In recent years, fees charged by franchise brands have increased significantly without additional support. Buffalo Wings & Rings, a growing 80-plus unit global elevated sports restaurant brand, is bucking the industry trend and vowing not to continue charging franchisees investing in growing with the brand. With that mindset, the company announced their “One Franchise Fee for Life” franchise development incentive.
“We have been listening to the multi-unit operators both in and outside of our organization. They have repeatedly told us that they don’t like constantly paying a franchise fee when they continue to open new locations. Basically, don’t nickel and dime me,” says Dan Doulen, director of franchise development for Buffalo Wings & Rings. “As a company that understands that franchisees expanding is a positive for the entire system, we wanted to create an incentive that resonates with the message that we are in this together.”
Buffalo Wings & Rings’ “One Franchise Fee for Life” franchise development incentive simplifies the franchise fee for new and expanding operators. Franchisees will pay a one-time $40,000 fee, allowing them to open as many approved locations as they please within a development schedule and within current strategic growth areas.
This development incentive will end by December 31.
“Franchise brands make the bulk of their revenue from a royalty stream fueled by successful franchise operations. We feel that by strengthening the entry point to our brand, we can show strong operators that we are committed to their success, not focused on additional fees,” says Philip Schram, chief development officer for Buffalo Wings & Rings. “Many franchise brands have almost as many franchisees as units. How much support can you give a group like that? At Buffalo Wings & Rings we think that a limited number of franchisees owning multiple units is a win-win for everyone and allows our corporate team to focus more resources on fewer franchisees.”
While the incentive is designed for consistent growth within the system, Schram notes that they must continue to be protective as to who is allowed to join the brand. Those interested in the Buffalo Wings & Rings franchise opportunity should have liquid capital of $300,000 or higher and a net worth of at least $1 million. The investment to open a Buffalo Wings & Rings franchise ranges between $1.2 million and $3 million. All prospects will be taken through the normal financial and operational approval process before the incentive is awarded.
Under the “One Franchise Fee for Life” franchise development incentive, the franchisee will be able to secure a single defined market but will not be able to secure future agreements for future markets. If the franchisee would like to secure future markets they will need to sign an area development agreement. In order for the incentive to continue, a franchisee will need to open his or her first location within 24 months, a second location within 18 months, a third within another 18 months, and then every location beyond the first three must be opened within 12 months. Current franchisees can take advantage of the incentive only if they do not currently hold a franchise agreement that they have not moved forward on.
In 2014, Buffalo Wings & Rings introduced a $30,000 reduction of the franchise fee, which sparked an increase in franchise agreements to 17 from three in the previous year. The company is committed to listening to operators and only offering incentives that meet the needs of qualified investors when the timing is right to spur continued growth.