Buffalo Wild Wings to-go restaurant interior.
Buffalo Wild Wings

Buffalo Wild Wings' is going deep into its counter-service potential.

Inspire's Restaurant Empire is Only Getting Bigger

And it's going to include 100 Buffalo Wild Wings' 'Go' stores by year's end.

Aaron Allen, CEO and chief global strategist of his eponymous Aaron Allen & Associates, called Inspire Brands, “the fastest-growing foodservice company in the history of the world.” And in an era where U.S. acquisitions are driving nearly 30 percent of revenue growth among publicly traded restaurant companies, consolidation and multi-brand targets are becoming only more common corners of the M&A discussion. FAT Brands spent $892.5 million in 2021 to spread to 17 concepts and 2,300 franchised and company-run stores. Restaurant Brands International forked up $1 billion to add Firehouse Subs to its lineup alongside Popeyes, Tim Hortons, and Burger King. Panera Brands sprung up in August as a combination of Caribou Coffee, Einstein Bros. Bagels, and the cafe giant, a 4,000-location suite with 110,000 employees.

While scaling through acquisition is hardly new to restaurants, some of the potential today is. The ability not just to complement and spread occasions through brands, but to mix tools and digital access and let those strengths spill over. When Inspire was formed February 2018 following Arby’s Restaurant Group’s $2.9 billion purchase of Buffalo Wild Wings (it now also includes Sonic Drive-In, Rusty Taco, Jimmy John’s, Dunkin’, and Baskin-Robbins) the guiding strategy was to develop a family of highly differentiated and complementary brands. Hotel companies provided perhaps the best comp, and how they web out from a base of power. The connection fit given CEO Paul Brown hailed from Hilton Worldwide. He told QSR in Inspire’s infancy it planned to mirror the sector’s framework of driving concept value from within a collection of brands. Put differently, independent concepts that pull from a center of excellence.

This is, without question, one of the lures triggering consolidation in the shadow of COVID-19—the ability to pool resources and leverage collective scale to weather challenges. Everything from supply chain to digital and native investments. For example, RBI CEO Jose Cil said one of the runway zones for Firehouse in joining the company was the ability “to accelerate digital through our technology investments that we've made over the last many years with over 200 engineers in our team.”

RBI boasts an in-house stack, including loyalty programs and a CRM engine. It’s poured resources into white-label delivery alongside partnerships with third-party vendors. “To really start to bust it out and increase development, it takes a well-resourced partner with not just a matter of capital resources, but expertise, talent, and scale,” Firehouse CEO Don Fox told QSR.

There’s also the natural extension of bringing new opportunities to an established franchise network. RBI is just now ramping up Popeyes internationally and promises the same for Firehouse. Of the company’s 27,667 units, close to 17,000 exist outside the U.S.

As Allen also pointed out: 85 percent of global foodservice growth originates outside the U.S.

“There are very few independent companies really in that [top 500], In-N-Out Burger would be one,” he says. “But there’s a lot of much bigger guys that are behind the scenes that are pulling the strings.”

And Inspire wasted no time becoming one of them. As noted, however, there’s more whitespace than pre-COVID as the notion of how brands complement one another burst open.

Inspire recently cut the ribbon on its first Jimmy John’s-Dunkin’ co-brand. It also debuted the “Alliance Kitchen” in Atlanta, the first ghost kitchen owned and operated by a multi-brand company.

Based in Atlanta, Alliance Kitchen allows customers to order through a particular brand's online ordering platform or via third-party apps.

Inspire Brands

A ghost kitchen with multiple brands, from one company? This is hardly going to be an outlier in the coming years for restaurants.

Food from each of Inspire's restaurants is on display (except Dunkin'), which is where this opportunity splits apart from pre-COVID days. One case study in action—for fast casual Rusty Taco, it was the brand's first entry into the Atlanta market.

The interior features a segmented kitchen and cross-trained workforce designed to fulfill orders across multiple brands. Compared to five stand-alone restaurants, Alliance's setup reduces labor requirements by 54 percent, cuts square footage needs by 19 percent, decreases equipment costs by 45 percent, and slices energy consumption by more than 50 percent. Catering to third-party delivery drivers, the ghost kitchen also touts a lounge with heated pickup lockers, free WiFi, charging stations, and complimentary Dunkin' coffee.

In addition to offering convenience and greater access to well-known brands, Alliance has the ability to serve as a testing ground for new labor models, kitchen layouts, and menu items. Buffalo Wild Wings will use the ghost kitchen to test Flippy Wings, a robotic chicken wing frying solution from Miso Robotics that increases food production speeds by 10–20 percent. After experimentation concludes in Alliance, Inspire said the robot will move to a standalone Buffalo Wild Wings restaurants in 2022.

Clearly, this is only early innings of how Inspire’s network could evolve now that the digital gates have swung open—Stephanie Sentell, Inspire's senior vice president of restaurant operations and innovation, told CNBC that the company's digital sales have more than doubled to excess of $6 billion.

