Chain Raises Curtain on Expansion

"This deal is going to put us on a whole different playing field," Jeffrey P. Benson, CEO of the Great Texas Movie Co., tells GSR. The former Deloitte & Touche CPA says the equity backer will make it possible to open 50 cinema-eateries within five years.

Benson's company owns four cinema-eateries and two traditional theaters--all first-run venues. Texas is home to the most cinema-eateries in the US, according to In Focus magazine, the North Hollywood, CA-headquartered publication for the National Association of Theatre Owners in Washington, DC. And for that reason alone, Benson says the expansion plan will take the operator out of state for the first time.

Benson is in talks to take over at least three closed theaters by year's end. Due to the highly competitive nature of the industry, all he will say is he's looking at locations in Oklahoma, Arkansas, Michigan and Florida. If the equity play is made, construction will begin by the end of first quarter 2006, he says.

Until the deal's signed, Benson isn't giving any hints about the equity backer or even his homeport. But, he is working a 50-50 partnership to build a war chest with at least $10 million to leverage the plan. He estimates it will take four months just to make the ownership change with the Texas Alcohol & Beverage Commission so the dinner-and-theater model can remain the same.

In June, the chain will open a fourth location for its "Movie Tavern" brand--a 25,000-sf, four-screen in a high-profile shopping center in the two-university City of Denton north of Dallas. He could christen another project yet this year. The hard push is slated to begin in 2006 when he's penciled "three or four" openings on his calendar. The plan is to steadily increase the number of openings through 2008 when he hopes to be cutting ribbons on 15 locations in the US.

Benson stresses it's not cheap to convert a dark theater into a cinema-eatery. The Denton Center theater is costing $1.7 million to gut and rebuild, he says.

It's also not easy to find experienced operator pros who know the ins and outs of running restaurants, bars and theaters. For that reason, Benson says the Great Texas Movie Co. will keep its expansion to corporate-owned sites.

The budding chain's biggest competitor is Austin-based Alamo Drafthouse Cinemas, which has six locations open and is franchising its plan. One franchised theater is open in Houston, but the deal calls for at least one more, according to information from the chain's website. It's no secret around town that Alamo Drafthouse, which has passed the eight-year mark, is scouting Dallas/Fort Worth--a logical move since it has theaters in the state's other three metros.

The cinema-eatery stage includes the Texas-grown Studio Movie Grill and New York City-based Angelika Film Center that, like Alamo Drafthouse, don't stick strictly to first-runs for their menus. Studio Movie Grill, a late 1990s spin-off of a 13-year-old operation that got its start in the Granada Theatre in Dallas, operates theaters in Addison and Plano. Angelika, a popular showplace for the Cannes Film Festival lineup, has screens in New York City, Dallas, Houston and Plano.

Outside the Texas line, theatergoers would be hard-pressed to find the dinner, movie and a drink concept in a one-stop shop. According to In Focus, even the land of Hollywood is barren when it comes to cinema-eateries, as is the rest of California. The magazine's research shows the first cinema-eatery opened in July 1990 in Portsmouth, VA and the second oldest is on Marco Island, FL. A few are scattered in between in small towns along the East Coast, most not first-runs and not necessarily licensed for alcohol sales.