Octane Entertainment (Octane Raceway and Mavrix)
Octane Entertainment, which operates Octane Raceway, opened its second entertainment venue, Mavrix, on March 7, 2020, only to find itself mandated to close Mavrix a mere 10 days later. “Our management team immediately went to work to predict (as best as was possible) and prepare for what we would need to re-open when the time came,” says Scott Sanders, founder and CEO of the Scottsdale-based company. “Our goal has always been to provide memorable entertainment experiences for our guests and now we were going to have to figure out how to do that in a new environment with smiling faces hidden behind masks.” The first step was to evaluate all customer contact points.
Scott Sanders, founder and CEO of Octane Entertainment
Octane Raceway worked with a company that had been using UV-C lights to sanitize materials in hospitals to adapt a large, refrigerator-sized cabinet to sanitize all helmets after a race. And the company purchased sanitizing fogging machines to disinfect the karts between races. At Mavrix, Plexiglass dividers were installed between each set of bowling lanes and all booths in the sports grill, where a fewer number of tables, chairs and barstools were spaced out “to better accommodate a term we were quickly becoming more and more aware of: ‘social distancing,’” Sanders relates.
Along with developing detailed sanitization wipe-down procedures for all touchpoints throughout both venues, Octane Entertainment implemented QR code food and drink menus and created signs to place on tables once they had been sanitized by a team member after each use. And, in efforts mirrored throughout business and home settings alike, Sanders says, “We sourced hundreds of reusable masks for our team members as well as thousands of disposable masks for guests. We purchased as much hand sanitizer as we could from our local vendors and then scoured the internet for more.” Additionally, Octane Entertainment purchased touchless temperature thermometers and created check-in logs for each shift, to help ensure employees were safe for guests as well as each other.
“Once we had the needed safety infrastructure in place,” says Sanders, “it all came down to training our team on how to work effectively in this new environment while still ensuring our guests had a great time.” Crediting them for going above and beyond in very uncertain and challenging times, he says, “It was, and still is to lesser extent, a crazy and challenging time to operate a customer-facing business where your guests are looking for a fun escape from their own daily challenges.
“We ultimately did not pivot our business away from our core competency, memorable fun, but transformed each and every customer contact point to be as safe as possible while still providing a temporary escape from the challenges of COVID.”
The Economic Roller Coaster
Mavrix’s opening coincided with Spring Training, and its second-week soft opening was a huge success; Sanders recalls Mavrix had a nearly packed house all weekend. And then, all of a sudden — COVID-19, and the venue was closed. “We went from a $75,000-plus weekend to zero revenue for the next two and half months,” Sanders relates. Noting that Mavrix was a high seven-figure project that was funded through of combination of personal investment and bank financing, Sanders says he began reaching out to the bank, the landlord and all key suppliers to talk through what could or could not be done as soon as the company came to understand that COVID was not going away in a matter of days or weeks. “I am thankful for the relationships that have been built over the years,” he says, “and there was a lot of compassion and understanding that we ‘were in this together and would get through it the same way.’”
But dealing with the potential disastrous financial meltdown that was narrowly avoided was not his most challenging decision, Sanders shares. “The truly most challenging task I had was to lay off (temporarily, but we did not know for how long) approximately 85% of our team. It weighed extremely heavily on me as I consider Octane Entertainment to be an extended family that I take both pride and responsibility for employing more than 200 people.”
According to Sanders, Octane wrapped up 2019 as the best revenue — and profit — year in its 16-year history, and 2020 was poised for a repeat performance. “The first 10 weeks of 2020 brought in more than a million dollars of sales. After closing on March 17, it would take another 26 weeks to repeat the same milestone,” he says. When the business reopened over Memorial Day weekend, it was to minimal traffic; and, while business slowly improved, it seemed to be at the mercy of the national news cycle: When COVID spiked, business would quickly drop; as numbers declined, business would slowly build. By October, Octane’s public business had returned to approximately 90% of 2019 levels, but, critically, the corporate events that have historically been the core strength of business — 30 to 40% of Octane’s total revenue — remained nearly non-existent. “We started to see some positive momentum beginning in December for holiday events, only to see half of them cancel or postpone when another surge occurred in November,” Sanders relates.
“For both Octane and Mavrix, January marked the start of what feels like a real recovery. Both companies have regained profitability, which has been a major relief, although we are now struggling heavily with staffing shortages along with the entirety of the restaurant and hospitality sector,” says Sanders.
Staying Strong and Moving Forward
The “anything and everything” mindset included working with vendors and banks, securing a “just in case” line of credit to backstop potential losses beyond existing cash reserves, and applying for EIDL loans and PPP loans. Sanders describes the divide and conquer effort he shared with Octane’s COO JP Mullan to try and cover all of bases. “His focus was to ensure we had all of the policies, procedures, equipment and training needed to ensure guest and employee safety and mine was to ensure we had sufficient cash to continue to cover ongoing operating losses and whatever additional COVID-related expenses that continuously popped up,” Sanders says. “As to whose job was harder, it depended upon the day. Neither were fun but both were necessary.”
Focused on making guests and employees feel safe and putting their team back to work as soon as possible, “to help them earn money and put food on the table for their families,” Sanders says, “We were in a constant cycle of flux from week to week.” The challenge was how to staff to meet unknown and quickly changing demand. “If we over-staffed, we lost even more money, and if we were caught short staffed, we suffered through service challenges below our standards,” Sanders explains. The two companies together lost more than a million dollars in 2020. “We were extremely lucky and thankful to be able to have the PPP program help recoup a portion of those losses.”
Appreciative of Arizona’s business climate and the support of the many customers who have come out to support a locally owned business, Sanders says he believes Octane has made it thought the most challenging part of the storm and will continue to recover. “Octane Raceway and Mavrix are expecting very strong second halves of the year as consumer confidence continues to build and companies begin to reward and bring together their employees who have worked remotely and in front-line essential businesses,” Sanders says. “We are looking forward to an even stronger 2022 and expanding both Octane Raceway and Mavrix to new locations in the Valley.”
Octane Entertainment — with Octane Raceway and Mavrix — is one segment of the June 2021 cover story “Fun Is Our Business: Survivors of a year that’s been anything but fun.”
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