In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Wings Over franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Wings Over franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Wings Over franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Wings Over outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of Wings Over’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2016 and 2017 average, median, high, and low gross sales for the franchised Wings Over businesses that were open for the franchisor’s entire 2016 fiscal year (October 1, 2015 to September 30, 2016) and the franchisor’s entire 2017 fiscal year (October 1, 2016 to September 30, 2017), separately stated

• 2016 and 2017 average, median, high, and low gross sales for the company-owned Wings Over businesses that were open for the franchisor’s entire 2016 fiscal year (October 1, 2015 to September 30, 2016) and the franchisor’s entire 2017 fiscal year (October 1, 2016 to September 30, 2017), separately stated

Section I – Background Information

17 Things You Need to Know About the Wings Over Franchise

New Group Acquires Wings Over and Preps for Growth

1.  At the beginning of October 2017, Wings Over announced that it was being acquired by Delectable Capital for an undisclosed amount. Delectable Capital is run by Dan Leyva, Kevin Mok, Raunak Nirmal, and Mike Wang, a group of college friends who were all devastated when the Wings Over near Cornell University closed in 2016.

2.  According to Leyva, after their favorite Wings Over location closed, the friends joked about opening it back up. Leyva added, “That lasted only five minutes before it turned into a real conversation about how we can do this. What would it look like?” A month later, Leyva, Mok, Nirmal, and Wang signed a lease for their Ithaca, New York, Wings Over franchise.

3.  About a year after the desire to reopen the Wings Over location near Cornell University, Delectable Capital was finalizing its deal to take over the franchise from founders Patrick Daly and Harold Tramazzo. According to Leyva, he and his friends didn’t have high expectations when they approached Daly and Tramazzo about a possible sale. But they were surprised to discover the duo was ready to focus on their families and take a step back from the rigors of growing a restaurant chain.

4.  The young friends (Leyva, Mok, and Nirmal are all 25-years-old and Wang is 30) are ready to take over and bring Wings Over to the next level. While young, Leyva has been in the restaurant business since he was 14. Once he graduated from college, Leyva took a job as general manager at New York City restaurant Tacombi. He helped grow technology platforms Salido and MealPal (formerly called MealPass), and has always had a knack for the start-up and growth side of hospitality.

5.  Delectable Capital has broad plans to reshape Wings Over. Leyva believes the franchise can get to 100 units within the next three years and triple that amount, if not more, in the coming decade as Delectable Capital targets the national landscape. At the time of the announcement, Leyva said he plans to go out to stores and meet with franchisees to understand what their true pain points are, and find out where on-the-ground operators feel the whitespace lies.

6.  In the next year or two, however, the biggest focus will be on redesigning and reimagining the concept and making the outlets more inviting for dine-in guests. Leyva added, “Really, when you think about chicken-wing restaurants it’s either a sports bar, like Buffalo Wild Wings, or it’s a little hole in the wall. It’s not really a place where you want to go on a date or anything like that. We kind of want to be right in between. We don’t serve alcohol, but we want it to be super nice, super comfortable, modern, and a place where people want to come in and have a really enjoyable experience.”

7.  Leyva said that one of the biggest goals for Delectable Capital is to foster a workplace where employees stick around. He said, “We always will invest in people first. The product will always be a focus. We feel if we take care of our people inside and we take care of the product, everything else will kind of fall into place. We’re super thankful to Pat and Harold for what they’ve done in terms of where they’ve got the brand to where it is today. If it wasn’t for those guys this wouldn’t be possible at all.”

Refreshes Brand for Future Growth

8.  In early August 2018, Wings Over launched a major rebrand that touches everything from the ordering experience to the logo, restaurant design, website, and more. At the time of the announcement, there were five “2.0” locations planned for 2018: Athens, Georgia; Clemson, South Carolina; College Park, Maryland; South Bend, Indiana; and Knoxville, Tennessee. Wings Over CEO Dan Leyva said that the existing locations will adopt the new design over time.

9.  Wings Over worked with Chipman Design Architecture – a group known for its Chick-fil-A work – on the platform. The goal wasn’t to make the restaurants modern, it was to make them clean and fresh. Wings Over wanted to take a reverse course to many of its chicken-wing competitors: the brand hoped to encourage dine-in guests with the changes. Wings Over added Coke Freestyle machines, digital menu boards, and communal and private-seating options. There are TVs to watch sports – a big draw in the locations near college campuses.

