A&W Restaurants lowers franchise royalties for new operators

New financial incentive kicks off our Second Century Growth Initiative

A black and white photo above a color photo showing A&W Restaurant from many decades ago and an A&W Restaurant today.

As we approach our 100th anniversary in business as America’s first restaurant chain, we’re launching a new franchise growth program with reduced franchise royalties to entice more entrepreneurs to join our growing franchise system. The Second Century Growth Initiative reduces royalties for new U.S. franchise partners. An incentive program for current operators will be introduced in February at A&W’s National Convention.

Since 2011, A&W has been owned by its franchisees. Our popular quick-service chain is known for freshly made A&W Root Beer, 100% U.S. beef burgers and other all-American food, and we have more than 600 locations in the United States.

First-year royalties for new operators will be reduced from 5% to 2%. The royalties are adjusted to 3% in the second year and to 4% in the third, before returning to 5% in the fourth year.

President Paul Martino said the program underscores the company’s long-term focus. “Reducing royalties enables operators to spend more on their operations in those crucial first years,” he says, adding that the discounts will save the owner of a restaurant with $1 million in sales $60,000 in royalties. “As a franchisee-owned brand, A&W is in a unique position to make decisions that are best for the brand and its operators over the long haul, not the next quarter.”

Since being acquired from YUM! Brands in 2011, A&W has opened more than 60 new U.S restaurants; 15 are planned for 2019. Same-store sales on average have grown more than 32%, with AUVs also up by a third.

As part of the Second Century Growth Initiative, Martino was promoted from COO to president and given development responsibilities. Dave Crowley was hired as director of Franchise Recruitment, and the development department was restructured to add more resources to drive significant new store growth. A new flagship franchise training center is underway.

“The last seven years have brought a remarkable turnaround, and the system has been energized with more than 60 new restaurants,” says CEO Kevin Bazner. “Now, as we enter our second century, it’s time to really accelerate A&W’s expansion.”

America’s first and oldest restaurant chain, A&W still makes Root Beer fresh in each restaurant from real cane sugar, water and a proprietary blend of herbs, bark, spices and berries that are served in a frosty mug alongside burgers, fries, chicken tenders and other All American Food® favorites. There are nearly 1,000 locations worldwide.

Learn more

You can discover more about our franchise offering by filling out the form on this page. You can also continue to explore our research pages to learn more about the A&W restaurant franchise opportunity. We look forward to hearing from you!

How the entire executive team supports our franchisees

The best fast food franchise to own is one that fully supports its franchisees. At A&W, you’ll find the best support anywhere.

The exterior of an A&W Restaurant, with an A&W sign and “All American Food” against an orange facade on the front of the building and blue skies with white clouds above.

At A&W Restaurants, our executive team works with franchisees in every sense of the word. We’re not just sitting in our corporate offices in Lexington, KY, with no clue how to run a restaurant. In fact, everyone in the head office works in an A&W restaurant once a quarter, because we never want to forget our true focus: Delivering a great experience for customers and a strong bottom line for franchisees. The insights we gain, plus that fact that our brand is owned by our franchisees, makes us one of the best fast food franchises to own, period.

Everyone on our corporate team earns bonuses based on profitable same-store sales growth, which has averaged almost 33% since 2011. That’s performance tied to bottom-line profitability rather than top-line revenues.

Support you can count on

Linda Mulder is one of our most venerable franchisees. Not only is she the daughter of A&W Chairman Dale Mulder, she also brought the Hand-Breaded Chicken tenders to our menu by market-testing her recipe and then working with A&W to smooth out kitchen processes and develop pricing models.

She and her three siblings are multi-unit owners, with 10 A&W restaurants in Michigan, and also own other fast-food franchise concepts. She says A&W stands out from other fast food franchises in distinct ways.

“The support I can count on from corporate is just great. I just opened a new restaurant, and they were there through the design process. I had beautiful drawings, 3D drawings showing the equipment, how it was placed, and that was a really valuable tool,” Mulder says.

“They were there through the whole process,” she says. “We had weekly calls on how far are you coming, how’s it going, and we had a very hands-on relationship with our field person. The week before we opened, she was there helping. So there was quite a bit of direct hands-on help and frankly, it was very nice to have that even though I’ve been in the business for many years. It was very much appreciated.”

Tom Thompson has owned the A&W in Dubuque, IA, since the mid ’90s. His family still owns several convenience stores, and he was raised working in the grocery stores his parents ran. He loves the opportunity with A&W to grow and is considering adding another location to his portfolio, which he’s confident the community would support.

