How are you thinking about all these things as it relates to your brand partners (franchisees) and continuing your expansion through them?
It’s a question we've asked ourselves. We believe ghost kitchens are a nontraditional type of location, much as a stadium or mall or some other type of restaurant would be. And that's how we're approaching it first and foremost. But we believe it does offer our brand partners the opportunity to fill in areas where real estate costs are super high—think of Manhattan, San Francisco, markets like that where there's extraordinary density, even Chicago and the urban areas there, where we normally wouldn't go. We can now get in there and not feel the burden of a street-side location in Manhattan that has a rent for 2,000 square feet at over $500,000 a year. The economics don't work as well.
At the same time, we're also trying to gain an understanding of just how the economics work for dark or ghost kitchens, how they're going to work long-term. What does the relationship with the delivery company look like? In this case it will be with DoorDash, they’re our partner, but how do the economics work for a franchisee? What we don't want to do is steer completely away from our core asset, which is our restaurant, into a ghost kitchen, but I think there's a nice mix. So like we did with delivery when we rolled delivery out, we took a long time really testing and understanding what we needed to know to make the economic model work for everybody. And that included DoorDash, ourselves, our brand partners, everyone, and then turned that on when it was right and the time was right. I think you'll see us do the exact same thing here.
We’re well underway, but there is a lot more to learn. Dark kitchens, just like delivery, cannot be viewed as this panacea. There's a lot of work involved in truly understanding how to make that model effective.
Wingstop has plans for thousands of international locations. How do you take this concept that has done so well in the U.S. into international markets? And how might that have been affected by everything that's gone on these last these last several months?
It is our vision to become a top 10 global brand, and the reason we believe that that's very achievable centers on the fact that chicken is the No. 1 consumed protein in the entire world. Bone-in chicken is the preferred product outside the United States. We eat a lot of breast meat here, but everywhere else you go in the world, it’s primarily bone-in chicken. There's really not a concept like ours anywhere else in the world. And chicken wings, much like they were in the U.S., are considered to be an appetizer, not a center-of-the-plate item. So we've carefully constructed a number of different ways to enter different markets throughout the world and test and understand what really works.
READ MORE: Why International Markets are Key to Wingstop's Growth Goals
We believe we've identified the right platform or concept that makes the most sense, and it's reasonably consistent with what we do here in the U.S., which is a street-side location that's focused primarily on off-premises, but it offers a premium occasion, which we believe we do here in the U.S. in terms of, chicken wings are an indulgent item. They're not the lowest-cost item, but the quality and the craveability drive a more premium occasion, and we believe that has great applicability in international markets as well.
To give you a couple of data points on our success to date, we're closing in on our 100th location in Mexico. It's established as a sports bar–type concept called Wingstop Sports. It has 150 seats, full bar, broader menu, and we have quickly established ourselves as one of the top two casual-dining brands in all of Mexico in a short period of time. The second place I’d point you to is the U.K., which is not typically considered a high chicken consumption market. But there's a strong demand for unique flavors, an experience that is trendy and engaging, and our business has done exceptionally well. In fact, our highest average unit volumes that we experience are in the U.K., and we also have, in addition to three of what we call our traditional locations, already opened a couple of dark kitchens leveraging our delivery platform that are doing very, very well.
Companies get harder to change as they get bigger. How can Wingstop continue to grow but also remain an innovator?
It's hard. I've heard some various experiences from leaders over the years, and many arrived at this idea that when you start to approach, at least in the restaurant industry, 2,000 locations, that there's this chasm you must cross that either creates long-term success for your brand because you've built the platform for sustainability, or you've grown beyond your capabilities and you start to either make mistakes or stumble or can't afford the infrastructure and everything you need in order to really expand beyond that point. We're rapidly approaching that, and because of that, we've spent a lot of time over the past few years thinking about what that day looks like so it doesn't jump up and surprise us. There's no real magic to 2,000, I think it's just done on analyses over time that there are very few chains that hit that level and then can continue to expand.