Inspire said Monday it “experienced a transformative 2021,” as the company completed the integration of Dunkin’ Brands. (It purchased Dunkin’ and Baskin-Robbins in December 2020 for $11.3 billion—the largest restaurant deal dollar figure since 3G Capital LP, Burger King Worldwide Inc., acquired Tim Hortons for $12.64 billion in August 2014. Panera Bread follows at $7.5 billion, a price paid by JAB Holdings in 2017).

Citing “the benefits of this integration and Inspire’s commitment to a tightly integrated shared services model,” the company generated more than $30 billion in total global system sales last year. Now the second-largest restaurant group in the U.S.—that became true when Dunkin’ closed—Inspire opened more than 1,300 restaurants globally in 2021. More than 500 of those came in the U.S., and the company presently sits at 22,000 locations stateside and nearly 32,000 around the globe.

“Over the last year, our team has worked tirelessly to leverage each brand’s growth potential and implement programs with the goal of making them stronger than they would be on their own. This commitment has contributed to our development success this year while positioning us to further accelerate growth in 2022 and beyond,” Brown said in a statement. “It’s never been a better time to franchise with Inspire Brands as each of our brands have a significant runway for growth domestically and internationally.”

To the earlier, broader point, Inspire said its “differentiated group of concepts has allowed its franchisee network to diversify its portfolios with complementary brands, all backed by the strength of the Inspire platform.”

Essentially, Inspire continues to foster cross-brand growth with collective scale and resources (finance, tech, real estate, etc.).

While Inspire, a private company, did not divulge exact figures, it said it “delivered record top-line results across all brands” last year.

This manifested through modular constructions, drive-thru-only models (Jimmy John’s), and digital-only restaurants (Dunkin’) among traditional builds.

Inspire Brands
Jimmy John's

From a Jimmy John's-Dunkin' co-brand to a Jimmy John's without a dining room, it was a busy year of development for Inspire Brands.

In regards to Dunkin’, the brand’s first digital-only store opened in August on Beacon Hill. Called “Dunkin’ Digital,” it fulfills orders placed through the brand’s app or at one of two in-store kiosks. The food is then picked up at a designated area.

At the time, Inspire said the number of on-site employees for this unit matched that of traditional Dunkin’ locations. Employees just diverted focus to “fulfilling orders with heightened speed and accuracy.”

Inspire is also on the verge of dialing up Buffalo Wild Wings’ quick-service growth. In March 2020, Inspire unveiled Buffalo Wild Wings’ “GO” concept, an 1,800-squart-foot design featuring a walk-up counter, digital menuboards, and a small seating area with TVs to entertain customers while they wait for their order. Also, guests who order ahead can pick up from a heated locker.

It headed first to Sandy Springs, Georgia. There’s others in Tucker, Georgia; Melrose Park, Evergreen, and Des Plaines, Illinois; and Glendale, Colorado.

While unclear what the total count is today, Inspire said Monday it expects to open 100 by year-end 2022.

Buffalo Wild Wings

Buffalo Wild Wings took its learnings from COVID shutdowns and turned them into a to-go concept.

This model also comes a couple of years after Buffalo Wild Wings rolled a B-Dubs Express counter-service model in Minnesota. The 2,500-square-foot concept offers a dining room that seats 35–40 people and gives customers the option of ordering ahead or dining in. There’s only one Express spot, in Hopkins, Minnesota.

Traditional Buffalo Wild Wings are between 4,000 and 7,000 square feet and provide 200 seats or more.

Going back further, the brand has plenty of roots in quick service. Founded in 1982 (it began franchising in 1990), it originally launched as a “quick-casual” restaurant where customers ordered at a counter and had their food delivered to their table.

In 2002, the company shifted focus to the full-service sports-bar concept, which helped Buffalo Wild Wings accelerate unit growth and average-unit volume. That's what sparked rapid expansion, but the landscape has adjusted years in a matter of months during the COVID window, from labor costs to construction delays to how customers are getting their food.

Across the fleet, Inspire signed nearly 800 new restaurant commitments across all brands in 2021 and opened more than 800 stores outside the U.S. Dunkin’ debuted its 300th location in Europe in October.

Dunkin’ also brought its 1,000th Next-Gen store to market three years after the concept’s launch in Quincy, Massachusetts. Dunkin’ Next-Gen restaurants feature a dedicated mobile order pick-up area so guests who order ahead via Dunkin’ App can get in and out of the restaurant faster. Guests can track the status of their mobile order placed for in-store pick-up via a digital order status board, too. At select builds, Dunkin’ also offers a dedicated drive-thru lane for mobile order pick-ups. 

There’s also a tap system, serving a variety of consistently cold sips, such as iced coffee, iced tea, Cold Brew and Nitro-Infused Cold Brew (a Next Gen exclusive.)

“We see a strong runway for continued growth for the brand through restaurant footprint and omnichannel throughout Europe,” the company said.

To note, Arby’s, in January, signed an exclusive development agreement with Shahia Foods Limited Company, one of the largest Dunkin’ licensees globally, for “significant expansion” across the Kingdom of Saudi Arabia. This agreement marked the brand’s entry into Saudi Arabia and largest expansion into the Middle East to date. Shahia Foods operates more than 500 Dunkin’ locations across Saudi Arabia, Bahrain and Germany