Wingstop Inc (WING) Q4 2020 Earnings Call Transcript

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Wingstop Inc (WING 1.97%)
Q4 2020 Earnings Call
Feb 17, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop, Inc. Fiscal Fourth Quarter 2020 Earnings Conference Call. Please note that this conference is being recorded today, Wednesday, February 17, 2021. On the call we have Charlie Morrison, Chairman and Chief Executive Officer, and Michael Skipworth, Executive Vice President and Chief Financial Officer.

I would now like to turn the call -- conference over to Michael. Please go ahead.

Michael J. Skipworth -- Executive Vice President, Chief Financial Officer

Thank you and welcome. Everyone should have access to our fiscal fourth quarter and full year 2020 earnings release. A copy is posted under the Investor Relations' tab on our website at ir.wingstop.com. Our discussion today includes forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect. Our SEC filings describe various risks that could affect our future operating results and financial condition.

We use certain non-GAAP financial measures that we believe can be useful in evaluating our performance. Presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are contained in our earnings release. Lastly, for the Q&A session, we ask that you please each keep to one question and a follow-up to allow as many participants as possible to ask a question.

With that, I'd like to turn the call over to Charlie.

Charles R. Morrison -- Chairman and Chief Executive Officer

Thank you, Michael, and good morning, everyone. We appreciate you joining us for our call this morning and hope everyone is safe and well. As I reflect back on the unprecedented year of 2020 it was clearly challenging for us all, but has also underscored the resiliency of the Wingstop brand and given us confidence that our growth strategies will enable our long-term vision of becoming a top 10 global restaurant brand.

I'm extremely grateful for our team members, our brand partners and supplier partners and their commitment to the success of the brand and living our mission to serve the world flavor. Our growth strategy is predicated on expanding our global footprint, and despite the challenging backdrop of the COVID-19 pandemic we opened 153 net new restaurants in 2020, including a record 59 new openings in the fourth quarter alone.

Our brand partners are eager to build more Wingstop restaurants as a result of our best-in-class unit economics. Our domestic restaurants have achieved an average unit volume of $1.5 million up from $1.25 million just a year ago. With an average initial investment of $400,000 our brand partners can enjoy cash on cash returns approaching 70%. As we close the year, our domestic development agreement pipeline hit an all-time high with more than 700 restaurant commitments at the end of 2020.

This compares to a prior record pipeline of agreements at the end of 2019 totaling 610 restaurant commitments. Those commitments for new openings are primarily spread across the coming three to four years. Thus we remain confident in our ability to deliver against our three to five year development growth target of 10%-plus unit growth and believe that the current 2021 outlook will be slightly above that target and in line with current consensus estimates.

2020 also marked our 17th consecutive year of positive same-store sales growth, closing the year at 21.4%. On a two-year basis that equates to 32.5% same-store growth. Our strong top line growth coupled with our restaurant expansion led to system sales of approximately $2 billion, an exciting inflection point for Wingstop. Another milestone achieved in 2020 was our ability to exceed $1 billion in annual systemwide digital sales. Our digital business represented about 40% of total restaurant sales at the start of the year and has now grown to more than 60% of sales and has sustained above this level the last three quarters pointing to the stickiness among our new digital guests.

As a reminder, 2020 also represented our first year introducing delivery systemwide as a new channel and now represents more than 25% of total sales, which has nearly doubled after only one year. Guests that use us for delivery are typically new to our brand representing a great growth opportunity for the future. In 2020, our database of digital users has now expanded to more than 20 million guests. While 2020 was a record year for top-line growth for the brand we believe there are a number of levers for us to pull to continue to drive long-term sustainable growth and deliver on our three to five year target of mid-single digit domestic same-store sales growth.

The 20 million guests in our digital database, driven by our continued growth in our delivery channels will fuel our CRM engagements efforts as a key lever. Our personalized one to one marketing will play a bigger role to quickly generate repeat orders from the increasing number of new digital guests as well as continue to increase frequency among our core fans. We won't stop there. Our national advertising strategy is working and we continue to have a significant opportunity to close the gap to other top 10 brands in brand awareness and consideration.

In 2021 we will leverage our system sales growth of nearly 30% achieved in 2020 and carry a multi-million dollar surplus of advertising funds and utilize them to pull all these growth levers including an aggressive strategy to lap our strong second and third quarter 2020 results with premium placed ads in places we know people will be watching notably, live sports. We believe we are well positioned to lap our remarkable 2020 results with continued domestic same-store sales growth.

I'd like to provide an update on our international operations. As with most global restaurant brands, the impact the pandemic has had on international operations is greater than what we've seen in the U.S. particularly, since the majority of our international restaurants had a higher concentration of dining room sales. However, we are encouraged by how our brand partners have been able to weather the storm the past year and we will continue to support them as they emerge from this difficult operating environment.

Despite the challenging circumstances we still opened 25 net new restaurants across five countries and had only one closure, an amazing result indeed. We believe our international partners will emerge from this pandemic in a position of strength as we continue to invest in our international business and execute against our global strategy. While 2020 was a record year for Wingstop on so many fronts, I am really moved by the resiliency and momentum in the brand as we continue to build Wingstop into a top 10 global brand.

We will continue to make the necessary investments in people, technology and our restaurants to grow the brand and maximize shareholder value. We remain confident in our strategic plans that will continue to reward our shareholders, brand partners and team members.

And with that, I'll turn the call over to Michael.

Michael J. Skipworth -- Executive Vice President, Chief Financial Officer

Thank you, Charlie. As Charlie mentioned, 2020 demonstrated the strength and resiliency of our model and positions us well for 2021 and beyond. 2020 marked a year of record top-line growth for the brand. Domestic same-store sales grew by 18.2% in the fourth quarter and 21.4% for the full year, which is a 32.5% comp growth on a two-year basis. Record same-store sales growth combined with 153 net new restaurants resulted in approximately $2 billion in system sales for 2020, up 28.8% from $1.5 billion in 2019.

The 153 net new restaurant openings, which includes 59 net new restaurants in the fourth quarter, a record quarter for us, resulted in a global footprint of 1,538 restaurants. We are excited by our brand partners' strong interest to build and operate more Wingstop restaurant and believe we have the right foundation and drivers to execute against our long-term target of 6,000-plus global restaurants.

Royalties, franchise fees and other revenue increased $4.1 million to $28 million for the fourth quarter from $23.9 million in the prior year. The increase was primarily due to domestic same-store sales growth of 18.2% as well as 152 net franchise restaurant openings since December 28, 2019, partially offset by a decrease in contributions received for our brand partner convention in the fourth quarter of 2019. We did not hold a convention in 2020.

In the fourth quarter, our company-owned restaurant sales increased $1.8 million to $15.9 million from $14.1 million a year ago, mainly driven by same-store sales growth of 10.4%. Cost of sales as a percentage of company-owned restaurant sales increased by 250 basis points compared to the fourth quarter last year, primarily driven by a 27% year-over-year increase in the Urner Barry cost of bone-in wing. Our wing price mitigation strategy is in place with our largest poultry suppliers during this near-term pressure and has effectively lowered the cost of wings relative to full implied market value.

The increase in cost of goods was partially offset by the leverage gained on labor and other operating expenses due to the growth in average unit volumes. While this is a short-term pressure on cost of goods, we are pleased with the improvements we saw in labor and other operating expenses underscoring our efficient restaurant operations and our ability to secure competitive rates for delivery. At Q4 margins, we believe our brand partners benefit from best in-class cash on cash returns of north of 50%.

Reported selling, general and administrative expenses increased $3.1 million to $21 million from $17.8 million in the fiscal fourth quarter of the prior year due to $1.4 million in higher professional fees, primarily related to opportunistic investments in technology and international projects to advance our global strategy. $1.3 million of expenses related to COVID-19 and continued support provided to international brand partners as certain markets reinstated restrictions as they work to contain the spread of the virus.

