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Wing-Stop Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for a Wingstop Franchise?
To open a Wingstop franchise, you will need to budget between $259,400 and $912,100 for the initial investment, which includes a franchise fee of $20,000. Additionally, you should have cash reserves of $30,000 to $40,000 and a net worth between $350,000 and $1,000,000. Understanding these financial commitments is crucial for prospective franchisees as they prepare to enter the competitive food service market.
What Are the Ongoing Fees Associated with a Wingstop Franchise?
Wingstop franchisees are required to pay a royalty fee of 6% on gross sales, along with a marketing fee of 5.30%. These ongoing fees are essential for maintaining brand presence and operational support. It is important to factor these costs into your financial projections, as they will impact overall profitability and cash flow management in your franchise operation.
What Is the Average Revenue Potential for a Wingstop Franchise?
The average annual revenue per Wingstop unit is approximately $1,816,486, with a median revenue of $1,669,009. However, revenue can vary significantly, with the lowest reported annual revenue at $442,869 and the highest reaching $5,021,415. This wide range highlights the importance of location, management, and marketing strategies in achieving financial success within the franchise model.
What Is the Expected Breakeven and Payback Period for a Wingstop Franchise?
Wingstop franchisees can expect to reach breakeven within approximately 18 months of operation, with an investment payback period of around 12 months. These timelines are crucial for potential franchisees to understand, as they provide insights into the financial viability and speed of return on investment, helping to inform their decision-making process.
Wing-Stop Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Wing-Stop Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 1363 | 1541 | 1727 |
| Net Change YoY | 178 | 186 | |
| Franchised Units | 1327 | 1498 | 1678 |
| Net Change YoY | 171 | 180 | |
| Corporate Units | 36 | 43 | 49 |
| Net Change YoY | 7 | 6 |
Initial Investment
The initial investment for a Wingstop franchise ranges from $259,400 to $912,100. This includes the initial franchise fee of $20,000, which is a necessary cost to start your franchise journey. Additional costs can vary significantly based on location, build-out requirements, and operational needs.
Ongoing Fees
Wingstop franchisees are required to pay a royalty fee of 6% of gross sales. Additionally, there is a marketing fee of 5.30% to support brand promotion and advertising efforts. These ongoing fees are essential for maintaining brand strength and operational support.
Financial Performance
The average annual revenue per Wingstop unit is approximately $1,816,486, with a median revenue of $1,669,009. The revenue can vary widely, with the lowest reported annual revenue at $442,869 and the highest reaching $5,021,415. This performance metric is crucial for potential franchisees to assess profitability.
Breakeven and Payback
The typical breakeven time for a Wingstop franchise is around 18 months, indicating the time it takes to recover the initial investment. Franchisees can expect to achieve a payback on their investment within approximately 12 months, making it a potentially lucrative opportunity for those who manage their operations effectively.
Franchise Growth
Wingstop has shown consistent growth in the number of franchised units, increasing from 1,327 in 2021 to 1,678 in 2023. This expansion reflects the brand's popularity and the increasing demand for its offerings, suggesting a strong market presence and potential for future growth.
Corporate Structure
Wingstop, Inc. operates both franchised and corporate units. In 2023, there are 49 corporate-owned locations alongside the 1,678 franchised units. This dual structure allows for a blend of corporate oversight and franchisee autonomy, fostering a collaborative environment for brand development and operational success.
Frequently Asked Questions
The initial investment to open a Wingstop franchise ranges from $259,400 to $912,100. This includes the franchise fee, equipment, and other startup costs.