Topgolf's Sim Lounge Plan: What Operators Need to Know

Topgolf is the 800-pound gorilla of the golf-tainment industry. 104 venues worldwide. Average annual revenue of $17 million per location. A brand so dominant that “Topgolf” has become the Kleenex of indoor golf — people use the name to describe the entire category.

If you’re researching how to open a golf simulator business, you’ve probably wondered: can I open a Topgolf? And if not, what’s the next best thing?

Here’s what the franchise brochure says. Here’s what they don’t tell you.

The Three Topgolf Concepts — And Which One You Can Actually Use

Topgolf operates three distinct concepts. Only one is accessible to outside operators. Here’s the breakdown.

Concept 1: Full-Scale Topgolf Venue ($15M-$50M per location)

This is what everyone pictures. The three-story, 67,500-102,000 square foot facility with 102 climate-controlled hitting bays, Toptracer ball-tracking technology, full restaurants, multiple bars, private event spaces, 250+ TV screens, and 350-400 employees per venue.

The company currently operates 104 of these across six countries. The newest is the Parsippany, New Jersey prototype — a $30 million build that broke ground in June 2025 and opened July 3, 2026. It’s the first venue with Topgolf’s “My Bay, My Way” personalization system, arcade games, redesigned outfield targets, and a rooftop terrace.

Can you open one? No. Not in the United States or United Kingdom. Topgolf owns and operates all domestic venues directly. International partnerships exist, but they require a minimum commitment of five venues and access to $150 million in capital. You’re not buying a franchise. You’re entering a territory development agreement with one of the most recognizable entertainment brands on the planet. They’re not looking for operators. They’re looking for empire builders with deep hospitality and real estate development experience.

Concept 2: Topgolf Swing Suite (Licensing Model — $100K-$500K estimated per installation)

This is the only Topgolf concept available to independent operators. Topgolf Swing Suite is a licensing program that places 1-7 simulator bays powered by Full Swing technology into existing hospitality venues — hotels, casinos, sports stadiums, entertainment districts, and country clubs.

There are currently 200+ Swing Suite bays across 70 locations in 26 U.S. states, plus Canada, Hong Kong, and Australia. The business model is a licensing agreement structured as a sales-type lease over 3-5 years. Topgolf recognizes this revenue in its “Other business lines” segment — roughly $14-17 million per quarter across all licensing and Toptracer deals combined.

Key partners include:

Delaware North (foodservice giant) — placed Swing Suites at The Turn in Titletown (Green Bay, near Lambeau Field), Good Game at The Battery (Atlanta, next to Truist Park), and Banners Kitchen & Tap (Boston, next to TD Garden)
State Farm Arena (Atlanta Hawks) — first permanent Topgolf amenity inside a major sports arena
Various hotels, casinos, and country clubs nationwide

Can you open one? Technically yes, but you’re not building a standalone sim business. You’re adding a Topgolf-branded entertainment amenity to an existing venue. The economics work for the host venue — it drives incremental food and beverage revenue, attracts events, and keeps guests on property longer. But it’s an add-on to an existing hospitality operation, not a standalone business model.

The pricing is opaque — Topgolf doesn’t publish Swing Suite licensing costs publicly. Industry estimates from comparable simulator licensing programs (Full Swing, AboutGolf, HD Golf) suggest a 3-5 year licensing agreement at $2,000-$5,000 per month per bay, with installation costs of $50,000-$100,000 per bay depending on the buildout. Topgolf’s brand premium likely adds 20-30% to those numbers.

Concept 3: Lounge by Topgolf (Failed — Closed June 2024)

This is the concept every sim entrepreneur should study carefully.

In January 2020, Topgolf opened the world’s first “Lounge by Topgolf” in Kirkland, Washington — a 9,200 square foot indoor simulator lounge in a mixed-use development. It featured four entertainment bays plus a VIP bay, a full restaurant and bar, private event space, and an “innovative digital sky” ceiling. It was Topgolf’s first attempt at a smaller-format, indoor-only venue that could go where a full-scale Topgolf couldn’t.

It closed June 30, 2024, after four and a half years of operation.

The space was 7,761 square feet (smaller than the original 9,200 SF plan). Five Iron Golf subleased it in October 2024, opening a 4,500 square foot, 4-bay Trackman-equipped location in the same space. Five Iron is a minority investee of Topgolf Callaway Brands.

Why did it fail? The company never disclosed specifics, but the math tells the story. A 5-bay simulator lounge in a Seattle-area mixed-use development, generating maybe $30,000-$50,000 per month in sim rental revenue at $50-80 per hour, plus whatever F&B a 7,761 square foot restaurant could push. Even at 50% margins, you’re looking at $500,000-$700,000 in annual profit before rent, labor, and overhead. In a prime Kirkland Urban location with 650,000 square feet of office space (two of three buildings vacant), the rent alone was probably $25,000-$35,000 per month. The math never worked for a corporate-owned concept with Topgolf’s overhead structure.

The failure of Lounge by Topgolf is the single most instructive data point for anyone considering a small-format sim lounge. If Topgolf — with its brand, buying power, supply chain, and operational expertise — couldn’t make a 5-bay lounge work, what makes you think you can do it without those advantages?

