DILL DINKERS DC

Confidential Investment Memorandum

Flagship Indoor Pickleball Facility | Target Capacity: 11 Regulation Courts

Prime Location

Fort Totten / Upper Northwest D.C. Submarket

Investment at a Glance



1

Sources and Uses of Capital

2

Executive Summary


The Opportunity

We are launching the premier Dill Dinkers facility in an underserved, high-density corridor of Washington, D.C. This investment represents the intersection of America's fastest-growing sport and a disciplined, site-driven development strategy.

We hold the exclusive franchise rights to open Dill Dinkers locations in Washington, D.C., elevating this beyond a single-site operating opportunity.


The Brand

Proven Scale

  • 37 Dill Dinkers locations currently operating across the U.S., one of the fastest-growing franchise networks in the sport. Notably, 12 of those locations operate in the DMV market, which means we benefit from locally proven operational playbooks, not just national ones.

Strategic Advantage

  • Reduces market-entry risk through existing brand awareness
  • Supports faster customer adoption vs. independent launch
  • Improves execution certainty with a proven, scalable concept

The Operators

This opportunity is led by two partners with complementary skill sets, deep roots in the Washington, D.C. market, and the exclusive Regional Developer rights for the District, a franchise designation that grants them the sole authority to develop and operate Dill Dinkers locations across Washington, D.C.

Jonathan Boateng — Co-Founder

Jonathan holds a B.S. in Computer Engineering from Georgia Tech and has built his career in cybersecurity, business analysis, and project management for federal agencies. He leads site selection and operational strategy for Dill Dinkers DC, applying the same analytical rigor his technical background demands.

Travis Andrews — Co-Founder

Travis is the CEO of Init One Solutions, a DMV-based firm specializing in AI-powered digital intelligence and cloud solutions, where he has developed deep expertise in project management and organizational scaling. At Dill Dinkers DC, he leads the Regional Developer operations and franchise support infrastructure across Washington, D.C.

Beyond their roles as Regional Developers, Jonathan and Travis are also direct equity investors in Dill Dinkers at the corporate level, a position that reflects their conviction in the brand's long-term trajectory and ensures their interests are fully aligned with both the franchisor and the investors in this facility.

Director of Operations

A Director of Operations has been identified and has committed to the role.


The Investment Thesis

$1.5 million in seed capital funds the build-out and working capital for an 11-court regulation facility in the Fort Totten / Upper Northwest D.C. submarket.

Investors receive a tiered return structure designed to prioritize rapid capital payback followed by a perpetual high-yield equity stake.

Dill Dinkers DC holds the exclusive franchise development rights for 3–5 locations across Washington, D.C. Founding investors will be offered the opportunity to participate in subsequent Washington D.C. locations before any broader capital raise, creating a compounding opportunity for those who invest early in the platform. Participation is subject to the terms of each future offering.


Conservative Financial Modeling

Our modeling excludes high-margin revenue streams entirely and holds utilization flat once it reaches the level a comparable Dill Dinkers facility operates at today. No alcohol sales, no membership growth beyond 500 members, and no assumption that the facility ever fills further. Additional upside is modelled separately.

Full-Rent Baseline

$768k net income in Year 2, at 55% utilization with no rent abatement

Operating Plan

$1.21M net income by Year 4, as utilization reaches 65% and holds

Capital Payback

Between 3 and 5 years, depending on how quickly utilization ramps


The Market

Washington, D.C.'s dense residential population, combined with limited indoor recreational competition, creates an unusually attractive risk-adjusted opportunity. A specific Target Site has been identified that meets strict operational criteria, with advanced lease negotiations underway.


Site details and financial model available upon execution of NDA. This memorandum contains forward-looking statements subject to material risks and uncertainties.

3


The "Target Site" Profile

To protect the integrity of ongoing negotiations, the specific location remains confidential pending NDA execution. However, we are actively underwriting a specific property that fits our strict operational model. Our site selection strategy prioritizes demographic density, competitive positioning, and structural suitability over opportunistic pricing.

Court Capacity

The target facility accommodates 11 Regulation Courts (including one champion court) with proper spacing for tournament-grade play and spectator areas.

Structural Specifications

18ft+ clear span ceiling height ensuring optimal playability and regulatory compliance for competitive events.

Demographic Targeting

High-density residential zone with limited indoor recreational competition and favorable household income profiles.

Economic Viability

Lease terms structured to ensure profitability at conservative utilization. The facility breaks even at 32.9% utilization on full market rent, roughly half our Year 2 assumption.

