Antonio Swad opened the first Wingstop food outlet in Texas in 1994; in 1997, they started expanding thru franchising, and today they have more than 1,600 franchise units. Most of these franchised restaurants have locations on the territory of the U.S, but lately, they have started offering franchising opportunities in Canada.
This company has franchises in more than 12 countries, which means that this business opportunity can also be attractive for international investors, not only for U.S-based entrepreneurs. The main goal of this review is to present to a potential franchisee all information about Wingstop franchise cost, fees, and potential profit that can make the owner of this brand restaurant.
How Much Does The Wingstop Franchise Cost
The estimated starting Wingstop franchise cost is between $347,600 and $759,100; this financial prediction includes one-time initial fees, which total cost will be $30,000 ($20,000 Franchise License Fee + $10,000 Development Fee.
The most significant starting expense is associated with the leasehold improvements; building constructional improvements will have cost between $167,500 and $391,000. Whether starting investment will be on the low end or the high end will depend on how much the franchised restaurant has square feet.
These restaurants have an aviation-theme decor in the style of the 1930s and 1940s, so every future owner of this franchise must be aware that his leasehold location will need a lot of decoration and construction improvements.
Although Wingstop franchise cost is a little higher because of their decoration style, it is worth every cent. These restaurants are unique, and investing in this type of decor will attract more regular customers, and thus owner’s profit will be much higher.
To become a Wingstop franchise owner, every applicant must have a Net Worth of $1,200,000 and own a Liquid Capital of $600,000. To start this franchised restaurant, the franchisee applicant must possess a significant investing budget, so it is the main reason why franchisor capital requirements are very demanding.
Wingstop franchise starting costs list:
- Leasehold Improvements: $167,500 – $391,000
- Furniture, Audio/Visual equipment & Small-wares: $69,700 – $140,000
- One time Initial Fees: $30,000
- Computer Systems for Point-of-Sale, Back Office, & Kitchen: $17,000 – $24,600
- Opening Inventory: $10,000 – $16,000
- Architectural Professional: $9,400 – $24,000
- Signs: $4,600 – $27,300
- Business & Operating Permits: $4,500 – $8,500
- Restaurant Decor Package: $2,400 – $25,200
- Security Deposits: $0 – $10,000 -costs related to the landlord, utilities, and insurance companies
- Estimated Total Investment: $347,600 – $759,100
Wingstop Franchise Fee
The Wingstop starting franchise fees are a Development Fee of $10,000 and an Initial Fee which costs $20,000. The ongoing fees are a Royalty Fee of 6% of the Gross Sales and Ad Fund Fee that is 5%; these ongoing fees will cost the franchisee a total of 11% of the Gross Sales, and they must be paid every week.
This franchisor requires that the franchisee sign the Development Agreement and the Franchise Agreement. This is a slightly different approach that we can usually see because even if you want to start only one Wingstop franchise, you will need to pay both of these fees.
So franchise applicants must be aware that all one-time starting fees will cost them a total of $30,000! Only U.S Army Forces Veterans have the right to a $15,000 Initial Fee discount; for this group of investors, this fee will be only $5,000.
Also, for all those investors who want to reduce to minimum Wingstop franchise starting cost, it would be an ideal option to buy an existing franchise. After purchasing an existing Restaurant, there is no cost of the Initial Fee; the franchisor will charge only a Transfer Fee of $10,000.
Wingstop Franchise list of fees:
- Initial Fee: $20,000 – one time cost
- Development Fee: $10,000 – one time cost
- Royalty Fee: 6% of the weekly Gross Sales – an ongoing cost
- Ad Fund Fee: 5% of the weekly Gross Sales – an ongoing cost
- Transfer Fee: $10,000 – if it is bought an existing franchise
- Renewal Fee: $15,000 -after expiration of the ten years Franchise Agreement
- Website Maintenance Fee: $50 per month
- Intranet Network Fee: up to $50 per month
Wingstop Franchise Profit
These franchised restaurants, on average, have Annual Net Sales of $1,480,000 with a Profit Margin that is 10% to 13%, which means that the Wingstop franchise owner can expect a profit that will be from $140,000 to $222,000 per year.
The Wingstop Franchise Disclosure Document reveals that this company franchises make on average annual net sales of $1,488,622, so we used the most accurate data to calculate how much does a Wingstop franchise owner makes. There is no data about how much these franchised restaurants deliver profit margins in the FDD, so we used results that similar franchising concepts have.
According to DrWealth, KFC restaurant’s profit margin is 13,3%, so we can predict that the Wingstop franchise can deliver similar margins. Both brands’ franchised restaurants have comparable ongoing fees, and both are operating in the same industry with similar prices on the menu.
This franchisor’s weekly Royalty and Ad Fees are pretty standard for the fried chicken franchises, so franchisees don’t need to worry that ongoing fees will burden their business profitability. Overall, chicken meat is one of the cheapest food products, and fried chicken has a decent cost and profit ratio.
We can summarise that the Wingstop franchise is a very lucrative franchising opportunity that can bring to its owner a very nice profit at the end of the year, with a relatively quick Return of Investment.
With more than 1,400 franchise units in the U.S and approximately 200 international ones, Wingstop is one of the better-known brands specializing in selling fried chicken wings. This company is growing steadily every year, and it is expected that these aviation-themed restaurants will be even more popular among customers and investors in the future.
When we compare Wingstop franchise cost to the franchising offer of their main competitors (KFC) we can notice that starting this brand franchise will be more affordable. On their menu are all sorts of chicken meat dishes, french fries, wine, beer, and cold and hot beverages, and all these products have very good profit margins.
The fun fact is that this franchisor didn’t have any restaurants in the territory of Canada till 2022. The first one will be opened in Toronto, and they signed franchise agreements for opening 100 new Canadian franchise units in the next few years.
This brand works heavily on expanding thru the whole of Canada; they are searching for new franchisees in this territory, so for all those Investors who wish to start the Wingstop restaurant, now it is possible to apply for this franchise.
The most significant advantage of owning this restaurant is that they offer customers an entirely different eating experience. The combination of the decoration in the style of the 1930s and 1940s and the tasty food that they have on the menu is a total hit, so it is no wonder that their base of loyal customers is growing every day.
The Wingstop franchises, on average, have high Gross Revenues, and because of that, every owner of this franchised restaurant can expect a secure monthly cash flow with good margins. It is anticipated that investors can make a Return of Investments in three years, but will that time be more or less, it will all depend on the location and managerial skills of the owner.
A Wingstop franchise is a good option for entrepreneurs who own an investment fund for starting a business and want to enjoy the benefits that provide already established brand awareness and franchisor support in every segment of the business thru the whole duration of the Franchise Agreement.