In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Wingstop franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Wingstop franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Wingstop’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average annual net sales information for (1) all Wingstop Restaurants (both franchised and company-owned), (2) separately for all franchised Wingstop Restaurants, and (3) separately for all company-owned Wingstop Restaurants, in operation in the United States during the entire 2015 Fiscal Year
Section I – Background Information
Once buffalo-style chicken wings became all the rage, more than one chain sprang up to meet the growing demand. One such chain that got its start in 1994 was Wingstop, founded by Antonio Swad in Garland, Texas.
The number of locations has been growing for several years and currently stands at over 900, 19 of which are company-owned and more than 50 of which are located outside the U.S. in such countries as Mexico, Singapore, the Philippines, Indonesia, and the United Arab Emirates.
Here’s how Wingstop is flapping higher in the competitive buffalo wings segment:
Wingstop keeps things relatively simple, offering three different kinds of wings, including classic, boneless, and tenders (breaded strips). There are also several sides available, including hand-cut fries, beans, and made-fresh-daily coleslaw.
But everyone knows that when it comes to wings, it’s all about the sauces. In fact, Wingstop is fond of saying they aren’t in the wing business – they’re in the flavor business.
Wingstop offers 11 sauces as follows (listed hottest first down to the milder ones): Atomic (the hottest), Mango Habanero, Cajun, Original Hot, Louisiana Rub, Mild, Hickory Smoked BBQ, Lemon Pepper, Garlic Parmesan, Hawaiian, Teriyaki.
Wingstop went public in 2015, and since then the price of its stock went from a high of $35.96 to a low of $20.31 and now seems to be settling into the mid and upper twenties. Interestingly enough, while the company’s stock price doesn’t seem all that impressive, quite a number of institutional investors have been raising their positions by buying more shares.
While many analysts have continued recommending a buy position with the stock, some have said to keep it neutral and a few have given it a “sell” rating.
William Engen just recently and somewhat abruptly resigned as Wingstop’s COO. He had only just become COO in September 2014 and guided the chain through its initial public offering in June 2015.
National Wing Day
July 29 is National Chicken Wing Day, and Wingstop pulled out all the stops with its heart-to-win auction on Periscope, the livestream video app for iOS and Android devices.
The “THUMP by Wingstop” event featured $5,000 in prizes such as a Beach Cruiser Bike, custom Nike shoes, and even a “Choose Your Own VIP Experience” worth up to $1,500 to attend any concert in any location of your choice.
Each auction was won by the bidder who tapped the Periscope heart icon the most times as the auction closed.
Winning the Comparison
When you start reading reviews doing direct comparisons between Wingstop and the chain to beat, Buffalo Wild Wings, it’s pretty clear that overall Wingstop has the better wings while “B-Dubs” has the larger share of brand recognition.
Section II – Estimated Costs
- Please click here for detailed estimates of Wingstop franchise costs, based on Item 7 of the company’s 2016 FDD.