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How to Start a Drive-in Movie Theater Business in 2023

Do you want to start a drive-in-movie theater? If YES, here is a 18-step guide on how to start a drive-in-theater business with no money and no experience.

Businesses in this industry let people watch movies on a large screen but the difference is that they watch it outside, while sitting in their cars. The movie screens are put up on a semi-private area and since many couples are still willing to pay, this can be a lucrative business.

If you plan to start this business, you will need working capital and of course, a solid plan. You will need to start by getting a good location because without it, you will find it hard to attract customers. Drives-in theatres are enjoying resurgence in the united states, but drive-in movie theatre supplies and equipment aren’t exactly easy to find.

Starting this business will cost a good deal, and you don’t want to waste money on equipment that isn’t going to last or be suitable for the outdoors. Unlike a standard movie theatre, in this business you won’t have to worry about velveteen seating or ambient lighting.

Aside from the cost of airing films, your costs will fall into three broad drive-in movie equipment categories. These categories are namely; a drive-in theatre screen, a projector suitable for drive-in movies, and Drive-in movie concessions. There is ample information for you as you read on if you truly want to start this business.

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Steps to Starting a Drive-in-Theater Movie Business

1. Understand the Industry

The drive-in theatre industry is believed to have peaked in the 1950s; in 1952, more people attended drive-in theatres than regular theatres. Reports have it that by 1958 there were 4,063 drive-in theatres in the United States. But the industry reduced precipitously throughout the 1970s and 1980s, and between 1978 and 1988, more than 1,000 facilities were closed.

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The industry continued to decline in the 1990s, and by the turn of the millennium, 447 sites operated 684 screens. By the end of 2011, these figures had dropped to 606 screens at 366 drive-in theatre locations. But we believe that a lot of factors have kept this industry from becoming extinct.

Things like affordability and convenience, the desire to get out of the house during pleasant weather, plus nostalgia for the 1950s which many drive-ins are touting.

This business is also more social than any indoor theatre (where you are not even allowed to talk, much less walk your dog or throw a Frisbee with the guy down the row). It simply means that drive-ins combine the best of commercial-theatre scale with home-theatre indulgence.

Reports about this industry have shown that the drive-in theatre industry is traditionally made up of largely independent operators and a few regional chains. Research has shown that during the late 1940s, chains owned 31.9 percent of establishments and controlled 39.8 percent of car capacity.

This particular industry has always been seen as a competitor of the traditional theatre industry for many years. It is important to state that competition from online videos will largely counterbalance this positive trend.

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But even though disposable income levels have risen since the recession enabling more entertainment spending, media consumption is increasingly shifting toward lower-cost online subscriptions such as Netflix and Hulu. This trend has been supported by the rising number of tablets and smartphones capable of streaming movie files, as well as the continued development of wireless data connection.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic characteristics for drive in theatre audience differ in important respects from commercial cinema audience. There are a noticeably higher proportion of people with higher educational qualifications. Older audiences tend to dominate but teenage audiences (14-20 years) rarely attend.

Note that apart for assessing potential audience through demographic data, you can leverage on psychographic research as a tool for understanding your prospective audiences. Where demographic data looks at purely social classifications; psychographics looks at psychological factors that impel audiences to respond to certain kinds of offer – key factors such as values, attitudes, personality, interests and lifestyle.

In this business, diversity represented by drive in theatres has been seen increasingly as a lifestyle choice for a range of audiences with shared values and attitudes, rather than simply a cultural choice for a particular social class.

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It is believed that the zeal and the opportunities for doing so vary considerably from group to group. Teenagers living in a rural community may want to see a film each week but might have to travel 10 miles or more to get to the nearest multiplex cinema. This brings a drive in theatre business into play.

3. Decide Which Niche to Concentrate On

We all know that movie theatres generally are custom designed buildings that enable viewing movies from any sitting position; they equally have big lavatories, lobbies and projection rooms. The general industry can be said to be a competitive industry, but it does not in any way stop any individual who is hungry for success from making headway in the industry.

