How Much Does it Really Cost to Open a Wingstop in 2021?
Wingstop is a network of eateries with an aviation motif that specializes in chicken wings with a range of intensely flavored sauces. With the help of franchising, Wingstop has experienced a tremendous expansion in recent years. Investing in a franchise can be quite profitable. This article contains all you need to know about Wingstop cost and things to note to start the business successfully.
About Wingstop
American global fast-food franchise Wingstop specializes in chicken wings. Their eateries and settings have an aviation theme based on pre-jet aviation from the 1930s and 1940s.
It offers hand-sauced, hand-tossed, boneless chicken wings, tenders, freshly cut, seasoned fries, and drinks.
Anthony Swad established the chain in 1994 in Garland, Texas. In 1997, it begged to give franchises, and in 2002, it sold its one billionth chicken wing. The chain now numbers more than 1,400 eateries. Its main office is in Addison, Texas.
In 2003, Gemini Investors bought it; in 2010, they sold it to Roark Capital Group; and in 2015, it became public. It collaborated with DoorDash for nationwide shipping and commemorated its 25th anniversary of operation in 2019.
Mexico hosted Wingstop’s first overseas outlet in 2011. Since then, the number of eateries in that nation has increased to 21.
As of now, Wingstop is active in the following countries: Singapore, Singapore, Australia, Saudi Arabia, Indonesia, Malaysia, Mexico, Panama, United Arab Emirates, United Kingdom, United States, and the United Arab Emirates.
It is the biggest fast-casual restaurant chain in the world that specializes in chicken wings. It takes tremendous pleasure in its amazing flavor and customer service.
The business has been expanding for more than 25 years and is still expanding. From Singapore to Mexico to the United Kingdom, Wingstop operates in 13 different nations.
Cost of Joining the Wingstop Franchise
The minimal cost required to launch a Wingstop franchise are listed below. The first figure is the minimum liquid capital you require, which is the sum of money you must have on hand to meet immediate financial obligations.
Your total financial holdings, including investments and real estate, make up your net worth. Please take note that these figures are only an estimate and that additional fees or prices may apply depending on a variety of variables, such as the place where you plan to open.
Expenses and Wingstop Franchise Cost;
Liquid Capital $600,000
Net Worth $1,200,000
Total Investment $346,775–$733,249
Franchise Fee $20,000
Below is a further analysis of the setup cost and expenditures associated with opening a Wingstop franchise.
Development Fee; $10,000 $10,000
Franchise Fee; $20,000-$20,000
Rent; Varies
Security Deposits; $0-$10,000
Architectural/Engineering Fees; $7,500-$24,000
Professional Fees; $1,500-$4,000
Leasehold Improvements; $150,000 $385,000
Business and Operating Permits; $3,000-$5,500
Décor Package; $7,000-$10,100
Furniture and Equipments; $113,400-$137,000
Point-of-Sale Register and Kitchen Display;$15,000 $27,100
Signs; $8,900-$26,500
Opening Inventory; $10,000-$15,000
Opening Publicity and Promotions; $5,000-$15,000
Additional Funds–3 months; $25,000-$35,000
TOTAL COST; $376,300-$724,200
Recurring Fees
The Wingstop franchise holder is required to continue making payments. A royalty charge cost equivalent to 2% of gross sales is due from Wingstop franchise owners throughout the first full year of the restaurant’s operation.
The royalty charge cost increases to 4% of gross sales in the second full year of operation for the Wingstop franchise.
The royalty charge is 6% of gross sales beginning on the first day of the restaurant’s third operational year and continuing thereafter.
Wingstop also levies a 5% advertising fee on gross sales to cover regional advertising and promotions. And lastly, owners are responsible for recurring technology fees of up to $100 every month.
Factors that Affect the Profit of a Wingstop Franchise
Location
The most important factor affecting a franchise’s performance has to be its location. It’s fortunate that Wingstop offers area protection because you can nearly guarantee that there won’t be any rivals within a specified radius of a square mile.
Since there are already so many establishments and shopping centers, you might not receive a guarantee and you might face competition that could hurt your revenues.
Although Wingstop offers location protection, your establishment may face competition from other fast-food wing restaurants in the neighborhood.
Additionally, keep in mind that some locations might be more accessible than Wingstop. Wingstop often offers grab-and-go meals or sit-down meals in their restaurant with an aviation theme.
On the other side, some locations feature a drive-thru that allows patrons a quicker and more convenient choice without requiring them to from their vehicle. Given that it is less suited than locations with drive-throughs, this may discourage visitors from visiting Wingstop.
Staff
The quality of its staff will undoubtedly influence your restaurant’s revenue. Sales performance won’t be fantastic if they aren’t driven to perform well or if their training is ineffective.
Despite the fact that Wingstop provides training for its staff, each store will have a unique mix of people from various backgrounds.
It can be challenging to find motivated individuals willing to invest in the restaurant as franchisees, but doing so is the only way to achieve excellent performance and high-profit margins.
