Yesterday morning, Wingstop—the preferred chicken-wing joint of rapper Rick Ross—debuted on the stock market, where it promptly raised $110 million in proceeds. The number is significant: Experts predicted that the fast-casual chain would raise money, but not that much money. Shares were priced at $19 (beating the $16 to $18 pre-debut predictions), and the stock rose as high as $31.99 on the day, according to Reuters.
You could say things are good for Wingstop and—we’re assuming—Rozay, whose own mini-empire of franchises in the South appears to be profitable. To get a little more insight into the company’s IPO and rap-world associations, we caught up with Wingstop CMO Flynn Dekker on the morning of the company’s NASDAQ debut.
Here, he gives us an inside look at what drove the fast-casual chain’s IPO so high (“it’s not BW3’s”); how national minimum-wage movements affect the company’s plans; and, of course, whether or not Rick Ross is really Dekker’s boss.
Here’s what we learned from the Wingstop honcho…
Wingstop is a fast-casual trailblazer.
“I like to say that we were fast-casual before fast-casual was cool because we’ve been doing this for 21 years. When we started we were take-out only and over the years we evolved to have dine-in. I don’t think that we invented the category, but we were one of the brands that had been doing it for a long time before it had a name.”
Wingstop isn’t Buffalo Wild Wings.
“Buffalo Wild Wings is a completely different experience. They do a wonderful job but their experience is about sports, TVs, the beer, and the bar. The wings are one part of that. If you look at our model versus theirs, we’re 75 percent carry-out. In a lot of cases, we’re in the exact same parking lot and we both do great. So, I don’t think we really compete. I think everyone assumes that we do because they have wings and we have wings but, but at the end of the day, we can both thrive.”
I call it in..she pick it up lemon pepper all flats! #EatLikeABoss #StillThinknWingstop A photo posted by Ricky Rozay (@richforever) on
Like Shake Shack, Wingstop sees specialization as the key to success.
“I think what you see over time, when you look across the restaurant landscape, is that the notion of trying to be everything to everyone has really fallen out of favor. We don’t have a salad, or a taco, or a sandwich. We have bone-in-chicken, boneless chicken, some tenders, some sides, and drinks. That’s it. I think the people that thrive and survive over time are the people that do one thing and do it better than everybody else. That’s what we are. I think that’s why we have such a passionate fan base.”
Wingstop and Starbucks don’t share customers now, but they might soon.
“It’s all about timing. Eventually, we can move into a strip center that has a Starbucks in it, but that’s not where we start. We tend to start in the inner core of the city and work our way out. Our audience index is high in terms of Hispanic and African-American customers, so we tend to put our restaurants in locations where those communities are more likely to have access to them. Once we find success there, then we move our way out to the more suburban areas.
The nice thing about our brand is that we don’t compete with those guys for real estate. We can go get very low real-estate costs and move into awesome neighborhoods that they’re not looking at. Even when we move into the more suburban areas, we can pay less money and be inside the strip center and still do great.”
It’s possible to maintain steady prices when working with a volatile commodity like chicken wings.
“I like to say that chicken wings are a commodity, but flavor isn’t. Flavor is what we’re known for. It’s what we focus on. The nice thing about the Wingstop model is that our real-estate and labor costs are low. It doesn’t take a lot of people to run a Wingstop location. Because our average unit volumes are so high, we can absorb some chicken-wing volatility. This brand is so great because our other costs are so low that we don’t have sweat it. We don’t have to jack prices up on our costumers.”
Ditto for regions where the minimum wage is rising.
In terms of minimum wage hikes, the good news is that we’re not a bottom feeder when it comes to paying our employees. We don’t necessarily have to react when minimum wage goes up because most of our employees are long-term employees and we don’t have high turnover so we’re typically already above that rate. The franchisee sets minimum wage for each individual store. They’re an independent operator in that regard, so they handle all issues regarding labor.
We @wingstopcutler !!! @djkhaled @iampeterbailey #MIAMI A photo posted by Ricky Rozay (@richforever) on
Social media is a powerful wing-selling tool.
“I think that one of the coolest things about Wingstop is our social engagement. We have one of the highest social-engagement rates in the industry. A lot of brands say that they’re doing it but we actually are. They might have a million followers on a given platform but those followers are just sitting there passively. What good is that?
One thing that we look at closely before we do any kind of advertising or promotion is what social media users are talking about in relation to Wingstop. I appreciate that they’re talking about Wingstop, but I’m really looking for whatever comes after the “and…”. Wingstop and what else? Wingstop and music. Wingstop and art. Wingstop and sports. Whatever it is, we try to focus our attention on getting more involved in whatever comes after the and.”
And now, what we really want to know: How does Rick Ross fit into the equation?
“A lot of people think that I report to Rick Ross and, in a way, I do. He’s an awesome partner for this brand and he is the number-one promoter in the world. He’s out there hustling everyday and he really gets the message out there. He’s been a great partner in this business. He’s got 11 restaurants and he’s got the rights to open 25-plus. He’s a great partner.”
But really: Is there a special business arrangement with him? How do you explain all those lyrics about lemon-pepper wings?
“No, that’s all natural. Rick does that all on his own. He promotes all the brands that he works with and believes in and that’s why we love him.”
Let’s test your Rick Ross knowledge…
The first is a verse off his 2010 album Teflon Don. It goes, “She’s thinking Phillipe’s, I’m thinking Wingstop/ Fiending lemon pepper…”?
She a keeper?
“I got my thing cocked.”
I should’ve known that. That’s a no-brainer.
This next one is from “Devil In A Red Dress.” He says, “I never needed acceptance from all you outsiders/ Had cyphers with Yeezy before…”?
Before he fell in love with the beautiful Kim Kardashian.
“Before his mouth wired.”
These next two both involve Wingstop references. “When I hit a lick, I bought a Wingstop (Twenty of em)/ I sprinkle lemon pepper…”?
I’m stumped again.
“In that re-rock.”
I’m just trusting that the last one is the one that I know.
Let’s see if we can go for 25 percent. This is off of “Devil Is A Lie” with Jay-Z…
“Wingstop, fat boy need a ten piece!” I knew that one.