Wingstop Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

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 your Development Agreement.

2.  Franchise Fee:  $20,000

• You currently pay a $20,000 franchise fee for each Restaurant. Wingstop may increase that franchise fee in the future.

3.  Rent:  Amount Not Specified

• A Wingstop Restaurant occupies approximately 1,200 to 2,000 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 to lease space in an enclosed mall or similar high-rent facility.

• Rent depends on geographic location (for example, the West Coast, the East Coast, or the Midwest), space size, local rental rates, businesses in the area, site profile, and other factors. Wingstop cannot estimate precisely your initial real estate investment.

4.  Security Deposits:  $0 to $10,000

• 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:  $5,800 to $35,500

• The architectural/engineering consultant’s fee portion represents the cost of plans and specifications when using approved Wingstop architectural and engineering consultants.

• The high-range charge will apply if the agency from which you obtain your building permit requires additional engineering for the Restaurant.

• If you use (only with Wingstop’s pre-approval) a non-approved outside architectural or engineering consultant, your costs for these services could be meaningfully higher.

6.  Professional Fees:  $2,500 to $7,500

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

7.  Leasehold Improvements:  $155,000 to $570,000

• Leasehold improvement costs can vary significantly depending on factors like (i) whether pre-construction demolition of existing walls and partitions is required, (ii) whether the space was previously used as a restaurant and already contains facilities required by code, such as a grease trap, ventilation system, and fire extinguisher system, and (iii) regional differences in materials and labor costs.

• The high and low amounts reflect estimated leasehold improvement costs without any landlord tenant improvement allowances factored in but do include a 10% contingency (of the total estimated cost) for unexpected cost over-runs, delays, etc. (Not all franchisees receive tenant improvement allowances).

• If your landlord provides a tenant improvement allowance and you do not experience significant cost over-runs, delays, etc., your actual leasehold improvement costs might be at the lower end of the estimate (although your landlord might incorporate the amount of the tenant improvement allowances into your rent).

• Although Wingstop expects all projects to fall within the indicated range, as Wingstop Restaurants continue to expand to higher cost markets, 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:  $4,500 to $8,500

• 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:  $6,300 to $32,480

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

• All items must be prepaid at least 30 days before the start of construction.

10.  Furniture, Fixtures, Audio/Visual System, Equipment, and Smallwares:  $55,850 to $138,100

• The high and low amounts represent the price to buy (not lease) new equipment. This range includes all kitchen equipment, furniture, stainless steel fixtures, millwork, small wares, and audio-visual equipment.

• All items must be prepaid at least 30 days before the start of construction.

11.  Point-of-Sale, Back Office, Kitchen Display Software and Hardware and Related Items:  $12,000 to $13,000

• You must purchase and install the electronic Point-of-Sale system, EMV card reader equipment, and other required equipment according to Wingstop specifications. You also must have a high-speed Internet connection for the Point-of-Sale system.

• All items must be prepaid at least 30 days before the start of construction.

12.  Signs:  $3,360 to $32,000

• You must purchase your signage package from approved Wingstop system vendors in accordance with Wingstop specifications. This item includes the standard Wingstop exterior signage, including shipping.

• All items must be prepaid at least 30 days before the start of construction.

13.  Opening Inventory:  $10,000 to $16,000

14.  Opening Publicity and Promotions:  $5,000 to $15,000

• If your Restaurant is located in a core market (currently, the Dallas-Fort Worth, Houston, or San Antonio, Texas DMAs; the Los Angeles, California DMA; or the Las Vegas, Nevada DMA), you must spend at least $5,000 to market your new Restaurant’s opening.

• If your Restaurant is located in an emerging market (currently, the Chicago, Illinois; Denver, Colorado; Miami-Ft. Lauderdale, Florida; Sacramento, San Francisco, or San Diego, California; Phoenix, Arizona; or Abilene, Austin, Corpus Christi, Harlingen, El Paso, Laredo, Lubbock, Monroe-El Dorado, Monterey-Salinas, Odessa-Midland, Tyler-Longview, or Victoria, Texas DMAs), you must spend at least $10,000 to market your new Restaurant’s opening.

• If your Restaurant is located in a market outside both the core and emerging markets, you must spend at least $15,000 to market your new Restaurant’s opening.

• You must spend the total amount within 2 months after your Restaurant opens for business (the “Grand Opening Period”).

15.  Additional Funds – 3 Months:  $25,000 to $40,000

• Wingstop assumes you will need the indicated amounts for rent, utilities, wages, 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 2 trainees to attend the required training program.

16.  Total (excluding real estate purchase and lease costs):  $315,310 to $948,080