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Review of the BW3 Franchise Opp and Startup Costs

Founded in 1982, Buffalo Wild Wings, or BW3, has become one of the leading social gathering places in a community to watch sports, enjoy some wings, and have a good time. With a memorable national advertising campaign, the original sports bar that James Disbrow and Scott Lowery opened was called Buffalo Wild Wings & Weck, which is how the BW3 moniker came about. They opened their bar because they couldn’t find a place that served the wings they craved so much.

BW3 began franchising in 1991 and as of 2013, there are over 500 different franchise locations around the world. There’s also an additional 400+ stores that are currently owned by Buffalo Wild Wings. What makes this an attractive franchising opportunity is the fact that not only are wings served with 14 unique sauces, but a full menu is also offered that includes, ribs, sandwiches, and burgers.

In other words, the business model of this chain of restaurants is to help people have a good time the best way they know how.

What Are the Requirements to Become a BW3 Franchisee?

Buffalo Wild Wings recognizes that an extensive investment must be made in order to establish a sports bar in a community. They also recognize that a failure of a franchise to thrive and grow will create a negative situation for the nearly 1,000 current locations of BW3. That means anyone wanting to become a franchisee of this organization must have some extensive finances so that stability in this highly competitive market can be achieved.

To that extent, any potential franchisee must have a minimum net worth of $1.5 million. Out of that net worth, half of it, or $750,000, must be a liquid cash asset. That means stocks, bonds, mutual funds, or other assets that can be immediately sold for cash in addition to saved cash must be consistently available. More importantly, absentee ownership of a BW3 franchise is not allowed. Management groups are allowed for owners who wish to operate more than one location and 50% of BW3 franchisees do own at least 2 locations.

The initial franchise fee for a BW3 location is $40,000. It is a 20 year lease of the name that also requires a 5% ongoing royalty fee to maintain the franchise. The minimum investment of a new franchise to date has been more than $1 million, with the highest start-up costs recorded at over $3 million for just one location.

BW3 Is Focusing on Area Development

Because there is so much interest in the BW3 brand right now, Buffalo Wild Wings has created what they call an “Area Development Minimum” when it comes to be a franchisee of the name. That means a mandatory minimum of two locations is required to start a new franchise as of 2014. In practical terms, that means all of the above stipulations on franchise fees, net worth, and cash liquidity must be doubled at the time of this writing to qualify.

BW3 also requires that a maximum of 80% of a franchisee’s start-up costs can be leveraged. This means that at least 20% of the start-up of both franchise locations must be in a liquid cash form. Considering the minimum amount to start-up a location is $1.2 million, a new franchisee would be required to finance $480,000 of start-up costs through liquid cash assets at minimum. That is in addition to the ongoing cash liquidity requirements as well.

BW3 Also Requires Traffic Studies

Buffalo Wild Wings also has requirements about where a location of a franchisee’s restaurant may be located. The preference is that they are near large retailers that bring in large amounts of traffic daily, but the primary stipulation involves front of store traffic and side of store traffic. A location must have a minimum of 25,000 in daily traffic counts at the storefront and 10,000 in daily traffic counts at the side of the store. Without these verified traffic counts, a franchising agreement cannot proceed.

A minimum community population of 40,000 is also required for store placement. There are also median household income stipulations and 80% of that population must be within a targeted age range that is dictated by Buffalo Wild Wings.

Unlike other organizations, BW3 will not help you negotiate your lease, nor will they be responsible for your lease in any way. No guarantees are provided.

How Does BW3 Help Franchisees Succeed?

The primary method of success at a Buffalo Wild Wings comes from the quality of service that each customer receives. To insure that each customer receives the best experience every time that they walk through a franchisee’s doors, Buffalo Wild Wings has established certified training restaurants where prospective franchisees will work, train, and learn the BW3 method of service over the course of 7 weeks.

In addition to the extensive training, an extensive regional and national marketing campaign currently exists that will often include co-op advertising. With strategically placed commercial airings during sporting events and other high viewership times, Buffalo Wild Wings insures through memorable advertising and attractive food products that people will want to visit a local location – especially if they have never done so before.

Buffalo Wild Wings also provides franchisees with ongoing supports on operations, will evaluate the effectiveness of a franchisee to help improve local processes, and allows franchisees to participate in local purchasing cooperatives to help reduce overhead costs. The minimum number of employees required to run a location is 40, but as many as 60 employees can be required depending on the size of the location.

BW3 might be a difficult franchise to start-up for the average business owner, but the potential for profits makes the difficulty worthwhile. Buffalo Wild Wings is a growing brand with growing influence in their target market. If you want to break into the restaurant business with a proven commodity, there may be no better branding to associate yourself with right now than BW3. If you can meet the financial and location restrictions, then contacting them about your interest should be done immediately.

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