The Museum of Illusions is an unusual concept with rapid growth in the American market and is a very profitable business.
By the end of next year, the Zagreb Museum of Illusions could have a chain of as many as 50 museums around the world. The Museum of Illusions currently has franchises in 36 cities, including New York, Paris, Dubai, and Shanghai. A new impetus for the development of the largest chain of private museums in the world has been given by the investment of Invera Equity Partners. The Dutch equity fund became the owner of 65 percent of the company Metamorfoza, which is behind the Museum of Illusions, and undertook to recapitalise the company with $3.5 million.
– During the show ‘Entrepreneurial Mindset’, Slaven Kordić, executive partner of Invera Equity Partners, said: ‘It will be invested in pivoting the existing business model. We will expand further through franchises. We have secured nine new franchises for next year. The first own museum will be in one European Capital of Culture, and since the company is globally present and we want to be close to our franchisors, we will open one museum in the American market. Museums aim to provide people with better education, better training, and quality assurance of the museum, i.e., the preservation of its identity. We want to create new exhibits with franchise partners that will increase the attractiveness of the exhibition.’ He also revealed that museums will open in Tel Aviv and Philadelphia by the end of this year.
Explaining why the IEP chose the Croatian company, Kordić said that the Museum of Illusions is an unusual concept with rapid growth in the American market and a good team of young people, and that it was a very profitable business. This branch of the entertainment industry is called ‘edutainment’, and its fastest growing segment is ‘midway’.
– ‘People spend up to two hours there and are in a very attractive location, where many people pass. The big guys have started investing in such attractions in recent years. Merlin Entertainment is owned by Blackstone, the world’s largest private equity fund, and the Lego Foundation. They own Madame Tussauds, London Eye and Legoland,’ said Kordić.
He expects Metamorphosis to continue to grow primarily thanks to new franchises, but the Museum of Illusion is also looking for compatible concepts that could build on existing museums, and expansion, especially in the Far East, is possible by taking over competitors.
– ‘Now, the company has a terrible new impetus, it has received new capital. Yesterday we received 30 franchise applications from around the world. Now, the focus is on bringing that growth, and we hope that in five years the value of the company will be over one hundred million dollars,’ said Kordić.
The Museum of Illusions was founded six years ago by Tomislav Pamuković and Roko Živković while Zagreb was rapidly developing as a tourist destination. They were driven to franchise by the danger of their concept being copied.
– ‘People contacted us with the desire to open something similar. We realized that the best expansion model on the market is the franchise model. We first opened a museum in Zadar, and then museums in the surrounding countries. We could only survive by quickly expanding and maintaining our identity,’ said Tomislav Pamuković, co-founder of the Museum of Illusions.
He said that previous marketing experience was useful for him and Živković when founding the Museum of Illusions.
– ‘We turned the concept towards Facebook and Instagram. We realised those social networks bring a lot in both marketing and finance, and we wanted to take advantage of that. We wanted most of our rooms to be interesting for photography. Hashtags have also been put up to share immediately. In fact, we were counting on free marketing,’ Pamuković explained.
He pointed out that the Museums of Illusions are primarily oriented to the local population, then to tourists.
Pamuković believes that the main difference between private and state museums is that the latter do not listen to trends. He is also sorry that the highest VAT on a ticket to the Museum of Illusions in Croatia is a full 25 percent.