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Film Journal - Expansion Course: Studio Movie Grill Double-dates Dinner at the Movies

January 23, 2013

“I don’t know what your perspective is, but I see this category as the future of moviegoing,” says Brian Schultz, co-founder and president of Dallas, Texas-based Studio Movie Grill about in-theatre dining (SMG, www.studiomoviegrill.com). “There are going to be different versions, but everyone will increase their offerings and customer service to create a nice night out. That is the only way, I think, our industry can remain relevant.”

Film Journal International began its exclusive series about “Dinner at the Movies” in June 2007 with a profile of Studio Movie Grill. As the company approaches its 20th anniversary, it seems only appropriate to check in with “the leader of the movie-grill concept offering up first-run movies and alternate programming alongside an American Grill menu and full-service bar.” While the motto has since changed from “Film, Food and Fun” to “Eat Drink Movies,” Studio Movie still Grills to Perfection, as our then-headline opined. In fact, with “quality our number-one ingredient,” Schultz and his chefs have set a new mandate.

Founded in 1998 with the conversion of the 1946 Granada Theater in Dallas, SMG has grown from five cinema-eateries with 40 screens in Texas back in 2007 to 11 locations and 102 total screens across four states. “We had to bring on some really incredible people that have the same kind of mindset that we do so that they can help run those regions,” Schultz attests. “Through 2013, we will be announcing a very aggressive growth pattern that includes our existing Texas, Illinois and Atlanta markets as well as introducing ourselves to North Carolina and two other states.”

Studio Movie Grill in Charlotte has an anticipated opening date of March 4, 2013. For now, the growth of the concept is best exemplified by the dual openings of SMG Spring Valley in North Dallas (Oct. 12) and SMG Duluth (Nov. 28), its seventh location in Texas and second in the Atlanta market, respectively. “These new theatres embody a decade of best practices and theatre trends,” Schultz assures. Whereas Duluth offers ten screens and 1,700 fixed “lounge seats” with individual dining tables attached, at 2,200 seats and 16 screens, Spring Valley is their largest location yet. (Spring Valley and Duluth feature Dolphin Seating; a new SMG prototype chair from Camatic is coming soon.)

“That is big,” Schultz contends about finding the sweet spot. “The governor for us will be about being able to execute our high-quality food served to the table. At full capacity, Spring Valley has the ability to serve over 3,000 meals in the course of three hours.”

Like everything else at SMG, the evolution of the seating arrangements that now come on a fully reserved basis throughout (powered by Ticketsoft and “very well-received”) has been subject to research and the result of careful observation. “A lot of our customers like having a rolling, not-connected chair with either a countertop or larger table,” Schultz relays. “As you and your readers are aware, sightlines are critical to the moviegoing experience. So, a lot of times you are making qualitative decisions. It is not really a black-or-white decision because there is a business case for both to be made. As we worked with our customers and surveyed them about these options, they actually preferred better sightlines over a larger table. The only way we can do a true stadium sightline is by using that type of seating.” With 60 inches (152 cm) of legroom, he says, auditorium capacities are about half what a regular theatre would hold with the same square footage. It’s well worth it to him, however, and “all about creating a totally comfortable experience that offers VIP treatment at an affordable price.”

The look and feel of the exterior, lobby and bar-lounge areas have changed as well. “Embodying the hallmark architectural and design details that distinguish our Studio Movie Grill brand nationally,” Schultz says, SMG Spring Valley was designed as the new flagship location in collaboration with Dallas-based Droese Raney Architecture. “We wanted a modern space that was approachable,” he says about “infusing the brand identity into the décor. People come to the movies to hear a story and we want the space around that experience to be one that is well-designed and contemplated. We moved away from the traditional multiplex’s neon and blinking lights intentionally.”

Instead, SMG opts for “a style in line with a contemporary hotel or lounge,” using mid-century appointments and a mix of textiles and natural materials, stone surfaces and warm wood accents. “What we are trying to do is create that unexpected touch, that small, unanticipated element that stands out much like not charging a premium for our reserved seating, offering extra legroom and great service.”

That attention to spiced-up detail extends to the food and beverage selection too. “Some people are surprised that we offer our own wine [this writer included]. We traveled all over California testing all sorts of wines, which was so much fun,” Schultz laughs. “We found a winery in Santa Barbara that set aside an area just for us. They are now making our very own ‘Studio’ Cabernet and Chardonnay, which are my favorite and my wife’s. She loves our crab cakes and I love the kale and avocado salad.” Sounds like studio-grill dining has come quite a ways.

Years ago, Schultz observes, “it was really more about frozen, stadium-type food, with sub-run movies and lower-quality sound and projection—because there were just retreads of older theatres.” Not that there is anything wrong with old theatres, of course. Before receiving the SMG treatment, Spring Valley was the Loews/AMC/Regal Keystone Park 16; see www.cinematour.com/tour/us/5762.html. (Duluth is the result of the conversion of a former Circuit City store shell). “We like taking theatres that haven’t been kept up or have grown tired and giving them a whole new life. It’s just amazing how, with a little love and attention, these theatres can revive themselves and their neighborhoods.”