We are doing a lot of things to prepare for that. One, continuing to invest in our team and our people to make sure that we have the resources, the people, the infrastructure we need to be able to cross that chasm effectively. And second, even though we've built a very robust technology platform, we still believe there is a way to make it even more scalable so that it becomes a global platform. And that is really what we're talking about more and more every day is, we no longer have a restaurant support center where our team resides to help support our franchisees; it’s a global support center. We have a global mindset now, and that mindset enters our conversation every day. There isn't just an international team at Wingstop; we certainly have a leader who heads up international, Nicolas Boudet, but he is supported by his peers in a global effort to grow this business.
The more we can adapt that global mindset and make all of our decisions such that they become global is important. Because at the end of the day, many brands have not built the technology infrastructure for a global business. They grew a lot of markets, they may have gotten to one or two restaurants overseas, but they weren't able to take their platform they developed technologically in the U.S. and adapt it. We're getting ahead of that so that as we grow, we can bring new brand partners into our business on a platform that's already well established and save them a lot of that work.
You had very impassioned comments that you shared publicly after George Floyd’s murder. That seems to point back to the culture you’re building at Wingstop. What is the role you think Wingstop can play in both your employees’ lives and also your customers?
Whether it's our guests or our team members, we really anchor everything in our core values as an organization. And one of those core values is authenticity, and it transcends just the product that we sell, which we haven't changed in over 25 years. We still make our wings and our fries and our ranch the same way we did 25 years ago, with the same ingredients from the same suppliers. And it's that commitment to staying true to who we are that I think is an overarching testament to this brand.
When you think about our guests and our franchisees, we have this very diverse group of people, as diverse as it gets, I believe. And you hear them talk about our brand and the passion they have for it and the love they have for it. We've learned over the years, we have one of the most anticipated product occasions out there in the industry. If you go to Twitter and you just search Wingstop, they're thinking about that next occasion: “I want Wingstop.” “I crave Wingstop.” “Somebody bring me Wingstop.” “When will Wingstop deliver?” I heard that for years. And I think it's our job to make sure that we satisfy that crave.
If you fast forward even to the pandemic, when it started, part of our success has to do with the fact that our food is very comforting. And we are a brand that people trust. And you put those two things together, it took some of the pressure off. So our role in their lives now is to give them that comfort when life is difficult on so many fronts. As we also look at what's happened since the murder of George Floyd, it really did open a dialogue within the organization amongst our team, our brand partners, and our customers, about the role that Wingstop can play and the role that we can play in advocacy in the community.
We have these weekly Zoom calls now with our team where we get together and the entire company is on this Zoom call, 200-plus people. And usually you tell them, “OK everybody hit the mute button and what I'm going to do is speak to you and present to you and tell you what's going on with company,” which is fine, because you need to keep people informed. But at the same time, that day I was really taken aback by what had happened in Minneapolis, and I expressed that it was weighing on my mind, that what happened was disgusting, outraging. And what I said to the team was, I want to hear what's on your mind. It was authentic, I didn't plan it this way, it just happened. And I said, “Unmute, I want to hear what you have to say.” And what transpired from there was real, it was raw, it was highly emotional. A lot of people just in tears, quite frankly.
READ MORE: The Power of Culture to Pull Your Brand Through Crisis
What I really heard a lot of was especially Black employees and team members who were talking about their lives and what they have experienced—the idea that they’ve been pulled over in their car because of the fact that they’re black and therefore was profiled to be associated with a crime that occurred, which they weren't. People telling me that they have conversations with their families and their children about being careful about walking down the street at a certain time of day and how you present yourself. These are real experiences. And so from all of that came a push that I really felt I needed to take public, and to talk about the fact that we as leaders are given the responsibility and the authority to make decisions and do things that can impact not only our organizations, but the world around us. What we need to do is listen, open the conversation with our people, our teams, and learn from that—because as a white man, I don't understand everything that a Black person goes through in this world today, but I want to learn and understand that so that I can affect change in whatever way I can.