$2.1 million in investments in people-related expenses associated with higher variable-based compensation expense, inclusive of additional stock-based compensation expense due to the company's results in 2020. These increases were partially offset by a decrease of $1.8 million related to the brand partner convention we held in the fourth quarter of 2019.

Reported SG&A was $69 million for the year, which excludes the gain on sale of $3.2 million from the refranchising of seven company-owned restaurants. Due to its materiality, this gain was recorded in it's own line in the P&L and is not included in SG&A. Adjusted for this reclass, our prior SG&A guidance would have been $66.7 million to $67.7 million. Full year SG&A, as reported, was $1.3 million above this adjusted guidance as we made opportunistic investments in technology and international as we continue to advance our long-term growth strategy. We believe these investments support the long-term growth of the brand in achieving our goal of 6,000-plus global restaurant.

Adjusted EBITDA, a non-GAAP measure, was $16.2 million for the fourth quarter, representing a 14.7% increase versus the fourth quarter of 2019. As we have previously communicated, we completed the refinancing of our securitized financing facility in the fourth quarter and recorded loss on debt extinguishment of $13.7 million. As a reminder, the non-recurring loss on debt extinguishment is excluded from our adjusted EBITDA, adjusted net income and adjusted EPS calculations.

Despite the transaction closing late in the year, an increase in our total indebtedness by $153.8 million versus the third fiscal quarter of 2020, we saw lower interest expense in the fiscal year 2020 versus 2019, thanks to the more favorable debt terms of this facility, which carries an interest rate of 2.84% compared to the prior rate of 4.97% and will translate to approximately $2 million in annual interest expense saving. As a result of $38 million of expense associated with the refinancing of our debt and related payment of a special dividend in the fourth quarter, we reported a net loss of $6.4 million or a loss of $0.21 per diluted share.

Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures were $5.3 million and $0.18 per diluted share, up 23% and 29%, respectively compared to the prior year fiscal fourth quarter. Reconciliations between non-GAAP and their most comparable GAAP measures are included in our earnings release.

We ended the year with $434.3 million in net debt and a leverage ratio of 6 times, a level of -- we are comfortable with given our asset-light, highly franchised business model and our ability to quickly delever based on our EBITDA growth and strong cash flow generation. We are consistently evaluating the best use of capital and believe the return of capital is an important part of our commitment to our shareholders.

In addition to our regular quarterly dividend, we paid a special dividend of $5 per share for a total dividend of $5.14 per share in the fourth quarter. Today our Board of Directors announced a quarterly dividend of $0.14 per share of common stock, payable to stockholders of record as of March 5, 2021. This dividend totaling approximately $4.2 million will be paid on March 26, 2021. Since our IPO, we have returned an approximate $0.5 billion to shareholders and this return of capital demonstrates our confidence in our long-term outlook for our business.

We will continue making the appropriate investments for the long-term growth of the brand and remain confident in our three to five-year outlook. As noted in the release this morning, we are reaffirming our targets of mid-single digit domestic same-store sales growth and 10%-plus unit growth. As for 2021, we estimate reported SG&A to be between $76 million and $78.5 million. This includes the following estimates for 2021.

Brand partner convention of $2 million, which has an equal and offsetting amount recorded in revenue, stock compensation expense of $9.7 million to $10.2 million, and expenses associated with national advertising of $9.2 million to $9.7 million, which also have an equal and offsetting amount recorded in revenue. Adjusting for these items, we estimate adjusted SG&A, a non-GAAP measure, to be between $55.1 million and $56.6 million in 2021 compared to $50.9 million in 2020.

I'd like to close by expressing my gratitude to all of our team members, our brand partners and supplier partners for their entrepreneurial spirit and service-mindedness as we continue to navigate this challenging time. Our brand has demonstrated its strength and resiliency and we look forward to continuing to execute against our growth strategies and deliver on our vision to become a top 10 global restaurant brand.

With that, we're happy to take your questions. Operator, please open the lines for questions.

Questions and Answers:

Operator

[Operator Instructions] And our first question today will come from Jeffrey Bernstein with Barclays. Please go ahead.

Jeffrey Bernstein -- Barclays Capital -- Analyst

Great. Thank you very much and hope you guys are doing well down in Texas these days. I had one question and one follow up. The question is regards to the comps as we go through 2021. I know, you didn't give specific guidance to '21 alone but needless to say you're lapping a 25% to 30% comp in the middle of '21. So I think you made reference to confidence in sustaining positive comp growth, well for those compares. I'm wondering whether you think that's reasonable as you move through the middle of the year?

And obviously, you don't want to offer any specific color perhaps the the drivers of the continued growth you mentioned, whether you could prioritize the national ads versus digital versus customer data I think, were the three kind of primary areas you mentioned and then I had one follow-up.

Charles R. Morrison -- Chairman and Chief Executive Officer

Good morning, Jeff, and thank you for the question as well as for your sentiment on what we're going through down here in Texas. It is cold. We did give the same guidance that we gave last year, as you may recall, which is a long-term outlook of three -- or a mid-single digit same-store sales growth over the next three to five years. We still feel very comfortable with that as well as a 10%-plus unit growth target, so reaffirming those metrics.

As we think about 2021, yes, a couple of things. We are on a seasonal basis or quarterly basis we certainly have some tougher compares in quarter two and quarter three than we do in one and four however, I think on a two-year basis that's probably the best way to think about what we're seeing in the comp and giving our confidence to be able to hit those long-term metrics that we guided to.

As for the levers, yes. I mean there are couple of things that are important here. Number one, our average unit volume has now grown to $1.5 million across our domestic system, which is a game changing type of AUV, which is fueling the development numbers that we are seeing as well as our brand partners' interest in adding new restaurants to their portfolio. I would also call attention to the fact that our investment cost of $400,000 has remained relatively unchanged for almost five years, so the cash on cash returns are very, very good for our brand partners.

As we look to this year, we were able to pull additional advertising dollars out of 2020, and put them into 2021. And as I mentioned on the call, we are applying those dollars in the key time frames where, if you will, climbing that mountain is a little more difficult than the rest of the year but we do have confidence in that. And then the other thing we noted having now an over 60% digital business creates a lot of good information for us to leverage, to interact and engage with our guests. A lot of the growth we saw this last year came from new guests to our system.

And so therefore we're going to be leveraging the investments we've made in a robust CRM platform to engage with those guests generate those second, third and fourth Wingstop occasions and so on and then to convert them into heavy users in the future. And we think having that lever with more than 20 million guests in that system gives us even more confidence in our ability to continue to deliver positive same-store sales growth over the long haul.

Jeffrey Bernstein -- Barclays Capital -- Analyst

Got it. And then my follow up was just a comment you made in your prepared remarks on the unit growth for '21. It looks like you delivered 11% growth in '20, a very difficult year, and you talked about the pipeline growing. So I think you mentioned you look confident in slightly above the 10% long-term target just wondering whether there is any franchise push back because otherwise it would seem like right there is opportunity to exceed that 10% by a fair amount considering the real estate availability, the less competition? I'm just wondering -- I just want to clarify your comment around 2021 unit growth and what might limit that growth from being stronger?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yes, and I appreciate that question, Jeff. Couple of comments on that. Number one, the name of this game is about unit growth. Too often we get hung up on same-store sales, we look at sequential comps quarter-to-quarter, we think about how that impacts the unit economic model and as I mentioned that ours is really strong and in a great position. And that is fueling our brand partners' demands for additional restaurants to add to their portfolios and grow their overall value.