Back to the restorative powers of libation, Schultz says SMG is governed by a chef-driven concept today. “Instead of having cooks per-se, we actually have chefs at each of our locations. And they are literally in competitions twice a year for cooking up new ideas. That’s how we design the menu, which is all about items that we can do truly well. We just celebrated the 13th anniversary of Thad Kelley, our executive chef,” he enthuses, noting how much cooking has been done since “we started out on the second floor of a movie theatre.” While there is no kitchen at his office, Schultz assures that, as the company evolved, SMG’s headquarters have “always stayed right next to one of our theatres. I am so fanatical about service and the concept itself. The only way that we can learn and continue to innovate is to stay connected to the customer and the brand. We like being on-site…and walk around a lot and listen.”

In addition to his customers and chefs, Brian Schultz gives due credit to several mentors and role models, including his original partner, Martin Massman, “who backed me when I was only 23 years old.” Calling him an “expert in efficiency and systems,” Schultz also cites Norman Brinker, the official father of the casual-dining category with more than 1,500 Chili’s and Maggiano’s restaurants in 32 countries today. “Every time we got together, he would challenge me: ‘You have the ability here to create a new category.’ And ever since, frankly, most of the innovations that Studio Movie Grill first introduced have become over the years the standard for what people are doing in the in-theatre dining segment.” While Schultz finds this both “interesting and rewarding,” to some of his staff it is understandably “frustrating” at times.

On the theatrical side, Schultz takes inspiration from the likes of Teddy Solomon and Stan Durwood, who he credits for being “the true showmen who focused on the customer.” With their legacy in mind, he ventures “a potentially controversial statement: As industries consolidate, a lot of times they can lose their souls as they get much larger. I think that’s another huge differentiator that we have been able to maintain with our culture. We can do a lot of different things because the core values of the company really focus on customer service, high-quality food and the best presentation. Taking the lead position as the innovator of the future of moviegoing is something that we talk about a lot and take very seriously here to make sure that we keep this wonderful experience relevant for years to come.”

Two Cooks in the Tech Kitchen 
Since 1997, Studio Movie Grill’s Brian Schultz and Brad Miller of Film-Tech have enjoyed what they call “a customer-focused collaboration,” in comparison to a straightforward vendor-exhibitor relationship. They have worked together for 15 years “to try to create the future of the industry, but always being cognizant to act in the best interest of our customer,” Schultz assures.

Studio Movie Grill utilizes Film-Tech Cinema Systems’ DCS technology with Active NOC services in all of their locations. The system was chosen because of its “truly turnkey operation, requiring absolutely no projection staff whatsoever,” the exhibitor noted. The “industry’s only Active NOC” permits SMG management and staff “to put all of their focus on the restaurant and theatre operations, rather than worrying about the booth. Studio Movie Grill is able to save money in operating costs, both on payroll and energy usage due to the built-in energy management system that Film-Tech provides. All the management has to do is enter their showtimes into the ticketing system and the rest is handled by Film-Tech, including powering on/off the auditoriums each day in an energy-efficient manner, building playlists, obtaining and managing all KDMs, and content management. With Film-Tech’s proactive NOC monitoring, incidents such as a lamp not striking are almost always resolved before the customers even realize there has been a problem. These exclusive and valuable features enable Studio Movie Grill to operate with greater uptime and at a higher level of quality with less cost.”

In addition to the products and manufacturers mentioned in this article, SMG and Film-Tech also deploy Barco projectors and “Dolby’s most advanced 3D and digital technology.” SMG Duluth offers all QSC sound featuring BASIS processors. Throughout the circuit, PlexCall systems are installed, “providing the guest immediate F&B service at the touch of a button” ( see feature on PlexCall here). Schultz also credits Brandt Gully of EFA Partners (Entertainment Financing Advisors) and Jeff Ferry of Goldman Sachs for negotiating the deal that “has allowed us to grow.” 

XDuluth on CBS Atlanta http://www.cbsatlanta.com/video?autoStart=true&topVideoCatNo=default&clipId=8089036

Originally published at FilmJournal.com on January 23, 2012

Leading provider of digital media services for film and television

Background: Seasoned management team formed new film and television digital media services company and approached EFA to arrange financing for potential acquisition targets.

EFA Process: The company retained EFA to arrange acquisition financing and EFA approached several banks and specialty lenders.

