Despite a cool economy, chicken-wing franchises are red-hot.
Chains that sell everything from traditional deep-fried Buffalo wings to more gourmand varieties (think mango habanero or Caribbean jerk) increased units by an average of 5% in 2010 – more than double the rate of food brands as a whole, including pizza or sandwich shops, according to FranData, an Arlington, Va. research firm.
In Minneapolis, Buffalo Wild Wings says its same-store sales for the third quarter are up 4.8% from a year ago. Wingstop, a Richardson, Texas, franchise that’s been on a growth spurt since 2009, plans to open its 500th store before year’s end. And East Coast Wings & Grill, based in Winston Salem, N.C., has seen 30 consecutive quarters of same-store growth.
Franchisors say chicken wings, which trace their roots to Anchor Bar Restaurant in Buffalo, N.Y., are no longer viewed as just “pub grub” or something for sports fans to eat on game day. These days, customers tend to be families looking for an inexpensive night out and busy professionals wanting an easy solution for dinner.
“It’s a great alternative to pizza and Chinese food,” says Deborah Serls, who worked in neurological testing before opening a Wing Zone franchise last month in Savannah with her husband, Jeremy. The couple, who were already “huge Wing Zone fans,” decided to become franchisors after Jeremy lost his corporate job. They liked that Wing Zone offered four weeks of training at company headquarters in Atlanta where “you’re thrown into the kitchen,” she says.
Similarly, Stephen Sullivan of Hoboken, N.J., was a Buffalo Wild Wings fan but could only find the chain when he traveled. In November 2009, he put together a team of investors and opened New Jersey’s first Buffalo Wild Wings franchise. He has since opened a second location and secured the rights to five more. The tough economy hasn’t seemed to hurt business. “People want a little bit of an escape,” he says. “They can come here, have their wings and cold beer, and not break the bank.”
Some franchises – there are nearly two dozen in the chicken-wing category, including a host of relatively new franchises such as Atomic Wings and Hurricane Grill & Wings – are differentiating themselves with flavors that run the gamut from sticky sweet to stupidly hot. Others are marketing healthy wings or kid-friendly options like chicken fingers or mac and cheese.
Still, could all this be a passing fad – or could the market be headed for a wing glut? Not likely, says Peter Schwarzer, FranData’s director of research. “Chicken wings are here to stay,” he says, pointing to the fact that a number of major franchises, including Pizza Hut and KFC, have added chicken wings to their menus. He likens the category to burgers, adding “we still see new hamburger brands come out the gate.”
That said, the challenge for any industry enjoying growth is to handle it well. Chicken-wing franchisors need to work hard at “attracting the best qualified franchisees, and providing them with the necessary support structure and a long-term brand strategy,” he says.
Potential franchisees, meanwhile, must grapple with steep costs of entry – startup fees for Buffalo Wild Wings can run as high as $3 million – and the challenges of running a restaurant, from handling food to providing quality service.
Plus, with so many newfound wing varieties, franchisees will want to choose the concepts best positioned to, er, take off in their market.