A frosted A&W mug of rootbeer is pictured with an orange straw. An out-of-focus restaurant interior is the background.

Like Linda Mulder, he’s also impressed by the level of support he receives from corporate. “I think the best thing about being a franchisee in this particular business is probably the uniqueness of the relationship that A&W has with the franchisees, particularly through the franchisee’s association, the National A&W Franchisees Association,” Thompson says. “NAWFA has a contractual responsibility with corporate, getting involved in brand standards, marketing, what have you. As a result, that relationship is unique and I think one of the best reasons that Brand A&W is successful.”

Thompson says A&W’s support goes above and beyond, and that’s something prospective franchise buyers should know.

“I think a franchisee coming into this system can count on genuine support and not just lip service,” he says. “It’s not just in Lexington; we have regional meetings where questions are not just encouraged but they’re needed, and the dialogue that we develop over that helps set the stage for true support. True, genuine ‘I care about your restaurant’ support.”

Learn more

You can discover more about our franchise offering by filling out the form on this page. You can also continue to explore our research pages to learn more about the A&W restaurant franchise opportunity. We look forward to hearing from you!

A&W adds detailed revenue picture for potential investors

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

The exterior of an A&W restaurant in daytime.

Looking to thoroughly vet our franchise before investing? No problem. We’ve added an Item 19 to our FDD.

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.

Learn more

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!

How A&W Restaurants help boost small communities

Far-reaching supplier makes small towns more accessible for our burger franchise, allowing franchisees to succeed while reinvesting in their hometowns

In late September 2017 in Bemidji, MN, the town of about 14,500 celebrated the opening of a new A&W restaurant with free Root Beer Floats. A&W was a thriving business in the Minnesota town in the 1950s and 1960s, but had been gone for many years. Its return was welcomed with open arms by local fans.

The Bemidji location is one of 18 new A&W Restaurants opened in 2017, with several more in development. Many of our 625+ U.S. locations are in smaller communities, where franchise buyers can take advantage of lower real estate prices and fewer competing brands.

“Current and new franchisees are expressing their confidence in the A&W brand by signing development agreements, opening restaurants across the country and participating in our system remodeling program,” says Kevin Bazner, President and CEO. “It is gratifying that many of our new restaurants are being opened by current franchise partners.”

Crew members at the new A&W Restaurant in Bemidji, MN, stand behind the counter and smile as they prepare for the grand opening of the store.

Whether you’re seeking a sit-down eatery for your hometown or looking for a smart, scalable investment to diversify your portfolio, A&W is a great franchise for small towns.

A small-town franchise with big-brand resources

Bemidji was a perfect opportunity for a new location, not only because of its history with A&W Restaurants but because the town is situated at the junction of two major highways and a little over an hour away from Grand Rapids, MI. We anticipate our new franchise will not only create loyal brand fans locally, it will also capture outdoorsmen and road-trippers looking for something more comforting than a drive-thru as they pass by on the highway.

A&W is positioned to help franchisees succeed thanks to our vendor relationship with Restaurant Supply Chain Solutions. Because they have existing relationships with Yum! Brands, we can leverage that reach and buying power for A&W locations in even the most out-of-the-way places.

How A&W gives back

Small towns are the type of community where A&W excels. Jim Brajdic owns units in several small towns in the Fox Valley area near Appleton, WI, and one reason his restaurants thrive is because they all give back to their communities.

“There are a lot of people who come into our restaurants because of what we do and what we represent,” says Brajdic, who is also a member of the National A&W Franchisee Association board, which co-owns the A&W brand and collaborates on all decisions. “We get involved with the Cancer Society Walk, the Salvation Army. We donate grocery bags full of food to be delivered to the needy in our community.”

When schools or non-profit organizations are seeking help with fundraisers, they often turn to Brajdic, whose restaurants might, for example, donate sales from Root Beer Floats. A small-town franchise is more likely to plug into the interconnectedness of a tight-knit community. “We won an award from United Way for Small Business of the Year,” Brajdic noted.

Two Root Beer Floats are pictured in frosty mugs with A&W logos.

A&W Restaurants are known for our signature Root Beer Floats, made from Root Beer mixed fresh daily in every restaurant and served in frosty mugs.

