At a glance, it seems like basing a restaurant solely around chicken wings and beer is a
winning combination.
Wings are delicious, versatile, and historically cheap, and beer?
Beer is amazing.
"Mmmm, we'll have five of those - um… sorry can we have 4 of those and a tap water.
WHAT?"
That's why it's surprising that Buffalo Wild Wings is struggling.
They seem to have all the elements of a successful business plan: fun food, sports, and an environment
that's perfect for meeting a group of friends and just hanging out there.
But in 2017, BDubs announced profits were down, and they were starting to sell company-owned
locations to franchisees.
Let's talk about just why they're having such a tough time.
Flying chicken prices
In 2017, Buffalo Wild Wings announced they were going to be restructuring in the face
of a huge problem.
Their entire future rested on something completely out of their control: the price of chicken
wings.
And that's terrifying for any business, especially when the product in question is what they're
all about.
At the time they released their 2017 earnings forecast, they were paying an average of $2.16
per pound.
Compare that to the previous year's average of $1.72, and you can see how that would start
to cut into their bottom line.
BDubs went into damage control mode, ending half-price wings Tuesday and replacing that
with a boneless wings promotion they hoped would stop the bleeding caused by their increased
product costs.
And it's impossible to tell what's going to happen to those chicken prices in the future,
and that makes it pretty hard to solidify a business plan.
Market dip
In early 2018, Inspire Brands took a $2.9 billion chance and bought Buffalo Wild Wings.
That's a huge investment, and when new CEO Paul Brown stepped up to tell everyone what
problems would be fixed, he said he was going to start with the biggest: a lack of anything
that set it apart from all the other places doing chicken wings.
"I think that if you look back when Buffalo Wild Wings was really, really, really successful,
it was really the only one out there doing what it was doing," […] then more competition
has come in, and I think some of that competition has been a little bit more innovative."
Brown says they need to overhaul their menu, which has been largely unchanged for too long.
He says they need to offer customers something they can't get anywhere else, and by extension,
give them a reason to go there.
Company stranglehold
In 2017, shareholder Mick McGuire made a move to seize three seats on the chain's board,
and he got them.
He did it because he saw something very wrong in the way BDubs was run.
At the time, the company owned about half of their 1,250 locations, and that's a lot
to keep track of.
McGuire stepped onto the board and brought the argument that they should only own about
60 restaurants, and the rest should be sold off to franchisees.
Not long after, the company announced they would sell 83 locations to franchisees.
Just what is going to happen to the rest of the company-owned locations is still unclear,
but representatives did note they were afraid selling too many properties at once would
flood the market.
But more franchise owners would give locations more hands-on control, and might help steady
a sinking ship.
Sports fumble
In 2015, Fortune ran a feature on what a brilliant idea Buffalo Wild Wings' business plan was.
It encouraged people to hang out, drink, eat, and watch the game.
It's basically the opposite of your typical restaurant that wants to flip tables.
In theory, it's great, and it worked for a while.
But then sports particularly football started to take a nosedive in the ratings.
According to Nation's Restaurant News, NFL ratings dropped by 5.3 percent in 2017.
That translates to a lot of customers who would rather stay home on a Sunday afternoon.
They said it was a warning for sports-centric chains like Buffalo Wild Wings, and at a time
when more and more people are either turning away from big-league sports or choosing to
watch them at home, it may be time to rethink their strategy.
Wild calories
Take just one glance at Buffalo Wild Wings' nutritional guide, and it's enough to make
you put down the wings and grab a salad instead.
"There's been a mistake.
You've accidentally given me the food that my food eats."
A basic, small serving size of wings is going to set you back 1000 calories and 51 grams
of fat.
If you add sauce, you can add up to 310 calories and 30 grams of fat.
And that's still just for the small size!
Wings don't have to be that unhealthy.
Cook them on the grill or in the oven instead of in oil, and you can cut out a lot of the
bad stuff.
When you can get all of the taste and none of the guilt from the comfort of your own
kitchen, is it any wonder people are staying away?
Lunch bust
For a long time, dinner made up around half of BDubs' targeted business.
Lunch, late-night, and happy hour sales were largely neglected, and that's a shame, because
those are the perfect times for grabbing a quick order of wings and a beer.
"I'll have some chicken wings Kitchen's closed until dinner, just have deserts and cold stuff.
Boy some chicken wings would really hit the spot."
It wasn't until 2015 that they introduced their Fast Break lunch menu and their guarantee
of fast, mid-afternoon service.
Even more surprising, it wasn't until 2016 that they started pushing their Happy Hour
menu.
It seems a huge oversight, and it turned into a new business strategy that finally widened
their target crowd.
Too little, too late?
Hopefully not.