From one to nine B-Wings & Rings, plus ‘lots of adventure’ at Two Men
Illustration by Jonathan Hankin
Todd Fetter concedes he and his family have been winging it since 2012. That was the year they opened the first of nine Buffalo Wings & Rings, now spread across Ohio, South Dakota, Nebraska and Minnesota. None of the seven family members family had ever operated a restaurant.
But Fetter, a born-entrepreneur who owns an industrial manufacturing business and farms 3,000 acres of corn and soybeans in central Ohio, is apparently someone who can’t sit still.
When Fetter was looking to franchise in 2009, he eyed Buffalo Wild Wings. But the overall investment was too high, he concluded. He took his family to the Cincinnati outpost of Buffalo Wings & Rings (like BWW, founded in Ohio). Everyone agreed the food was delicious. Nonetheless, it took the Fetters three more years to get financing to open their first restaurant, in Piqua, a small town (population 21,000) in central Ohio.
The Fetters then went on a roll—opening seven more restaurants by April of this year. (The ninth was scheduled to open, in Mankato, Minnesota, this summer). “In less than two years, we went from one restaurant to eight,” he said, still sounding surprised at the achievement.
As of June, the family’s most recent Buffalo Wings & Rings was in Aberdeen, South Dakota (pop. 27,333)—next to the very first Super 8 Motel. “We bought the ground from the grandson of the founder of Super 8 hotels,” said Fetter, adding he’d like to expand the wing concept in the upper Great Plains and is looking for a site in Sioux Falls.
To finance his initial growth, Fetter borrowed from regional banks, using his farm as collateral. Lately, however, he’s turned to community banks for loans. “The South Dakota location, for example, was financed by First State Bank of Roscoe, in Roscoe, South Dakota,” he explained. “You sit down with the guy who owns the bank. You have the decision-maker right in front of you. With the bigger banks you never talk to the decision-maker.”
Investing in a Buffalo Wings & Rings doesn’t come cheap. It costs from $1.32 million to $2.44 million to open one, notes the company’s franchise disclosure document.
Franchisees pony up a weekly 5 percent royalty and are charged up to 4 percent of sales for advertising. The pay-off? According to Item 19, 44 franchised and company-run restaurants opened at least six months rang up average annual sales of $1.93 million in 2016.
Yet for all Fetter’s hard work and business savvy, he’s hit something of a wall. “Going from one restaurant to nine has been a matter of sheer guts and winging it. But now we have to change the ways we think if we are to get from nine to 20. So we are hiring a consultant to help us,” Fetter said.
Meanwhile, Fetter’s four adult children (the fifth is a teenager) have formed an investment group and are minority partners. Two sons oversee restaurant operations. Wife Audra recruits managers and is in charge of the office. Boasted her husband: “She’s beyond organized.”
Two Men and a franchise
This summer, Bill Bass and his St. Petersburg, Florida, crew experienced an unusual problem even for a moving company. His Two Men and a Truck business—one of the 16 he and partner Don Hughes franchise—had to figure out how to move a 6-foot by 9-foot painting from an apartment to their truck. The piece, which didn’t fit in the building’s elevator, was on the 28th floor.
But Bass isn’t the type of guy to say no. A former Army captain who flew helicopters and trained pilots, he earned degrees from Princeton and Stanford (two master’s!). His holding company, Black Wolf Group, includes a home healthcare franchise, a marketing and data analysis company and a design/retail firm that sells socially conscious clothing.
Twelve years ago he and Hughes were out-of-work but well-capitalized executives desiring to launch a clothing company offering great customer service like their former employer, Lands’ End. “It permeated the culture,” Bass recalled in a phone interview.
The duo, who’ve either acquired or “greenfielded” the Two Men and a Truck franchises since 2005, now operate in eight cities (Tucson, Phoenix, Las Vegas, St Petersburg, Orlando and Miami, Salt Lake City and Minneapolis). “All our deals are for single territories or a group of territories already in place,” Bass explained, adding they like to open a franchise a year.
The economics of the business are pretty simple. Each franchise rings up roughly $2 million annually; about 10 percent of that sum is pre-tax profit, he said. New trucks cost “slightly less than 20 percent” of revenue and, overall, cost roughly15 percent of revenue to operate. Manpower overhead (“the guys and gals on the trucks”) runs 32 percent of sales.
According to the FDD, investment for a standard franchise costs from $178,000 to $590,500, depending on whether you buy an existing location or develop a new one. The royalty is five percent.
The partners initially self-financed their franchise, funding expansion via profits from the first few units. Today, a line of credit helps even out cash flow, particularly in summer.
“Moving is a cyclical business that peaks on weekends, the end of months, and in the summer,” Bass explained. “The perfect storm occurs the last weekend of the month in June and July.”
About that 6-foot by 9-foot painting. Bass said the crew intended to partner with a window-washing company that would rappel it down the building’s side using its equipment.
But the building’s owner objected and the crew eventually figured out how to trim the painting’s size and fit it in the elevators “Lots of adventure in the moving business,” Bass declared.
David Farkas has covered the restaurant business for 25 years as a reporter and food writer, and writes about development deals in The Pipeline in each issue. Send your franchisee development agreements to him at firstname.lastname@example.org.