El Paso’s Wing Daddy’s spreading wings with franchising

Sept. 21--Wing Daddy's Sauce House, a fast-growing El Paso restaurant chain, has opened restaurants in San Antonio and Mexico, but its three owners are now ready to spread their wings even further via franchising.

"Over a year ago, we started the process. It's a long, complicated process to be legally franchisable," said Mario Southern, one of three partners who started the chain six years ago after jotting down their restaurant ideas on a napkin during a bull session at a local sports bar.

Wing Daddy's has found success in the competitive, and increasingly crowded sports bar and chicken wings niche.

But the owners don't like their restaurants labeled as sports bars.

"We're called a sauce house (the restaurant features 17, daily-made dipping sauces), not a sports bar," partner Ryan McNellis said last week as he and Southern drove back from Las Cruces, where they checked on a restaurant under construction there. "You would never take kids to a sports bar. We're a sports restaurant."

Wing Daddy's focuses on food (its extensive menu includes not only chicken wings, but ribs, burgers, and other fare) and on being family friendly unlike competitors such as Hooters, Twin Peaks, and Buffalo Wild Wings, Southern said last week. He sat inside a Wing Daddy's tucked inside a shopping center at 1201 Airway in East Central El Paso.

A bevy of female waitresses stood near the front door as the lunch crowd filtered in. Wing Daddy's has all-female wait staffs like many of its competitors. But unlike some of the competition, they don't wear provocative uniforms because of Wing Daddy's family-friendly mode, noted Gerry Lopez, Wing Daddy's district manager.

The chain has nine locations: Five in El Paso, two in San Antonio, and two in Mexico. By the end of October, the owners expect to open the chain's first New Mexico location in Las Cruces, its third San Antonio location, and a third location in Mexico in Nuevo Laredo. It also is about to begin construction on a location in Monterrey, Mexico.

The Mexico restaurants are part of a joint venture with a Juárez partner that Southern didn't want to name because of safety issues in Mexico.

The chain employs about 350 people, including about 260 in El Paso, Southern reported.

"We've had so much more success than we expected, and surpassed our highest goals," Southern said. But the owners did not divulge sales numbers.

So, Southern, 41, McNellis, 41, and Sung Song, 42, the partner with the most culinary and restaurant know-how among the three, decided franchising made sense.

In March, they became ready to franchise, and have prospects in Phoenix, Las Vegas, and Dallas-Fort Worth, Southern reported.

A franchisee has to pay $484,632 to $721,673 to open a Wing Daddy's franchise, he said.

"It's a growth model different from expanding through only opening corporate-owned locations," he said. "The corporate model requires more hands-on (management), and franchising allows faster growth and more long-term returns."

The owners also will continue to open company-owned stores with possibly two more in El Paso, Southern reported.

Art Diaz, director of the The Franchise Center at the University of Texas at El Paso, said he's not familiar with Wing Daddy's, but he said he's happy to hear the owners are franchising their concept.

Diaz said he's encouraged several El Paso restaurateurs and other business owners to franchise, but he's had no takers.

"It takes tremendous risk taking and tremendous funding, and a lot don't believe they can make it work," Diaz said. "You need to make substantial profit from sales to be able to franchise."

It also takes around $250,000 to pay for the consultants and the legal work and paperwork needed to set up a franchise program, Diaz said.

Southern wouldn't divulge Wing Daddy's costs for setting up its franchise program. But, he said, business owners should be prepared to spend around $200,000 on it.

Another stumbling block is franchising requires a good system to insure the food, or other products, and other elements of a concept remain consistent, Diaz said.

"If you want to grow and create monster wealth," then franchising is a good path, Diaz said.

"Whoever buys a franchise has to pay franchise fees, and royalties. It creates cash flow for them (franchisors)," he said. But that's why a concept has to show good profit, so franchisees can pay the fees and still make money, he said.

Bob Ayoub, president of Mimco Inc., an El Paso shopping center developer, said the company recruited Wing Daddy's for a new center it built about three years ago at Sean Haggerty and U.S. Highway 54.

"They have a good concept and they deliver great food and service," Ayoub said in an email.

Southern said one of Wing Daddy's keys to success has been putting most of their restaurants in neighborhood shopping centers.

"We like to be near people in neighborhoods so we're their go-to-place," Southern said.

Erika Ibarra, 30, said she and her family have been going to Wing Daddy's about two years because they like the food, drinks and family atmosphere. It's better than the national chains, she said.

"We (Ibarra and her husband) come to watch games sometimes. You can have a drink, and also bring the kids. They love coming here," Ibarra said last week as she ate boneless chicken bites during a lunch at the Airway location. She brought fellow Southwest University classmate Diana Tovar, 30, for her first visit.

"I like it. It's better than Buffalo Wild Wings," Tovar said.

Ibarra said she likes going to an El Paso-owned restaurant.

"I hope they can spread out more," she said when told Wing Daddy's was beginning to franchise.

Southern said the plan is to be extremely careful in picking franchisees.

"We want to be picky. It's a slow growth model. We don't want to do more than five (franchises) a year," he said.

Vic Kolenc may be reached at 546-6421

Locations

East Side: 12115 Montwood and 1461 N. Lee Treviño

East Central: 1201 Airway

Northeast: 11100 Sean Haggerty

West Side: 7500 N. Mesa

Las Cruces: 775 S. Telshor, open in October

Mexico: Juárez, Centro Commercial Las Misiones; San Luis Potosi, Mexico; and Nuevo Laredo and Monterrey, Mexico, coming.

San Antonio: Two locations, third coming

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