Result: Closed debt financing to support two company acquisitions and working capital facility.

start quoteWe selected EFA as our advisor due to their financial experience specific to the film and television services sector. The past year has been tremendous for us as we significantly grew our business with EFA arranging financing that allowed us to execute on our growth plans very quicklyend quote

John Suh
Co-Founder and Co-President of  Pixelogic

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Television broadcast company owning and operating WGGB-TV and WGGB-TV D2, the ABC and FOX network affiliates serving the Springfield-Holyoke, MA market

Background: Initially approached by Gormally Broadcasting to arrange financing to recapitalize the company and fund planned acquisition growth. EFA became company’s sell-side advisor when industry changes and market forces made exploring a sale a more advantageous and financially rewarding strategic option for the company.

EFA Process: EFA was successful in securing financing commitments to fund a recapitalization and several acquisitions during the initial engagement focus. However, marketplace dynamics noted above resulted in EFA recommending a company sale. EFA provided a tailored, results-oriented approach from start to finish.

Result: EFA identified Meredith Corporation (NYSE: MDP) as the leading buyer and managed all aspects of the sale, maximizing the sales price received for the company.

start quoteIt was a pleasure working with Dave Harrington and the team at EFA. Through Dave’s deep industry knowledge, relationships and marketplace expertise, we were able to maximize the ultimate value of our company’s broadcast assets. end quote

John Gormally,
Founder, Owner and President of Gormally Broadcasting

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Growing movie theatre company that provides an in-theatre dining experience with over 300 screens throughout the US

Background: Longtime client that initially approached EFA seeking junior capital to grow its business.

EFA Process: After reviewing the company's capital structure and growth plans EFA recommended a financing structure that would recapitalize the company and provide significant growth capital.

Result: Closed three financings that recapitalized the company and provided growth for new theatres. Studio Movie Grill also retained EFA for M&A opportunities and to assist with restructuring process.

start quoteWe were delighted to work with the EFA Partners team on our second successful financing with them. Their wide range of capital markets experience, banking relationships and deep knowledge of the cinema and location-based entertainment industries made them the perfect choice to assist with our financing efforts, which support SMG's active growth strategy. end quote

Brian Schultz,
Owner, founder and President of Studio Movie Grill

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Television and motion picture post-production and digital content management services

Background: Company approached EFA seeking refinancing of its debt subsequent to other advisors attempting to do so with a combination of senior debt and equity.

EFA Process: After reviewing its capital structure EFA recommended a debt structure to fully refinance the company's debt.

Result: Closed senior debt facility that refinanced the company's existing debt, which was much more cost-effective than equity.

start quoteThe EFA team proposed a creative strategy to recapitalize Modern VideoFilm that met our needs in a way that was unique and different from what other financial advisory firms proposed to us. We appreciated their understanding of the entertainment industry and EFA's extensive financial relationships and we look forward to continuing our relationship. end quote

Moshe Barkat,
CEO and President of Modern VideoFilm

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Mark Cuban and Todd Wagner's well established movie theatre company - with almost 300 screens located throughout the US

Background: Landmark approached EFA for an equipment financing to convert its screens from 35mm to digital projection.

EFA Process: While the company had many financing options given its strong ownership, its management was busy with business operations and retained EFA to handle the digital conversion financing process.

Result: Closed equipment financing facility utilized for all of its digital projectors. EFA led all aspects of the financing including negotiation of complex digital cinema conversion agreements.

start quoteEFA's unique knowledge and experience with film exhibition and digital cinema was extremely helpful in leading our financing process. Landmark prides itself in providing the best customer experience to its patrons and we are excited that this financing will allow us to continue that with our digital conversion. end quote

Sky Hansen,
Chief Financial Officer of Landmark Theatres

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Provider of digital information services to the film industry

Background: Company approached EFA seeking funding to refinance debt and provide growth capital.

EFA Process: After reviewing its capital structure and growth plans, EFA approached the specialty lender market and arranged debt facility. Subsequently, company retained EFA as sell-side advisor. 

Result: Arranged debt for refinaning existing debt and for growth. Also, handled sale process from start to close for successful sale of business.

start quoteIt was a pleasure to work with the team at EFA Partners who served as our advisor on the sale of West World Media. Through deep industry knowledge, relationships and marketplace expertise, we were able to achieve a successful outcome. end quote

Brett West
Founder and President of West World Media

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Television industry management group formed to manage and operate US TV stations

Background: Huntington approached EFA seeking capital for potential television station acquisitions.

EFA Process: EFA understood that private equity firms and lenders are seeking experienced management teams to back for acquisition opportunities in the television sector.

Result: EFA has introduced the company to several private equity firms as well as senior lenders, resulting in bids for groups of television stations and the company continues to seek other opportunities, with EFA’s assistance.

start quoteWe are acutely aware of the trends that are transforming the local broadcast TV business and have recently begun to explore opportunities to acquire stations. We are very excited about the prospects for the industry and the opportunities to capitalize upon. We are also pleased to have EFA Partners as our financial advisor as their many years of media industry experience and extensive financial relationships will help us accomplish our goal of building a best-in-class station group.

end quote


David Tynan,
CEO of Huntington Broadcast Management Group

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