Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs 2013: Detailed Estimates of Wingstop Franchise Costs (2013 FDD)

by Franchise Chatter on June 26, 2013

in Chicken Wings Franchise, Franchise Costs



Franchise Chatter Membership Information

Detailed Estimates of Wingstop Franchise Costs Based on Item 7 (Estimated Initial Investment) of Wingstop’s 2013 Franchise Disclosure Document

1.  Development Fee:  $10,000

  • The only initial investment under the Development Agreement is the development fee. You currently pay a $10,000 development fee for your first Restaurant and development fees of $10,000 for each additional Restaurant you commit to develop under the Franchise Agreement.

2.  Franchise Fee:  $12,500 – $20,000

  • Wingstop Franchise Photo by samantha celeraYou currently pay a $20,000 franchise fee for your first Restaurant, and the then current franchise fee for each additional Restaurant, developed under the same Development Agreement. Wingstop’s franchise fee for additional Restaurants (after the first one) developed under the same Development Agreement currently is $12,500.

3.  Rent:  Not specified

  • A Wingstop Restaurant occupies approximately 1,350 to 1,800 square feet of leased space, typically in an in-line (strip) shopping center in an urban or suburban commercial area.
  • Your investment could be substantially higher if you decide to buy property for your Restaurant or lease space in an enclosed mall or similar high-rent facility.

4.  Security Deposits:  $2,000 – $8,000

  • Landlords typically charge a security deposit equal to one month’s rent and also may have site lease deposits that vary according to location.
  • Utility and other companies typically charge security deposits that vary by locale and in relation to the customer’s credit history.
  • Insurance companies may require deposits or prepayment of premiums.
  • Some of these security deposits will be refundable depending on your agreement with the landlord or the utility and other companies.

5.  Architectural/Engineering Fees:  $8,000 – $9,500

  • The architectural/engineering consultant’s fee portion represents the cost of plans and specifications if, as currently required, you use Wingstop’s approved architectural and engineering consultant.
  • The high-range charge will apply if the agency from which you obtain your building permit requires complete mechanical/electrical/structural drawings for the Restaurant.

6.  Professional Fees:  $1,500 – $4,000

  • Professional fees are for attorneys, accountants, or other professionals from whom you seek advice.

7.  Leasehold Improvements:  $110,000 – $242,394

  • The high and low amounts reflect estimated leasehold improvement costs without any landlord tenant improvement allowances factored in but do include a 10% contingency fee (of the total estimated cost) for unexpected cost over-runs, delays, etc. (Not all franchisees receive tenant improvement allowances).
  • Although Wingstop expects all projects to fall within the indicated range, as it continues to expand to higher cost markets, its experience with these costs could change significantly.
  • Wingstop may require you to upgrade, remodel, and refurbish the Restaurant during the franchise term. These changes might be based on the standards and specifications then in place for new Wingstop Restaurants.

8.  Business and Operating Permits:  $1,000 – $3,500

  • In addition to a health department permit, you must obtain a permit to sell beer and wine.
  • The low range assumes your Restaurant is located in a “wet” area and that you can obtain a “beer-only” permit. The high range assumes your Restaurant is located in a “dry” area and that you must establish a private club to qualify for an alcoholic beverage permit.

9.  Decor Package:  $2,500 – $4,000

  • You must purchase your decor package before installation. This item includes standard interior and exterior decor, including shipping.

10.  Furniture, Fixtures, Audio/Visual System, Equipment, and Smallwares:  $48,235 – $138,347

  • The high and low amounts represent the price to buy (not lease) new equipment. This range includes stainless steel fixture production and audio-visual equipment.

11.  Point-of-Sale Register, Hardware, and Software:  $15,000 – $20,000

12.  Signs:  $4,386 – $21,157

13.  Phone System:  $2,500 – $3,500

14.  Opening Inventory:  $7,500 – $10,500

15.  Opening Publicity and Promotions:  $2,500 – $25,000

  • If your Restaurant is located in a market with an established Area Cooperative, you must spend at least $2,500 on your grand opening advertising. However, Wingstop recommends that you spend at least $5,000. The total amount must be spent within 60 days after your Restaurant opens for business.
  • If your Restaurant is located in a market without an established Area Cooperative, you must spend at least $25,000 on your grand opening advertising. The total amount must be spent within 60 days after your Restaurant opens for business.

16.  Additional Funds – 3 Months:  $25,000 – $35,000

  • Wingstop assumes you will need the indicated amounts for rent, utilities, inventory purchases, office supplies, printed materials, phone, facsimile, employee training, pre-opening and regular salaries for managers, wages of hourly employees, insurance premiums, debt service, real estate services, legal, internet/intranet expense, accounting expenses, and other expenses during the initial phase of your Restaurant’s operation, which Wingstop estimates to be 3 months.
  • Includes expenses for travel, lodging, meals, transportation, and incidental expenses for two trainees to attend the required training program.

17.  Total (excluding real estate purchase and lease costs):  $252,621 – $554,898

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