Site Lines: Urban Renewal

Wing Zone targets inner-city locations to find its fans and build loyalty.

By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 2/1/2007

Wing Zone didn’t begin locating in inner cities for the applause, good will or some higher karmic purpose. Not that it’s unhappy with those outcomes. But it did it because those neighborhoods are rich with customers and employees.

The 90-unit takeout and delivery concept was founded by Matt Friedman and Adam Scott, who had cooked and sold wings out of their fraternity house at the University of Florida. The first unit opened near the school in 1993. Several units and years later, Wing Zone opened in Atlanta near Georgia Tech, in what was, in 1998, a "turning area."

"There was risk involved, but what we saw was a daytime population, a nighttime population and a severe lack of restaurants," says Friedman, president and CEO of the Atlanta-based chain. "Combine that with our product mix lending itself to ethnicity, and it wasn’t a total risk, it was a strategic decision."

Risky Business

Friedman admits there are challenges to locating in urban markets. Profits are not immediate, especially if the area is being revitalized. But he points out that the cost of getting into the business is reduced, thanks to government incentives and lower rents and construction costs. And the labor pool is substantial because there is a lack of other businesses, and stores are within walking distance or a short bus ride from where people live.

Because there is risk involved, Wing Zone does not encourage first-time franchisees to open in urban markets. "If someone does it as their first store and they’re not successful, the chances of opening more stores is very slim," Friedman says. Wing Zone’s inner-city franchisees usually were raised in or live in the areas in which they operate.

The chain doesn’t actively solicit minority franchisees, but it seems to attract them. Friedman says that perhaps 25 percent of its franchisees were minorities, but about 50 percent of new franchisees are. He credits the fact that a large portion of Wing Zone’s customer base are minorities and live in urban areas. "What makes us unique is that we know how to open up in inner-city markets," he says.

Friedman also points to Wing Zone’s simple menu and operations, and low cost of entry. The average cost of opening an outlet is $220,000; average unit volume is just under $550,000, he says.

Seeking City Scapes

Wing Zone plans to fill in current markets along the East Coast with 30 to 35 new units in 2007, its most aggressive expansion yet. While about 15 percent of its units are in urban areas, Friedman expects about 30 percent of new units to open in inner cities.

"There’s a lot of people that talk about doing inner-city and minority development, and others that do stuff with it," Friedman says. "I think Wing Zone is a company that’s actually doing stuff with it, and we think it’s a good fit for us."

And potentially a gold mine: In that transitional Georgia Tech neighborhood, properties that were going for $100,000 in 1998 are now selling for up to $1 million.