The Numbers: What Topgolf’s Financial Reality Actually Looks Like

Let’s cut through the brand mystique and look at the actual financial data, because Topgolf’s trajectory is more complicated than the “slam dunk success story” narrative suggests.

The Good

$17 million average annual revenue per venue — top performers hit $20-28 million
Mid-30% EBITDA margins per venue (as stated by CEO David McKillips in June 2026)
$3-5 million net profit per venue annually for mature locations
104 venues and growing — 21 new venues added in 2024-2025
F&B now 68% of total revenue (up from 54% in 2018) — higher margins than gameplay
Payback period dropped from 5.2 years (2018) to 3.7 years (2025) — modular design standardization reduced construction costs per bay
70% of Swing Suite customers are age 18-34 — the demographic every entertainment concept wants

The Bad

Same-venue sales have been declining — Q2 2025 Topgolf venue revenue was $468M, down from $473.7M in Q2 2024, despite having more venues open
Topgolf lost nearly $1 billion in value under Callaway ownership
Hundreds of employees laid off in early 2026
Former CEO Artie Starrs resigned after four years
Average check size is dropping in 2026 (McKillips confirmed this in June 2026)

The Ugly

The planned IPO never happened. Leonard Green & Partners acquired a majority stake instead. Callaway retained 40% and two board seats. The company is now valued at a fraction of where the IPO prospectus projected.
Topgolf Callaway Brands announced a split in 2026 — separating the Topgolf and Callaway businesses. This is widely framed as “unlocking shareholder value,” which is corporate-speak for “the conglomerate structure wasn’t working.”
Golf ball quality issues. The RFID-based balls use microchips that throw off the center of gravity and compression, causing balls to fly up to 15% shorter than standard golf balls. This matters because it alienates the serious golfer demographic Topgolf needs to grow.

The Turnaround: What McKillips Is Actually Doing

New CEO David McKillips joined from CEC Entertainment (Chuck E. Cheese’s parent) in 2026. His analysis of Topgolf’s problems is brutally honest:

“The brand leaned too heavily into the social experience.”

Only 35% of golfers currently visit Topgolf. That’s a massive untapped market, but it’s also a sign that Topgolf has been optimizing for the non-golfer at the expense of the actual golfer.

His plan:

Switch from RFID balls to proprietary Toptracer technology — fixing the ball performance problem that turns off serious golfers
Introduce simulator leagues nationwide — directly competing with Five Iron Golf, X-Golf, and every indoor sim facility that’s been running leagues for years
Launch a three-tier membership program — “good, better, best” structure with a low-cost entry for social customers and a premium tier for frequent golfers
Diversify venue formats — five different build types instead of the one-size-fits-all 102-bay monster, including smaller footprints in underserved markets
Double the venue count — McKillips believes there’s room for 200+ domestic locations, targeting 3-5 new builds per year
Add non-golf entertainment — arcade games, dart boards, pickleball courts (at 7 locations starting 2027), expanded mini golf
New leadership from entertainment/theme park backgrounds — CIO from CEC, VP of Venue Services from Palace Entertainment, regional VPs from family entertainment centers

The five different build types are the most interesting part for the sim business market. It signals that Topgolf recognizes the 102-bay, $30-50 million model doesn’t work everywhere. Smaller formats, adaptive reuse of existing buildings, and tiered investment levels suggest Topgolf is trying to solve the same problem every sim facility operator faces: how do you match the venue size to the market demand?

What Topgolf’s Strategy Means for Independent Operators

Here’s where this gets practical for anyone reading this who wants to open a golf simulator facility.

Signal 1: Topgolf Validates the Category, Not the Brand

Every Topgolf venue that opens normalizes indoor golf as entertainment. The 104 venues have introduced millions of people to swinging a golf club indoors. That’s great for the entire industry. But Topgolf’s struggles — declining same-venue sales, valuation collapse, layoffs, the failed Lounge concept — prove that even the dominant brand doesn’t have this dialed in.

The category is real. The market is growing. But the business model is harder than the glossy brochures suggest.

Signal 2: The Swing Suite Licensing Model Is a Warning

Topgolf’s licensing model for Swing Suite places its brand and technology in existing hospitality venues. It’s not a standalone sim business — it’s an add-on amenity for hotels, casinos, and sports bars. The host venue absorbs the real estate cost, the F&B infrastructure, and the staffing. Topgolf gets licensing revenue with minimal capital exposure.

If you’re a hotel or sports bar operator looking to add simulators, Swing Suite is a legitimate option. You get the brand recognition, the technology, and the operational playbook. But you’re also paying a premium for a brand that may not move the needle as much as you think — 70% of Swing Suite customers are 18-34, which is great for the brand but means your existing customer base may not care about the Topgolf name.

If you’re an entrepreneur looking to build a standalone sim business, Swing Suite isn’t the path. You don’t need Topgolf’s permission to put simulators in a bar. You can buy a TrackMan iO for $12-14K and a GSPro license for $250/year and build your own sim bar for a fraction of what a Swing Suite licensing deal would cost.