"The 'Green Light' Criteria: We have identified the specific site and are currently negotiating terms. Specific address and detailed site plans available upon execution of NDA."


Conservative Modeling Methodology

Built on Conservative Baselines

Our financial model incorporates multiple conservative assumptions designed to stress-test the business under adverse conditions. This approach provides sophisticated investors with confidence that projected returns reflect genuine operational capability rather than optimistic scenario planning.

Revenue Cushion Strategy: High-margin alcohol sales have been excluded entirely from these projections, despite representing 15-20% of revenue at comparable facilities. This deliberate omission creates substantial upside optionality while ensuring baseline projections remain achievable through core operations alone.

Utilization Cap Philosophy: Utilization ramps from 47.5% at launch to 55% in Year 2, 60% in Year 3, and 65% from Year 4 onward, where it is held flat for the remainder of the model. We do not assume the facility fills beyond that point. A Dill Dinkers facility in Maryland operates at 65% today, so our plan projects toward a level the brand has already achieved rather than past it. The facility breaks even at 32.9% utilization on full market rent.

01

Year 1 Launch Strategy

Assumes 9 Months of Free Rent (not including NNN) through negotiated abatement. We treat this as a one-time "Launch Subsidy" to build cash reserves, not recurring income.

02

Year 2 Reality Test

Assumes full market rent load plus annual escalations. The model proves viability without the subsidy, demonstrating sustainable economics.

03

Ongoing Escalation Planning

All expense projections include annual increases for rent, labor, and operating costs to ensure multi-year accuracy.


Financial Projections Overview

47.5%

Year 1 Utilization

Launch phase with conservative ramp-up assumptions

55%

Year 2 Utilization

Full market rent

60%

Year 3 Utilization

Mature facility performance

Year 1: Launch Dynamics

Net Income: $892k | Margin: 51%

Year 1 Net Income is stabilized by the negotiated rent abatement. This 'Launch Subsidy' offsets lower initial utilization (47.5%), allowing the facility to exceed its Year 2 profitability immediately. This protects cash flow while the member base ramps up.

Year 2: The Reality Test

Net Income: $768k | Margin: 35%

Year 2 is the reality test. Full market rent, no rent abatement, no alcohol revenue, and utilization at 55% — ten points below where our plan settles and ten points below the comparable Maryland facility today. The business still returns $768k. This is the year that proves the model works before any of our growth assumptions are needed. This represents the true operational capability of the facility under normalized conditions without subsidies or optimistic assumptions.

Year 3: Mature Operations

Net Income: $1M | Margin: 40%

As utilization increases to 60% (still below peak capacity), profitability expands dramatically. This demonstrates the substantial operating leverage inherent in the fixed-cost structure once the facility achieves market acceptance.

Critical Insight: The Year 2 performance validates the investment thesis. With full rent load and conservative utilization, the facility generates substantial profit, proving the business model without reliance on favorable temporary conditions.


4

Understanding the Revenue Model

This is a "Facility Rental" model, not a hospitality model. We sell time on courts. Our projections exclude alcohol sales entirely, in every scenario, to demonstrate raw operational viability.

The Core Principle: Utilization Drives Profitability

This sports facility operates on a fundamental economic principle: fixed costs are constant, regardless of court occupancy. Investments in courts, lighting, and infrastructure generate the same daily expenses. Unlike retail, every additional booked court hour contributes almost directly to the bottom line, after minimal incremental expenses.

Success hinges on membership engagement and visitor traffic. Members provide a reliable revenue base. However, the real impact comes from members filling courts and attracting others. Drop-in visitors pay premium rates, often representing the highest-margin revenue stream.

The strategic imperative is clear: maximize court occupancy across all available hours. Every time slot represents an opportunity to convert unused capacity into revenue. An empty court is lost revenue, a missed chance to build community, and a failure to attract new members.

84%

Court Access

Primary revenue driver

14%

Membership Dues

Recurring revenue foundation

2%

Retail & Sponsors

Non-court income


Projected Revenue Breakdown (Year 2)

This analysis presents a realistic second-year projection based on achieving 55% average court utilization. This scenario excludes alcohol sales for a conservative baseline, though beverage sales can be a meaningful supplementary stream, and projects the revenue split as follows: Court Access (84%), Memberships (14%), and Retail/Sponsors (2%).

Court Access Revenue

$1,843,000

84% of Total Revenue

This dominant category includes all court usage, broken into five distinct booking types. This diversity provides resilience, allowing various booking types to compensate for each other's performance.

