franks only — NFTs, DAOs, and GOLF
franks only is one of the first golf communities on-chain. For the golf obsessed, franks only consists of a collection of 10,000 NFTs — unique digital collectibles living on the Ethereum blockchain. franks only will create a new model for the golf community. Not only will your token get you access to an exclusive marketplace, events, and golf tournaments, it will also gain you access to the first private golf course where your membership is granted through a franks only NFT. We’re not talking about a golf course in the MetaVerse, we’re talking about a golf course in the real world. We want to build a real golf course. franks only.
What we want
The franks need a place to play golf. We need a place that doesn’t force the old, exclusionary, white-collar culture. We need a modern golf and social club for the franks to hang out, watch golf, talk golf, imbibe, and ultimately play golf.
We want a place that can host our events. A place where we can bring guests and bridge the MetaVerse with the real world. We want a club where membership is not granted through high initiation fees, referral letters, and nepotism, but, instead, by holding a franks only NFT.
The golf course needs to be playable and well-maintained. Ideally, we’d have at least 18 holes, a well rounded practice facility, a pro shop full of franks only merchandise, and a clubhouse with plenty of dining, bar, and event space. Since our golf course is 100% limited to its location, lodging and access to an airport will also be paramount.
What we know
Golf is expensive, exclusive, and not always the most welcoming or forgiving. There are numerous barriers to entry, and even once you do get into the game, it’s difficult to improve and find places to play. Public golf courses have become increasingly difficult to get tee times at, and private courses are becoming more and more unobtainable. With extremely high initiation fees, high monthly dues, monthly/quarterly minimums, assessments, exclusive waitlists, and limited access for younger members it’s very difficult for young golfers and families to get access to decent courses and facilities.
Golf course monetization
In an ideal world, the golf course is 100% autonomous and self-sufficient. It would be able to support itself through profits on food and beverage, lodging, merchandise, events and secondary sales royalties from our NFTs. There is massive potential with these royalties, and opportunity for us to offer secondary, tertiary, etc. NFT collections, and use the proceeds for the club. However, we would like to consider the potential reality in which NFTs lose popularity and we are forced to consider alternative methods. There are a couple options for us to consider as the project grows.
Greens fees / monthly dues
This is a more traditional country club and golf course model, and something we want to try our best to avoid. However, it would provide immediate capital to handle our monthly operating costs, which start the moment we make a purchase. Early NFT adopters would be granted lesser fees or dues. We would also work to implement more inclusive models, such as NFT punch cards, that would provide discounted rates for a number of pre-purchased rounds, with guest privileges.
Guests, Outings, and events
- Guest fees
- Golf outings
- Corporate/public events
Each of these all come with built in monetization and overhead. One of the most exciting opportunities with any sort of event at our club is that we will use newly-created NFTs as our tickets for people to get access to their event. Not only is this an awesome collectible for our guests, it also comes with built in secondary royalties that will be redistributed to the club. For any given event, we can collaborate with artists and athletes to generate one a kind NFTs with built-in utility and access.
For members who bring guests to come enjoy the club, they will be required to purchase a guest frank NFT in order to gain access. This will give them full access to the club while they visit with a member, and access to the online franks only pro shop for as long as they hold the NFT. Our founding franks (10,000 initial NFT holders) will be able to mint a limited supply of guest passes for free. Additional guest pass NFTs will be available for purchase.
franks only merchandise
The franks only pro shop (virtual and at the club) will have exclusive merchandise for our NFT holders. This is where we can also start to expand. We would like to limit access to the online pro shop to NFT holders only, with special access given to our initial franks only NFTs. As we release more NFT collections, access will be given after initial drops, and for a subset of merchandise available to all NFT holders.
Typical country club organization
A typical country club usually votes in a board of directors to uphold the club’s by-laws and drive and advise on the overall direction of the club. The general manager of the club then reports to the board of directors, in the form of a weekly board meeting, and carries out the requests of the board using the underlying organization of managers and staff. The general manager also uses this time to report on the overall status of the club and bring up any issues or outcomes from the previous week. An average structure may look something like this:
The two main questions that we have when it comes to this org structure are:
- Are all of these positions necessary at our golf course?
- Does one person (general manager) want to have 10,000 bosses?
As we think about answers to these questions, let’s dig deeper on what our model would look
How we can better organize our golf club
Starting at a high level. In our model, the board of directors would be replaced by our DAO, a decentralized autonomous organization (more on this later). Voting rights will be established via ownership of our NFT, and subcommittees with specific interests will be able to be formed and submit proposals to the larger DAO.
