Rocklin residents John and Susan Hughes had begun to think that maybe one day they would open another one of their Laser Craze family entertainment centers, but then came the letter from an attorney in Ohio.
The lawyer represented a business called Lazer Kraze, which had three centers in Ohio and Kentucky, and that business had trademarked the name. The owner demanded that the Hugheses stop using their moniker.
“We started down the path of fighting them,” Susan Hughes said. “We wanted to keep our name. We had built our brand in the community, and we got to a point where we had to make a decision. Do we continue down this path for another year and a half, spend the money and the time?”
For her husband, it really wasn’t so much the money. Their business will bring in roughly $1.5 million in revenue this year, he said, so they could fight it, but all the time and energy spent on a legal fight could instead go toward expanding their business.
“The legal advice from my attorney was simply, ‘John, you can head down this road and you will probably prevail, but it will be another 18 months before we see our day in court, and it’s going to cost you another $100,000,’ ” said John Hughes. “ ‘So, do you want to expand your business and grow your brand, or do you want to have this suck up your time?’ ”
The Hugheses made what they call “a really hard decision.” They are changing the name of their 3-year-old baby to Xtreme Craze. New signage will be installed at the end of September at Merlone Geier’s well-trafficked Blue Oaks Town Center, 6600 Lonetree Blvd., in Rocklin. The website, www.lasercrazeca.com, will soon be redirected to a site with the new name.
“Our biggest concern is that there be no confusion in the community,” Susan Hughes said. “Nothing is changing about Laser Craze, except the name. There are not new owners. Customers are going to receive the same incredible, interactive experience they always have.”
Our biggest concern is that there be no confusion in the community. Nothing is changing about Laser Craze, except the name. There are not new owners. Customers are going to receive the same incredible, interactive experience they always have.
Susan Hughes, co-owner of the newly renamed Xtreme Craze business in Rocklin
John Hughes said he really had to change his mindset: “I was bitter for a long time. For about a year, I was like, ‘Are you serious? This can’t be true that someone in Ohio could actually think they’re losing business to me in Sacramento.’ Just intuitively, it didn’t make sense to me.”
Once their minds were made up, the couple said, they started looking upon the name change as an opportunity to demonstrate that they offer more than laser tag. Roughly 45 percent of the company’s business comes from birthday parties, many of which are for children who primarily play in the bounce houses and arcade. Laser tag, which makes up 55 percent of the center’s business, attracts a lot of teenagers, but players can be as young as 7.
John and Susan Hughes, both of whom are 46, say they love to play the game themselves, and once a month, they do so with their staff of 35. Their teen and tween daughters, Timbre and Teal Hughes, also frequently get into the action.
The laser tag business wasn’t always something that John Hughes viewed as a promising venture. He thought his little brother, Gregory Hughes, was nuts when he called him 25 years ago to tell him that he was quitting a good corporate job to open up an entertainment center with laser tag as its mainstay business.
But Gregory Hughes and a business partner ended up opening two successful Lazer Zone centers in the Boston area. Eventually, the younger Hughes sold his stake in the business to his partner and went solo. He incorporated with the name Laser Craze in 2007, then opened his first center in 2008.
He now has three arenas with that name, John Hughes said, and his insurer is paying to help him fight the trademark infringement battle with the company in Ohio. Gregory Hughes had searched the federal database in 2007, when he initially incorporated, and had found no other business with a trademark on Laser Craze. The Ohio company applied for its trademark in 2008, after Gregory Hughes’ business was already open.
John Hughes is rooting for his brother, but it won’t affect his decision. He and his wife hope to open up a second location by the end of 2016, so they are focused on rebranding and expanding.
“It took us about a year and a half of planning and building before we could open our doors here,” John Hughes said. “We crossed every hurdle you could ever imagine trying to get the place open. Our business is exploding now, with 21 percent year-over-year growth in revenue and players. This year, we’re expecting 80,000 people to play the game. We started with 46,000 in 2012.”
The Hugheses invested $650,000, pretty much all of their savings, into the business, they said, and after making pitches to 30 different banks, they sat down at a Starbucks with Matt Hine of California Bank & Trust. They talked for two hours, John Hughes said, and by the end of the conversation, Hine was impressed with their detailed business plan, their past business experience and the fact that Hughes’ brother had met with so much success in the business.
The Hugheses received a loan, backed by the U.S. Small Business Administration, for $650,000, they said, and because of their success, California Bank & Trust has been asking whether they’re ready to expand.
The couple renovated 18,000 square feet of a shuttered Mervyn’s department store. They acquired state-of-the-art equipment and hired artist Jody Barrilleaux to airbrush the arena walls with a glow-in-the-dark spacescape. Planets explode, meteors hurtle and stairs lead to the heavens.
“We were all in,” Susan Hughes said. “You can’t do something like this and not do it right.”
After the couple’s first 18 months of business, John Hughes said, they reached positive cash flow. He had continued to work his corporate job managing a team of salespeople in the medical industry, he said, so it wasn’t unusual for him to work a combined 90 hours a week in both businesses. Susan Hughes, a former television advertising saleswoman, was a stay-at-home mom when Laser Craze opened, but she found herself spending plenty of late nights nurturing the new baby.
“When we first opened, we thought that, with the movie theater next door, people would go to a movie and then come over here and play,” John Hughes said. “That’s not really the case. ... For a family of four to go to the movies, it costs 80 bucks. If you want to come here and spend 2.5 hours and have your kids have a blow-out time, it will cost you 80 bucks. You don’t do those two things together. It’s an entertainment choice to come here.”