Buffalo Wings & Rings continues to work to find the right franchisee, both in terms of financing and cultural fit.
“It’s not just anybody with a check. They need to share in our culture, our vision and share our values. We’re not going to just let anybody in our chain,” said Philip Schram, executive vice president of franchise development. “We are looking for brand partners with successful business experience and at least one operating partner with successful restaurant management experience.”
Buffalo Wings & Rings requires a minimum of $400,000 in working capital and a minimum of $1 million in net worth. The final decision to award a franchise is based on a combination of the applicant’s related experience and financial capability. The total investment will vary based on the site selected, equipment package, leasehold improvements, deposits, construction costs in the franchisee’s market and other factors.
“In the current economy, financing has become more difficult. This is why our franchise is perfectly catered to the multi-unit franchisee or corporation,” added Schram. “The cash flow is more readily available, as is the financing.”
Buffalo Wings & Rings is designed with simplicity in mind to ensure franchisees are able to focus on their customers. The atmosphere Buffalo Wings & Rings provides is fun and engaging, providing a family friendly place to come for fantastic food and to watch a game. As part of the team, franchisees are backed by the Buffalo Wings & Rings support system which includes: site selection, construction, real estate assistance, marketing assistance and financing assistance.
Franchisees can also get funding from many commercial banks. The most important thing they will be looking at is your credit rating. Bankers will favor businesses with brand names, like Buffalo Wings & Rings, and a long track record of consistent cash flow. Franchisees will need to put down 20 percent of the cash needed from personal funds. If conventional lenders turn you down, you can look into an SBA-backed loan. Another option is the government-lending program backed by the Department of Veterans Affairs. The program, called Patriot Express because of its relatively fast approval time, awards loans up to $500,000 to active-duty military preparing to transition to civilian life, as well as to spouses and survivors of veterans. These loans come with the SBA’s lowest rates.
Husband-and-wife team Al and Mary Hauck decided to open a Buffalo Wings & Rings in Minot, North Dakota. They invested approximately $2 million to buy the land, building and convert the site into a full-service restaurant. They cashed in their assets and raised several hundred thousand along with an SBA-back loan to finance the rest.
“If the restaurant failed, we would have been bankrupt,” said Al Hauk. “But we believed in the brand and fortunately for us the restaurant has been a huge success. We are now hoping to open several more locations.”
The franchisor provides prospective operators solid financials - mostly presented in Item 19 in its franchise disclosure document – and an opportunity to get feedback from existing franchisees and their experiences. The company showed a 13 percent growth over the last few years and the store is reporting between $2-2.5 million dollar profits annually.
Startup Costs, Ongoing Fees and Financing
Total Investment: $968,500 - $2,784,500
Franchise Fee: $5,000 - $35,000
Ongoing Royalty Fee: 5%
Term of Franchise Agreement: Term of agreement not renewable
Net Worth: $800,000
Liquid Cash Available: $300000