There are, without a doubt, numerous ways that our golf course could be organized. Initially, we’ll replace the board of directors with a decentralized autonomous organization (DAO), but after that, we’ll need to be smart with the structure. We’re trying to build something small that can scale and poor initial implementation can be devastating to the long-term project.
Let’s explore a couple options for the underlying organization:
Lean and mean
At a bare minimum, we see our golf course needing at least two leadership positions at launch.
- Director of Golf and Operations (held jointly by the two founding franks)
With these two positions, we can take care of the majority of what will be necessary to run a small golf course from a day to day decision making stand point. Each leadership position will be in charge of building out their own organization, and plan to employ a small grounds crew and staff to help get us started. Depending on the model chosen by the community, a small staff of around ten people should be able to run the club and get the project started. As the project grows, this organization will be able to scale accordingly to ensure the long-term viability of the project.
Outsourced golf course management
Operations like Troon and ClubCorp offer outsourced golf club management options that we could use to run the operations of our club. This would offer top-class service and operations from the very beginning of the project. This does come at a cost. Contracts will have to be entered into between our organization and theirs and profit sharing will be in place. There are smaller scaled and more flexible management operations that we could partner with, but, at the end of the day, we’ll be tying ourselves to another organization. This isn’t something the founding franks are interested in, but should be discussed as a potential option.
Starting a golf course is expensive
After consulting multiple firms who specialize in golf course projects (from empty properties to renovation/revitalization projects), here’s what we can expect if we were to build a 36 hole, par 72, championship style golf course:
- We should be looking for 250–300 acres of land. Depending on location you could spend anywhere from $5–25mm.
- Expect to spend anywhere from $4–6mm per golf course
- $25–40mm for facilities (clubhouse, practice areas, maintenance, equipment, lodging, food and beverage)
What this means is that we would need at least $40mm, conservatively, or somewhere closer to $75mm realistically, just to get started. After that there will be ongoing operating costs, maintenance, future club investments, taxes, and legal fees. This wish list will not be cheap and it’s very far from easy.
A better model
The current private golf courses are set up on antiquated bylaws, and run by an appointed board and committees, who ultimately answer to the membership. Decisions come from a central source, and most of these seats are filled with people out of touch with the current game. On top of that, some of the oldest and most exclusive golf clubs have endowments large enough to buy most of the golf courses in their respective states and not even blink an eye. Because of this, change in the current model is very difficult and very slow.
Instead, we want to introduce a model using web3 and blockchain technology. By minting a special NFT, holders will gain access to our private golf club. No waitlists, no letters of recommendation, no interviews with the board. Simply mint an NFT and you’ve got access. The next step is to replace the board with a completely decentralized autonomous organization (DAO). The DAO will be put in place for members to submit proposals and vote on aspects of the club. What renovations should be prioritized, how the clubhouse should look, what kinds of indoor/outdoor practice facilities we should build out, and what the course’s monetization model should look like. At this point, the future of the club is in the hands of the community. Only NFT holders would ever be allowed to create and vote on proposals for the DAO. A percentage of profits collected from the club would go directly into the DAOs treasury and be accessible by the DAO to execute on enhancements and future projects for the club.
As for the course itself, we believe that while the championship style facility sounds awesome and the thought of hosting a PGA, LPGA, Korn Ferry, or Champions Tour event is a total dream, the upfront cost, overhead, and upkeep to maintain such a facility is a bit ridiculous. If we’re honest with ourselves, most of the average golfers don’t want to go out and get their teeth kicked in on a championship style course over and over again anyways. Instead, we think this is an opportunity for us to get creative and build something new.
A few ideas
When it comes to purchasing or building a golf course and social club, there are quite a few options for us to consider. Here are a few ideas to get us started.
The six hole course
A 12 hole course with six hole loops is a really interesting idea. Potentially, we could get creative with the routing in a way we could still play 18 unique holes. Think large shared fairways and greens with multiple tee boxes. The massive benefit here is that you can accomplish an interesting and playable golf course on a fraction of the amount of land and capital necessary. We also think the 12 hole round could be a revolutionary new take on golf. No more 4–5 hour rounds. This idea could be built from scratch or built using an existing golf course infrastructure.
Purchase an existing course
It can’t be overlooked that going from something to something great is much easier than going from nothing to something. That said, there are potential issues with purchasing an existing club depending on the location and current state of the golf course. Massive renovation projects can sometimes be more expensive than starting from scratch and depending on the state/city/county certain renovations and expansions will be subject to current permits, zoning, and regulations. These limitations can be massively limiting and should not be overlooked as we start our new club.
