British Laser-Tag Game Expands To Asia, and Now North America

LABYRINTH AND LIGHT

JUST when you think you're safe, an eight-year-old zaps you from around a corner. It happens in a game of laser tag, invented in Britain and now expanding across North America from a base in Canada.

On this particular afternoon, a game is being played at the Laser Quest site in Richmond Hill, a suburb north of Toronto.

The game is played in a dark labyrinth. Each player, and there can be as many as 27, wears something that looks like a life vest with a circle of light bulbs on it. Everyone carries a laser that, when fired, sends out a long red beam of light. Each time your light touches an opponent's vest, a central computer records your score.

``Laser Quest is an extension of childhood games such as tag and hide and seek,'' says Greg Thompson, the president of Laser Quest Corporation. ``The attraction is each game is different, and there's real participation.''

Laser Quest arrived in North America by mistake.

In June 1992, Mr. Thompson got off the train in Nottingham, England, and asked two teenagers for directions. ``They said, `Are you going to play Laser Tag?' I tried it and liked it so much I canceled my ticket home and went searching for the [game's] owner,'' he recounts.

Thompson put a deal together with the British developers of Laser Quest, two young men, Nick Brunt and Simon James, and Simon's father, David, who had provided the financing for the British operation. Today, there are 60 sites in Britain and 30 more in continental Europe and Asia combined.

The arrangement gives the Canadian publicly traded company 100 percent of the rights in Canada and 37.5 percent of the rights in the United States and Mexico. In the US and Mexican market, the British company, Laser Quest U.K. Ltd., owns another 37.5 percent, with 25 percent held by private investors.

At first, Thompson and his partners franchised the idea. But the franchises did so well on a relatively small investment - each site cost about $400,000 (Canadian; US$288,725) - that the company decided to go it alone and finance new outlets itself.

``We're not franchising them, because we make more money owning and operating them ourselves,'' Thompson says. ``When we own it, we can make as much as $600,000 to $700,000 a year. With a franchise, it's a one-time fee plus, maybe, $30,000 a year in royalties.''

``Each site has been profitable from day one,'' says David Rosenkrantz, an investment banker with the Toronto firm of Gorntiski, Thompson & Little, which is advising the company.

But is it a mistake to go it alone when franchising might spread the risk? Without referring to Laser Quest by name, the question was put to one franchising consultant.

``If they can handle the business, it's probably wise to keep it in-house,'' says Karen Castelane, of Castelane Consulting in Toronto. She adds that there are reasons why franchising is sometimes an advantage. ``People franchise to expand into areas they might not otherwise get to,'' she says. ``And they sometimes get the energy of a motivated local entrepreneur.''

Laser Quest has ambitious expansion plans. It has opened three outlets in Canada and three franchise sites. This month, a company-owned site opens in Regina, Saskatchewan; next month, one in Montreal.

But it's in the US where plans are humming. There is just one site now, in Lexington, Ky., but this year alone, the company plans to open five more sites in places such as Spokane, Wash.; Nashville; and Lincoln, Neb.

``We have two leases signed and should have three more done before the end of May,'' Mr. Rosenkrantz says. ``We're looking at having 25 sites in the [US] by the end of 1995.''

Back to the game.

It isn't just the vest and its epaulets that can be a target. Sticking the laser around the corner is no protection; the laser itself has sensors too, and it can be zapped. There is a buzzing sound for 5 seconds until the laser is recharged.

Outside this Richmond Hill Laser Quest site, there are people waiting to pay $6 to play. Most of them are under the age of 17.

``We've had more than 1,000 people through on a Saturday,'' says Pat Wilmot, manager of the site. ``It's a good, simple business because there's no inventory and no receivables.''

The game lasts 15 minutes. Computerized sheets of paper with each player's code name on them are passed out when the game ends.

JB came in first; this reporter came in third to last. JB is the eight-year-old.