Qualifications to be Accepted in the Wingstop Franchise
You must fulfill the following requirements in order to be approved as a Wingstop Brand Partner;
1. A track record of success running a portfolio of multiple restaurants
2. Successful experience owning many restaurants.
3. Net worth in total should be about $1,2 million.
4. Total liquid assets of $600,000.(Assets that can be turned into cash within ten business days are considered liquid assets.)
5. Access to liquid capital and net worth is proportional to ownership level. ( may differ greatly from the minimum needs).
6. The minimum devotion for development is three restaurants.
7. Ready to provide guarantee duties under a franchise agreement.
8. Duration of the necessary training programs commitment.
9. Involvement in the day-to-day operations of the business, proximity to the location.
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Process for Starting a Wingstop Franchise
If the aforementioned requirements are met, you can begin the process of starting a Wingstop franchise. The procedure appears to be as follows:
1. Verify your ability to pay for it. If you have expertise in managing a restaurant portfolio and a net worth of at least $1.2 million, you probably have some money management skills that are relevant to starting a restaurant.
Make sure you have the money to pay for real estate purchase and lease costs, security deposits, shipping costs, food costs, equipment and signage costs, licensing and permit costs, insurance costs, uniform costs, and more before deciding to open a Wingstop franchise.
2. Examine the industry and your own experience. You might not be familiar with Wingstop as a sort of restaurant. It is essential to have a clear idea of what will be required for this business to succeed.
Analyze the market in the area where you want to launch a Wingstop. Make sure there is enough demand in the area for this kind of restaurant.
3. Make a franchise application and get accepted. Utilize Wingstop’s website to submit your application. The Wingstop franchise team will evaluate your application to see if you are a strong candidate. Wingstop will let you know whether you’ve been given the all-clear after a number of reviews.
4. Open your Wingstop restaurants after completing your training. The company requires franchise owners to finish 19 hours of online training, more than 30 hours of classroom training, and more than 153 hours of in-restaurant training before establishing their Wingstop.
To make sure your restaurant is operating efficiently, you might have two opening restaurant trainers visit your location.
Advantages of Joining Wingstop
1. Wingstop offers area protection. With territory protection, you can nearly guarantee that you’ll have a steady stream of clients or a sizeable number of repeat customers because there won’t be much or any competition in that particular area.
2. Wingstop would assist new franchisees in finding a place devoid of competing fried chicken eateries that might reduce their margins. Having area protection within the brand, particularly as a fast-food choice, can guarantee your store’s success and appeal.
3. They have a substantial amount of resources available to assist the franchises. They provide assistance with real estate, shop design, building, and any other daily support services Wingstop can provide, like opening agents to assist your team if you’re new or launching your first restaurant.
4. Additionally, it links to its global presence, which aids in branding and marketing. Since dealing with major companies has its advantages, the franchises receive a lot of work done for them.
5. The variety of flavors offered by Wingstop for its fried chicken is another excellent asset. They’re fantastic flavors that may stand out and draw attention, but they’re not ones you typically find at restaurants that serve fried chicken.
6. They also offer shifting menu options and seasonal cuisines that follow current trends. This keeps their menu interesting and encourages repeat business from clients.
7. Through Wingstop, you have the choice to oversee and manage the franchise while still reaping the rewards of ownership from afar by appointing someone as the principal and general manager.
8. Additionally, a sizable portion of Wingstop’s business is conducted online. Having this technologically enhanced ordering system gives clients a quicker method to obtain their food as more businesses move to online applications.
Disadvantages of Joining Wingstop
1. A few of the challenges is that the two administrators must complete mandatory training in the Wingstop system for 25 days because they will need to work at the store full-time.
For some, this might be a fantastic learning opportunity, but for other, more seasoned entrepreneurs, it might feel like a burden.
2. Wingstop franchises are required to stock everything that Wingstop wants of them and are not permitted to utilize any flavors other than those found on their standard menu.
Without prior approval from Wingstop, franchises are not permitted to sell or deliver anything more but what is on the menu.
3. Additionally, Wingstop does not offer any direct financial aid to prospective franchise owners that require assistance with the first costs and investment. However, if it’s not directly with the brand franchisor, there are third-party organizations that can assist consumers, but it will cost money as it usually does.
4. With a royalty rate of 6%, Wingstop is also fairly expensive. Franchises typically cost between 4% and 6%, so it is undoubtedly more expensive. As the required investment can exceed $700,000 with a franchise fee of $20,000, it is also quite a hefty one.
5. For Wingstop, there is also established opposition. Additionally, they don’t use a lot of seasoning in their fried chicken, so they concentrate more on the authentic flavor of what fried chicken should taste like, serving it with sides like mashed potatoes and coleslaw.
6. Additionally, it’s a bit more difficult to stand out because there are other fried chicken restaurants like Buffalo Wild Wings and Korean fried chicken restaurants like Bonchon that provide seasoned fried chicken.
7. Concerns have also been raised about the rising cost of chicken wings. Previously selling for $1.50 per pound, chicken wings are now $3.00 or more.