Another thing to consider with an existing property (or a brand new property), is the golf course architect. While most of us golf nerds would die to be able to be a member at an Alister MacKenzie, or own an equity stake at a Tom Doak, we need to keep in mind what value that is actually gaining us. Especially, if we aren’t going to be able to make significant improvements or changes. Even though it would be cool to have a big name architect on our golf course, it may not be the most practical.
One hole at a time
Considering the funding necessary to build an entire golf course and golf course facilities from scratch, one model that is particularly interesting is to start very small. As in, one hole at a time. By building one hole with three tee boxes to start, it would allow members to start playing much sooner than if we were to build out the entire project from scratch. One clever hole with three tee boxes allows us to play three holes of golf. Once the first hole is complete, you build two more holes, with three tee boxes per hole allowing you to play a nine hole loop. You continue to expand until you have all 18 holes. Shared fairways and greens is another possibility (or necessity) with this model, as well as another potential cost savings mechanism.
Carte blanche. Clean slate. Empty canvas. This is without a doubt the most difficult and expensive option, but also the most flexible. Purchasing a completely empty property would give us total creative freedom, and potentially provide an easier path for zoning and permitting. This would also take the most time (and potentially money).
Some of the biggest issues we’re going to have to look out for are with regard to regulation and zoning. A lot of existing courses will be subject to specific zoning by the county, city, or even state, which will dictate what will and will not be feasible. If we were to purchase an empty property, we would have to obtain permits and proper zoning to be approved by the county in order to even start building our project. There are also numerous conservational regulations that golf courses are potentially applicable. None of these issues are insurmountable, however they are issues that will complicate things and the community should be made aware of as the project progresses.
How are we going to pay for this
Our initial NFT sale for the franks only project will generate ~3000 ETH, which at the time of publishing this document would equal ~$12mm. The team has decided to put 80% of the initial sale towards the club. Of the 80%, we will escrow 50% of the initial sale to cover legal fees, startup costs, and ultimately taxes. The NFT space is still in its infancy and there aren’t clear answers on regulations and liabilities. The team wants to make sure that we’re not broadsided by a large bill before we even get started. We hope that not all 50% will be necessary and plan to redistribute whatever is left over back into the project. The remaining 30% plus will go directly into the project to help get us started. This will be first used to fund events, tournaments, gatherings, merchandise, and ultimately the franks only golf club. The last 20% will go to the team for their time and efforts to start and build the project.
Additional revenue will be generated through merchandise sales from the franks only online pro shop, which we plan to open once we hit 75% of sales.
As the project starts to sell out, we’ve also planned to host in-person tournaments and gatherings which will come with additional NFT drops. Specific collections will be released for each event. These events will be for franks only NFT holders, but depending on the clubs interest, may be opened up to the public.
There will be a 10% royalty attached to each franks only collection. Of these royalties, 75% will be reinvested back into the club. The remaining 25% will go to the founding franks for their continued support on the project.
Now, anyone with a calculator can tell you that these numbers don’t add up to the $75mm dream club, and this is important. We don’t set out to build some big epic clubhouse with flashing lights, 20 indoor simulators, three or four courses, two putt-putt courses, and a top golf knock-off for the driving range. While all these ideas sound cool and fun, we know it’s not necessarily money well spent to get this venture off the ground. We want to build the infrastructure for a top notch, golfer’s paradise, on a fair budget, with the ability to scale and without trying to over-promise or be unrealistic. We think this is the most pragmatic approach to get the franks golfing quickly and enjoying the experience of what the club and the community has to offer. With that in mind, we do hope that as the project grows, we will attract potential investors with a proven track record in the golf industry. Partnerships like this will not only help us get the club off the ground quickly, but will also help to serve as guarantors for any loans we may need, as well as consultants on the project.
As the club continues to profit, the community will be in charge of steering the direction of the club. This direction will be ever evolving and growing with the community’s input.
All of these numbers are a best guess estimate and will be subject to change as the project evolves and more decisions are made by the community. We want to involve the community in the decisions we make at franks only. We believe this level of involvement is one of the most important factors to the success of the project.
What exactly is a DAO, and why a DAO is potentially a bad idea
When we started this project, we were, and still are, convinced that a golf course would be a great fit for a DAO. To ensure this, we think it’s important to argue both sides, and illustrate what this could or could not look like.
A decentralized autonomous organization (DAO) is based on the principle that all decisions and execution of those decisions can be made by a community of people (decentralized) in an autonomous fashion.
