The unveiling/deployment of new kitchen equipment would enable faster throughput and expansion of development opportunities, Saleh said. Picture non-traditional venues and potentially even drive-thru restaurants. Essentially, Wingstop could trim square footage if it had a more efficient kitchen capable of serving added orders. “We believe this development could increase the concept’s ultimate domestic unit potential beyond the stated 2,500 restaurants,” Saleh wrote.
Morrison echoed the thought. “What I can say is that it definitely has the potential to help us enter into nontraditional locations,” he said. “So that would include locations in airports or perhaps casinos or stadiums, other venues like that where the cook times need to be faster. So that opens up a great opportunity for Wingstop that's not factored into our development assumption.”
Saleh provided some insight into just how much runway this presents for Wingstop. Using a London restaurant opened in September as the case study, the new equipment produces up to 75 percent reduction in cook times, down to 5–8 minutes from 16–21 minutes. He said this kind of dramatic fix “could help revolutionize the concept by opening up real estate the company otherwise would have avoided.”
When it comes to drive thrus in particular, the opportunity might just mirror what’s taking shape at Chipotle. The popularity of delivery coupled with a reduction in cook times could lead to Wingstop developing more units with a digital pick-up window, similar to Chipotle’s “Chipotlanes,” Saleh said. Using the Mexican fast casual as a measuring stick, Wingstop would look at costs of about $75,000 more per unit, bringing the total investment to $455,000 per drive-thru location.
Does that justify the investment? Saleh believes the resulting sales increase would improve cash-on-cash returns from 57 percent today to more than 60 percent.
Currently, roughly 75 percent of Wingstop transactions are takeouts. In late 2018, the company began a scaled roll out of delivery across its domestic system and ended Q3 with three-quarters of its fleet onboard. The plan is to eclipse 90 percent by year’s end. When that happens, Morrison said, expect Wingstop to turn up the dial on national TV advertising for delivery—something it hasn’t done in its history. The brand had just 30 percent of restaurants covered at 2018’s end.