Efforts by Buffalo Wild Wings’ new franchisor to revive the brand are already paying off for franchisee Diversified Restaurant Holdings (DRH), with same-store sales rising at the end of 2018 for the first time in three years, said DRH CEO David Burke.
He attributed the 64-unit franchisee’s comp sales growth of 2.2% during the last quarter of 2018 squarely to initiatives undertaken by Buffalo Wild Wings’ new owner, Inspire Brands. Adjusted for bad weather in some of DRH’s markets, the comp gain amounted to 3%, the company said.
“We believe this is a testament to the creative, measured approach being taken by the new franchisor to reenergize and rebuild the Buffalo Wild Wings brand, coupled with our focus on guest experience, loyalty attachment and development of the delivery channel,” Burke said.
He did not specify which of the initiatives undertaken by Inspire were most effective in boosting sales. Inspire executives have said their turnaround plan is still being drafted. To date, efforts to rejuvenate the brand have largely been marketing-related and tied to the NFL season. For instance, dine-in guests could vie for prizes during a fantasy football game offered exclusively by the chain during the fall and winter.
Inspire is testing a new format for the chain in four locations, but that endeavor was unlikely to generate material benefits for DRH during Q4. It was not revealed if one of the test sites is a DRH operation.
Nonetheless, Burke was effusive in praising the home office’s efforts to date. He cited confidence in the brand as the reason for DRH’s decision to purchase nine Buffalo Wild Wings units in and around Chicago. The seller and other terms of the deal were not disclosed, but Burke noted that the stores generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.5 million on revenues of $32.7 million for 2018.
The figures were aired in a prerelease of DRH’s unaudited results for the fourth quarter of 2018. Despite the rise in comps for the period, DRH’s revenues fell 6.7%, to $39.1 million. The quarter consisted of 13 weeks, compared with 14 weeks in the year-ago time frame.
DRH’s restaurants are located in Florida, Illinois, Indiana, Michigan and Missouri.