Membership Revenue

$301,000

14% of Total Revenue

Annual and monthly dues provide predictable, recurring revenue, stabilizing cash flow. Members often become brand ambassadors, driving organic growth. (Based on 500 members, held flat across all scenarios)

Retail & Sponsorship

$37,000

2% of Total Revenue

Modest, passive income with minimal overhead. Equipment, merchandise, and sponsorships contribute margin without consuming court time or staff.

Deep Dive: Court Access Revenue Components

The $1.84 million in court access revenue deserves closer examination. Understanding the mix reveals strategic opportunities. Each booking type attracts different customers, occurs at different times, and requires unique operational support.

Open Play Sessions

54% of Court Access | Highest Volume

Social, drop-in sessions maximize court utilization during peak hours and foster community. They serve as the primary customer acquisition funnel, with many members starting here.

Private Reservations

18% of Court Access | Premium Pricing

Individuals or groups book entire courts for exclusive use. These fill shoulder hours and attract serious players or corporate groups.

League Play

11% of Court Access | Recurring Weekly

Structured leagues run for 6-12 weeks. Players pay upfront, providing advance cash flow and guaranteed bookings. Leagues also boost concession sales.

Contract Time Blocks

9% of Court Access | Bulk Bookings

Coaches, corporate clients, or organizations purchase court blocks at discounted rates. These ensure utilization during slow periods and reduce marketing costs.

Events & Clinics

8% of Court Access | High-Touch Service

Birthday parties, corporate events, and clinics generate premium rates and word-of-mouth marketing. They require more staff but justify higher pricing through added services.

Strategic Implications for Operators

Revenue Concentration Risk

With 84% of revenue from court access, any utilization reduction poses significant risk. Diversification through memberships, retail, Food & Beverage, and alternative programming can mitigate this.

The Membership Paradox

Memberships, though only 14% of revenue, are strategically vital. Members use the facility more, creating a vibrant atmosphere. They are forgiving, provide feedback, and recruit others. Their value extends beyond the $301,000 line item, enabling other revenue streams.

Pricing Power & Elasticity

Success depends on pricing optimization. Open play needs volume-encouraging prices, while reservations command premiums without deterring bookings. Membership pricing balances committed revenue with accessibility. Ongoing analysis of booking patterns and feedback informs price adjustments.

The Utilization Challenge

Achieving 55% average utilization is demanding. Facilities with 10-16 courts open 14-16 hours daily mean 140-256 court-hours available. Reaching 55% requires filling 77-141 hours daily, year-round, despite fluctuations. This demands sophisticated demand generation and operational excellence.

Attract & Convert

Marketing drives awareness and first visits. Digital ads, partnerships, and events bring new players. Cleanliness, staff, and ease of participation determine return visits.

Engage & Retain

Converting visitors to regulars requires community building: social events, skill programs, leagues, and recognition. Communication via email, text, and app keeps the facility top-of-mind.

Optimize & Scale

Data reveals patterns: which hours need stimulation, which formats are highest margin, and which segments can expand. Dynamic pricing, targeted promotions, and innovation drive utilization gains and significant profit growth.

"Every hour a court sits empty represents not just lost revenue, but a missed opportunity to create the community atmosphere that makes a facility thrive. The most successful operators obsess over filling courts with the right mix of members and visitors at the right prices throughout the day."

Total Projected Revenue: Year 2

Based on 55% average court utilization without alcohol sales, the facility projects $2,181,000 in total annual revenue. This provides a strong foundation for profitability, assuming disciplined cost management. Third-year revenue grows approximately 14% as utilization improves to 60%

5

Distribution Waterfall

How Distributions Work: A $100,000 Example

01

Initial Investment

$100,000 committed at closing, representing approximately 1.33% of this location.

02

Year 1 (Launch)

Investors receive 10% of distributable cash. The remaining 90% is retained to build operating reserves during the ramp-up period. Projected Year 1 investor pool: $89,200, or approximately $5,900 per $100,000 invested.

03

Accelerated Distribution Period

Beginning in Year 2, investors receive 45% of distributable cash. This elevated rate continues until cumulative distributions to an investor equal that investor's initial investment.

04

Economic Recovery

Cumulative distributions are projected to equal the $100,000 initial investment during Year 5 under the operating plan, and sooner if utilization ramps faster. Rate of return depends on the performance of the location.

