In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Buffalo Wild Wings franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Buffalo Wild Wings franchise, based on Item 7 of the company’s 2020 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Buffalo Wild Wings franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned Buffalo Wild Wings outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of Buffalo Wild Wings’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average, median, highest, lowest, top 3rd average, middle 3rd average, and bottom 3rd average unit volume for the 23 inline, 287 freestanding, and 293 end-cap company-owned Buffalo Wild Wings sports bars that operated during the franchisor’s entire 2019 fiscal year from December 30, 2018 through December 29, 2019 (separately stated)
- 2019 average, median, highest, lowest, top 3rd average, middle 3rd average, and bottom 3rd average unit volume for the 29 inline, 293 freestanding, and 239 end-cap franchised Buffalo Wild Wings sports bars that operated during the franchisor’s entire 2019 fiscal year from December 30, 2018 through December 29, 2019 (separately stated)
Section I – Background Information
19 Things You Need to Know About the Buffalo Wild Wings Franchise
Switches Back to Selling Wings by the Numbers
1. In mid-March 2020, Buffalo Wild Wings announced that it had switched back to offering specific counts of wings, instead of hedging the numbers by offering small, medium, and large orders. Patrons will be invited to specify whether they want six, 10, 15, 20, or 30 wings in their orders. Buffalo Wild Wings dropped the specific numbers years ago in a bid to hold down costs while it was publicly owned.
2. Executives explained at the time that the wings it was serving varied widely in size and meat content. Patrons sometimes felt they were getting cheated because the wings were small. In other instances, they were getting heftier orders at the same price, with margins squeezed accordingly because Buffalo Wild Wings bought the pieces on a per-pound basis.
3. Rather than fiddling with prices, Buffalo Wild Wings switched to the small, medium, and large labels, using wing weights and sizes as the determinants of how many pieces were included in each order. But the plan backfired. As then-CEO Sally Smith explained at the time, employees couldn’t cut wings into halves or thirds to keep an order within the targeted weight. Instead, the orders were rounded up to the next whole wing, hiking food costs accordingly.
4. The escalating costs of wings were among the problems that caused investors to push for a sale of the chain and the resignation of Smith, who stepped down with Buffalo Wild Wings’ subsequent purchase by Arby’s for $2.9 billion. The two restaurant operations were then merged to form what is now Inspire Brands.
5. Buffalo Wild Wings said it was switching back to apportioning orders by count because customers were confused by the small, medium, and large labels. “No more wondering what a large order is,” the chain explains on its website. “Confusing wing sizes have been benched and we pulled wing counts out of retirement.”
6. According to a Buffalo Wild Wings spokesperson, “Over the past year, we talked to consumers through focus groups and surveys, and consistently heard that, without a wing count, our guests didn’t now what they were getting for the price. Following this feedback, we tested wing counts in approximately 100 sports bars across the country to confirm that insight. Through the test, we verified everything we heard in the consumer research: Our guests prefer wing counts. Of course, there will always be slight differences in weights, but our consumers told us they would prefer to have transparency when ordering.”
Debuts New Cauliflower Wings and New Buffalo Wedge Salad
7. Near the end of September 2020, Buffalo Wild Wings revealed a new vegetable-based wing option with the debut of new crispy Cauliflower Wings alongside a revamped salad menu that includes the new Buffalo Wedge salad and more. Made with real cauliflower, crispy Cauliflower Wings are tossed in Asian Zing sauce, then topped with everything pretzel spice, sesame, garlic, salt, pepper, Fresno peppers, and scallions. Cauliflower Wings can also be tossed in any of Buffalo Wild Wings’ 26 sauce flavors.
8. In addition to the new Cauliflower Wings, Buffalo Wild Wings has also revamped its salad platform with a new Buffalo Wedge salad, an improved Chicken Caesar salad, and a classic Chopped Cobb. Cut from a mini head of fresh romaine lettuce, the new Buffalo Wedge salad features blue cheese dressing, crispy bacon, tomatoes, blue cheese crumbles, and is served with a hand-breaded chicken tender drizzled with medium Buffalo sauce.
9. Meanwhile, the improved Chicken Caesar salad includes an upgraded Caesar dressing with more parmesan notes, shaved parmesan cheese, lemon pepper seasoning, croutons, and savory garlic parmesan-flavored chicken on romaine lettuce. And last but not least, the classic Chopped Cobb salad consists of a hard-boiled egg, bacon, tomatoes, blue cheese crumbles, green onions, buffalo seasoning, everything seasoning, diced chicken, and ranch dressing on romaine lettuce.
Aims to Become the Gathering Place for Esports Fans
10. In mid-August 2020, Buffalo Wild Wings stepped up its engagement with Esports by becoming the official sports bar of the League of Legends Championship Series. Rather than focusing exclusively on broadcast integration or social media promotion, the restaurant chain’s aim with this new partnership is to become a home for Esports fans.
