Highlights of Wings Over’s Item 19 Financial Performance Representations (2011 FDD)
- A Wings Over franchisee will provide restaurant services relating to the carry-out and delivery of, and offer for sale to the public of, boneless chicken wings (chicken tenders), bone in chicken wings, jumbo wings, St. Louis style ribs, specialty fried or broiled chicken sandwiches, wraps, hamburgers, and other approved items.
- The total investment necessary to begin the operation of a Wings Over franchise is $166,375 to $454,375. This includes $20,000 that must be paid to the franchisor.
- If you enter into a development agreement, in addition to the initial franchise fee for each franchise agreement you sign, you must also pay a development fee of a minimum of $50,000, depending on the size of your development area.
- The average gross sales for the 5 company-owned and 16 franchised Wings Over locations that were operating as of the date of this disclosure document and were open for the entire fiscal year 2010 (October 1, 2009 to September 30, 2010) was $1,249,060. The total gross sales for these locations in fiscal year 2010 was $26,230,262.
- Four franchised locations were not included in this Item 19 because they opened or closed in the middle of the year.
- Provided below is a breakdown of gross sales by location based on sales recorded on computers for each of these restaurants. The company has not audited or verified this information. The company has relied solely on the information provided by franchisees through their point-of-sale computer systems.
Albany, NY: $1,335,174 (franchise)- Amherst, MA: $1,605,738 (corporate)
- Bristol, CT: $932,321 (franchise)
- Brookline, MA: $1,298,002 (franchise)
- Burlington, VT: $1,469,554 (franchise)
- Columbus, OH: $1,433,674 (corporate)
- East Lansing, MI: $657,593 (corporate)
- Farmingdale, NY: $1,211,768 (franchise)
- Framingham, MA: $1,323,183 (franchise)
- Greenville, NC: $754,973 (corporate)
- Ithaca, NY: $1,184,559 (franchise)
- Newington, CT: $1,176,826 (franchise)
- Providence, RI: $620,432 (franchise)
- Saratoga Springs, NY: $689,725 (franchise)
- Somerville, MA: $1,099,939 (franchise)
- Springfield, MA: $1,641,921 (franchise)
- State College, PA: $1,720,798 (franchise)
- Storrs, CT: $1,169,144 (franchise)
- Syracuse, NY: $1,151,443 (corporate)
- W Hartford, CT: $1,375,593 (franchise)
- Worcester, MA: $2,377,901 (franchise)
- Total Gross Sales: $26,230,262
- Average: $1,249,060
- Gross sales means all revenue from the sale of all products and services and all other income of every kind and nature at or from the restaurant or otherwise related to the restaurant, including, without limitation, any proceeds from business interruption insurance, whether for cash or credit, and regardless of collection in the case of credit. Gross sales will not include any sales taxes or other taxes collected from customers by you and paid directly to the appropriate taxing authority.
- The average size of the above locations is 1,740 square feet.
- The number of outlets in operation from October 1, 2009 to September 30, 2010 that exceeded the average gross sales was 10 (48%). This includes eight franchised outlets and two company-owned outlets.
- The outlets described above obtained the majority of sales from carry-out and delivery services.
The Bottom Line
- If I ever decide to invest in another franchise, Wings Over will be on my very short list of brands to choose from. The numbers speak for themselves. With average gross sales of $1,249,060 and an estimated initial investment of $166,375 to $454,375, the franchise’s potential return on investment is as good as it gets. Using the midpoint of the initial investment range ($310,375), we arrive at a sales-to-investment ratio of 4.02, an astounding number that is literally double the widely accepted target ratio of 2.00.
- Their tight focus on a few key menu items appeals to me. But the real beauty of the concept lies in the extensive selection of sauces available (22 in all, including honey barbecue, which is the most popular by a 2-1 margin; spicy teriyaki, Cajun teriyaki; Cajun blackened; honey mustard; honey lime; garlic parmesan; Jamaican jerk; honey lime; West Texas mesquite; and sweet onion barbecue). So even with a limited menu, there’s always something new for customers to try.
- Another thing I like about Wings Over is their focus on takeout and delivery (most locations have only a small seating area with no table service). This is key to generating significant revenues beyond the four walls of the restaurant. Because of this, I would guess that the average occupancy costs for Wings Over restaurants is less than 10% of gross sales — another plus factor in my book.
- Wings Over’s average gross sales ($1,249,060) beats Wingstop’s ($750,626) and Wing Zone’s ($531,634) by hundreds of thousands of dollars. This is surprising to me because Wingstop and Wing Zone both have greater brand recognition than Wings Over. I would attribute this result partly to the fact that most of Wing Zone’s current locations are in major college towns, which is ideal for the concept. But it remains to be seen whether they can enjoy the same momentum in cities and towns across America. (In calculating average gross sales, Wings Over included the sales of 21 restaurants, compared to Wingstop’s 422 and Wing Zone’s 47).