This business is indeed a profitable industry especially if the business is well located. Due to how competitive this industry is and in the bid to stay afloat in the highly competitive movie business, owners of movie theatres now go the extra mile to ensure that they make their facility welcoming and conducive for customers. Movie theatres now have coffee bars, snack bars, free Wi-Fi et al.

It is also very important to note that this business has no known niche that you can focus in. When going into this business, you simply need to channel your resources to serving the community where your business is located which is why we believe your choice of location is a very important issue which you have to take seriously.

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The Level of Competition in the Industry

Research has shown that Pennsylvania had the most drive-in theatres at the end of 2011, with 33 theatres operating 54 screens. Second was Ohio, with 31 theatres and 48 screens, followed by New York with 28 theatres and 50 screens, Indiana with 21 theatres and 36 screens, and California with 19 theatres and 47 screens.

Only four states had no drive-in theatres at all: Hawaii, Alaska, Louisiana, and Delaware. However, even with the downturn in the industry, some new theatres were built in the 2000s, including nine in Alabama (plus two reopens), and six in Texas (plus seven reopens).

It is important to state that the fate of the drive-in movie theatre at the beginning of the second decade of the twenty-first century remained unknown. A lot of experts have expressed optimism for the industry. They have also predicted an eventual but inevitable death, due mostly to the inhibitive cost of converting to digital. The conversion to digital remained one of the most pressing issues for the industry.

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4. Know the Major Competitors in the Industry

It is no longer news that there are lots of businesses that do well than others. In the Drive in theatre industry, here are some well-known brands to reckon with;

  • Coyote Drive in
  • Delsea Drive in
  • Stardust Drive in
  • Becky’s drive in
  • Starlight Drive in
  • Harvest Moon Drive-In
  • 66 Drive in
  • Rodeo Drive-In
  • Mesa Drive in
  • Capri Drive in
Economic Analysis

Just like the traditional theatres we all know, drive-in theatres gain their profits from the two primary activities of admission fees and concessions. A lot of drive-ins are seasonal operators, which open an average of eight months each year.

Analysis has it that within their most prosperous years, 88 percent of drive-ins charged admission on a per-adult basis, admitting children for free. But just as the industry declined in the 1980s, businesses desperate for clients switched to per-car admission.

So during the 1950s, annual profits ranged from 15 to 30 percent of invested capital, which was a very high margin compared to indoor theatres, which averaged about 10 percent profit. Concessions usually contributed 35 to 40 percent of a drive-in’s gross receipts.

Indeed Drive-ins need a relatively high initial investment. Reports in this industry have estimated that the first drive-in theatre cost about $30,000 to build. But immediately after World War II, when the industry reached its climax, the average initial investment was about $100,000, not including the land.

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Even though the initial investment is high, this capital outlay was only about 30 percent of the average cost of an indoor theatre at the time. Research has shown that regular expenses in this line of business included film rental, energy consumption for projection and food preparation, payroll, and real estate. Payroll typically constituted about 28 percent of a drive-in’s operating expenses.

5. Decide Whether to Buy a Franchise or Start from Scratch

Buying into a franchise is the best way to start up a drive in theatre business. This is because an existing drive in theatre business will have organized its operations over time. This will give you the opportunity to inherit a business with streamlined and documented systems. This will make it very easy for you to learn the ins-and-outs of the business, and get to know the business through the seller and any experienced staff who will stay with the business.

It is important to state that existing staff often have more of a coalface perspective than the boss – they can provide valuable insight into how the business runs and areas that could be improved. In such cases, we believe that staff are likely to feel more comfortable communicating their concerns to a new boss, and may be able to suggest ways of solving the problems existing in the business.

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Also another thing you will be gaining when buying a franchise is inheriting staff that you don’t need to recruit and train. It will go a long way to save you time, money and energy that you can focus elsewhere in the business. We strongly advice that you identify early on if there are any staff morale issues that need addressing, or if staff are resistant to new ownership and the changes this might bring.

It is very important that you talk to the staff and find out if they are happy in their roles, if there is anything that would help them do their jobs better, and what concerns they might have about a new owner coming in.