11. Brandon Gill, director of experience and gaming for Buffalo Wild Wings, said, “We took a step back and looked at the space and really thought about how there’s all these sports fans that are watching traditionally at home and didn’t have a place to gather. We felt like, beyond just being a sponsor, we could really be that place to create that ritual for fans of the LCS to come in and gather.”
12. Earlier in 2020, Buffalo Wild Wings filed a trademark to become “The Official Bar of Esports.” Gill explained that the popularity of the LCS among a highly-prized demographic made it a natural starting point. “It kind of goes without saying what a massive sport it is – the third-largest sport for males 18-34 – and so it’s a bit of a no-brainer for us to lean in with the LCS immediately and create that space for those fans to gather and watch. And that’s our first way in as a sports bar.”
13. Gill also noted that in Buffalo Wild Wings’ experience working within Esports, the company sees no substantial difference between traditional sports fans and Esports fans. He said that Esports fans want to engage with one another to celebrate wins and experience losses. “We’re a great place for sports fans to gather and this is another great sport to add to our repertoire.”
14. Looking forward, Gill noted that the company is exploring other Esports to add to that repertoire, but did not share specific games it is eyeing. “As far as where we’ll go with Esports, I think it will be a similar approach [to the LCS]. I think we’ll find big events, we’ll find partners to augment this LCS partnership that we’re so excited about. And we’ll make sure that fans of the LCS and other Esports, and fans of other Esports, in general, will have a place to gather.”
Company History
15. Buffalo Wild Wings (originally called Buffalo Wild Wings & Weck) was founded in 1982 by Jim Disbrow and Scott Lowery in Columbus, Ohio. Disbrow and Lowery were originally from Buffalo, New York and were unable to find any places around Columbus that made buffalo wings like the ones from back home. So, Disbrow and Lowery decided to start making and selling their own buffalo wings. The first location was near Ohio State University, which helped fuel Buffalo Wild Wings’ success.
16. After a few months, Disbrow and Lowery brought in a third partner, Mark Lutz. Although none of them had any business or restaurant experience, they opened additional Buffalo Wild Wings stores around Ohio, Colorado, and Indiana. Buffalo Wild Wings began franchising in 1992 by working with Francorp, a Chicago-based franchise development firm.
17. Throughout the 1990s, Buffalo Wild Wings continued to open more franchises as well as company-owned locations. By the early 2000s, Buffalo Wild Wings had grown to over 211 stores across 27 states. In 2010, Buffalo Wild Wings opened its first international restaurant in Canada and a few years later the brand expanded to Dubai.
18. After a few more years of growth, Inspire Brands (formerly Arby’s Restaurant Group), which is controlled by private equity firm Roark Capital Group, announced its plan to purchase Buffalo Wild Wings for $2.4 billion plus debt in 2017. Today, there are Buffalo Wild Wings restaurants across the entire United States, as well as internationally in Canada, India, Mexico, Oman, Panama, the Philippines, Saudi Arabia, United Arab Emirates, and Vietnam.
Entrepreneur’s Franchise 500
19. Buffalo Wild Wings ranked No. 159 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Buffalo Wild Wings franchise costs, based on Item 7 of the company’s 2020 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Buffalo Wild Wings’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
Franchised
2017
- Outlets at the Start of the Year: 580
- Outlets at the End of the Year: 585
- Net Change: +5
2018
- Outlets at the Start of the Year: 585
- Outlets at the End of the Year: 587
- Net Change: +2
2019
- Outlets at the Start of the Year: 587
- Outlets at the End of the Year: 574
- Net Change: -13
Company-Owned
2017
- Outlets at the Start of the Year: 607
- Outlets at the End of the Year: 615
- Net Change: +8
2018
- Outlets at the Start of the Year: 615
- Outlets at the End of the Year: 621
- Net Change: +6
2019
- Outlets at the Start of the Year: 621
- Outlets at the End of the Year: 632
- Net Change: +11
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
- There were 1,206 Buffalo Wild Wings Sports Bars operating as of December 29, 2019.
- 1,175 of them operated during the franchisor’s entire 2019 fiscal year from December 30, 2018 through December 29, 2019 (the “Reporting Period”).
- The franchisor excluded from this group the 2 alternate format Buffalo Wild Wings Sports Bars that its affiliates operate and the 9 Sports Bars that its affiliates acquired from franchisees, because these Sports Bars are not typical of the experience of other Buffalo Wild Wings Sports Bars.
- The franchisor calls the remaining 1,164 Buffalo Wild Wings Sports Bars the “Covered Sports Bars.”
- The franchisor’s affiliates operated 603 of the Covered Sports Bars and franchisees operated the other 561.
- The franchisor excluded from the group of Covered Sports Bars the 6 affiliate-owned Buffalo Wild Wings Sports Bars and 8 franchised Buffalo Wild Wings Sports Bars that closed during 2019. All of those Sports Bars had operated for 12 months before they closed.
- This financial performance representation discloses the average annual Gross Sales, also called Average Unit Volume or “AUV,” during the Reporting Period for the Covered Sports Bars.
- The franchisor included Covered Sports Bars located in airports as “Inline” Sports Bars.
A. Company-Owned Sports Bars
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