Buffalo Wings and Rings Tests One-Time Franchise Fee
In an effort to enhance growth among multi-unit franchisees, Buffalo Wings and Rings is testing a one-time franchise fee.
Chief development officer Philip Schram said the idea came from multi-unit franchisees looking to grow efficiently.
“We hear a lot of multi-unit franchisees saying they don’t want to be nickeled and dimed with ongoing franchise fees, especially after they’ve acquired the experience,” said Schram.
He said experience was key in the decision, as much of the initial franchise fee went toward pre- and post-opening support. And for franchisees that want to add locations, that’s just not as necessary since they’ve been through the process before. And if the fee stands in the way of growth, Schram would rather nix it.
“The royalty fee is a success fee, the more the franchisee makes the more the franchisor makes. This one seems to be a barrier, which is not necessary for someone who is in a growth pattern,” said Schram. “If they want to come for training, they come to the convention, all that is already included in the royalty.”
He said it likely wouldn’t affect new franchisees coming into the system as Buffalo Wings and Rings doesn’t typically start operators out with a multi-unit deal anyway. After the franchisees have been in the system for a year or so, however, he said any further development deals would include a single franchise fee.
“Those that want to grow are excited,” said Schram.
Currently, the Cincinnati, Ohio-based concept has 56 locations across the country.
The test started in July and runs through the end of 2018. He said it was possible that it would be extended, but it depends how the test goes.
It’s not the first franchise fee incentive for the brand. Schram said a prior incentive spurred some major growth.
“We brought the fee from $35,000 to $5,000, we had six times more franchise agreements signed than the last year, and we got excellent feedback and the franchisees said it helped them a lot,” said Schram.
And the bulk of those actually opened, showing that a smaller or no fee didn’t remove any onus to open a location.
“It was not as if people said, ‘For $5,000, I’m not taking much risk,’” said Schram. “They paid the discounted fee and opened the store. I’d say that’s the proof that it will work this time, too.”