6. Know the Possible Threats and Challenges You Will Face

We strongly believe that building a drive in theatre business, just like any other known business has its own challenges and problems, which is very paramount that you know and understand before you venture into this business.

A lot of people depend on drive in theatres to be able to relax and have a good time, so when starting your drive in theatre business; you must first resolve your own problems before looking to settle the problem of others. Some of the problems you may encounter include;

  • Differentiating yourself from competition
  • naming your business
  • Securing the permits needed in your state to operate a service business
  • Buying equipment
  • Developing incentives for people to patronize your drive in theatre
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7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When thinking of the best legal entity for your drive in theatre business, an LLC is the best legal entity you can ever think of. If you really understand it, you will know that it is a hybrid business entity that has some of the characteristics of a corporation and a partnership or a sole proprietorship. This business structure brings together the pass-through taxation of a partnership or sole proprietorship with the <a ” target=”_blank” rel=”noopener noreferrer”>Limited liability of a corporation.

This legal form of business can also be taxed as an S corporation, C corporation, partnership, or sole proprietorship as long as a particular LLC qualifies under the desired tax classification. Using an LLC legal entity provides you with these few advantages

  • Limited liability
  • Flexibility in allocation
  • Taxation benefits
  • Freedom in management
  • Flexible number of members
  • Corporations or partnerships can be members
  • Can have a management group

8. Choose a Catchy Business Name from the ideas Below

  • Modern drive in
  • Eastern drive in
  • Kate drive in
  • Accurate drive in
  • Fire hotel drive in
  • Ocean view drive in
  • Nadal drive in
  • Sky view drive in
  • Sure desert drive in
  • Roma drive in
  • Special view
  • 3D world drive in
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9. Discuss With an Agent to Know the Best Insurance Policies for You

It is very essential to note that running a successful business means anticipating risks as well as consumer tastes, and business insurance for movie theatre companies is a huge challenge – particularly for first time entrepreneurs. You might think you do not need insurance in this line of business, but you do need it to protect yourself, your customers and your business. Insurance policies you need may include;

  • General liability Business insurance
  • Advertising agency insurance
  • Creative insurance
  • Business equipment insurance
  • Business interruption insurance
  • Business contents insurance
  • Professional indemnity insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

Intellectual property rights are your business asset, and are often the most valuable business asset that dictates the success of your business. Any business presently trading or considering starting in this modern age will have to check what intellectual property rights it owns and make sure that it is fully protected. Proper information in our society has moved individuals to understand that different types of ideas can be protected in different ways, depending on how they are expressed.

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This intellectual output and the protection of it is known as intellectual property protection; it is also a collective term for different types of asset including copyright, trademarks, patents, design rights and others. These assets are intangible, but can be very valuable since they enjoy legal protection.

In your drive in theatre business, there will be a lot of things to protect. Any logos or branding are likely to be protected by registered trade mark rights or the law of passing off. There will also be internet rights in any database underlying your website, which might be a marketing strategy.

11. Get the Necessary Professional Certification

Many will think that this industry has no professional certification for its operators. Indeed it might not have any direct certification, but it sure has a lot that can show your professionalism and affinity in the industry. They may include;

  • Electronic systems Certified
  • The Entertainment Technician Certification
  • National Association of Schools of Theatre Certification
  • CEDIA Certification

12. Get the Necessary Legal Documents You Need to Operate

These documents play an essential role in protecting the interests of the business and business owners over the course of a company’s lifetime.

  • Business Plan
  • DBA
  • Social Security number
  • Tax identification number
  • Employer’s identification number
  • Insurance
  • Non-disclosure agreement
  • Tax
  • Location agreement or lease
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13. Raise the Needed Startup Capital

Right from the advent of the silver screen, movies have been a popular form of entertainment in our society be it in the 1900s or in the 2000s. Also be it that you are showing a comedy that creates laughter, a drama that moves the audience to tears or a horror show that has people screaming out of fear, movies provide escape, fun and excitement for the millions of patrons who attend theatres each year.

