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UK, Malaysia operators freshen up Wingstop


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The first Wingstop in Malaysia is drawing big—and enthusiastic—crowds hungry to try the popular U.S. brand.

The lyrics of Rick Ross have helped chicken chain Wingstop gain cult status, particularly for its lemon pepper wings, a favorite of the rapper who’s also a franchisee with a couple dozen locations.

Over the airwaves and across the Atlantic, it’s verses such as “Wingstop owner, lemon pepper aroma,” and “Major real estate, them Wingstops must be doin’ nice/Trappin’ lemon pepper, got me movin’ two a night,” that first piqued the curiosity of Tom Grogan. A Rick Ross fan and co-founder of real estate investment group Lutti London, Grogan was looking to get into the restaurant business and Wingstop, he says, turned out to be the right fit.

“Demand for fast casual dining is increasing here in the UK,” says Grogan. “The marketplace in the UK, we don’t have a domestic chicken brand that sits in the middle of fine dining and fast food. We saw a void there that the brand nicely fits in.”

Tom Grogan

Tom Grogan helped launch Lemon Pepper Holdings to bring Wingstop to the UK.

Grogan, along with Rita Sharma, founder and CEO of luxury travel empire Bestattravel.co.uk, and Saul Lewin and Boris Kofman of London-based V2 Leisure, formed Lemon Pepper Holdings—yes, the name was inspired by Rick Ross’ love for the flavor and it’s also the group’s favorite—and signed a master franchise agreement earlier this year to develop 100 locations in the United Kingdom over 12 years.

“We’d always felt like Europe and the UK was a gateway for us,” says Larry Kruguer, Wingstop’s president of international. “There’s a lot of demand, but few operators who could do what we do, be us in that market.”

Lemon Pepper Holdings, which also has former Jamie Oliver Restaurant Group exec Christian Solanot in its arsenal as operations director, is one such operator, notes Kruguer.

“What caught our attention was they were young entrepreneurs who’d been very successful in real estate and had backed several high-profile restaurants in London,” says Kruguer. “While they didn’t necessarily have the experience of developing fast food, they demonstrated strong business acumen and passion.”

“We’re looking at this from quite a fresh point of view,” agrees Grogan of how LPH will roll out the Wingstop brand with some design adaptations for a more appealing dine-in experience, including partnering with an online music platform and giving its target millennial customers more visual aspects. Early consumer research indicates 75-80 percent of business will be dine-in, a flip from U.S. locations where 75 percent of sales are from takeout orders.

Larry Kruguer

Wingstop’s President of International Larry Kruguer.

“We’re young, fresh, nimble partners and we’re looking to use that,” Grogan continues. “We have to do something different here to stand out.”

Allowing for adaptations and “understanding there are those local nuances” is key to Wingstop’s international strategy, Kruguer says, a philosophy that’s playing out now in Malaysia.

Just two weeks before the announcement with LPH, Wingstop added another international market to its list, signing an agreement with The Great Fundamentals group to open 30 franchise locations in Malaysia over the next six years. It’s a strategic expansion of the brand in Southeast Asia, as the Dallas, Texas-based franchise already has a presence in Indonesia, Singapore and the Philippines.

Only about four months separated the signing of the agreement and the opening of the first restaurant in The Curve shopping mall in Mutiara Damansara in Petaling Jaya, Selangor, “probably a record in the Wingstop system,” says lead managing partner Siswanto. And it’s where the “tweaks” to the concept, as Siswanto calls them, are proving fruitful.

“Two of the most major tweaks we did were, one, we market and position that ‘Wingstop is more than just about wings.’ Two, we moved away from counter service because customers here immediately perceive you as a fast food joint the moment you make them order and pay first,” explains Siswanto, who goes by a single name.

Malaysian consumers typically think of chicken wings as snacks, says Siswanto, so to broaden Wingstop’s appeal The Curve location also offers drumstick and rice box combos and chicken burgers, along with the wings and sauces. The service model adaptations took some more research, including through focus groups, before the group landed on a hybrid model where customers order at iPad stations, receive a “table tracker” and food is sent to the table.

Siswanto

Siswanto’s The Great Fundamentals group plans to bring 30 Wingstops to Malaysia.

“When they are done eating, they pay at the counter,” says Siswanto. “It’s half service, so to speak.

“The fast casual space does not really exist in Malaysia yet,” he continues of the reasoning behind the change. “And our price point is in between fast food, such as KFC, and casual dining restaurant such as Nando’s. We strongly believed that if we stick to the counter service model that customers would perceive us as an ‘expensive fast food restaurant.’”

Before launching The Great Fundamentals, Siswanto founded AUM Hospitality, a franchisee of Johnny Rockets and Quiznos, along with several local brands. After selling that group to large regional retail player Parkson Corp. he decided to form the “GreatFUN,” as he calls it, and in addition to Wingstop has Majapahit, a restaurant and bar, and Fuze, a nightclub.

Wingstop, he says, resonates well with the local market as “chicken is the only protein that is consumed by people of all races and religions in Malaysia,” and “it’s not fast food.”

“It’s fast casual,” he continues. “Nothing sits on the heat lamp, everything is made to order. In that regard, our proposition is rather unique in the Malaysian market—you usually only see fast food and full service or casual dining restaurants here. There’s a good opportunity to fill the gap between the two.”

Challenges do exist, however. Malaysia is still recovering from what Siswanto describes as the “triple whammy” that was 2015: an oil price crash followed by the introduction of a goods and service tax and then a free fall of the country’s currency.

“Our biggest challenge is survive in this new reality where costs remain high while spending remains weak,” says Siswanto. “Pricing becomes the biggest determinant in consumers’ decision-making process. … But hey, people still gotta eat.”

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