That has been -- that manifested itself in the largest pipeline we've seen as a brand and it also has manifested itself in an extraordinary fourth quarter development number. And as you know, early in the year during the March and April timeframe even into June, we had almost a stoppage of development, a lot of that pipeline is pushing forward.

So if you add the new demand for new restaurant development plus what was in the pipeline plus what's in the pipeline going into this year, we did feel confident in stating that 10%-plus is certainly our long term algorithm but if you look at what consensus estimates were for the year, I also commented on that as being a real decent benchmark for where we think our development potential is.

Jeffrey Bernstein -- Barclays Capital -- Analyst

Great. Thank you.

Operator

And our next question will come from David Tarantino with Baird. Please go ahead.

David Tarantino -- Robert W. Baird & Co. -- Analyst

Hi, good morning. Hope you both are doing well. My question, Charlie, I think you mentioned several same-store sales drivers for this year, but you didn't talk about your dining rooms reopening, so I wanted to ask about your approach there on when the dining rooms might reopen, and if you've actually reopened any dining rooms and what you've seen since you've done that?

Charles R. Morrison -- Chairman and Chief Executive Officer

Good morning, David. The reason we didn't put that in there is not because we don't think it has some impact, it has more to do with trying to figure out when that would actually happen. I think at the end of the day a lot of our dine-in customers are also now carry out customers with our brand. They've converted nicely to off-premise. And I think, if you think of Wingstop as compared to perhaps any other brand in the space, our digital infrastructure allowed that conversion to be done with relatively little impact to our business if anything has helped us grow, right.

And so we are being thoughtful about our approach. We certainly will prioritize and continue to prioritize the health and safety of our team members as well as our guests. But as we see the impact of the pandemic starting to subside we would expect to open up those dining rooms. But I would not put it at the top of the list as what we think are the material impacts to our top line, it has more to do with continuing to generate strong advertising messages that cause people to consider Wingstop, those people were targeting.

Again, just as a reminder, tend to be those heavy QSR customers that we have not really had in our brand for a long time and we're adding more and more of those with the levers we've pulled around delivery, digital and our advertising. And we'll continue to do that throughout the year. And then once they come in, they are new guests. We want to reengage them immediately and bring them back for that next occasion. So everything we can do to ensure a quality occasion for either delivery or carry-out is paramount and then a reengagement opportunity to bring them back hopefully, within the next month, that's our objective.

David Tarantino -- Robert W. Baird & Co. -- Analyst

Got it, and then one follow up. Just a clarification. The 20 million people you have in your database is an impressive number given the scale of your brand, does that include customers ordering through the third-party app. And I guess, Charlie can you talk a little bit about kind of how you reach the customers that are coming in through the third-party app as opposed to the Wingstop app?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yes, it's a great question. Thank you. The answer is no, that database does not consist of people coming through the third-party app and --which is DoorDash just to be clear. Our partnership with DoorDash, of course, just the opportunity to clearly understand who those guests are in terms of how they shop, who they are. We don't have specific information that would allow us to put them in their data -- our database to market directly to them, but indirectly who they are has a lot to do with how we fashion our advertising approach and how we go market to them directly either in the digital space or through some of our national advertising.

So we believe that, yes, this is a really nice database, it's large and it is adding new guests at a very high pace right now as given what we've experienced through the pandemic. So again, why it's important for us to engage quickly and efficiently with those guests to bring them back into that next occasion.

David Tarantino -- Robert W. Baird & Co. -- Analyst

Great. Thank you very much.

Operator

And our next question will come from John Glass with Morgan Stanley. Please go ahead.

John Glass -- Morgan Stanley -- Analyst

Thanks. Good morning, you all. So I also want to follow up just on the ad spend and then how you think about that. Is there a way, Charlie, you can quantify the incremental spend, I think you said multi-million dollars or maybe if you could express right TRPs or how do you want to think about ad spend increase versus '21 if you don't want to do dollars, maybe some other metric. Does that plan include like advertising funded by DoorDash, for example, are you including or excluding or do you have agreements with them as they think about promoting the brand on their own app as a way to also drive incremental sales?

Charles R. Morrison -- Chairman and Chief Executive Officer

Hi, John. Good morning. The best way to characterize it is more weeks and more TRPs. Yes, we're not providing specifics on each of those, but you can rest assure there are more weeks and more TRPs from that spend. I think the other way I would characterize it is quality, which I mentioned in my comments. Given the fact that there is not a lot of new content and programming out there yet, we do believe that will come along. The one place we know people are living is in live sports and so we have moved a lot of our inventory into places where we believe people will be consuming TV, which will be more live sports and premium sports at that. So that's another indication of how we're utilizing those incremental dollars effectively.

As it relates to our partnerships, no, there is no money coming into the ad fund associated with our partnership with DoorDash. We may choose to invest in another free delivery program or they may do that with us as they've done before. That's up in the air at this point but again, $1.5 million average unit volumes, $4,000 investments fuel unit development, which is really where our focus remains in terms of the health and strength of the business.

John Glass -- Morgan Stanley -- Analyst

So maybe, then I could just follow up on that. Of the pipeline you've got now, can you just review number of new franchisees that have entered this system this past year versus the existing legacy percentages or new markets versus existing markets and are you thinking post-COVID now about a format shift or as you think about how that evolves, are you going to see new formats in '21 that sort of focus on our digital footprint that you've talked about that in the past but if there's been any evolution in that thinking?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yes, the numbers remain consistent with prior years. 80% to 90% of our total pipeline over those years has been from existing franchisees and that remains consistent with what is going on last year. We've added very few net new franchisees to the system. Our existing brand partners are growing in size and scale, and they're able to take the strong cash returns they are generating and reinvest that back into the business. And so we expect that to continue.

As it relates to format -- or let me address first markets, sorry. Very strong in our fortress markets, very consistent with what we've talked about in the past. We have about 25 key markets in the U.S. that we are working very diligently to establish a strong presence and fortress them, and that's working very well. So that usually makes up more than 75% of our total development.

And then lastly, as it relates to new formats, we are up to 13 ghost kitchens across the planet for Wingstop. We're expanding them in the U.S. in key markets. Very early stages but we like what they provide for us. Right now it comes down to the same comment I made in prior quarters. We really want to understand the unit economic model, we want to understand whether to partner or build strategy and we're taking our careful and thoughtful consideration into each of those decisions as we move forward. But expect us to continue to expand that footprint as well.

John Glass -- Morgan Stanley -- Analyst

Great. Thank you so much.

Operator

And our next question will come from Andrew Charles with Cowen. Please go ahead.

Andrew Charles -- Cowen and Company -- Analyst

Great. Thanks and hope you guys are staying safe in Dallas. I have one clarification and one question. So the clarification is that, somewhat of a year ago you provided the three to five-year outlook for mid-single digit comps and 10%-plus store growth, can you just remind us if this is an average over the three to five-year timeframe or an annual range you guys hold yourselves accountable to, and specifically I totally get obviously, the thought that obviously same-store sales are likely to grow next year, but can you talk about your level of confidence in delivering mid-single digit comps in 2021?

Charles R. Morrison -- Chairman and Chief Executive Officer

Good morning, Andrew, and thank you for the well wishes. All is well, lacking power and water, but we'll be fine. It's a good question because if there were an average, I would say all we got to do is deliver flat for the next few years and we'll hit the number and I don't think that's what anybody is expecting at Wingstop, and it's not what we're expecting for ourselves. We do believe the brand has the potential over the three to five year timeframe of delivering mid-single digit comps, and hence why we reinforced that message this year much as we did last year.

