This article was updated with the 2023 Franchise Disclosure Document
With more than 1,200 locations across the globe, Buffalo Wild Wings is a popular franchise brand among both consumers and franchisees. The problem for the latter though might be its cost: you would need to invest on average $3.6 million to open a new Buffallo Wild Wings restaurant..!
That’s definitely much higher than the average investment required for similar restaurant franchises. So is this is really worth it?
In order to answer that question, we need to look at how much profits you can really generate with a Buffalo Wild Wings franchised restaurant.
In this article we’re looking into the latest Franchise Disclosure Document to find out how much profits you can make with this business, and whether you should invest in a Buffalo Wild Wings franchise. Let’s find out!
Key stats
| Franchise fee | $25,000 |
| Royalty fee | 5.00% |
| Marketing fee | 3.25% |
| Investment (mid-point) | $3,651,000 |
| Average sales | $3,306,000 |
| Sales to investment ratio | 662.0x |
| Payback period | [franchise_value_investment_payback] |
| Minimum net worth | $1,500,000 |
| Minimum liquid capital | $750,000 |
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 | Buffalo Wild Wings |
| FRANCHISE FEE | $25,000 |
| ROYALTY FEE | 5.00% |
| INITIAL INVESTMENT | $2,482,000 – $4,805,000 |
| AVERAGE REVENUE | $3,306,000 |
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About Buffalo Wild Wings
Buffalo Wild Wings is an American sports and entertainment-themed dining restaurant headquartered in Atlanta, Georgia.
It serves the US, Mexico, Panama, India, United Arab Emirates, the Philippines, Saudi Arabia, and Canada.
Buffalo Wild Wings was founded in 1982 in Columbus, Ohio, by James Disbrow and Scott Lowery and specializes in chicken wings, sandwiches, burgers, sauces, and beer. It began franchising in 1991, long before merging with Inspire Brand.
Today, the sports bar brand has 1,258 locations spread across 50 US states and 10 other countries across the globe.
Buffalo Wild Wings franchise pros and cons
Pros
- Training: the franchisor offers a management training course to help new sports bar owners familiarize themselves with the business model. The in-restaurant training lasts 60-120 days. In addition, franchisees can expect 210 hours of on-the-job training and another 40 hours of classroom training.
- Third-party financing: Buffalo Wild Wings does not offer direct or indirect financial support to its franchisees. However, its third-party affiliates can provide funding to cover the cost of equipment, startup costs, accounts receivable, payroll, and inventory.
- Global presence: Buffalo Wild Wings is a leading casual dining restaurant, and its good reputation makes it easier for franchisees to tap into new markets.
- An innovative menu: the combination of spiced chicken wings in different seasonings with beer and the sports-viewing thrill is unmatched. Also, the sauce varieties entice customers to keep coming back for more. This helps restaurant owners stand out from the competition.
- Marketing planning and support: the franchisor provides detailed marketing support and promotional campaigns. These include social media management, ad templates, email marketing, regional advertising, national media, and website development.
- Ongoing support: the parent company supports franchisees in every step of the business operation. This includes the grand opening, site selection, propriety software, field operations, security and safety procedures, and online support.
Cons
- No absentee ownership: the franchisor expects new restaurant owners to participate in the business’s daily operations. It’s almost impossible to pursue other investment opportunities if you own a Buffalo Wild Wings franchise.
- Not a home-based franchise: franchisees can only operate their businesses from an active office or retail facility.
- 40-60 employee requirement: this is the minimum number of employees to run the franchise business.
- No exclusive territories: Buffalo Wild Wings does not give restaurant owners exclusive rights to operate their franchise businesses in the selected regions. You may face fierce competition from similar units and other restaurant chains like Applebee’s, Chili’s, and Wingstop.
- The ambiance may not suit everyone: Buffalo Wild Wings is loved for its wings, beer, and sports combination. But the ambiance may not suit customers looking for a serene environment.
How much does a Buffalo Wild Wings franchise cost?
You need to invest around $3,651,000 to open a Buffalo Wild Wings Sports Bar.
The investment amount is an average for both freestanding and non-freestanding Sports Bars. Thus, the amount can change depending on the type of Sports Bar and other factors like location, size, etc. Although, the latest FDD shows that the difference is relatively low ($3.8 vs. $3.4 million).
The amount you would pay as investment covers a range of startup costs.
In addition to the initial franchise fee ($12,500-$25,000), the investment also covers costs like site approval fees, training fees, building costs, equipment, the first 3 months of working capital, etc. Here’s the full breakdown with low and high estimates:
| Type of Expenditure | Low | High |
|---|---|---|
| Initial franchise fee | $12,500 | $25,000 |
| Site Approval and Training Fees | $1,200 | $83,800 |
| Building/Construction/Equipment | $2,707,900 | $3,824,500 |
| Grand opening advertising | $12,500 | $12,500 |
| Additional funds – 3 months | $100,000 | $150,000 |
| Pre-Opening | $79,900 | $709,000 |
| Total | $2,914,000 | $4,804,800 |
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| Buffalo Wild Wings |
| FRANCHISE FEE | $25,000 |
| ROYALTY FEE | 5.00% |
| INITIAL INVESTMENT | $2,482,000 – $4,805,000 |
| AVERAGE REVENUE | $3,306,000 |
What’s the AUV of a Buffalo Wild Wings franchise?
On average, a Buffalo Wild Wings franchise makes $3,306,000 in revenue per year (the “Average Unit Volume”).
This number is the annual median sales of 521 franchised Sports Bars operating in 2022.
As this is average, it can vary based on the type of sports bar you are willing to open. For example, an inline or end cap bar revenue is nearly the same, whereas, a free-standing bar revenue is slightly higher.
| Type of bar | Number of stores | Median sales |
|---|---|---|
| Inline | 24 | $3,518,094 |
| Free Standing | 279 | $3,405,908 |
| End-Cap | 218 | $3,136,801 |
| Total | 521 | $3,306,274 |
How profitable is a Buffalo Wild Wings franchise?
On average, a Buffalo Wild Wings franchise makes $554,000 in profits per year. This represents a 17% EBITDA margin.
Note that Buffalo Wild Wings doesn’t provide any detailed information about the financial performance of its franchises in its latest Franchise Disclosure Document. Instead we had to make assumptions which we have summarized below.
| Profit and loss | Amount | % Sales |
|---|---|---|
| Sales | $3,306,274 | 100% |
| COGS | $(826,569) | 25% |
| Gross Profit | $2,479,706 | 75% |
| Labor | $(958,819) | 29% |
| Marketing and royalty costs | $(272,768) | 8% |
| Occupancy | $(297,565) | 9% |
| Other OpEx | $(396,753) | 12% |
| EBITDA | $553,801 | 17% |
Is a Buffalo Wild Wings franchise a good investment?
As we just saw, it costs on average $3.6 million to open a new Buffalo Wild Wings franchise. That’s significantly more than the average restaurant franchise.
So are the profits worth the $3.6 million price tag? Well, we think it does.
Indeed, we estimate Buffalo Wild Wings franchises have a 7 years payback. In other words, you would repay the $3.6 million within 7 years on average by using the profits generated by the business.
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| Buffalo Wild Wings |
| FRANCHISE FEE | $25,000 |
| ROYALTY FEE | 5.00% |
| INITIAL INVESTMENT | $2,482,000 – $4,805,000 |
| AVERAGE REVENUE | $3,306,000 |
Disclaimer
Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
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