The A&W FDD now includes specific earnings from franchisees, allowing investors to more easily assess the risks vs. the benefits of investing in our restaurants
If anything can be said to be exciting in the world of Franchise Disclosure Documents (FDDs), then we’re setting off some firecrackers this year: A&W has added an Item 19 Financial Performance Representation to our annual FDD for the first time since the acquisition from Yum! Brands. What that means for investors is a much clearer look at our historical financial performance.
To the uninitiated, an FDD is the annual filing required by the Federal Trade Commission that includes vital information an investor needs before they purchase a franchise. As Forbes writer Amy Feldman succinctly put it, “If you’re thinking of becoming a franchisee, the franchise disclosure document is chock-full of important pieces of information on how much you’ll be expected to invest, whether the brand is expanding or shrinking, how high the ongoing fees will be, and whether existing franchisees are mired in litigation with the franchisor.”
You should always read an FDD before buying a franchise, and the A&W FDD just added some of the most relevant information an investor could want.
Why an A&W Item 19 is good for investors
An Item 19 is considered by some legal experts as extra protection for investors, due to the detailed federal and individual state laws that specify how information is presented in the annual FDD filing. The information presented in our FDD goes through a thorough review by both our legal and executive teams to make certain everything is correct to the best of our ability to provide it.
We encourage investors to have their own legal counsel review any contracts before making a binding decision, but we want to be as open as possible about what A&W has to offer. We very strongly believe in our brand, especially since franchisees assumed ownership in 2011. Since then, all decisions are based on the collective decisions of our franchisees, and we have seen our same-store sales increase, on average, 33%.
“We’re very proud of our strong, consistently improving performance, and we think adding more details that reflect our financial performance only strengthens our value proposition for investors,” says President and CEO Kevin Bazner. “Our franchisees have made A&W Restaurants what it is today, and we want future franchise owners to get as thorough a picture of our company as possible before they join the A&W family.”
What any good Item 19 can tell you
Many franchisors include an Item 19 in their annual FDD. While the way the information is structured can vary greatly from company to company, the A&W Item 19 includes average net sales, median net sales, and high and low net sales reported by our franchise owners and separated into categories based on restaurant type. That includes freestanding restaurants with drive-thrus; restaurants with drive-thrus located at convenience stores and gas stations; and captive audience restaurants.
When can you see our Item 19?
We know that if you’ve been considering purchasing an A&W restaurant franchise, one of your key questions is, “How much can I make?” And one of the ways you try to estimate that, although no earnings are ever guaranteed, is by evaluating past performance of active franchisees.
All qualified franchise candidates will receive a free copy of our FDD, which includes the detailed Item 19, early in the franchise investigation process. In other words, once we’ve determined that you might be a good fit for us and vice-versa, we’ll send you the document for you to review. It’s part of the due diligence that every smart investor exercises before signing on the dotted line.
If you’d like to discover more about the A&W investment, please take a look at our research pages. To start a conversation and request the latest A&W FDD, just fill out the short, no-obligation form on this page and someone from our Franchise Development team will be in touch. We look forward to hearing from you!