I've really tried to get people to listen, to get out and learn, and to take action as leaders, as CEOs running companies or whatever role you have. I think that is what our guests would expect of us as a brand. I know it's what our brand partners expect of us as an organization, and it’s what our team members would expect of me.
What does it mean to have this culture, and how do you sustain that as you become a company that is global and has thousands of locations?
It’s probably the hardest thing we do as leaders is, not only introducing and developing the culture within the organization, but sustaining it. And we've spent a lot of time really working hard to articulate what our culture is as an organization and then cascading that through the entire company—not only to just our team members in the office, but also to our brand partners, to our guests, to our shareholders, all the various constituents that are important to us.
We chose not to take what I would consider the traditional approach where you do a word cloud of all of the words that would come up in definitions of culture—none of which are wrong, by the way, but they tend to have a common theme: integrity, respect, trust, service, etc. What we did is we boiled it down into that which we felt we could execute against 99 percent of the time and made those our core values, and then said, there are things we aspire to get better at.
A good example would be transparency, especially with our franchisees, making sure that our discussions are honest and transparent, that we can always do better at innovation. And then also looking out for those watch-outs, those negative values that can hurt your organization, like complacency, the siloed organization, things that detract from good cultures.
We've spent a lot of time teaching that and as we onboard you, the first thing we do is walk you through our value system. We then walk you through our mission, which is to serve the world flavor, and we break it down into what that means to us as an organization. It's not just about the product, but it's about service to all the people that we support. It's about being a worldwide brand. It's about the communities that we’re involved in and how we can give back. And then, of course, our vision to be a top 10 global brand, which means if you're going to be here and be a part of this team, we aspire for high growth.
We want people who are highly intellectually curious, who want to grow with us and be a part of that. So if you put that whole value system together, it connects very, very well. It's clear. And I think that helps engagement with our company. We were happy to say that our engagement scores that we monitor every single year continue to get better and are amongst the best in class, way above the average for restaurant companies. And I think it's because we have a lot of transparent conversations.
I learned from a leader years ago a concept for a meeting called NETMA. It's an acronym and it stands for “Nobody ever tells me anything.” I'm sure you've heard that in organizations where people sit back and they might be doing a very important task but they feel like nobody ever tells them what's going on. Well, we don't. And so these Zoom meetings I mentioned that we do once a week during the pandemic are built to continue that message of, we want to make sure you're engaged, you're informed, you know what's going on in the brand, and you know what your impact is and why it's important. And that's worked very well for us.
What's the thing that's keeping you up at night, whether that’s pandemic related or not?
Prior to the pandemic, I've been asked that question very, very many times, as you get asked that by shareholders, for example, and others. I've always said that it's that which is out of our control that worries me the most, because we have to be prepared to react to it. And I've carried that comment forward to say that, if something material were to happen, how would we behave as an organization?
Now, since the pandemic—of course nobody planned for it, nobody saw it coming—what I've been able to stand behind is say that our culture and our value system is what has made us as successful as we are today, even post-pandemic. A lot of that centers on what I was talking about before: It's the transparent communication, it’s the mutual accountability, it’s the trust that we have within the company amongst our team that has been able to allow us to pivot very, very quickly. I think as leaders, the thing we worry about the most is what happens when it really gets weird and ugly and difficult. And we've experienced that in a number of ways over the last six months, and we've been able to navigate it quite well. At the end of the day, it is a people business and it comes down to the people you have around you that enable those things to be in place and have you well prepared for the unforeseen thing that comes.
For me, then, if I look forward, we do have to continue to be innovative with technology. We cannot get complacent with the results that we're seeing right now. This is an opportunity to invest and think about the future, which is exactly what we're going to do. Hopefully that will propel us to continued success in the future. But I think if we maintain the culture, that's really what's going to get us there.