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Case Study Wing Shack

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Submitted By nassky
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1. What issues must the owners consider before deciding whether to open more restaurants on their own or to franchises?

The wing shack is a successful restaurant started by a couple of college student, it has been running its business for 3 years successfully and showing increased in profits. The owners initially decided to open a new restaurant in a city about one hour away, but the owner felt that this will put a strain on their partnership. This led them to another choice, which is franchising.

Firstly, in case for restaurant, decision have to be made regarding Channel width that is how many outlets, for wing shack, so far they only have one primary outlets, and are planning to built another one in another town, this led us to the selective distribution where it refers to The wing Shack uses more than one outlets but restrict viability of the products or services to a limited outlet. This channel is based on a geographic segmentation. This is because the Wing Shack is started by only a couple of students, and they want to limits themselves to large cities where there is a large demand for their business.

Next the channel length, that is the number of intermediaries between the manufacturer and final consumer. I think that the wing shack uses a direct channel that is the manufacturer sells directly to the consumer, and the manufacturer performs all the channel function. I think wing shack have no other choice but to choose the direct channel because the restaurant service must be performed while the consumer is present. This will also enable the firm to have a close contact with the final consumer and the ability to react quickly to changes in market. And for franchising, the wing shack owners should consider the advantages and disadvantages of franchising. Advantages Disadvantages
Franchisee Established product/ service
Technical / managerial

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