Signal 3: The Lounge by Topgolf Failure Is Your Case Study

Topgolf’s Kirkland Lounge was a 5-bay indoor sim facility with a full bar and restaurant, in a prime mixed-use development in one of the wealthiest metro areas in the country, backed by the most powerful brand in golf entertainment.

It lasted four and a half years and closed.

The failure modes are instructive:

Revenue concentration. Five bays generating $50-80/hour in sim rental, plus F&B from a 7,761 square foot restaurant. That’s not enough throughput to cover the fixed costs of a full-service operation in a premium real estate market. The sim bays might have been profitable, but the restaurant was a drag.

Real estate mismatch. The Kirkland Urban development had 650,000 square feet of office space. At one point, two of the three office buildings were vacant. The foot traffic and daytime corporate customer base that the Lounge depended on evaporated when the office market softened. This is the same problem that kills sim facilities everywhere — you can’t control your landlord’s leasing strategy.

Operational complexity. Topgolf runs 102-bay venues with 350-400 employees. The Lounge was a 5-bay venue with a full kitchen. The operational overhead of a corporate hospitality operation doesn’t scale down linearly. The same systems, processes, and compliance requirements that work for a $17 million venue crush the margins of a $500,000 venue.

The premium lounge squeeze. The Lounge was positioned as “upscale” — craft cocktails, locally curated dishes, digital sky ceiling. That means higher buildout costs, higher F&B costs, and higher price points. Premium lounge customers are less frequent and more price-sensitive than the casual crowd at a regular Topgolf. The Lounge was stuck between being a special-occasion destination and a regular hangout, and it couldn’t satisfy both.

Signal 4: Topgolf’s Pivot to Smaller Formats Confirms the Market

McKillips’ five build types and his target of 200+ domestic locations is a direct admission that the 102-bay flagship model is maxed out in Tier 1 cities. The next wave of growth requires smaller formats that can go into suburban markets, secondary cities, and adaptive reuse spaces.

That’s the same opportunity the entire sim facility industry is chasing. Five Iron Golf went from 24 to 30+ locations. Another Nine sold 75+ territories in under six months. X-Golf has 50+ U.S. locations. Back Nine is expanding in mid-sized markets.

Topgolf is late to this party. The independent and franchise sim facility operators who have been building 4-8 bay venues in mid-sized cities for the last 3-5 years have a first-mover advantage that even Topgolf will struggle to overcome.

Should You Try to Work With Topgolf?

The honest answer depends on who you are.

If you own or operate a hotel, casino, sports bar, or entertainment district with existing F&B infrastructure: A Swing Suite licensing deal is worth exploring. You get brand recognition, proven technology, and operational support. The licensing cost is an acceptable expense if the incremental revenue from the Topgolf nameplate justifies it. Get a detailed revenue projection with and without the Topgolf branding — the premium might not be worth it in markets where the brand isn’t already strong.

If you’re an entrepreneur building a standalone sim facility from scratch: Don’t waste your time chasing a Topgolf deal. It’s not available to you. Build your own concept with better equipment for less money. A 4-bay sim bar with TrackMan iO or GOLFZON TwoVision will cost you $250,000-$300,000 all-in. You can have it open in 6-9 months. Topgolf’s minimum viable project timeline is 18-24 months and requires institutional capital.

If you’re looking at international markets (outside US/UK): Topgolf is actively seeking international development partners with $150M+ in capital and multi-venue commitment. If you have that kind of backing, the opportunity is real. But be honest about what you’re signing up for — 5-10 venues at $15-50 million each, with Topgolf’s operational requirements, technology upgrades, and brand standards. That’s not a lifestyle business. That’s a real estate development fund with a golf theme.

What to Take From Topgolf’s Playbook

Topgolf is a category-defining brand that has proven the golf-tainment concept at massive scale. 104 venues doing $17 million each is not a fluke. But the company’s financial struggles — lost valuation, declining same-venue sales, layoffs, the failed Lounge concept, the CEO turnover — should give any aspiring operator pause.

The brand is learning the same lessons every sim facility operator learns: real estate is unforgiving, utilization drives everything, and premium concepts struggle to find recurring customers. The difference is Topgolf can absorb $30 million failures. You can’t.

The smart play for most entrepreneurs is not to chase a Topgolf deal. It’s to build a sim facility that competes on operating fundamentals — utilization rate, real estate cost, revenue per bay, labor efficiency — and let Topgolf spend $30 million per location proving the market exists. Then you step into the gaps they leave behind.

If you want the full picture on building a sim facility, start with the pillar guide. For the franchise comparison against concepts you can actually buy, read Another Nine vs Five Iron vs Back Nine. And if you’re wondering whether the premium lounge model works outside of Topgolf’s balance sheet, the sim lounge vs sports bar analysis has the numbers.

Topgolf will survive its current turbulence. The brand is too big to fail in any meaningful sense. But the era of “Topgolf is the only play in town” is over. The sim facility boom is producing better, cheaper, more flexible concepts every month — and you don’t need Topgolf’s permission to build one.