Museum of Illusions

## Executive Summary

Museum of Illusions is the largest privately held chain of museums in the world, with nearly 70 locations across 27 countries and five continents. Founded in Zagreb, Croatia in 2015, the brand achieved overnight success and has since expanded globally through both franchised and corporate locations. In January 2026, the company was acquired by an investor group led by Brightwood Capital Advisors to accelerate global expansion. The franchise offers an immersive entertainment experience combining optical illusions, educational content, and social media-friendly attractions. With yearly gross sales averaging $3.3 million and estimated earnings of $467K-$600K per location, the concept demonstrates strong unit economics, though the 8.5-10.5 year payback period reflects the substantial initial investment required.

## The Business

Museum of Illusions operates experiential entertainment venues that blend learning and entertainment through optical illusions, immersive exhibits, and interactive installations. The museums attract visitors of all ages with Instagram-worthy photo opportunities and educational content about perception and visual science. The typical unit attracts 100,000-300,000 visitors annually, generating revenue primarily from ticket sales. This ticket-based model provides significant advantages: minimal cost of goods sold, independence from global supply chain issues, and scalable operations. Each museum can be managed with a small team, and all locations survived the COVID-19 pandemic, thriving upon reopening. The company has invested in AI, machine learning, and big data for site selection, pricing, and visitor analytics, and maintains an R&D center in Croatia for concept development.

## The Numbers

**Initial Investment:** $1,935,500 - $6,552,500 (per FDD Item 7)

**Franchise Fee:** $100,000 (non-refundable, paid at signing)

**Royalty Fee:** 15% of gross revenue

**Contract Term:** 10 years initial, 10 year renewals

**Average Gross Revenue:** $3,334,395 per year

**Estimated Earnings:** $466,816 - $600,192 annually

**Payback Period:** 8.5 - 10.5 years estimated

**Visitors Per Location:** 100,000 - 300,000 annually

**Current Locations:** Nearly 70 across 27 countries

**Training:** 72 hours combined classroom and on-the-job instruction

## System Health

The franchise demonstrates exceptional global growth momentum. From a single location in Zagreb in 2015, the brand has expanded to nearly 70 locations worldwide. The company opened 11 new sites in 2023 and announced plans for 18+ new museums in 2024, with particular focus on US expansion. Corporate locations opened in Minneapolis, Atlanta, Denver, and a flagship on the Las Vegas Strip in 2023, followed by Austin, Houston, Scottsdale, and Pittsburgh. International expansion includes venues in Montreal, Marseille, and Bordeaux. The January 2026 acquisition by Brightwood Capital Advisors from previous owner Invera Capital Partners signals institutional confidence in the brands growth potential. New locations planned for 2026 include Sacramento, London, Birmingham, Miami, and San Francisco. The organization scaled from 7 employees to 450+ by 2025.

## Franchisee Experience

Franchisees receive comprehensive support including 72 hours of training combining classroom and on-the-job instruction, marketing support with ad templates and social media strategies, site selection assistance, lease negotiation help, and access to a franchisee intranet platform. Notable franchisee testimonials include:

**LOL Entertainment (Dallas/Austin):** "Our first Museum opened in Dallas in 2019, and our relationship with the franchisor team has always been more than just a typical franchise partnership. It has been a true collaboration where we learned, grew, and achieved success together." The company expanded from Dallas to Austin and now operates multiple locations.

**Budapest Franchisee (expanded to Germany):** "Right after my first contact with the MOI founders about opening a Museum of Illusions in Budapest, I was blown away by the professionalism of this young brand. How they treated prospective partners was very unusual for me, offering full transparency about the financial performance of other franchisees and sharing best practices."

As part of the Brightwood transaction, five franchised locations (Boston, Chicago, Pittsburgh, Philadelphia, Scottsdale) are transitioning from LOL Entertainment to become corporate-owned.

## Risk Assessment

**Key Concerns:** - Very high initial investment ($1.9M-$6.5M) limits franchisee pool - 15% royalty fee is significantly above industry average - Long payback period (8.5-10.5 years) creates extended financial exposure - Entertainment/tourism sector vulnerable to economic downturns - Dependence on social media trends and visitor experience novelty - Competition from emerging immersive experience concepts - Recent ownership transition may bring strategic changes

**Mitigating Factors:** - Strong gross revenue ($3.3M average) and earnings ($467K-$600K) - Ticket-based revenue model with minimal COGS - All locations survived COVID-19 and thrived upon reopening - Global brand recognition with 70 locations worldwide - Institutional backing from Brightwood Capital - R&D center developing new exhibits and experiences - AI-powered analytics for site selection and pricing

## Competitive Position

Museum of Illusions competes in the experiential entertainment sector against concepts like Meow Wolf, teamLab, Candytopia, Color Factory, and local immersive attractions. The brands advantages include global scale with nearly 70 locations, established franchise infrastructure, and proven unit economics. The focus on optical illusions and educational content differentiates from purely entertainment-focused competitors. However, the immersive experience market has become increasingly crowded, with new concepts regularly entering the space. The brands longevity since 2015 and ability to attract institutional investment demonstrate resilience, while ongoing R&D investment ensures exhibit refreshment to maintain visitor interest.

## Validation Questions for Franchisees

1. What is the typical ramp-up timeline from opening to reaching average revenue levels?

2. How often are exhibits refreshed and what are the costs for exhibit updates?

3. What is the seasonal variation in attendance and how does it affect cash flow?

4. How has the Brightwood Capital acquisition affected franchisee relationships and support?

5. What are the real estate requirements and typical lease terms for museum locations?

6. How do performance metrics differ between franchise and corporate locations?

7. What marketing support and co-op programs are available to franchisees?

## Data Gaps

- Detailed franchise unit economics by geography not publicly disclosed - Franchisee satisfaction survey results not available - Specific build-out costs and construction timelines not detailed - Multi-unit development terms and incentives not specified - Exhibit refresh frequency and associated costs not documented - Staff requirements and labor cost benchmarks not published - Franchise vs corporate location performance comparison not available