But the school at 1504 N. Fremont St. wasn't filling up its classes, a diverse offering of yoga, music, creative movement, art and drama for babies through 5-year-olds. So Mr. Johnson, 40, and Ms. Johnson, 37, launched "Bubbles Bashes" on weekends, hoping to increase cash flow and enrollment.

What better way to attract new customers, the couple reasoned, than to give them a taste of Bubbles Academy's curriculum in the context of a birthday party? At the same time they could showcase their 10,000-square-foot facility — formerly a commercial film studio — that features 30-foot-ceilings, theatrical lighting, a surround-sound system and photo-realistic murals of a meadow and ocean designed to bring city kids closer to nature.

So Bubbles Academy built parties around three kid-pleasing themes — "Under the Sea," "Music and Motion" and "Treasure Hunt" — and included an art project, yoga and musical activities in each one.

The parties are not cheap. A Bubbles Bash starts at $750 and can run even higher depending on the number of kids. Families who sign up for classes receive a $200 discount and now account for 90% of all birthday customers.

The move has paid off. Last year 250 bashes — at an average per- party cost of $640 — brought in about $160,000 in revenue. Parties are booked up a year in advance. Best of all, Mr. Johnson says, the events helped him achieve his primary goal: Almost 800 children are now enrolled in Bubbles Academy programs.

"It was a textbook example of how effective word-of-mouth marketing can be for a small startup," he says.

THE PARTY'S ON

Bubbles Academy entered the lucrative children's party market just as many affluent parents were rejecting modest in-home celebrations and embracing lavish, theme-oriented, activity-based events run by professionals. Companies and organizations catering to kids — toy stores, museums, cooking schools, indoor sports facilities — are offering birthday parties to capitalize on the growing demand.

"Birthday parties are a highly effective marketing tool for a new children's business," says Susan Fogel, chair of the marketing department at DePaul University. "You get a large audience all at once with very little effort."

There's no shortage of party options, either. Sweet & Sassy, the children's hair-salon franchise in Lincoln Park and Oak Brook, offers six themed events, including a "princess party" where little girls dress in gowns and get makeovers.

At Glazed Expressions, a pottery studio with two city and three suburban locations, guests paint piggy banks and figurines or make stuffed animals.

And at the fast-growing franchise Pump it Up — an indoor playground that opened a location three blocks from Bubbles Academy last fall — partygoers bounce, slide and jump on giant inflatable castles and fortresses. Prices for most parties start at about $200 but increase based on time and guests.

Several factors are driving the trend. Time-crunched parents would rather pay hundreds of dollars to outsource a birthday party than deal with the hassles of running one themselves; and parents want to treat their kids to a party that's more exciting and entertaining than the old-fashioned mix of musical chairs and a magician. What's more, many city homes simply aren't large enough to accommodate dozens of guests.

DR. SEUSS AND DINOSAURS

Space isn't an issue at Bubbles Academy, where the average bash involves 25 kids and 50 adults. Mr. Johnson and his 25 instructors — musicians, actors and dancers — customize parties to meet trends in pop culture, unlike franchises that must follow corporate guidelines.

There are about 20 different Bubbles Bashes now, including parties designed to combine music and motion ("Barnyard Boogie"), showcase children's literature ("Cat in the Hat Party"), and blend art and action ("Dinosaur Party").

"Kids have fun doing something unique without getting too wild, and no one ever cries or gets hurt," says Lindsey Simon Ciral, a 38-year- old Chicago lawyer and parent. "For me, it's worth spending the extra money."

©2008 by Crain Communications Inc.