Wingstop
Wingstop offers cooked-to-order chicken wings and other wing-related dishes in a hand-sauced and tossed format. Known for its variety of flavors and quick service, Wingstop operates in the fast-casual dining industry.
About Wingstop
Wingstop Inc. is an American international fast food chain that primarily sells buffalo wings. Wingstop locations are decorated with a 1930s and 1940s pre-jet aviation theme.
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Wingstop franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a WING-STOP® Restaurant is between $298,200 and $1,013,500, excluding real estate purchase and lease costs [p.1]. This includes a mandatory payment of $50,000 to the franchisor or affiliate even if you only want one restaurant franchise [p.1].
What is the initial franchise fee?
The initial franchise fee varies depending on whether you are purchasing an existing restaurant or entering into a development agreement. For new developments, the franchise fee is $25,000 and must be paid in full upon signing the Franchise Agreement [p.164]. If acquiring an existing restaurant, there is no initial franchise fee; instead, a transfer fee of either $10,000 or $15,000 is paid [p.15].
What are the ongoing royalty and advertising fees?
The ongoing royalty and advertising fees are primarily derived from royalties paid by franchisees, which are calculated as a percentage of their Gross Sales [p.95]. Additionally, there is an obligation for franchisees to contribute to the national advertising fund (Ad Fund) [p.107], with these contributions being accounted for in the Company's financial statements [p.95]. The exact rates and amounts are not specified in the provided excerpts.
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement covers a ten-year period and provides for one ten-year renewal [p.93]. This means the total duration of the agreement, including any renewal, would be twenty years.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot sell, assign, transfer, give away, pledge, mortgage, or otherwise dispose of any interest in the Restaurant, the franchise, the Restaurant's assets (excluding food products and merchandise sold in the ordinary course of business), or your rights under this Agreement without the prior written consent of the Company [p.191]. Any such transfer lacking Company's prior written consent will be ineffective against the Company and will constitute a default under Section 16(b)(20) [p.191].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate a franchise agreement if the franchisee fails to comply with any lawful provision of the franchise agreement and does not cure such failure after being given written notice and a reasonable opportunity, which cannot exceed 30 days [p.5].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD excerpts do not detail specific financial requirements such as net worth or liquid capital needed to qualify for a franchise.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. The FDD indicates that there are no restrictions on the franchisor's activities at Non-Traditional Venues within your Trade Area, and you may face competition from other franchisees, outlets owned by the company, or other competitive brands [p.46, p.48]. Additionally, you have no competitive protection from Wingstop-brand competitors located outside the physical boundary of your Restaurant's Trade Area [p.48].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training at a designated, certified training facility either at their headquarters in Dallas, Texas, or other remote locations. This training must be completed by you or your Designated Principal along with a General Manager to their satisfaction. Ongoing support and services are required under the Franchise Agreement, but specific details on ongoing support beyond initial training are not detailed in these excerpts. [p.34]
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations except for the preceding one. They do not authorize their employees or representatives to make such representations either orally or in writing [p.66]. However, if you are purchasing an existing outlet, they may provide actual records of that outlet's performance [p.66].
What am I restricted to selling, and where must I buy supplies?
You are generally restricted from operating a similar business during the term of the franchise. As for sales, this isn't specified in the excerpts. For supplies, you must buy ingredients and supplies that meet required grade and quality standards from designated or approved sources, primarily from Wingstop's system vendors and distributors [p.28].