After nearly 12 years under its new ownership, Buffalo Wings & Rings has emerged as a leader in its competitive segment with its unique club-level experience and smart approach to development.
Twenty-sixteen was a rough year for the restaurant industry. According to TDn2K’s latest Restaurant Industry Snapshot, overall same-store sales in the fourth quarter dropped to negative 2.4 percent. And so far, 2017 isn’t looking too much better. The MillerPulse restaurant index report showed a 1.5 percent decline in same-store sales this past January—the seventh decrease in the past eight months.
But despite that lackluster performance, there’s one brand that has managed to stand out from the pack for the better—Buffalo Wings & Rings, a 70-plus-unit Cincinnati-based full-service family and sports restaurant.
Same store sales and average unit volumes for the brand increased .5 percent in 2016. Meanwhile, other casual dining brands were struggling to keep up—some restaurants saw as much as a nine percent drop. For the rest of the restaurant industry, same-store-sales traffic has dropped for 15 of the past 16 months, with only February of 2016 ending on a positive note. And on a two-year basis, same-store sales were also down 0.6 percent—the worst in the post-recession era.
But despite the negative numbers for many casual dining restaurants, it’s clear that Buffalo Wings & Rings isn’t a brand that’s willing to follow the pack. Fueled by a defined branded message that’s positioned around an unparalleled “Club-Level Experience,” Buffalo Wings & Rings has successful carried the momentum from a strong 2016 into the first 31 days of 2017.
“In the early years, we worked diligently to establish our true identity and create a way to differentiate ourselves from others in the space. Then, through core consumer research, we found ownership in the club-level experience—our guests were adamant about having the same upscale experience they received at the game in a family sports restaurant environment,” said Diane Matheson, Vice President of Marketing for the emerging brand.
This brand positioning has provided Buffalo Wings & Rings with a clear blueprint for everything it does—from restaurant design and TV positioning and promoting the highest level of entertainment possible, to a keen attention to detail and ongoing menu innovation led by its own executive chef, Elliott Jablonsky.
STARTING THE GROWTH TREND EARLY
Forecasting oncoming shifts in the competitive restaurant market place, Buffalo Wings & Rings decided to build upon and perfect its growth strategy of diversifying its target franchisee prospects to include those with limited restaurant experience. By working with prospects who are on the hunt for the next great portfolio investment—a target traditionally dismissed by competitive restaurant franchises—Buffalo Wings & Rings awarded restaurant agreements to 17 operators in 2015 and 12 more in 2016.
“While we remain very calculated in the awarding of franchises, our model lends itself to taking on a sophisticated businessperson and evolving them into a thriving restaurateur,” said Buffalo Wings & Rings CEO Nader Masadeh, who learned of the strength in flexibility of operators while filming CBS’ Emmy Award nominated Undercover Boss. “We have carefully engineered our kitchen to operate more like a quick-service restaurant versus a full service. This simplifies a menu that’s often perceived as complex, and it provides a little more flexibility when it comes to deciding who ultimately leads our new restaurants.”
Filling its development pipeline before the casual dining segment took a hit was vital to Buffalo Wings & Rings propelling its growth forward during an industry-wide slowdown. It was during this time that the brand ramped up its marketing and product innovation, which resulted in the brand’s franchisees seeing increases. Meanwhile, other restaurants chose to scale back when sales fell.
“In investing, I have always taken the approach that when stock prices decrease, you buy. We take that same approach with Buffalo Wings & Rings. While other brands pull their foot off the accelerator, we press it down,” said Philip Schram, Chief Development Officer for Buffalo Wings & Rings.
With so many other restaurant brands in the marketplace, one challenge for Buffalo Wings & Rings has been locating ideal real estate. While this adds on more time to the opening timeline, the brand still opened seven new locations last year with comparable numbers also scheduled for 2017.
The cost of opening a Buffalo Wings & Rings is $1,244,000 to $3,085,000, depending on land ownership and type of unit. Although a large investment, franchisees are experiencing a strong ROI that continues to increase year after year, as reported in the brand’s Franchise Disclosure Document’s Item 19. And because the brand is dedicated to full transparency, interested candidates can request this information online.
NO CORPORATE DEBT, STRONG MANAGEMENT TEAM
When Masadeh and Schram bought the brand in 2005, the entrepreneurial duo committed to growing their brand the right way—and that was methodically with a strong annual P&L.
“This meant a no debt structure supported by a very calculated awarding of franchises to those who would be focused on being scalable and structured in their business modeling,” Masadeh said. “While some franchisee prospects may not be concerned with the debt structure of a company, we felt it was necessary to have structure that aligned with a very profitable, long-term focused growth brand.”
The brand’s franchisees agree with the management approach, including a best-in-class support model backed by a leadership and corporate team much larger than other brands of Buffalo Wings & Rings’ size.
“It starts with the support of the corporate team,” said Todd Fetter, owner of seven Buffalo Wings & Rings. “Without that, we wouldn’t be expanding. I’ve heard horror stories from other franchises about when you sign the franchise agreement—suddenly corporate is gone and you don't see them again. With Buffalo Wings & Rings, they listen to us when we give feedback. They are there from signing all the way through opening—and beyond. They are flexible but respectful of the brand standards. I can call up Nader and Philip, the owners, which I don’t think you can do at a Subway, Burger King, or other big corporate franchises. I do know that I’m not looking to move away from this brand. I know what we can do, and I know what the stores can do. I’ll continue to grow because of corporate and the ability of the team around us.”
WITH SUCCESS COMES RECOGNITION
Whether its Franchise Business Review calling Buffalo Wings & Rings a best franchise, or industry publications highlighting the brand’s strong growth, the industry is clearly favorable toward the Buffalo Wings & Rings’ continued movement. The same goes for its guests—SMG, a company that turns customer data into real, actionable insight, uncovered high guest satisfaction results through its measurements.
“Franchisees will only want to invest in our brand if they can see a strong customer positioning backed by true satisfaction,” Matheson said. “It is vital that we continue to innovate our product and our operations. This, in turn, will drive more customer sales.”
The family-friendly feel that resonates with the consumer also drives the brand’s franchisees.
“I’m in business with my family, we’re having fun, and we’re building something great for future generations of the Fetter family,” Fetter said. “I have no exit plan. In all my previous business ventures, I had a plan of when and how I wanted to get out. I have no thoughts of getting out or slowing down with Buffalo Wings & Rings."
2017 AND BEYOND
It’s clear that the brand’s system is working. With the opening of seven new restaurants and 12 signed franchise agreements, 2016 was the best year for Buffalo Wings & Rings since 2010. And the brand is already building on that momentum in the new year. In fact, Buffalo Wings & Rings is expected to open a record number of restaurants in 2017.
“Our goal for 2017 is to experience a more regular evolution when it comes to development. We want to see a consistent number of store openings each month, which will ultimately boost our system wide sales,” Schram told 1851 in a February 2, 2017 article. “Between our passionate franchisees and our excellent performance last year, I’m confident that the Buffalo Wings & Rings brand will continue to build on its strong momentum in 2017.”