Wingstop modified three restaurants in the Dallas-Fort Worth market to try and find the most effective upgrades. The testing will allow the brand to lay out a sequence and process of which parts it will invest in, and in what order. The improvements aren’t limited to company stores, of which there are only 29. Wingstop is consulting with its franchise advisory council to evaluate what updates would yield the highest returns for franchisees and the brand.
“At the end of the day, it'll all be about making sure that we generate a great return on investment so that we maintain the best-in-class unit economics we have,” Morrison said.
The company is being methodical with piloting every new component. It’s too soon to reveal what technology would have the greatest effect on transaction times and would be rolled out systemwide, but Morrison isn’t ruling anything out just yet.
“We have not yet gained enough insight to suggest that we would change the complexion of the restaurant from our standard 1,700-square-foot, limited seat, heavy carryout, delivery-oriented restaurant,” Morrison said. “However, certainly it can improve throughput, which can make existing restaurants that much more productive and have capacity for additional growth … We haven't really even hit the top end yet on all our restaurants.”
At the end of Q2, Wingstop had 135 international locations. Morrison said the company is adjusting operations to accommodate different needs in various markets, but some of those processes could eventually make it to U.S. stores.
High traffic locations, like shopping malls in the U.K., have been able to accelerate orders churning out an order in five to seven minutes instead of 12-15 minutes. This change in speed is improving the brand’s image, bringing up guest satisfaction scores, and improving guest experience, Morrison said.
Wingstop added 113 new restaurants in Q2, which pushed systemwide sales up 21.9 percent compared to last year. The growth boosted total revenue 31.1 percent. That translated to $48.6 million compared to $37 million this quarter last year.
The company is ahead of its development goal and, as a result, its growth outlook for 2019 was adjusted from 136 to 142 net new restaurants, Wingstop’s chief financial officer Michael Skipworth said.
“I'm very pleased with the strength of our pipeline of new restaurant development,” Morrison said. “This rate of unit growth is consistent with our long-term target of 10 percent-plus unit growth.”
Wingstop execs have a vision to grow the brand six times the size it is today, Morrison said.
Over the past two quarters, Wingstop’s investments—digitizing every transaction and simplifying our guest experience with technology and kitchen enhancements—are resulting in higher average-unit volumes and driving franchisees to join the brand.
Wingstop’s fortressing strategy is also pushing franchisees, both existing and new, to invest in certain markets. The company is focusing on development in 25 markets and about 80 percent of the company’s development pipeline are in those specific markets.