So yes, I mean, does it have the potential? Absolutely. We have to be diligent and thoughtful in pulling the levers. But again, I go back to the fact that this brand was so well positioned with our investments that we made in digital and delivery to prepare ourselves for this. We've only effectively been delivering food to our guests nationwide for a full year now, we believe there is growth opportunity there. We believe there is growth opportunity by way of our advertising and expanding that. I mean, we -- not only did we pull money in from last year but we grew our sales by 30%, which feels a lot of dollars in the ad fund to really up our game dramatically.

So there are plenty of levers there to be pulled to help continue the growth. And noting, of course, we're rolling over a big number but we've done that many times in our 17-year history of positive same-store sales growth.

Andrew Charles -- Cowen and Company -- Analyst

Thanks for that, Charlie. And then, Michael, question for you. How does the bone-in wing pricing mechanism impact 4Q results? Wing inflation was about 17.7% and gross margins were down about 270 basis points. Can you say what the gross margin would have been without the pricing mechanism? And then looking ahead, what are your vendors saying about the outlook for bone-in wing prices as we look across 2021?

Michael J. Skipworth -- Executive Vice President, Chief Financial Officer

Yes, Andrew, that's a -- it's a fair question. I appreciate it. I think we did point out in our prepared remarks that the underlying Urner Barry was up 27% and if you think about our bone-in wing mix of our COGS representing about 60% of mix, you can kind of work that math to get to a much lesser impact.

And I think one thing that's really important to point out is the discipline we've had as a brand around taking strategic pricing twice a year. And if you look back to 2017 where we saw similar inflationary numbers in bone-in wings then you can compare and our corporate store P&L as a proxy, the Q4 of back then in 2017 compared to Q4 in 2020 and there is -- we're running a much lower food costs. So that's the combination of discipline around menu pricing as well as the pricing mechanism we have with our suppliers.

But obviously that's one piece of it, but we've also been focused on making sure we're taking care of our team members in the restaurant as well and making investments there. And so that's been a big priority for us for 2020 and remains -- it remains that way for us as we go into 2021. But as far as the outlook, there is clearly a fair amount of uncertainty around reopenings and how overall supply will -- for the entire bird will play out.

We've got a lot of mismatch, if you will, on the demand for the bird. Demand's really soft for the back half and we've got some soft demand, low prices for breast meat right now and that's obviously impacting the overall supply. And production levels at poultry suppliers in addition to their challenges they have as they manage the impact of COVID on their plant production levels. But I think we're anticipating an inflationary year obviously, compared to 2020 as it relates to wings but nothing -- we don't think we're well-positioned to navigate through as a brand.

Obviously, Charlie called out the AUVs that we're running right now for the system of $1.5 million, which provides a nice amount of leverage on the P&L. And even as you think about the inflationary prices we're seeing in wings right now, the profit dollars that our brand partners are enjoying are up year-over-year, which is really kind of -- you don't take percent on the P&L to the bank, you take dollars and so that's what we're focused on when we look at the economics and the overall return.

Andrew Charles -- Cowen and Company -- Analyst

That's helpful. Stay safe, guys.

Charles R. Morrison -- Chairman and Chief Executive Officer

Thank you.

Operator

And our next question will come from Andy Barish with Jefferies. Please go ahead.

Andy Barish -- Jefferies -- Analyst

Hey, guys. Good morning. Yes, glad you're trying to keep warm down there and safe. I'm surprised no one's asked about the virtual concepts yet, can you just kind of frame up how you're thinking about all the, It's Just Wings and now Cosmic Wings added in 1,300 Applebee's and so on and so forth?

Charles R. Morrison -- Chairman and Chief Executive Officer

Well, good morning, Andy. Thank you for that question. I was surprised as well. The -- let me give you an answer to that. I think, Michael, just talked about the demand for chicken wings. And it's interesting that we've arrived at the point that we believe that selling chicken wings is the answer to same-store sales growth, which we would argue. If you're Wingstop we understand that, but we believe that having a robust digital infrastructure already in place and proper delivery partner have more to do with the strength of this business and the strength of the brand than anything else.

We love selling chicken wings but all we think that's doing is impacting the commodity costs, which as we've seen over the many years we've been doing this, rise and fall with what I would call competitive intrusion. And so we want to first say thank you to our suppliers. As Michael mentioned, they have been with us knowing that we will be a wing buyer in this market for the long haul and have supported us. And I think that's really important to recognize that they -- the relationships we have with our supplier partners really demonstrates the strength of Wingstop. And the fact that we have not had any issues with supply even given the demands for the product in the market.

I think our same-store sales performance and our confidence in our performance in 2021 are demonstrating the fact that -- and this really isn't impacting the Wingstop business other than just putting pressure on supply. But again, as Michael very clearly articulated, cash profits for our brand partners remain strong. We've got the right mechanisms in place to navigate yet another difficult wing environment, but overall margin performance even is as strong or stronger than it was in 2017 when we experienced this. So I think we're in great shape. Not a concern.

Andy Barish -- Jefferies -- Analyst

Thanks for that, and just one quick follow up, if you could on the 50-plus domestic openings. How much of that do you think is some of the delays from earlier in the year particularly, as you mentioned development obviously stopping in kind of March, April, May. And did this sort of catch you up from some of those earlier openings in '20 that may have occurred?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yes, we entered 2020 expecting to have a very strong development year and of course, we did with the 153 net new openings is exceptional performance given the challenge of the pandemic. That fourth quarter number really is not indicative of the push in the pipeline as much as it is the demand for new restaurant openings our brand partners had and perhaps even an acceleration in performance.

Usually our pipeline has about a nine month window in front of it, and so if anything, any push would be a first quarter type of phenomenon but I think I'd call more attention to the 700 restaurants that are in the pipeline for potential development being roughly 100 more than it was a year ago and those stagger out over three to four years is the better indication of just what we think is the strength in the pipeline going into 2021.

Andy Barish -- Jefferies -- Analyst

Thanks, guys.

Operator

And our next question will come from Chris O'Cull with Stifel. Please go ahead.

Chris O'Cull -- Stifel Financial Corp. -- Analyst

Thanks. Good morning, guys. I believe the company's initial G&A guidance for '20 was for it to grow roughly 10% but it increased by over twice that rate even excluding the COVID-related expenses, and for '21 it looks like you're growing roughly 15% excluding the same costs. I'm just wondering, Charlie, how are you determining whether you are spending at the appropriate levels? And Michael, what level of COVID-related expenses are you assuming in '21?

Charles R. Morrison -- Chairman and Chief Executive Officer

Good morning. Thank you. Any time you experienced the kind of growth that Wingstop has experienced and I would note, obviously this year growing your revenue, your systemwide sales by 30% presents an opportunity for the company to evaluate investments we can make to further that performance into future years. And as you know this brand has already grown to about $2 billion in systemwide revenue now. We think that there is a necessity to make sure that we have the right infrastructure systems and people in place to catapult us well beyond this level. We think the $2 billion is a bit of an inflection point, and I've commented on that many times in the past with both investors as well as the analyst community.

Even though we grew our G&A costs during the year, I would point to the fact that we did a few things we thought were the right thing to do for our business. Number one, we protected our international brand partners and their businesses. They've had a tough year, and with the strength we saw in the domestic business it was our decision and choice to make sure that we do everything we can to insulate them from the impacts of the pandemic and prepare them for a strong emergence. And I noted that we only closed one net restaurant in our international business and I think that's indicative of the money we've put into G&A to support them.

Number two, we also want to make sure we're protecting our technology investments. And it goes without saying that the investments we've made over the past five years have been fantastic for the brand. They were made with the partnership of a lot of -- a number of players who have supported us through that timeframe, but now that our business is more than 60% digital it's time again to make sure that we're protecting that investment and contemplating what that looks like for the future. So we did make some investments in the fourth quarter to evaluate and study what that future looks like.

