Wingstop Stock

Wingstop Inc. (Wingstop) operates a fast casual chicken wings-focused restaurant chain worldwide.

The company offers classic wings, boneless wings, tenders, and chicken sandwiches, always cooked to order, and hand-sauced-and-tossed in 11 bold, distinctive flavors.

The company is primarily a franchisor, with approximately 98% of Wingstop’s restaurants owned and operated by independent franchisees.

Brand

The company offers its guests fresh, cooked-to-order wings, tenders, and chicken sandwiches with bold, layered flavors that touch all of the senses. The company complements its wings, tenders, and chicken sandwiches with fresh-cut, seasoned fries and fresh, hand-cut carrots and celery.

The company’s 11 flavor offerings, along with limited time offerings of special flavors, create a differentiated experience that drives demand across multiple day parts and occasions.

Strategy

The company’s key strategic priorities include sustaining long-term same store sales growth; maintaining best-in-class returns; and expanding the company’s global footprint.

Franchise

The company’s franchisees operate restaurants in 45 states and 11 countries and the U.S. territories. The company has rigorous qualification criteria and training programs for its franchisees and require them to adhere to strict operating standards. The company works hard to ensure that every Wingstop franchise location meets the same quality and customer service benchmarks in order to preserve the consistency and reliability of the Wingstop brand.

Franchisees (along with their managers) must attend and successfully complete a four-week training program prior to opening a new franchise restaurant. The company’s training program covers various topics, including Wingstop culture, food preparation and storage, food safety, cleaning and sanitation, marketing and advertising, point of sale (‘POS’) systems, accounting, and hospitality, among others.

All of the company’s franchise agreements require that each franchised restaurant be operated in accordance with the company’s defined operating procedures, adhere to the menu the company establishes, and meets applicable quality, service, health, and cleanliness standards. The company enforces the contractual requirements of its franchise agreements. The company has a broad and diversified domestic franchisee base.

The U.S. Franchise Agreements

The company enters into area development agreements with the U.S. franchisees, pursuant to which they are granted the right to develop restaurants in a defined market area.

The company generally updates and/or revises its franchise agreement on an annual basis, and as a result, the agreements the company enters into with individual franchisees may vary.

International Franchise Agreements

The company’s markets outside of the United States are operated by master franchisees with franchise and distribution rights for entire regions or countries. The master franchise agreement typically requires the franchisees to open a minimum number of restaurants within a specified period.

Suppliers and Distribution

The company’s franchisees are required to purchase all chicken, groceries, produce, beverages, equipment and signage, furniture, fixtures, logo-imprinted paper goods, and cleaning supplies solely from suppliers that the company designates and approves.

The company’s chicken supply is diversified both geographically and with a broad range of suppliers supporting the Wingstop system. The company designates sources for potatoes to ensure that they are grown to the company’s specifications. The company also requires franchisees to use its proprietary sauces, seasonings, and spice blends; and to purchase them and other proprietary products only from designated sources.

All food items and packaging goods for Wingstop restaurants in the U.S. are supplied through one distributor. There are 17 geographically diverse distribution centers, which carry all products required for a Wingstop restaurant and service all of Wingstop’s domestic restaurants. The distributor is contractually obligated to deliver products to the company’s restaurants at least twice weekly, and provides consolidated deliveries with a tightly controlled and monitored cold chain for perishable items. The distributor’s national distribution system has a documented recovery plan to handle any disruption.

Wingstop contracts directly with manufacturers to sell products to the distributor, who in turn receives a fee for delivering these items to the company’s restaurants. The majority of Wingstop’s highest-spend items are formula or fixed-contract priced. Wingstop has also negotiated agreements with its beverage suppliers to offer beverage dispensing systems, along with associated branded products, in all Wingstop restaurants.

Government Regulation

The company and its franchisees are subject to the U.S. Fair Labor Standards Act, the U.S. Immigration Reform and Control Act of 1986, the Occupational Safety and Health Act, and various other federal and state laws governing matters, such as minimum wage requirements, overtime, fringe benefits, workplace safety, and other working conditions and citizenship requirements.

In addition, the company is subject to the rules and regulations of the Federal Trade Commission (the ‘FTC’) and various state laws regulating the offer and sale of franchises.

Trademarks

The company has many registered trademarks and the Wingstop mark and Wingstop names and logos, in particular, have significant value and are important to the company’s business.

History

Wingstop Inc. was founded in 1994. The company was incorporated in Delaware in 2015.