The common example that’s often used to explain a DAO is a vending machine. A DAO is essentially a decision making mechanism. It’s able to make simple decisions based on a proposal and votes by the members of the organization. Now, picture a vending machine that’s hooked up to the internet. As stock gets low, it can use the DAO to determine if it should restock. As it collects payments, the DAO is used to purchase more stock, and distribute profits to its members. Where the example breaks is during the restocking of the vending machine. The vending machine needs a human to come and restock the machine, and that human needs to make decisions like, which row each item should be stocked in, and how many items should be stocked. The trust in the output of these functions is put entirely in the human, and therefore the organization needs to share the trust in that human to properly execute. In a perfect DAO example, a robot (or some other autonomous mechanism) would handle these procedures and would make all decisions while restocking through the DAO. Similarly, if the vending machine breaks down, needs to be cleaned, or needs any sort of service in today’s world, a human has to be involved in the decision-making process. Ideally, an automated service would be hired through a DAO proposal and once approved, dispatched to the vending machine to complete service, and payment would be released at the completion of the service. Since all of these outputs would be handled via the DAO, output becomes trustless, and is guaranteed to execute. Unfortunately, none of these automated services exists today and the ones that might are most likely not ready for real-world applications.
This is also where the golf course example potentially falls short. There is massive human input and output necessary to keep the operation running. Not to mention the fact that there will inevitably need to be land deeds and loans taken out, which will require human signatures and guarantees through collateral. Likewise, we will have to likely deal with permitting and zoning issues.
The potential issue with a golf course operation is that none of the operations are currently autonomous. Almost every single operational decision that needs to be made on a daily, hourly, sometimes by the minute basis needs an actual human input and output. We need a schedule for the driving range, great! The members of the DAO can draft a proposal, take a vote and make a determination of what it should be. However, the output and enforcement still requires an actual human to handle. Want to do a renovation on the club house? Awesome! Draft a proposal for the DAO to vote on. Once it passes, we still need actual humans to follow through on the proposal and use funds from the DAO’s treasury to execute on that proposal. Once we get the renovation in the works, we’re going to need to apply for permits, deal with zoning issues, hire contractors, and we will inevitably run into issues. Do we appoint a decision maker in the proposal so they don’t have to continue to come back to the DAO every time something comes up? Sounds practical, but what happens when the 10,000 members disagree with a decision made by this person? Having to go back and forth to the DAO for every decision could be extremely inefficient. Unfortunately, the world as we know it isn’t quite ready for a 100% autonomous blockchain executable. But one day, it will be.
In the renovation example, a DAO model that could work is based on contracts made with architects, contractors, etc. A contract can be drafted with specific requirements and deadlines, as well as funds available for payments at specific intervals and funds set aside for additional budget based on certain benchmarks. We think there is serious potential for this to work, but finding contractors and architects to work with such a model, and ideally be paid in cryptocurrency, may be difficult, especially when it comes down to picking a location. There are definitely areas of the country that are much more open to working and operating in such a framework, and this could be a limiting or deciding factor when picking our location for the franks only club.
A way that a DAO could work for the overall golf course operation is by appointing people in the real world and giving them decision making power and authority. For example, a proposal could be drafted detailing the role expectations and privileges for a general manager for the club. This proposal would lay out exactly what they were allowed to do and what was expected of them. Their salary would be agreed upon and the members of the DAO could vote to approve the proposal and therefore hire the general manager. While this would work, we do think it will be difficult to find someone willing to work in such a model. They would essentially have to answer to 10,000 bosses at any given time. To smooth this out, we would suggest the proposal to work like a long-term contract, with intervals for employee review, and options for both employee and DAO to terminate given a predetermined set of criteria. This would give the general manager job security, and allow them to effectively run the club. Does this solve the issue? Is this truly how a decentralized and autonomous organization should function and operate? All of these are open questions that we would be gracious to hear your feedback on.
We need to keep in mind that this is a total experiment in the practical applications of a DAO. We will be constantly learning and adapting as this project evolves. We are not going to pretend for one second that we have all the answers or know exactly how this is going to function, but that’s the really fun and exciting part about this adventure. As we learn more and more info becomes available we will strive to dive into deeper detail.
The franks only NFT project is currently minting NFTs at https://franks.golf. Come help us shape the face of something totally new and completely transformational.
What do you say, frank?
Did we get something wrong? Do you disagree with our take? Do you absolutely love it and want to get involved?
Still not clear on the whole NFT and DAO thing? Check out this link with tons of great information: https://future.a16z.com/dao-canon/