Wingstop Franchise Costs $259K – $912K (+ 2024 Profits)

Wingstop Franchise, a notable name in the restaurant industry, specializes in offering a flavorful experience with its signature chicken wings, boneless wings, tenders, chicken sandwiches, and seasoned fries.

Founded in 1994 and headquartered in Addison, Texas, Wingstop embarked on its franchising journey in 1997, quickly establishing itself as a key player in the fast-food sector.

The brand distinguishes itself through its cooked-to-order, hand-sauced, and tossed chicken wings that come in a variety of proprietary sauces and seasonings, offering a unique taste that sets it apart from competitors.

Type of Expenditure	Amount
Initial Fees: Development Fee Franchise Fee	$10,000 $20,000
Security Deposits	$0 – $10,000
Architectural/Engineering Fees	$6,500 – $35,500
Professional Fees	$2,500 – $7,500
Leasehold Improvements	$155,000 – $570,000
Business and Operating Permits	$4,500 – $8,500
Décor Package	$11,888 – $32,480
Furniture, Fixtures, Audio/Visual System, Equipment and Small-wares	$55,850 – $147,346
Point-of-Sale, Back Office, Software and Hardware and Related Items	$15,581 – $23,655
Signs	$3,797 – $38,752
Opening Inventory	$10,000 – $16,000
Opening Publicity and Promotions	$5,000 – $15,000
Additional Funds – 3 months	$25,000 – $40,000
Total	$325,616 – $974,733

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

The Initial Franchise Fee is $20,000, which must be paid in full when you sign the Franchise Agreement. This fee is non-refundable and is a one-time payment to acquire the franchise rights.

Royalty Fee

Royalties are 6% of Gross Sales, paid weekly. This fee is an ongoing payment that gives franchisees the right to continue operating under the Wingstop brand. For franchises renewing who have previously committed to and installed the required point-of-sale system by December 31, 2016, the royalty is reduced to 5%.

Advertising Fee

The Advertising Fee, or Ad Fund contribution, is currently set at 5.3% of Gross Sales, with an annual adjustment provision that allows the fee to be no less than 5% and no more than 5.5%. This fee contributes to national and regional advertising efforts and is paid weekly along with the royalty fee.

Transfer Fee

The Transfer Fee is $10,000, payable before the effective date of the franchise transfer. This fee is charged when the franchise rights are transferred to another entity and is non-refundable.

Renewal Fee

The Renewal Fee is 25% of the sum of the then-current development fee and franchise fee, which currently would equal $7,500. This fee is due when you renew your franchise for a 10-year term and is non-refundable. For a second 10-year renewal term, the fee increases to 50% of the sum of the then-current development fee and franchise fee, currently equating to $15,000.

Franchise Pros and cons

The pros

The Wingstop franchise is one of the most lucrative and fast-growing, and it offers franchisees some amazing advantages. These are:

• Low start-up costs: The application fee and royalty fee for the Wingstop franchise are relatively low compared to those of other franchise options. This encourages new franchisees to invest in multi-unit stores
• Great support: Wingstop offers extensive training to would-be franchisees to identify real estate, restaurant construction, and management. This equips new and inexperienced franchisees with the knowledge to run their franchises
• Opportunity for growth: The Wingstop franchise has experienced steady growth for the past few years. This has been reflected in the number of new stores recorded between 2019 and 2021. You should not be surprised if a location close to you is earmarked for Wingstop market expansion. This offers new franchisees a great opportunity to add more stores
• Territory protection: Wingstop grants franchisees competitive protection in a trade area around the restaurant. As such, it will not permit the establishment of another franchise in the same location. This gives would-be franchisees a conducive market to thrive and an incentive for potential expansion
• Online ordering: Wingstop has adopted modern technology that allows customers to order online. This technique is not only fun but also convenient to customers and promotes growth. It also leads to franchisees requiring fewer employees, thereby reducing employee costs
• Brand popularity: The Wingstop franchise is well known for its brand of flavored and great-value Buffalo chicken wings. This gives would-be franchisees the purchasing power and marketing clout that only established brands can offer

The cons

Even though it has the above amazing benefits for aspiring franchisees, Wingstop still has its pitfalls. These includes:

• Relatively high ongoing costs: New franchisees have to meet advertising and marketing fees. As compared to other franchisors, these charges are a bit on the high side, which may put off interested franchisees
• Full-time commitment: The Wingstop franchise is not a good fit for those interested in just a financial investment. The reason is that it requires franchisees or their designated principal to assume full responsibility for the day-to-day running of the franchise.
• Limited Varieties: Wingstop has a relatively specific and limited menu for its fast foods. This may act as a limitation in attracting more customers
• No financing: Wingstop doesn’t offer direct or indirect financing to potential franchisees. Either way, it does not guarantee a franchisee’s note, lease, or obligation.
• Not suited for inexperienced franchisees: The chain’s requirement of a three-store minimum and previous multi-store owners’ preferences do not favor those new to franchising

How to apply

Opening a Wingstop franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Wingstop franchise.

1. Conduct Preliminary Research

• Visit the official Wingstop website: Familiarize yourself with the brand, its values, and its offerings.
• Understand the market: Assess the demand for Wingstop’s offerings in your desired location and the competitive landscape.

2. Review Franchise Requirements

• Financial requirements: Review the financial investment needed, including franchise fees, development fees, and other startup costs.
• Operational requirements: Understand the brand’s operational standards, including menu offerings, customer service expectations, and store aesthetics.

3. Submit an Inquiry

• Contact Wingstop: Use the franchising section on the Wingstop website to submit an inquiry expressing your interest in opening a franchise.

4. Receive and Review Franchise Disclosure Document (FDD)

• Review FDD: Carefully read the FDD provided by Wingstop, which outlines detailed information about the franchise opportunity, including obligations, fees, and legal agreements.

5. Attend Discovery Day

• Visit Wingstop headquarters: If your initial application is well-received, you may be invited to a Discovery Day at Wingstop’s headquarters, where you’ll get a deeper insight into the franchise.

6. Secure Financing

• Assess your financial options: Look into financing options if you need assistance covering the startup costs, including loans and investment opportunities.

7. Select a Location

• Work with Wingstop to identify a suitable location: Wingstop may assist in identifying a strategic location based on market research and territory availability.

8. Sign the Franchise Agreement

• Agree to terms: If both parties agree, you’ll sign the franchise agreement, committing you to the terms and conditions of operating a Wingstop franchise.

9. Complete Training Program

• Undergo training: Participate in Wingstop’s comprehensive training program to learn about operating procedures, food preparation, and business management.

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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