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Buffalo Wild Wings is still wheezing, franchisee says

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The changes planned for Buffalo Wild Wings by its new owner can’t come fast enough for one of the casual chain’s largest franchisees, Diversified Restaurant Holdings. The 65-unit operator posted a 6.4% decline in same-store sales and a $1.1 million net loss for the second quarter ended July 1.

CEO David Burke attributed the sales decline to a drop-off in traffic.

Losses deepened from the year-ago deficit of $291,000 despite a drop in the price of chicken wings, Diversified’s biggest cost. The company paid $1.66 per pound for the brand’s signature product in Q2, compared with an average of $2.03 in the year-ago period.

Burke said one of the benefits of Buffalo Wild Wings now being owned by Inspire Brands, a holding of multiconcept owner Roark Capital , is greater purchasing leverage for the wings brand. Inspire is also the parent of the Arby’s fast-food chain and the R Taco fast-casual taco operation.

Burke said he’s also encouraged by Inspire’s “improved corporate marketing strategy planned for the upcoming football season along with the many other positive developments that are being tested and implemented, from advertising to information technology to menu innovation.”

Inspire, which is privately owned, has not publicly detailed the specifics of that turnaround plan.

“Our second quarter results reflect the ongoing headwinds that the Buffalo Wild Wings system is facing in the short-term while our franchisor, under new ownership, works to realign media and promotional strategies and reinvigorate the brand,” Burke said in a statement.

Diversified’s revenues were $37 million, a 7.3% decline from a year ago.

Comps for the Michigan-based operation were a sharp contrast from the Q2 results from a number of competitors. Outback Steakhouse, BJ’s Restaurants and Brewhouse and Texas Roadhouse have also posted strongly positive same-store sales for the period. Applebee’s, the segment’s leader in sales and unit count, generated its strongest same-store sales in a decade, at 5.7%.

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