We're not prepared yet to talk about what the impact of that would be, but suffice it to say that we're going to do everything we can to protect that 62% digital business and grow it well into the future. And so I think it's important to recognize that we saw this as an opportunity to step on the gas with this brand. We certainly could have flowed a lot of those dollars to the bottom line, but we're not going to apologize for a 26% adjusted EBITDA growth for the year either. That's fantastic performance that I think any long shareholder would be very pleased with our performance on.

As we look to 2021, we're going to continue to invest. We want to make sure we have the right people in place to support the business and what we believe is strong growth coming out of this difficult time that we've all experienced. We do actually have a convention in 2021 planned, which is not in 2020 so that does impact the SG&A number, and then we'll continue to expand on technology and our international expansion. A lot of that comes in the form of leveraging third parties that can help us prepare the platform for the future.

And so we expect those investments to continue as well as making sure that our international partners in 2021 are still as well insulated as they can be from the effects of the pandemic. I would only say that we see the virus slowing down in the U.S., we see the vaccine performance. But if you look out across the world it is not the same story. And so we're cautious of that and making sure that we do everything we can to help them.

Chris O'Cull -- Stifel Financial Corp. -- Analyst

That's helpful, and then just a follow-up. We've heard a lot of brands that seek out Class A sites say that they haven't really seen a break in rents or any kind of improvements in location opportunities. Given that your model differs somewhat I'm curious if you're seeing a greater level of opportunity in Class B sites than you've typically seen?

Charles R. Morrison -- Chairman and Chief Executive Officer

Well, I think we've always seen a great opportunity in the Class B sites, which are Class A for us. So I thank our landlords across the country for providing us such opportunities to grow. But I do think that the market is going to continue to free up. I don't know that we're seeing substantially different rent rates overall, but we certainly have not seen them increase as we would have otherwise seen if we didn't have the pandemic in front of us or behind us. So I think it's pretty much stay the course. No real change there other than we've always had ample access to real estate.

Chris O'Cull -- Stifel Financial Corp. -- Analyst

Great. Thank you.

Operator

And our next question will come from Jared Garber with Goldman Sachs. Please go ahead.

Jared Garber -- Goldman Sachs -- Analyst

Hi. Thanks for taking the question. Many of mine have been asked and thanks -- have been answered, and thanks for all the color today. But want to just round up on the third-party delivery versus your white-label app digital ecosystem. Can you give any kind of breakdown on how that has trended throughout the -- maybe the fourth quarter, the breakdown of those two different channels and what you're seeing in terms of consumer behavior maybe similarities or differences on those channels?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yes, there's really not much I would call attention to as to the mix between Wingstop.com-sourced occasions and those from our third-party delivery partner, DoorDash. They run about -- with the exception of Q2 last year, which was a bit of an anomaly, they've been running about a 60-40 split to the -- to DoorDash's marketplace over Wingstop. But again, I just remind ourselves, we're agnostic as to the platform they come from other than the information that we get about our guests, which I addressed in an earlier comment.

Jared Garber -- Goldman Sachs -- Analyst

Thanks. And just a follow up there. Curious if you're seeing -- from this free delivery promotions that you offered in the fourth quarter, are you seeing new customers sign-up or engage with the brand on the back of those or if you can tell based on the consumer data or is that more of the core, core consumer?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, I think regardless of the promotion we believe that delivery represents for the most part a new incremental customer to Wingstop who have not tried us before, and hence my comment about really growing the size of our database that's indicative of the performance of delivery.

Operator

And our next question will come from Jeff Farmer with Gordon Haskett. Please go ahead. Hello, your line may be muted.

Jeff Farmer -- Gordon Haskett Research Advisors -- Analyst

Hopefully you can hear me now. You did talk about the importance of one-to-one marketing as a sales driver in 2021, but I am curious where you are right now with this strategy meaning, did you actively reach out to data by -- database customers in 2020? And if you did, how did you go about engaging with those guests?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, the answer is yes. We have been reaching out to those guests but I think the key message here is that, that database has built rather rapidly given the performance of the brand and the acceleration in our digital business in the last year. We've always leveraged our CRM platform to engage with them one-to-one tying into preferences that they have. We've been working to attend information about these guests to the database to help us understand them even better as to their preferences, so that we can in the future and going into this next year, spend more time really engaging them around events that they prefer, with products that they love in a timely manner. And I think that that's really fundamental at the core of what a good CRM platform should do.

Jeff Farmer -- Gordon Haskett Research Advisors -- Analyst

That's helpful. And just as a delivery follow up, I think your delivery mix as you mentioned was roughly in that 25% range, it sounds like you have confidence in your ability to potentially take that mix higher in 2021. Assuming that's the case, what does give you confidence that you can continue to move that 25% delivery mix higher?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, well, first and foremost, it's only our first year of really operating under a full delivery platform. So I think there is confidence we can grow that platform much larger than what it is today. We've always felt that way. If anything we might be a year or two ahead of where we thought the goal would be for the brand.

But I think -- I don't have a number, Jeff, to give you as to what I think it ultimately could mix that, but I do think you're starting to see Wingstop emerge as more like some of the large pizza players in terms of our mix of digital and our mix of delivery sales overall. And so, if you use that as a benchmark for potential then we've got a quite a ways to go.

Jeff Farmer -- Gordon Haskett Research Advisors -- Analyst

Thank you.

Operator

And our next question will come from Jon Tower with Wells Fargo. Please go ahead.

Jon Tower -- Wells Fargo Securities -- Analyst

Great. Thanks. Got a few for you. Would you be willing to quantify how much spend you've been so far using to support the international franchisees whether in 2020 or planned for 2021?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah. So in 2020 alone roughly $2 million to $2.5 million of our EBITDA impact was associated with that spend.

Jon Tower -- Wells Fargo Securities -- Analyst

Great. And in 2021, have you been able to parse that out yet?

Charles R. Morrison -- Chairman and Chief Executive Officer

We haven't provided, it's -- anything anticipated is already incorporated into our SG&A guidance.

Jon Tower -- Wells Fargo Securities -- Analyst

Okay, and then just one quick clarification. The convention, is that going to hit in the fourth quarter again or is it going to be in a different kind of year? And then on top of that, it sounds like at least historically, the company has shied away from the idea of a loyalty program, but you've got digital mix north of 60%, $20 million -- 20 million members in the database and we've got lunches across quick service landscape as well as some of the fast casual landscape, some of which recently have been very successful. So have your thoughts evolved around the loyalty program? Are you still sticking or staying away from it?

Charles R. Morrison -- Chairman and Chief Executive Officer

We're sticking with it. What I would give you as a response to that is number one, our same-store sales were up over 21% last year without it. Number two, and more importantly, we do have this large database of guests and the key is engaging with them productively. There is no pressure to have to provide a discounted-based loyalty type platform in order to do that.

And number three, we believe we are in a category all by ourselves and a category of one. We don't have a direct competitor that we feel we have to engage in a price war as most QSR players would do. So I think all of those protect us from having to feel a loyalty type platform would be necessary.

And then let me answer your convention question. It is scheduled and I really, really hope we get to pull it off in the first couple of weeks of October this year, so that will be fourth quarter.

Jon Tower -- Wells Fargo Securities -- Analyst

All right. Thanks, stay safe.

Operator

Our next question will come from Dennis Geiger with UBS. Please go ahead.