10.  Despite the renewed focus on dine-in customers, Wings Over has no plans to take anything away from delivery. In fact, Wings Over has also refreshed its delivery services by partnering with Olo and LevelUp to launch a new mobile app that significantly improves the ordering experience. Through the improved mobile ordering app, customers can now see images of every sauce and learn more about them. Customers can also view sides and even pay from their phones.

11.  As for the redesigned stores, Wings Over strove for a polished setting with neutral tones and pops of color. This also allows each outlet to tailor its design to the local community and present a brand far removed from the sterility some customers associate with chains. For example, the chairs have pops of color that represent the area, say the colors of the local professional or college team.

12.  Another goal of the rebrand was to broaden the appeal of the concept. College towns have always been a natural marketplace for Wings Over, but Leyva said the brand isn’t laser focused on one specific DMA or demographic. The improved dine-in features and digital capabilities are elements he hopes will work for new and returning guests.

13.  Leyva added, “Delivery is definitely on the rise and we’re very mindful of our footprint. We’re still not a full-service concept. We’re still not going into massive, 3,000, 4,000-square-foot locations. We’re still keeping a very tight footprint, but we’re just making sure, even if it’s just 20 seats, we want those 20 seats to be really comfortable. We want to make it so you really want to come in and eat, because, in general, I think a lot of people realize, hey this food is always fresh and I can eat it immediately. That’s an amazing experience.”

14.  Leyva said that Wings Over is only testing these changes at corporate locations for now. He said, “We want to make sure that we can get the new model right,” Leyva said. “We want to make mistakes and learn from all this. Hopefully we’re not making too many mistakes, but we want to make sure that we’re tightening this up so that when, after we do this review and our partners decide they want to grow, we’re able to give them a really polished concept that they can put fuel on the fire and grow from there.”

Company History

15.  Wings Over was founded in September 1998 by Patrick Daly and Harold Tramazzo at the University of Massachusetts in Amherst. Daly and Tramazzo wanted to create a delivery service business that sold high-quality hot wings to college students for a fair price. The two friends began selling and delivering wings in early 1999 and franchising started in the early 2000s. The idea took off and Wings Over became a cult favorite with college students. Today, Wings Over still mainly opens locations near college campuses on the East Coast of the United States.

16.  Over the years, Wings Over has expanded its menu and now serves more than just wings. The Wings Over menu also includes ribs, sandwiches and wraps, salads, and sides. Wings Over has an aviation theme and all of its menu items are named after planes and other aviation vehicles such as the F-16, B-17 Bomber, and the Zeppelin.

Entrepreneur’s Franchise 500

17.  Wings Over did not rank on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Wings Over franchise costs, based on Item 7 of the company’s 2018 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Wings Over’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  25
• Outlets at the End of the Year:  26
• Net Change:  +1

2016

• Outlets at the Start of the Year:  26
• Outlets at the End of the Year:  25
• Net Change:  -1

2017

• Outlets at the Start of the Year:  25
• Outlets at the End of the Year:  36
• Net Change:  +11

Company-Owned

2015

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  9
• Net Change:  +1

2016

• Outlets at the Start of the Year:  9
• Outlets at the End of the Year:  12
• Net Change:  +3

2017

• Outlets at the Start of the Year:  12
• Outlets at the End of the Year:  1
• Net Change:  -11

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

• This Item 19 presents historical data relating to the average gross sales for franchised and company-owned Wings Over businesses that were open for the franchisor’s entire 2016 fiscal year (October 1, 2015 to September 30, 2016) and the franchisor’s entire 2017 fiscal year (October 1, 2016 to September 30, 2017).

• The franchisor has not audited or verified this information. It relied solely on the information provided through each outlet’s point-of-sale computer systems.

Part 1 – Gross Sales for Franchised Outlets

• Part 1 below presents the total gross sales generated by all 26 franchised outlets in fiscal year 2016 and 24 of 25 franchised outlets in fiscal year 2017. One franchised outlet was not renewed at the end of fiscal year 2016 and the information provided below for fiscal year 2017 does not include one franchised outlet that temporarily closed in the middle of the year.

• In 2016, 8 (31%) of the franchised outlets met or exceeded the franchised average of gross sales and 18 (69%) of the franchised outlets did not meet or exceed the franchised average of gross sales.

• In 2017, 7 (29%) of the franchised outlets met or exceeded the franchised average of gross sales and 17 (71%) of the franchised outlets did not meet or exceed the franchised average of gross sales.

2016