Wingstop: Franchise Development Principles

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Yes, or if there's a different approach there.

A couple of things come to mind. First, their FDD, the franchise disclosure document, is one of the best I've seen. When I was there, I studied Taco Bell, Subway, Dunkin'. Great brands, right? I felt the FDD at Wingstop was very clear. When you have a clear franchise disclosure document, or what I would call the "Bible" with the rules on how we play, it made it easy for me to have conversations with franchisees. There was utter clarity. Having the right FDD is crucial.

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Since you mentioned AUVs, what sort of operational or design constraints tend to limit AUV growth? Does it come down to brand awareness, as you said? Are there other limitations that brands struggle with when trying to grow average unit volumes? We also see the glass as half full for Wingstop, but what challenges do other brands face in this regard?

One of the key things is the newness factor. Do you have any LTOs? Are you investing in product development? Let me quickly check this brand my friend owns; he's a franchisee. It's called Chicken Guy!, Guy Fieri's Chicken Guy! Hopefully, this call isn't about that company. I would ask him, "When was the last time your franchisor invested in new products?" If they haven't had a new product in over two years, I'd question the newness factor. What's bringing people into the brand? What's your new news? Every brand has LTOs, limited-time offers. At my current company, we have four LTOs a year, introducing fresh flavors to bring consumers back to try something different. Dutch Bros, Starbucks, McDonald's, and Wingstop all do it well. Brands that don't spend on product development are being penny-wise and pound-foolish, not investing in the brand's future. At Wingstop, even when I was there, we had a beautiful test kitchen where we tried new flavors every week. If you're not a wing eater, you probably shouldn't work there. We ate wings weekly, trying new flavors, which is super important. Investing in product development or newness, whether it's food or drink, is crucial.

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