Dennis Geiger -- UBS -- Analyst

Good morning. Thanks for the question and glad you are all safe. Just wanted to circle back on the international development opportunity. Charlie, I know you talked about how the international partners will emerge well positioned from the pandemic, but just wondering if you could provide an update on kind of where some of those partners are now in thinking about the trajectory of development going forward. And specifically maybe if you could also just touch on China, if there's any kind of new development and how you're thinking about that opportunity from the last update?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, thanks for the question. Much appreciated. Yeah, look, it's tough. A lot of our international markets rely on dining rooms notably, Mexico, which is our largest partner in the world and so not having full capacity or use of the dining room has been a big drag on their business much as we've seen for instance, other casual dining players here in the U.S., it's very similar circumstance. The challenge they deal with is the pandemic itself, the management of the vaccine and the controls that are in place and it's just difficult for us to see sort of a light at the end of the tunnel there.

That said, we did open 25 net new restaurants overseas last year during this time frame. And so I think there is still a desire for our brand partners to continue to invest and build restaurants. And hence why we've made the conscious decisions to support their businesses during this time frame to keep that development pipeline alive. I'll call attention to the U.K. We opened a number of restaurants this year, a mix of both street side as well as dark kitchens, and they're all performing very well. And we have adapted our business to more of a delivery and takeout model, heavy digital like we're seeing in the U.S. and that's working. Other markets like our partners in the Emirates, Indonesia, Singapore have all done quite well this year and have added new restaurants to their portfolio. So we're very happy with where we stand there. I think the future is bright as we start to emerge from this pandemic.

And then you asked about China. Yes, one of the comments I made earlier was that we did additional studies on international expansion, one of those was specific to China and we completed that in the fourth quarter. It's still a ways out in terms of our ability to really enter that market in a meaningful way. As I've noted before, we expected it to be one-and-a-half to two-year process before we got there. However, we believe the potential for a market like that represents as many as a thousand restaurants and more for Wingstop, so it's well worth our time and investment right now to prepare ourselves for that opportunity and not wait down the road.

Dennis Geiger -- UBS -- Analyst

That's great color, and just one unrelated follow up if I could. Just as far as size, if anything to share there, how that's gone, anything on expectations, etc.? Thank you.

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, I mean we came out assessed learning a lot more about the size. And Michael mentioned other parts of the bird are important in order to help mitigate wing prices. We had a good test. We're going to take that now, that learning expand upon it this year. There's not a specific commitment to roll that out yet in our pipeline, but we do have enough learning to be able to support what we believe is going to be a product for the future, for the brand, dark meat in general becomes a great opportunity as well.

So more to come. But right now we're going to focus on making sure we connect with these new guests, bring them in the building. We don't think that necessarily a new product is going to be the answer. And as Michael mentioned, we have put in some really solid mitigating practices in place to help support a lower food cost for our brand partners.

Dennis Geiger -- UBS -- Analyst

Great. Stay safe and warm. Thank you.

Operator

And our next question will come from Michael Tamas with Oppenheimer & Company. Please go ahead.

Michael Tamas -- Oppenheimer & Co., Inc. -- Analyst

Hi, thanks. Glad everyone is hanging in there. Just wanted to follow up on the fortressing strategy in the U.S. in those 25 key markets, do you think there's an opportunity longer term to maybe add more markets fortressing beyond those 25? You talked about your really strong unit economics and so I was wondering if there's any hurdles that would get you over -- that can get you over -- that can get you to more than 25 markets? Thanks.

Charles R. Morrison -- Chairman and Chief Executive Officer

Well, I mean, we certainly do develop in markets outside of those fortress markets but we think it's important to prioritize them because they create a lot of benefits for the brand. Number one, is just having that concentration in those 25 markets and being able to leverage that for advertising efficiencies on a local basis as well as supply chain efficiencies and so on. That said we're all across the United States and in many, many markets.

So opportunistically where we have a strong hold already that might not be in those 25 markets, we will continue to develop those. And let our brand partners do that, but this is our focus point. I'd also say that those 25 markets and the potential in those markets alone would catapult to follow way to our 3,000 restaurant potential in the U.S. So -- and it's a 3,000 plus. I say that because we think there's more opportunity but that strategy really is our game plan for how we get to 3,000.

Michael Tamas -- Oppenheimer & Co., Inc. -- Analyst

Awesome. Thanks for the time.

Operator

And our next question will come from Nick Setyan with Wedbush Securities. Please go ahead.

Nick Setyan -- Wedbush Securities -- Analyst

Thank you. You guys obviously talked about your expectation of the wing cost headwind being a trend, a near-term phenomenon, but at the same time obviously there is a little bit of a different dynamic in terms of the competitive encroachments. What if it doesn't and that being a near-term transient sort of phenomenon, what's plan B?

Charles R. Morrison -- Chairman and Chief Executive Officer

Well, I think Nick, to look for a plan B you would assume that it's a catastrophic challenge for the brand, which just isn't the case. Our food cost is running at levels that are below where they were in 2017 even at much higher wing prices. And so the way we solve that is hard work with our suppliers and continuing to work with them on ways we can use other parts of the bird to help mitigate some of the mix. Our boneless wing mix, which is typically a breast meat, white meat product, is the highest mix ever, so we do use product bundling as a way to mitigate the impact as well.

But I think if you go back to Michael's comment, a $1.5 million AUV even with the unit economic challenges of high wing prices still deliver exceptional cash-on-cash returns. So we don't think that we need to get into a position material changes in doing that. I think we're fine right now, and we do believe it will remain transient. It's proven that self in the past. Other competitors are pricing at very low levels to generate volume, we know that's not sustainable. We still believe we have pricing power within our top line and so we're going to continue forging ahead on our strategy.

Nick Setyan -- Wedbush Securities -- Analyst

And I mean, you guys did talk about Investor Day in terms of the longer term expectation of maybe being able to get the whole bird. I mean, what is the timeline for that? Is that still a strategy in the background that you're working toward?

Charles R. Morrison -- Chairman and Chief Executive Officer

Absolutely. Any time we can utilize more of the bird it gives us that opportunity to buy the whole bird. The market dynamics fluctuate, as we've seen this year, there is almost no demand for what we call the back half of the bird but that would be the leg and the thigh and the back portion of the bird and that's a struggle right now for us and anybody in this business, and breast meat demand is down too.

So this is a pandemic thing more so than anything. And I think as we start to retreat back to some normalcy and we pray that we do, brands like Chili's will put their fryers to used to take care of the dining room. We won't be seeing chicken wings flowing through, that's our guess.

Other -- these brands that are emerging, we understand and have said many times, we support what they're doing to try and keep their restaurants' capacity up. It's a smart move but do we believe it's sustainable? Probably not. And so we're going to continue to work on ways we can use dark meat in our products. The thighs are a great example of that and the test that we did and we have a lot of good learning there that allows us to pull that lever when we need it, and we can look at other products that we are always constantly evaluating to see what makes the most sense.

But right now the way we are sitting, I think we're in good shape on the P&L. We could obviously obviously be in better shape. But keep in mind that our labor and our four-wall rent costs are substantially lower than those brands. And so lot of times we get to talking about food costs and forget about those and that's really what fuels our P&L.

Nick Setyan -- Wedbush Securities -- Analyst

Thank you very much.

Operator

And our next question will come from Andrew Strelzik with BMO. Please go ahead.

Andrew Strelzik -- BMO Capital Markets -- Analyst

Hi, thanks for taking the question. I actually wanted to ask about labor, and I was hoping you could share your perspective on the current, excuse me, labor environment and with the conversation around wage potentially going up, how you think about with your franchisees managing through that environment should it come to pass?

And I was also hoping just to follow up on the conversation around the $2 billion kind of threshold that you guys have hit from a system sales perspective. You mentioned the implications for unit growth and some advertising stuff. Are there any other kind of structural benefits or opportunities that surpassing that threshold you think kind of opens up for the brand? Thank you.

