“My children go to Wingstop”, is a phrase I have heard countless times this year, mostly from sector operators presenting at Propel events, when asked what brand they admire or is one to look out for. From a cold call to the US brand’s head office, in six years Wingstop has become the go to quick service restaurant (QSR) brand in the UK for Generation Z, and with the new investment from US investment firm Sixth Street it is set to spread its wings further helped not only by a tasty and highly customisable menu, but a its laser-focused social media strategy and profile. 

Back to that cold call made by Lemon Pepper Holdings founders Tom Grogan, Herman Sahota and Saul Lewin, who all had experience in property but only the latter in the food and beverage sector. It was a shared love of music that first led Grogan and Sahota to Wingstop, a Texas-based business founded in 1994, with a market capitalisation of more than $10.5bn. One day in 2016, Grogan was listening to a US rapper who mentioned the brand. Intrigued, he hit Google to find Wingstop was huge in the US but had no UK presence. Grogan said: “We reached out to the brand cold – I emailed info@wingstop.com or whatever it was on their website – and just said, ‘Hey, we’d love to bring your brand to the UK’.” It took 18 months to convince the team in the US as well as a handful of investors to back their venture. “We’d identified a market position for a fast casual player to come into the UK, similar to what we’ve seen with Five Guys in the burger space,” Sahota said. “Before Wingstop, the sector was stagnant and there was no QSR speaking to Generation Z youth culture. We wanted to dial into that.” Or as recently hired chief marketing officer Dirujan Sabesan put it: “Developing meaningful partnerships in music, culture, and with like-minded brands to provide unique experiences for our audience.”

Prior to launch, Grogan and Sahota spent six months courting music collectives and tastemakers to make sure Wingstop’s product was seen in the right places with the right influencers. Not surprisingly there was a queue down the street when the brand made its UK debut in London’s Cambridge Circus in 2018. Sahota said: “Our core consumer is between 16 to early 20’s. I guess the channel they use and most engage with is TikTok. We had to pivot towards that and create content which is far more human and comes through to that customer.” A handful of “culturally relevant” social media stars have also been given a “black card”, which gives access to unlimited wings at its stores. “We’re the most followed UK restaurant brand on TikTok,” Grogan previously told The Times. “In fact, TikTok approached us to do its first restaurant takeover globally right here [in the Cambridge Circus site]. We closed the store for it and it brought in ten of its hottest UK artists.” For him and Sahota – both big rap fans – it’s been a winning blend of work and pleasure. 

Through authentic brand collaborations, partnerships and events, Wingstop UK has cultivated a connection with British music, fashion, and sport and in doing so embedded itself in youth culture. It has backed this up “with bold signature flavours, exceptional service and operational excellence”, which has led to industry leading net promoter scores and according to the business “an aspirational and unique market position in the UK fast casual restaurant sector”. It sees itself as not just a QSR brand, but as a “lifestyle destination, a community-first space, and a movement for more than just food”. And while that may seem a lofty place to position oneself, the numbers have certainly begun to back this up, and inevitably led to the recent investment interest it received and competitive bidding process it generated. 

The company’s revenue in the year to 31 March 2024 increased 122% to £84.7m (2023: £38.2m), driven by an increase in store count (12) and strong like-for-like growth of 51.3%. Since the period ended, like-for-like trading has accelerated. For the calendar year 2024, like-for-like sales have increased 59.4% (January to October). Revenue by the end of its current financial year is expected to be in excess of £150m. Its initial success led to parent company Wingstop taking a stake in the business, thought to be around 20%, which it has now believed to have rolled over. Michael Skipworth, president and chief executive of the global Wingstop business has previously described the UK business as a “playbook for the brand’s future restaurant development” internationally. He said in October: “We have more than 50 restaurants (in the UK) and average unit volumes (AUVs) now are more than $3m (£2.3m) in the market. They continue to showcase that same story. When you stack the vintage, each vintage is comping and growing transaction growth. The cash-on-cash returns, the unit economics are very similar to those that we experienced here in the US – maybe a little bit higher build-out costs. But when you look at the AUVs, north of $3m, the cash-on-cash returns [for franchises] are really strong there.” This may go some way to explain the punchy price that Sixth Street has paid, alongside the potential runway the brand still has.

Lemon Pepper, which will finish this year with 57 Wingstop sites in the UK, believes there is scope to reach 200 locations within the next five years, although Grogan has previously also talked about 300 sites, and even 500 sites, as a possible target for the brand here. Competition in the category remains fierce. With Wingstop joined by US peers Popeyes (TDR-backed) and Slim Chickens (Boparan Restaurant Group-backed) in nibbling away at long-established market leader KFC’s market share, that’s before the likes of Dave’s Hot Chicken and Chick-Fil-A fully join the fray, and not counting the UK-reared Chicken Shop, Butchies and Thunderbird. It suggests that consolidation may be on the way, especially for those smaller concepts, which may need to carve out an even more niche position in the marketplace to rival their US counterparts.

At a time when the M&A market has been subdued, this was a process done at speed and with strong competition in place. Indeed, all involved were determined that a deal would be agreed before the end of the year, which would have focused the minds of the investment firms involved. I understand that after offers were sent in on 16 December, a decision on the winning party was made two days later. Early speculation was that KKR had jumped in ahead of Sixth Street, BrewDog-backed TSG Consumer Partners, and Domino’s, in the race to back Wingstop UK. However, by the end of last week, it became clear that Sixth Street was the frontrunner, with its US office decamping to the UK in order to get the deal over the line. It does leave a tantalising thought of what would have happened if Domino’s had come out on top and what potentially its franchise base and logistical expertise and reach would have done with Wingstop. That will now have to wait for another brand. Sixth Street also has the advantage of already being in the Wingstop system, having backed Far West – a Wingstop franchisee, which currently operates more than 100 restaurant locations across California, Nevada, Washington, Colorado, and Utah, since the end of 2023. That its investments have included brands such as Airbnb, Spotify, the San Antonio Spurs, FC Barcelona and Real Madrid, will also have appealed to Wingstop and the UK management.

That management is led by Chris Sherriff, who had been with Wingstop for three years before he was made chief executive this summer. He previously spent six years at Unilever's Ben & Jerry's as head of retail in Europe and Asia. Earlier in his career he was at Yum! Restaurants International in senior operations roles. Despite the macro headwinds the sector has been facing in terms of inflationary pressures on utilities, labour and cost of sales, under Sherriff, Wingstop UK has been able to maintain and improve profitability across its estate. It will again look to up its opening rate next year, and there seems nothing at present that can check its current momentum or fight the power of its link to the wallet and attention of Generation Z.