9 October 2014
Short Assignment #2
Buffalo Wild Wings is a franchise that was established in the Unites States since the year 1982. Buffalo Wild Wings was founded by friends, James Disbrow and Scott Lowery. The two friends moved from Buffalo, New York to Kent, Ohio. When they arrived in Ohio, it didn’t take long for the two friends to realize there were no restaurants that served the Buffalo-style chicken wings they were craving from back home. The two friends joined forces, and opened up their first sports bar, called Buffalo Wild Wings & Weck. Buffalo Wild Wings & Weck was located in Columbus, Ohio. Buffalo Wild Wings began franchising in 1991.
Buffalo Wild Wings would be a great franchise to invest in, because of the goals the franchise has in the future. Today, there are just over 1000 Buffalo Wild Wings located within the United States, while the plans for the franchise are to open around 1700 franchises within the United States and Canada alone. This is a big opportunity for future franchisees.
On February 4, 2014 Buffalo Wild Wings released their fiscal fourth quarter results from 2013. The results showed that Buffalo Wild Wings revenue climbed 12.4% from 2012-2013. The total revenue for Buffalo Wing Wings in 2013 was $341.5 million dollars. With the spike in revenue from 2012-2013, Buffalo Wild Wings franchise is doing well and would be worth every penny investing in.
If I were to invest in a Buffalo Wild Wings located in the U.P. I would locate the franchise in Iron Mountain. Iron Mountain contains a few sports bars, but nothing compared to the Buffalo Wild Wings franchise. Buffalo Wild Wings would be the superior sports bar located in Iron Mountain. Iron Mountain has a population of 7,601 as of 2013 according to the United States Census Bureau. However, you have to take into consideration the two other cities within 5 miles of Iron Mountain, Kingsford and Norway. These three cities are called the tri-cities, so having a Buffalo Wild Wings in Iron Mountain, would also draw customers from Kingsford and Norway. The total population now combining the tri-cities is 21,499. This now triples the amount of customers. With not having many sports bars in the Iron Mountain area and having the combined population from the tri-cities, Buffalo Wild Wings chances of success are looking good.
Franchise sale provides the franchisor with additional resources for development, expansion and other purposes. Franchising fees and royalties collected regularly provide the resources necessary for chain development.
Building the value of the brand. You want to make sure you have a strong brand identification, covering both the products offered and the retail businesses operated.
At the beginning of the franchise program there is a broader risk that the trade name can be spoiled by misfits until such time the franchisor is capable of selecting the right candidate for the business.
The franchisor has to disclose confidential information to franchisees and this may constitute a risk to the business.
Considerable capital allocation is required to build the franchise infrastructure and pilot operation. At the beginning of the franchise program, the franchisor is required to have the appropriate resources to recruit, train, and support franchisees.
The franchisee has an opportunity to run a proven business concept with a successful operational track record.
The benefit of operating under a recognized trade…