In the age of Netflix and Co., the number of cinema-goers has dropped dramatically. Nevertheless, it can still be worth opening a new cinema. With targeted market analysis, a detailed financing plan and the tailwind of a cinema giant like Cinemaxx, the dream of owning a cinema can be realized through franchising.

The right location to open a cinema

Many cinema fans dream of opening their own cinema. However, the way there is long and the chances of success are only promising if a detailed market analysis, innovative ideas, and sufficient capital are available. Before a cinema can be opened, the location must of course first be clarified.

Depending on the location, there are enormously high rents in the inner city, which can, of course, be offset by a high potential customer base.

It is also important for the location to be connected by public transport and have enough parking spaces. You should also do a competitive analysis to examine the need to open a cinema in relation to competitors.

Once the right location has been found, there are costs for expanding or building the cinema. These depend, among other things, on the size of the cinema and the condition of the property.

Equipment and design

In order to successfully open a cinema, equipment costs are incurred. Particularly noteworthy are:

• Cinema chair
• Canvases
• mood lighting
• Projectors that involve extremely high acquisition costs

Depending on the screen size and quality, between 10 lac to 50 lac INR should be planned for a digital projector. The question of whether you want to open a cinema in which films in 4k or 3D films are to be shown is also relevant here.

There are also costs for sound systems, possible analog projectors if old film classics are to be played, as well as the setup of the anterooms and the cash desk area. Costs can be saved, especially in the sales area for snacks and drinks, if suitable sponsors are found.

Open and direct Movie theatre

In addition to the calculation, which mainly concerns one-off costs to open the cinema, there are of course also costs for ongoing operations that are included in the financing plan that has to be included.

Salaries for the staff at the cash register, in the snack area and at the entrance on the one hand and technical specialists who are responsible for operating the projectors and sound systems, as well as cleaning staff, on the other hand, determine the monthly personnel costs.

In addition, there are irregular maintenance costs, i.e. inspection, maintenance and repair of the projectors, ventilation systems, etc. For any renovation work, a buffer should be included in the financing plan for a possible loan to open your own cinema, for example, smeared walls or toilets to clean or replace damaged cinema seats or dirty carpets.

Market analysis before the Movie theatre opens

Depending on the location, either the potential running audience or the interests of the residents nearby towns are decisive for the choice of the program if you want to open a cinema.

For a walking customer, who is primarily determined by tourists, films with original subtitles should be offered, for example. Even old film classics can be very well received by certain target groups.

When selecting programs, detailed market analysis should, therefore, be carried out beforehand, for example through surveys, because ultimately the best cinema program is of no use if the cinema halls remain empty. Depending on the type of film to be shown, different rental fees apply.

These are mostly based on location and the expected number of visitors and are around 50 percent of the admission price.

Save costs with the Movie theatre franchise

If you want to open your own cinema and minimize financial risks, you can also choose to venture into independence as a franchise partner of a large cinema chain.

The advantages are obvious: if the cinema has already been opened, the costs for the takeover have to be paid, but these are generally significantly lower than the acquisition costs if you want to open a new cinema.

In addition, cinema giants such as Cinemaxx are known to almost every cinema lover and thus, above all, the costs for advertising are lower than in a completely unknown cinema.

Depending on the deal, you get your own cinema turnkey and pay part of the profit to the concessionaire, for example, Cinemaxx.

Open Movie theatre without risk?

In any case, opening a cinema in this age is fraught with risk. The number of cinema-goers has dropped significantly in recent years, but this development was counteracted by the advent of 3D technology.

In big cities there are many small cinemas, the selected classics or art house films demonstrate. These are usually even supported by the municipality as a cultural association. With enough capital, however, the least risky way to open your own cinema is to start as a franchisee.

Especially for newcomers to the cinema, the tedious calculation of the acquisition costs before the opening is an undertaking that is often underestimated. Costs can be quickly forgotten so that the capital is insufficient and the planned opening does not take place.

If tenancy agreements have already been signed, the ripcord can only be pulled with considerable financial losses.

With a large franchise partner, on the other hand, you ideally have a competent partner at your side who primarily advises and supports inexperienced managers.