Charles R. Morrison -- Chairman and Chief Executive Officer

Well, let me say this first, it's not really a good time in our economy given what's going on, especially in the restaurant industry to be talking about minimum wage legislation when -- what we're really talking about is trying to get especially smaller, independent operators back on their feet in growing their business. It's a heavy demand that we're placing on them, and I really wish we weren't talking about it right now.

We do, as -- if I think about Wingstop in the perspective there, we already operate in a lot of states that have enacted minimum wage legislation that's been developing over the past gosh, four or five years at least. So there are many markets where we're already up at that level. On a chain wide basis, our restaurants on average pay our employees somewhere between $11 and $12 an hour on average, has been consistent year in and year out. So even in a market like Texas, where the minimum wage may be sub-$8, it's still not the wage we pay and I think we lose sight of that.

So the wages would have to graduate up to those levels before it would really impact the business. I mentioned as well, we do have pricing power in our P&L and that's how we've addressed minimum wage legislation over the past few years in markets where we've seen it grow. It's challenging but I think right now is not a good time to be even contemplating a minimum wage increase. What we should be doing is everything we can to stimulate the economy, get people back on their feet, give small businesses the relief they need.

Andrew Strelzik -- BMO Capital Markets -- Analyst

Okay...

Charles R. Morrison -- Chairman and Chief Executive Officer

Let me address the $2 billion...

Andrew Strelzik -- BMO Capital Markets -- Analyst

Yeah.

Charles R. Morrison -- Chairman and Chief Executive Officer

I'm sorry about that. Yeah, so there is a little bit of science to the $2 billion threshold, but in some demonstration in the past of companies that have hit that milestone. And what we believe, and Michael and I have spent a lot of time thinking about this is, when you hit that threshold, the scale opportunities become pretty significant in terms of just a small amount of growth creates a lot of opportunity in the business. And so what we want to do is make sure that we're building this business so that we can sort of hit that consistent momentum run rate that a lot of companies have seen in this industry when they've cleared that $2 billion mark.

And that means you got to make sure A, you have the right infrastructure in place to support it, that means systems, financial systems, store-level systems above the four-wall systems for digital performance. We also need to have the right people in place and so investing in our talent base, growing the talent base to make sure that we're scaling with it, those are critical to the success of companies as they sort of hit this inflection point.

And we're right at it right now. We're being proactive in our approach to make sure that we're getting ahead of it. And at the Board level talking a lot about this because I think it's very important that we not lose sight of the fact that we have got a long way to go. And although we can rest on the fact we've had great success in what we've invested in so far, those investments are what got us to where we are now. We need to continue to look at those for the future.

Andrew Strelzik -- BMO Capital Markets -- Analyst

Great. Thank you very much.

Operator

And our next question will come from Brian Vaccaro with Raymond James. Please go ahead.

Brian Vaccaro -- Raymond James Financial Inc. -- Analyst

Good morning, and glad you all are well. I had a question and then a clarification. Charlie, historically you've highlighted the gap in awareness and consideration, compared to other brand there's a substantial long-term opportunity and you've also talked about even today, the growth in delivery during COVID that's included a lot of new customers. I was wondering can you further frame or quantify how much you've narrowed that gap in 2020?

Charles R. Morrison -- Chairman and Chief Executive Officer

I sure can. Not by a lot, believe it or not. We've had great performance but narrowing the gap on consideration, a small amount can yield a substantial impact to revenue and I think it's worth noting. And we noted this before but our brand in the U.S. is little over 1,300 restaurants. Some of the competitors that we compare against can have 5,000 to 10,000 or more restaurants in the U.S., so it's a substantial gap and just the penetration of the brand.

We also are a brand that sort of lives virtually in a weird way but our locations are not on the street corner with giant golden arches on, instead they're -- hidden back in strip centers and what we've determined today is the real estate. So it's a little harder for us to really generate that consideration the same way others do.

That being said, I think we've done an exceptional job showcasing itself in the top-line growth. And as we continue to invest and point our advertising muscle toward those people that really don't know much about Wingstop or may be aware, but haven't considered an occasion, which has those heavy QSR users, there is a huge, huge base of customers out there for us to go after and share some occasions with some of those other competitors.

So we have a long way to go. I would say the gap is in the mid-teens in terms of percentage points from where we need to be or where we desire to be long term. But again, like everything else that's a long-term outlook for us, and we'll just keep chipping away on it. And I think, again I can't reinforce enough that is showcased by the performance we've seen in the business.

Brian Vaccaro -- Raymond James Financial Inc. -- Analyst

Yeah. Okay, thank you, that's helpful. And then also could -- the clarification, could you clarify the comments on your '21 unit growth -- your 2021 unit growth, just so we're on the same page. There is different aggregators of consensus estimates that are out there. Our sources would suggest the consensus is modeling around 170 net new units in 2021, just wanted to confirm that's consistent with the consensus that you're referring to.

Charles R. Morrison -- Chairman and Chief Executive Officer

I would say you're not materially off that number, but we go by the aggregate of all of the folks that follow us and so that's the number we were pointing toward.

Brian Vaccaro -- Raymond James Financial Inc. -- Analyst

All right, thanks. I'll pass it along.

Operator

And our next question will come from Jake Bartlett with Truist Securities. Please go ahead.

Jake Bartlett -- Truist Securities -- Analyst

Great. Thanks for taking the question. Charlie, I'm still a little uncertain as to kind of -- as to what your guidance is for same-store sales in '21? It seems that you've endorsed this positive mid-single digit number, but if you could explicitly do so or not, I just want to make sure I'm understanding the intention.

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, we don't have an explicit guidance for 2021. We simply reinforced our three to five-year outlook for mid-single digit same-store sales growth.

Jake Bartlett -- Truist Securities -- Analyst

Okay, and maybe another way to get there is well, in the past, you talked about kind of some color on current trends like last year you talked about how the Super Bowl was very strong and you had a strong start to the year. Can you give us any color on what you're seeing year-to-date maybe it would help us kind of gauge the ongoing momentum in the business?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, Jake, null but I would just reinforce that what we had mentioned last quarter is, I think we need to avoid the sequential quarter-to-quarter discussions and quarter-to-date discussions and focus on the long-term algorithm for this brand. What I will say is with confidence, our average unit volume for 2020 was $1.5 million on an investment of $400,000 that hasn't moved over a number of years yielding exceptional cash on cash returns fueling development.

Jake Bartlett -- Truist Securities -- Analyst

Got it. And then I'm going to just take one last one and I'll pass it on, which is, earlier in the script or earlier in the Q&A session you talked about thinking about same-store sales on a two-year basis. Obviously that two-year basis has been moving around a lot, but is that how we should think about in terms of the two-year '20 -- that you experienced in '20 and kind of move that forward? I mean just give us some clarity on what you mentioned and kind of thinking about it on a two-year basis.

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, look, I appreciate the triangulation, Jake, toward the answer but look we have a two-year trend. It's been pretty consistent in terms of its pattern. I wouldn't rely on that for your estimates but I did mention that the more -- it demonstrate stability if anything in the comp. But what we aren't going to do is provide any specific indication. We are long-term focused.

Jake Bartlett -- Truist Securities -- Analyst

Right. I appreciate that and thank you very much.

Operator

And our next question will come from Joshua Long with Piper Sandler. Please go ahead.

Joshua Long -- Piper Sandler & Co. -- Analyst

Great. Thank you for taking my question. A couple of different follow ups, we've talked about the investments in the brand, in the people and how important that is to the Wingstop story, so I was just curious if you might be able to talk about how you coordinate the kind of the brand power of those investments and how you build the culture aspect of it across your domestic and then international pieces in the brand as well, knowing that that's going to be an important piece of the overall long-term growth story?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, well, I appreciate that question. Certainly, the culture of this company and the culture of our brand I believe is the foundation of our success, it's our people. And we've invested a lot over the past years to really build and strengthen the culture of this organization. And I have noted over the past year that aside from investments in technology we've made over the past few years, it's our people who have made the difference in Wingstop as compared to anybody else in performance. And I can't thank them enough for what they've done, and I think that culture that is inherent not only in our corporate entity, not only with our brand partners but in the restaurants is what makes this brand so special, and we will do everything to protect that.

