Launching a business is an exercise that is invariably fraught with anxiety. Bringing a brand-new concept to a marketplace unaccustomed to the offering only adds to the anxiety exponentially.
Such was the challenge facing Brandon Arceneaux and his business partner, Chris Hoegemeyer, in 2004 when poised to introduce the concept of a movie theater where one could eat and drink adult beverages to San Antonio. Alamo Drafthouse had been a hit in Austin, but the capital city has decidedly different demographics with a citizenry that puts a premium on eccentricity.
The business duo comprising Reel Dinner Partners Ltd. needn’t have worried: The original Alamo Drafthouse at Westlakes near Sea World off Loop 410 became profitable after just its second year. Today, the business partners operate three such cinemas with a collective 23 screens, including one cinema each at the old Central Park Mall site and in the Stone Oak area.
“They’re all doing very well,” Arceneaux says of the cinema concept he and Hoegemeyer introduced, hinting at even more expansion in the near future: “Nothing has been signed, but we are actively looking in the Rio Grande Valley,” he offered in a tantalizing snippet of insight worthy of a movie tease. Competitors quickly emerged in the wake of the partners’ success, lending credence to the adage positing imitation as the sincerest form of flattery. But the presence of rivals only serves to illustrate how welcoming the city is to the concept.
The success of the local Alamo Drafthouse operation offers something of a primer on corporate success. Armed with a bachelor of business administration degree from the University of Mary Hardin-Baylor — with double majors in management and marketing — Arceneaux teamed up with his former college roommate Hoegemeyer with big dreams of corporate success but little knowledge of the industry. “We didn’t have a lot of money in our mid-20s and knew more about business than about the film industry,” he recalls. “It was scary early on, but we have learned a lot since then.”
The initial cinema site may have presented itself to the partners by happenstance: a shuttered theater that required retrofitting rather than new construction. Raising $2 million for the work, the partners realized savings by refurbishing the old theater and then leveraging its success to open another pair. “We said, hey, it’s now or never,” Arceneaux says. “What made us pull the trigger was that it had been such a big hit in Austin.” Thankfully for the partners — and, by extension, the local movie-going public — the gambit paid off. The private investors that enabled the initial location were all paid within three years, Arceneaux says with palpable pride.
Happenstance — or you might say good fortune — seems to be a thread that runs through the business partnership. Both men attended Mary Hardin-Baylor on basketball scholarships — Arceneaux as a shooting guard and Hoegemeyer playing at small forward — and were assigned to live in the same dormitory. The two became fast friends and kept in touch when Hoegemeyer decided to transfer to Texas A&M. Later, the two worked together at Merrill Lynch in Austin, where they cut their teeth in the world of finance.
Their bond would later extend further: Both would marry women named Bethany. “Plus my Bethany’s son and one of Chris’s children were born one day apart,” Arceneaux says, sounding like the “in a world…” guy delivering a plot twist.
As appealing a concept as the Alamo Drafthouse is and as compelling as is the tale of its partners, the success of the company yields a substantial template on corporate success for would-be entrepreneurs. But financial wherewithal and economics study is for naught without the right attitude, Arceneaux says. “You have to pick something you’re passionate at,” he stresses, offering advice tidbits to anyone intent on emulating his and his partner’s success. “But be prepared for the hard work it’s going to take, and be prepared to make mistakes. Mistakes helped us to handle early adversity much better.”
When the subject of competition comes up — and the competition to appeal to movie-goers is fierce — Arceneaux betrays no worries. To counter any threat, the business duo have placed a premium on customer service, putting the experience of taking in a movie at an Alamo Drafthouse as enjoyable as the movies themselves.
To accommodate the unique dynamics of San Antonio, the business partners also operate the City-Base cinema, making its properties available for screenings by local filmmakers and staging a monthly showing of the classic Rocky Horror Picture Show to cater to its most ardent fans — dressed up as the classic film’s characters and reciting the entire dialogue of the movie by memory.
“This is what our customers tell us, that the biggest thing that makes us stand out is our focus on the customers’ experience,” Arceneaux says. “We want this experience to be overwhelming.”
Like the plot of any feel-good Hollywood movie, the story of Arceneaux and Hoegemeyer has had a decidedly happy ending and promises future installments. But in their case, the happy outcome is very real.
