Buffalo Wild Wings (BWLD)

Hoglum (91.34) Submitted: 1/12/07 11:41 AM : Start Price: $27.28 BWLD Score: 41.52

Buffalo Wild Wings growth is tremendous yet not out of control. I was looking at their standards for franchising and was quite impressed by the discipline they have adopted. Too many times in my life I've seen growth at any cost. Increase revenue, number of stores, number of whatever the gauge of the day may be. I believe BWLD has much better standards of quality than their competition while at the same time being aggressive in achieving the growth rates necessary to become a colossal food chain. Let's take a look at some of their criteria for franchising. The minimum unencumbered liquid assets required are $600,000 and a net worth $1.8 million to open two stores. Buffalo Wings and Rings requirements are an estimate of $389,000 to $498,500. Their website reads somewhat vague and even states, "we consider the personal net worth of each party and the capital liquidity". So what about them? Is it subjective?
The "trade area" necessary to open a Buffalo Wild Wings must have a minimum population of 25,000 within a 3 mile circle, 80% or greater between the ages of 20 and 50, $30,000 or greater median income, and 20% college educated. Looking at Hooters, they want 100,000 - 150,000 people within a 5 mile radius for 3-5 restaurants. I guess if you build it, they will come. Hopefully they'll have money too.
Buffalo Wild Wings franchises "must at all times have a full-time, qualified, experienced General Manager, whom we must approve in advance. The GM must have direct experience in unit-level management in the casual dining environment. The GM's responsibility is that of a senior executive with multi-unit restaurant management experience." The competition, WingZone, states, "Restaurant experience is helpful, but not required for single-unit operators." And also, "Prior to opening, the franchisee and management personnel attend a twelve-day training program at WingZone University in Atlanta, GA." Don't forget your 12 day diploma on the way out.
I don't know a whole lot about franchising, but after reading several websites of BWLD's competition, it struck me that they're tight about opening their stores. This is not done willy-nilly as some of the others seemed. The competition read at times almost as if they didn't know their own criteria. One competitor stated, "there are no provisions for financing in the estimates", while BWLD said, "We also require that no more than 80% of the start-up costs be leveraged." BWLD's statement simply makes me think they have their act together better than the rest. They know what they want and they accomplish their desired results. This authoritative approach gives me the inclination that they will outperform the competition and thrive above and beyond most others.

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