05

Permanent Ownership

The investor retains a 20% ownership position, approximately 1.33% of this location for a $100,000 investment, in perpetuity, with no additional capital contribution required. Projected steady-state investor pool: $259,000 per year, or approximately $17,300 per $100,000 invested, growing with pricing.

6

The Investment Structure: Safety First, Acceleration Second

Our capital structure reflects a sophisticated understanding of investor priorities: capital preservation during uncertainty, rapid payback during stability, and perpetual yield post-recovery. This tiered approach aligns management incentives with investor returns while maintaining operational flexibility.

1

Phase 1: Capital Preservation (Year 1)

Split: 10% to Investors / 90% Retained

We utilize the rent abatement period to build a "War Chest" of cash reserves. Instead of distributing this one-time subsidy, we retain it to protect the site against operational volatility, construction delays, or market softness. This conservative approach prioritizes business stability over immediate returns, with a projected investor share of ~$89,200 in Year 1.

2

Phase 2: The Payback Accelerator (Year 2+)

Split: 45% to Investors / 55% Retained

Once full rent obligations commence and the business stabilizes, we aggressively increase distributions to accelerate the return of capital. This elevated distribution rate (45%) continues until investors have received 100% of their principal investment, projected to occur during Year 5 under the operating plan, and sooner if the facility outperforms.

3

Phase 3: The Perpetual Yield (Post-Payback)

Split: 20% Equity Stake (Permanent)

After full capital return, investors retain a 20% equity position in perpetuity. This structure provides ongoing participation in distributions without any additional capital contributions. The perpetual equity interest allows investors to benefit from long-term facility operating performance and continued operational improvements.

Growth Bonus: The "Empire" Clause

Exclusive Priority Access for Founding Investors

Founding investors will be offered the opportunity to participate in subsequent Washington D.C. locations before any broader capital raise. Participation is subject to the terms of each future offering and is not a contractual right.


Projected ROI & Capital Payback Timeline

A risk-adjusted return profile. Investors receive steady cash flow with a target 100% principal return in under 5 years, followed by a perpetual equity yield. Below reflects the operating plan: utilization ramps from 47.5% at launch to 65% by year 4 and holds there.

Year 1: Capital Preservation

Investor Share: ~$89K

Focus on building reserves and operational stability

Year 2-4: Accelerated Payback

Cumulative Investor Share: ~$1.4M (includes Y1-Y4)

Aggressive 45% distribution rate drives rapid capital return

Year 5: 100% Principal Returned

Target for full principal recovery.

Sooner if utilization ramps faster than operating plan

Year 6+: Perpetual Yield

Annual Return: ~$259K (~17.3% Cash-on-Cash)

Cash flow income with no capital at risk

7

Upside Scenario: What Full Utilization Looks Like

Our operating plan holds utilization at 65% from Year 4 onward and assumes no further growth. This page isolates a single variable — what the same facility produces if demand pushes utilization to 80%. Every other input is identical: the same 500 members, the same prices, the same cost structure, and still no alcohol revenue.

There is no dedicated indoor pickleball facility operating in the District today. Players who want to play indoors leave the city. Our operating plan does not assume we capture that demand faster than a comparable suburban facility did, but this page shows what happens if being the only option in a dense, undersupplied market produces the kind of utilization that scarcity usually produces.

Operating Plan (Year 5):

  • 65% Utilization
  • 500 members
  • No alcohol revenue
  • Net income: ~$1,259,000
  • Net margin: 44%

Upside Scenario (Year 5):

  • 80% Utilization
  • 500 members
  • No alcohol revenue
  • Net income: ~$1,766,000
  • Net margin: 52%

Drivers of the Upside

Operating Leverage

Fifteen points of utilization adds $569,000 of revenue and only $85,000 of cost, lifting net income by $506,000. Close to 90 cents of each incremental dollar reaches the bottom line, because rent and base staffing do not move with occupancy.

Revenue We Have Not Counted

Two streams sit outside every projection in this memorandum, including the upside case above.

Alcohol service generates 15 to 20% of revenue at comparable facilities. We have assumed none.

Corporate buyouts and regional tournaments command rates well above standard court bookings. We have assumed none.

Neither is required for the returns shown here. Each is upside we have chosen not to count.

8

Scenario Analysis

Performance is driven primarily by court utilization. The table below takes our Year 2 numbers and asks what happens at different levels of court usage, including one well below our plan. These are not forecasts for each year. Our actual projections follow the utilization ramp described earlier: 47.5% at launch, reaching 65% by Year 4.