Building a successful drive -in theatre can be a lucrative and fun business venture if you know how to do it right, but it takes more than just showing a movie to be successful in this business. You need funds to be able to start up and run this business. Ways to get the needed funds may include;

  • Personal savings
  • Business loans
  • Crowdfunding
  • Social investment
  • Partners
  • Credit cards

14. Choose a Suitable Location for your Business

When starting your business, note that your drive-in movie theatre should be located in an area where there is a lot of driving traffic. Also have it in mind that a large land space is needed for the screen, stand and parking space. Make sure that you check with the concerned government office about zoning and licensing requirements.

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We believe that your biggest expenses will be land, screen(s), ramping and concession building. A screen may be purchased used from a closed drive-in or newly constructed by a professional screen company or by a local engineer. Also in this business, you will need approximately 10-14 acres for an approximate 500 car drive-in.

If you are building on land that was never previously a drive-in, you will need to build ramps in your field. Our research has noted carefully that the excavation work needed to build the necessary ramps can be quite expensive. Even experts in the industry believe that building new ramps can be cost prohibitive.

But there are a lot of drive-ins that build ramps when they add additional screens & are aware of some brand new drive-ins that have installed ramps. But have it in mind that it will all rest upon the layout of the property, ramps may not be necessary, but they generally are needed in order to ensure adequate sight lines to the screen.

It is also your duty to make sure the drive-in will be welcomed in the community of your choice. A lot of modern drive in theatres trying to build or reopen drive-ins have been faced with community opposition. A lot of individuals in this modern age have not been to a drive-in in many years (if ever), relying on the Hollywood stereo-type that they are noisy, rowdy places that are passion pits.

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Indeed, in reality most drive-ins are family oriented, safe entertainment venues. But it will also need careful consideration and some convincing regarding that fact on your part. Quite a handful of people also think drive-ins create traffic problems, this  is why you need to make sure that you will have adequate space to get many cars off the highway so that there won’t be a backup.

Some zoning boards require a holding driveway which can hold 1/3 of the theatre’s capacity in the driveway. A visit from the police, or even worse, an accident caused by backed up traffic is the last thing you need while trying to operate your theatre.

15. Hire Employees for your Technical and Manpower Needs

When starting this unique business, it is important that you consult with cinema equipment professionals when it comes to setting up your projection booth. They should be consulted very early in the game for advice on where to locate the projection booth, screen (there is a mathematical formula for this) and equipment that will be needed for a drive-in theatre.

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Starting this business is not easy and indeed cost effective. Note there are multiple vendors of used equipment and you may want to buy used when possible. We believe that the cost of a new splicer alone can be $500. A used booth set-up will cost approximately $20,000.

You will need a projector, lamp house, xenon bulbs, platter, rewind bench, splicer, FM transmitter, sound processor, etc. A lot of drive-ins use xenon lamp houses and platter film handling systems, but some still use a two projector “changeover” system.

It is very essential to note that a drive-in generally needs larger projection lamps due to the long throw to the very large screen and due to the fact that moonlight and other ambient light interferes with the image. For you to make sure you succeed in this business, you must have good sound and a bright picture.

This is because the combination of good sound, bright picture with a great snacks bar and a nice family-friendly environment already ensures that your business is successful. Try to be conversant or rather contact an estate agent who knows about the zoning of the land and any special laws in your area that may present a challenge when setting up a drive-in theatre.

Also, for customers to feel okay in your business there should not be a lot of ambient light shining into the property from other properties. To avoid it, you will need to construct high fences, grow tall trees quickly, or develop a cordial relationship with your neighbours to ask them to turn off their lights.

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Also try to ascertain what your local laws say concerning signage, handicap access, and any other local issues. Be sure the number of toilets and sinks is in relation to the theatre capacity.

The Service Delivery Process of the Business

At the initial stage of starting this business, we advise that you leave the booking of films to professional film bookers, at least when you first enter the business. This is because at that early stage, you will have your hands full doing the other things. Running this business can be a very tedious task and can often be frustrating. You should also try to build a relationship with distributors in the business.

