Antonio Swad, founder of Wingstop and Pizza Patron, explains why Wingstop required franchisees to select their own store locations rather than picking them on their behalf.
Assertion Not checkable as stated
Wingstop's private equity buyers diverted cash flow to avoid paying Swad's note
“Instead of using the money to make the payment to me for the company that I built, they took the money and they built corporate stores with it, which was adding to the intrinsic value of the company. They were bonusing themselves. If it ever looked like at the…”
Disclosure
Swad felt like a hypocrite scaling Wingstop because he was a vegetarian
“Keep in mind at this time, you know, I was feeling more and more like a hypocrite growing this company that sold nothing but chicken, not eating chicken myself, and knowing what the industry was like.”
Insight
Emotional buy-in near closing makes sellers vulnerable to unfavorable last-minute deal modifications
“The closer they get you to closing on a transaction like this, at this point, you're emotionally kind of already there. You're, you might even be spending the money, you know, in your mind. Oh, when I get that check, here's what I'm going to do first and all t…”
Assertion Not publicly verifiable
Swad sued Wingstop's buyers to recover the $12 million owed on his note
“Well, me and that one lawyer, we sued him. And keep in mind, they owed me twelve million dollars. Okay, that's a lot of money to a young, young man from Ohio who started off at the dish machine, you know. So I sued him. I sued him for my money.”
Assertion Not checkable as stated
Pizza Patron's controversial 'Pizza for Pesos' promotion catalyzed massive global publicity
“Got a lot of attention, global attention, and it catapulted the brand and the franchising program into a light. I couldn't have Couldn't have bought that much publicity at any price, and that, and that's when we really started to go, but it galvanized that cus…”
Insight
Franchising builds company value by using franchisee capital to scale proprietary IP
“If you want to build a company that's worth a lot of money, Franchising is a way to build it, and it's primarily the growth of the company is funded by other people. It's funded by the franchisee, and as long as I could control all the intellectual property an…”