And that is part of our outlook for the long term in achieving our vision is that, we maintain our entrepreneurial roots, we maintain the authenticity that this brand is all about, we continue to be service-minded and that we continue to have fun. There is nothing wrong with having fun in doing what we do. Food is fun, wings are a fun food, people love that about our brand. When we get too serious, it's probably at a point where we're going to have struggles. So rest assured, we're going to keep pushing to make sure that, that becomes and remains foundational for our business.

Joshua Long -- Piper Sandler & Co. -- Analyst

Great. Thank you.

Operator

And our next question will come from James Sanderson with Northcoast Research. Please go ahead.

James Sanderson -- Northcoast Research -- Analyst

Hey. Thanks for the question. I just wanted to follow up to the discussion on international development. Wondering based on your recent studies if you've reconsidered potentially, any type of master franchisee relationship with international development groups to really take advantage of some of the reductions in restaurants we see in Europe and potentially in China. And if that would come at some sort of different royalty rate compared to what we see today.

Charles R. Morrison -- Chairman and Chief Executive Officer

Can you -- I'm going to ask you to clarify that question, if you would, James. I'm not following where you're going. I want to make sure I address your...

James Sanderson -- Northcoast Research -- Analyst

No. Understood. I'm referring to an example that Domino's currently has with a number of larger international groups, so they have master franchisee relationships, and I believe that the royalty rate is at a discount of what the others domestically pay but they do have an opportunity to accelerate unit growth in those markets. I think best brands in China is an example of that. And I'm wondering if Wingstop is considering a similar type of relationship to accelerate unit growth in international markets you haven't really entered into yet.

Charles R. Morrison -- Chairman and Chief Executive Officer

Okay, thank you. We would refer to that as a sub-franchising opportunity meaning the master would have rights to also become a franchise owner in those countries. We do have some experience with that. I would not suggest that, that is a growth path opportunity for Wingstop. Conversely, we believe that having a solid, well-capitalized, real-estate-savvy partner in any market is going to be the best choice for us. Each market is different but I think you'll probably see more indication of Wingstop making investments in markets where we believe there is great opportunity to scale and grow rather than going the sub-franchise route.

And part of the reason for that is, it creates a lot more complexity while it does create a discount, if you will for the master franchisee. They have to have an operating infrastructure that can support those sub-franchisees that's difficult for them to execute consistently and it puts the brand or us in a position of having to support those. So I'm not sure that all of the previous experience on that is necessarily indicative of long-term success that may create some short term upside, but that's about it. So we're going to stay the course on our approach to large master developers in our markets for today.

James Sanderson -- Northcoast Research -- Analyst

All right. A quick follow-up. I was wondering if you had any feedback on some of the strategies that we had seen in the past that might be able to reduce the cost of labor in stores. The example I'm thinking of are locker systems that expedite the pick-up of delivery orders, things like that that we might see in 2021 that might be used to improve labor productivity.

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah, I mean we obviously by shutting down our dining rooms for almost a year now we have put all those things on the back burner, as it relates to what happens inside the four walls. I would only call attention to Wingstop being a very unique brand and that the roster size for our restaurants is rather small compared to most, and the number of people you can physically put in the kitchen starts to get fixed very quickly especially, at the higher average unit volumes that we're seeing.

So we -- aside from pandemic-related expenses in labor that is really about retention during this timeframe, you should be able to see as the volumes grow exceptional leverage on the P&L, which is under -- the underlying undercurrent if you will on our P&L today. So those -- while those are important opportunities for us I think, growing the top line is our key priority making sure that we keep our restaurants very efficient and keeping our model simple will yield better labor outcomes than some of the other tactics that we've talked about in the past.

James Sanderson -- Northcoast Research -- Analyst

All right, thank you.

Operator

And our next question will come from Peter Saleh with BTIG. Please go ahead.

Peter Saleh -- BTIG Research -- Analyst

Great. Thanks for taking the question. I wanted to ask, historically, as you mentioned several times on the call, the brand has lived in B real estate. But as you think out the next several years maybe five years or so, are you considering of peppering in your some of -- some better A real estate as we've seen with maybe some of the other competitors in the space?

Charles R. Morrison -- Chairman and Chief Executive Officer

Well, we don't believe we have a competitor in the space, so I'll start with that. So we don't look at what they're doing as a guide to what we would do. What I will say to this, Peter, is I think if anything we're going to continue with our quote-unquote B locations as our primary objective. They just work for us, we don't need that in-caped prominence in the strip center nor do we need a stand-alone building in order to generate the kind of performance we've seen.

Separately, if anything we might go to Cs and Ds by way of incorporating ghost kitchens into our mix. We think those have a more prominent opportunity. And if anything, maybe reducing seats in dining rooms over time as we continue to drive our digital mix north. Those are probably the more likely outcomes in our real estate strategy.

Peter Saleh -- BTIG Research -- Analyst

Great. Very helpful. Can we just come back to the conversation around delivery given that's about a quarter of your business, can you just talk a little bit about how the delivery customer may be different than your traditional customer. I think you said delivery is bringing in a new guest. So maybe just talk about the characteristics of how they may be different than your traditional guest?

Charles R. Morrison -- Chairman and Chief Executive Officer

Yeah. I mean, we've noted even years back that the traditional pizza concepts that offer delivery have a distinctly different guest that uses delivery than uses carry out. Wingstop's always been a carry out, take-out brand, a little bit of dine-in as well and so we knew that, that delivery customer was unique. And that was their preference, and they just don't want to carry out. So we've been able to pick them up.

And what we have said over the years is they tend to be more of that heavy QSR user, which represents a much broader mix of the marketplace than perhaps our core customer who typically is in the urban core of markets and is more likely to eat bone-in chicken and chicken wings than others.

What we're doing is expanding that out and broadening the play -- the playing field and inviting in those QSR customers that just didn't know us before, and that's helping fuel our growth. So generally speaking, a little less diverse and perhaps more income in this new consumer base that's using us for delivery and growing with us in the digital platform.

Peter Saleh -- BTIG Research -- Analyst

Very helpful. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 86 minutes

Call participants:

Michael J. Skipworth -- Executive Vice President, Chief Financial Officer

Charles R. Morrison -- Chairman and Chief Executive Officer

Jeffrey Bernstein -- Barclays Capital -- Analyst

David Tarantino -- Robert W. Baird & Co. -- Analyst

John Glass -- Morgan Stanley -- Analyst

Andrew Charles -- Cowen and Company -- Analyst

Andy Barish -- Jefferies -- Analyst

Chris O'Cull -- Stifel Financial Corp. -- Analyst

Jared Garber -- Goldman Sachs -- Analyst

Jeff Farmer -- Gordon Haskett Research Advisors -- Analyst

Jon Tower -- Wells Fargo Securities -- Analyst

Dennis Geiger -- UBS -- Analyst

Michael Tamas -- Oppenheimer & Co., Inc. -- Analyst

Nick Setyan -- Wedbush Securities -- Analyst

Andrew Strelzik -- BMO Capital Markets -- Analyst

Brian Vaccaro -- Raymond James Financial Inc. -- Analyst

Jake Bartlett -- Truist Securities -- Analyst

Joshua Long -- Piper Sandler & Co. -- Analyst

James Sanderson -- Northcoast Research -- Analyst

Peter Saleh -- BTIG Research -- Analyst

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