purpose. It is an expensive proposition and one that no track has yet to undertake. The option exists for racers to buy their own karts for a series but again this leads to a major increase costs and complexity.
Due to the large numbers of general public that do indoor kart racing each
year is this the vehicle by which we can raise awareness on the sport or do
you think it's going to take a big sponsor stepping in?
I think it will take a combination of sponsors and track commitment. All of the tracks are in the business to make money. If there is not a profitable bottom line to running a competitive series then it is challenging at best to gain tracks’ commitment to vigorously pursue. Sponsors are looking for a return on investment as well. This needs to translate into loyal customers that go out of their way to support those sponsors and tracks. It will be a challenge but nothing good comes easy.
Thanks for taking time to share your thoughts with us!