An indication is seen on a Buffalo Wild Wings restaurant on November 28, 2017 in Miami, Florida.
Joe Raedle | Getty Images News | Getty Images
Buffalo Wild Wings opened its a hundredth Go location on Wednesday in Latest York City, 4 years after unveiling the quick-service offshoot of its sports bar chain.
BWW Go sells the chain’s famous chicken wings and other classic menu items, but its locations are smaller and limited to delivery and takeout orders. For the sports bar chain, it is a option to make its brand much more ubiquitous, while offering customers more convenience.
Since 2018, Buffalo Wild Wings has been an element of Encourage Brands, which is backed by private equity firm Roark Capital. Initially formed after a merger between BWW and Arby’s, Encourage has since added other chains including Sonic Drive-In, Jimmy John’s, Dunkin’ and Baskin-Robbins.
Encourage is reportedly considering going public in late 2024 or 2025 and looking for a valuation of $20 billion.
BWW is the second-largest U.S. casual-dining chain within the bar and grill category with a market share of 14.4%, trailing only Dine Brands’ Applebee’s, in line with Barclays research. It’s carved out a chicken wing dominance amongst its closest competitors, serving greater than 3 million gallons of ranch and blue cheese dressing in 2023.
However the casual-dining segment has struggled, with publicly traded rivals like Chili’s and Red Robin perpetually stuck in turnaround mode.
Buffalo Wild Wings’ revenue fell 1% in 2023 to $2.32 billion, in line with franchise disclosure documents. A quick-growing spinoff like Go could make Encourage more enticing to potential public market investors.
Opening a standard Buffalo Wild Wings location requires anywhere from $2.44 million to $4.83 million in initial investment, depending on the restaurant’s location and other aspects, in line with franchise disclosure documents. As compared, a Go location will set a franchisee back roughly $560,000 to $1.05 million.
While a BWW sports bar is around 6,000 square feet on average, a Go location is roughly 1,500 square feet. Meaning cheaper real estate that is faster to construct and easier to operate.
“With the flexibility to suit into smaller footprints, it has the popularity of a longtime brand with the unlimited potential of an emerging one,” said Jack Litman, president of the Munson Group and franchisee of the a hundredth Go location.
Taking up takeout
The Go format is primarily meant to achieve the shoppers who sometimes don’t need to ditch their couches for a sports bar.
Before the pandemic, off-premise orders accounted for 15% of Buffalo Wild Wings sales, in line with John Bowie, brand president at BWW. Now, takeout and delivery make up roughly a 3rd of the BWW’s sales.
“This was a possibility for us to take the takeout portion of the business, put it inside a freestanding unit and put it very conveniently positioned to where our customer is,” Bowie told CNBC.
As of Wednesday, BWW has branded its entire off-premise business under the Go name, too.
Buffalo Wild Wings Go
Courtesy: Buffalo Wild Wings Go
BWW’s off-premise growth mirrors that of the broader chicken wing category, which soared in popularity through the pandemic. Like pizza, chicken wings travel well when delivered, but in addition they offer more variety, with an array of sauces and rubs to modify up the flavour.
While pizza chains like Domino’s and Pizza Hut have seen their sales struggle because the pandemic as pizza fatigue sets in, chicken wings have not slowed down in the identical way.
For instance, fast-casual chain and stock market darling Wingstop has reported strong same-store sales growth for the last 12 months and half, bucking industry trends. Bernstein analyst Danilo Gargiulo wrote in a February research note that Wingstop has the potential to be “the following Domino’s.” (Roark Capital previously owned Wingstop but exited its investment a 12 months and a half after the chain’s IPO.)
Other chains are actually also seeking to chicken wings to bolster their sales. Restaurant Brands International’s Popeyes added chicken wings to its menu permanently last 12 months.
BWW Go also gives the chain the chance to compete higher with its fast-food rivals. The chain can tweak its limited menu to appeal to the shoppers in search of a convenient dinner.
BWW Chief Marketing Officer Tristan Meline told CNBC in the longer term the chain may lean into offering more special sauces, menu items or deals to Go customers.
Growing interest
BWW plans to maintain adding to its current footprint of greater than 1,300 sports bars, but Go might be opening locations at a much faster rate, in line with Bowie.
“It takes a protracted time to get a sports bar approval and to construct a sports bar, but we have already seen with the 60 franchisees we now have now that they will start stamping these out, and the expansion might be very exciting,” he said.
BWW already has nearly 600 commitments from franchisees to open additional Go locations. About 85% of its operators also franchise with other chains owned by Encourage, like Dunkin’ or Arby’s.
However the calls to franchise are also coming from outside of Encourage; Bowie said that he’s been hearing from large franchisees that already operate multiple concepts.
The chain plans to open one other 50 Go locations by the tip of the 12 months.