All scenarios assume full market rent with no abatement, no alcohol revenue, and no debt service. Operating costs are held at Year 2 levels. Membership scales with utilization below the Year 2 level. Break-even is 32.9% utilization on full market rent, and a comparable Dill Dinkers facility in Maryland operates at 65% today.

9

How a $100,000 Investment Pays You Over Time

Years 1–5 come directly from the operating model. Years 6–10 hold utilization flat at 65%, with no additional courts filled, and prices and costs both growing 3% a year, so margin does not improve. Rent follows the lease schedule. Investor receives 10% in Year 1, 45% until capital is repaid, and 20% permanent ownership thereafter.


The Investment

Initial Investment

$100,000

Ownership Stake

~1.33% of this location

Capital Returned

During Year 5


How Your Cash Flows Back to You

Year 0

–$100,000 invested

Years 1–5

≈ $118,000 received, including full return of your $100,000

Years 6–9

≈ $17,300–$18,800 per year

Year 10

≈ $19,300


What Happens After Your Capital Comes Back

Your $100,000 is returned during Year 5. Everything after that is return on an investment you have already recovered.

17–19%

Annual yield on your original investment, after capital is returned

From Year 6 onward you receive approximately $17,300 a year, rising with pricing to $19,300 by Year 10. Your ownership does not expire. These distributions continue for as long as the facility operates. There is no maturity date and no requirement that the business ever be sold.


If the Business Is Sold

Your 20% ownership is permanent, but it isn't locked up. If the business is sold, investors receive 20% of the proceeds attributable to this facility as a lump sum at closing.

Illustration only. At Year 10 earnings of approximately $1.45 million and a 5× multiple, the business would be valued at roughly $7.2 million. A $100,000 position at approximately 1.33% would be worth about $97,000 at closing. Comparable operating businesses commonly transact between 3× and 5× earnings; at 4×, the same position would be worth approximately $77,000.

Cash Already Received

≈ $209,000

Plus Exit Proceeds

≈ $97,000

Total If Sold in Year 10

≈ $306,000

$306K

Total cash received

3.06×

Multiple on original investment

A $1.5 million raise for 20% implies a $7.5 million value today, close to the Year 10 figure above. That comparison treats the equity as the only thing investors receive. It isn't. The $1.5 million purchases a distribution stream that returns the full investment by Year 5 and 20% of this location permanently. By the time investors own the 20% outright, their capital is already back in their hands. The Year 10 figure is also built on earnings that exclude alcohol, events, membership growth, and any utilization above 65%.

No sale is planned, committed, or guaranteed.


Important Terms

The exit is illustrative. No sale is planned or guaranteed, and no market exists for these interests. Sale values for single-unit recreational facilities vary widely with size, lease terms, market, and buyer type.

A sale may involve multiple locations. If so, the proceeds attributable to this facility would be determined by valuing it on its own operating performance.

This is a long-term, illiquid investment. Interests are not publicly traded and cannot be readily sold. Interests may not be transferred, assigned, or pledged without the prior written consent of the managing members, and are subject to the transfer provisions of the Operating Agreement. Investors should be prepared to hold for the full life of the investment and should not invest capital they may need to access.

Returns do not depend on a sale. The distribution structure returns capital and generates ongoing yield from operations. A sale, if it occurs, would be additive.

10

Forward-Looking Statements & Disclaimer

11

Summary & Next Steps

The Market Imperative

Pickleball is the fastest-growing sport in America, with participation increasing 159% over three years. Yet Washington D.C. remains severely underserved relative to comparable metropolitan markets. This facility will be the premier indoor destination in the Fort Totten / Upper Northwest D.C. Submarket, capturing pent-up demand from a dense residential population.

Competitive Moat: The combination of location, capacity (11 courts), and operational expertise creates substantial barriers to competitive entry. High-quality indoor facilities require significant capital, favorable real estate, and operational know-how—creating significant barriers to entry in this submarket.

Investment Ask

$1.5 Million Seed Capital to fund buildout, courts and working capital

Target Capacity

11 Regulation Courts for leagues, tournaments, and open play

Year 2 Net Income

$768k at 55% utilization, rising to $1.21M by Year 4 under the operating plan

Payback Period

3 to 5 years depending on how quickly utilization ramps. Approximately 4 years under the operating plan.

Next Steps

Ready to signal your interest or learn more? Submit a confidential expression of interest below. A member of our team will follow up within 48 hours.

👉 invest.dilldinkersdc.com (ignore if you have already filled out the form)






Confidential – For Illustrative Purposes Only |

12