This is easier initially if you have a booker. We advise that you use a booker until you get the hang of it and you can eventually book your own films, though many owners find it is worth the cost to use a booker. Have it in mind that film rentals are usually a percentage of your box office take and can be anywhere from 10-90%- so don’t expect to make a lot from your ticket price.

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In this business, sometimes the studios ask that you run seven nights per week, not weekends only- to get first run films. And even then, they are under no obligation to offer you a particular film. The earlier you understand that you may not always make a lot of money at the box office, the earlier you start to concentrate on your snack bar/concession business.

This is where the money is to be made. We believe that a lot of drive-in owners will tell you that they are actually restaurant owners who play movies! This is why you need to play up your snack bar in your advertising, in your telephone recording that patrons phone to find out what’s playing, in your handouts at the box office, etc.

You need to make it attractive, make it unique. Find some food items that you will be known for, things that they can’t find at the supermarket or local fast-food places that would make many customers to stop at your drive-in. For you to succeed, you need to give them a reason to eat at your drive-in! Open early so people can eat supper there. Keep stock of your inventory costs.

16. Write a Marketing Plan Packed with ideas & Strategies

Marketing a drive in theatre business has changed a great deal in recent years, this we can attest to after the advent of social networking, which has made the current landscape an exciting place; as you can make an impact and attract new audiences whether or not you have a large budget to do so. You need to start your business with a well organised grand opening.

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During that grand opening week, you need to show movies for free to get the community members coming in and spreading the word about your new business. Have a once a month ladies watch for free night. Have it in mind that you need to develop a detailed marketing plan for you to achieve your goals in your business. Things to have in mind when bringing together your marketing plan includes;

  • Is your venue well-known locally? Do people know that you show films?
  • If so, how do they know? What do you tell them about what you show?
  • If you were a new visitor to the area, would you be able to find it?
  • Do you have appropriate signage outside your venue/around the surrounding area?
  • Is your website attractively designed and clearly laid out?
  • Are your listings regularly updated, and special events highlighted?
  • Is it easy to use, and is booking tickets a simple process – is it clear what concessions or special offers you have?
  • Are your contact details and map on the front page?
  • What information do you display on each film? Do you have links to trailers?
  • Is there an email or information about how your audience can engage with you?
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  • Do the local press cover your venue/events?
  • Do you know the person who covers the arts in your area? Have they ever been invited to your venue?
  • Are you listed in all the relevant local listings magazines?

17. Develop an Iron-clad Competitive Strategies to Help You Win

In this business, you need to be watchful or note your potential competition from indoor theatres. It is very important to note that if you are nearby an operating drive-in, locate yours in another area. It is very obvious that film companies often favour multiple screen theatres when it comes to permitting them to play first run film product.

This is for them to make more money on a picture if they release it to a multiple screen indoor theatre that can play it on more than one screen several times a day. Perhaps, you would likely fare better if you locate your drive-in where it is not close to big multiple screen theatres.

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We strongly advice that you build your drive-in with at least 2 screens because you will be able to attract more customers by having multiple pictures when you are needed to play the same movie for 4 weeks. Remember that it is your duty to make sure that you have an adequate population base to draw from and that the demographics would support attendance at an outdoor theatre. Ways to win your business competitors may include;

  • Create a membership database
  • Develop a business website
  • Establish an E-newsletter
  • Launch a members forum
  • Create an outstanding social media presence for your theatre

18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Brand awareness is the level of consumer consciousness of a company. It is a factor that explains a potential customer’s ability to not only recognize a brand image, but to also associate it with a certain product or service. Experience in the business world has shown that brand awareness is best spread through both inbound and outbound marketing efforts.

When competition in an industry is high, brand awareness can be one of a business’s greatest assets. Here are ways you can improve your company’s brand awareness;

  • Always hold an event
  • Show yourself
  • Sponsor something
  • Organise an experiential stunt
  • Take to social media
  • Launch a PR campaign
  • Invest in promotional merchandise