In a recent interview with Franchise Times magazine, which describes A&W as “the Norman Rockwell of American QSR,” Bazner noted the advantages of lower real estate costs and said A&W’s “sweet spot” is communities with populations between 5,000 and 25,000 that are located near major highways.

“This allows us to capitalize on major traffic patterns, but doesn’t marry us to being downtown,” Bazner told the magazine.

He also pointed out the labor pool is easier to access in small communities, and it’s easier to make connections with community partnerships, local media and civic organizations.

Learn more

If you’d like to discover more about why A&W is such a great franchise for small towns, please explore our research pages. To start a conversation, 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!

Why A&W has higher average ticket prices

We beat big burger franchises when it comes to average ticket prices. Why? Great burgers and loyal brand fans who drive repeat business.

A Root Beer Float in an A&W-branded mug is pictured on a tray with some fries and a bacon cheeseburger with tomato, lettuce and onion. A jukebox can be seen in the background.

Those frosty mugs of Root Beer, those crispy fries and those unbeatable cheeseburgers. A&W customers know they can count on the same great taste every time, and the same friendly service, too.

The big burger franchises may have A&W beat when it comes to the number of locations, but they’ve got nothing on us when it comes to loyal fans. How do we know? Because our average ticket price is higher than theirs but our customers keep coming back for more. We’ve experienced an average 33% increase in same-store sales since 2011.

A&W has over 625 locations nationwide and we are continuing to grow our brand strategically. We know that doesn’t come close to the big burger brands with tens of thousands of locations, but we’re fine with that. We are focused on growing at a pace that allows us to stay true to our core mission and the values that our fans have loved since we first introduced our creamy Root Beer at a roadside California stand 99 years ago.

How our average prices compare

 A&WMcDonald'sBurger KingWendy's
Average ticket price$9.22$4.72$4.99$5.18

Source: Business Insider

How we inspire customer loyalty

Part of the challenge of being a smaller burger franchise is maintaining consistent customer experiences at every location. Without the efficiencies afforded by a larger chain with thousands of locations, smaller chains are sometimes stymied by issues like supply and distribution. That affects both the customer experience and, ultimately, franchisee returns.

But A&W is partnered with Restaurant Supply Chain Solutions, which happens to be the supplier-distributor for the massive KFC, Pizza Hut and Taco Bell brands. That gives our smaller franchise much broader reach and greater cost efficiencies than we’d be able to achieve on our own. And it helps us maintain the same great food quality and experience for A&W customers, no matter where they are.

A&W is more than just burgers

If you’ve been looking for an investment that feels more like a franchise family and less like a mega-corporation, A&W is one of the best franchises to open. We are known for our creamy Root Beer, made fresh in stores every day, as well as our hand-breaded chicken tenders, cheese curds and burgers and dogs. With nearly a century in business, there’s no question about why our customers keep coming back.

A double bacon cheeseburger with tomato, lettuce and mayonnaise is lit dramatically against a dark background.

There’s no mystery behind our greatness: We execute well, we execute consistently and we listen to our franchisees. We have to. They own our brand.

What’s really exciting to an investor, however, is our accessible leadership and our steadily increasing sales. Our brand is franchisee-owned, so your input will be considered on every decision we make as a company. You don’t just get a seat at the table; you own the table.

Learn more about our burger franchise

You can discover more about our franchise offering by filling out the form on this page. You can also continue to explore our research pages to learn more about the A&W restaurant franchise opportunity. We look forward to hearing from you!

A&W vs. Dunkin’ Donuts

More prime territories, more lenient qualifications and the benefits of a franchisee-owned brand give us an edge over franchising powerhouse Dunkin’ Donuts

A&W Restaurants has been around for nearly a century. Dunkin’ Donuts, almost 70 years. And neither brand is going away anytime soon. So with two longtime stable brands in the foodservice franchising space, how do you decide the winner in an A&W vs. Dunkin’ Donuts competition?

It all depends on what you’re looking for.

Dunkin’ is well-respected in the world of franchising, and with good reason. But because of their far reach, getting in can be more difficult. Like us, they require foodservice experience. But with more than 10,000 units nationwide, Dunkin’ requires a multi-unit investment just to get your foot in the door. They also have more limited territory availability.

A&W, with over 625 locations across the U.S. and 340+ internationally, has much broader availability of prime territories. And while we welcome multi-unit ownership, we also have room for the single-unit owner-operator. We do have certain qualifications and standards our franchisees must adhere to, but they aren’t as strict as Dunkin’s requirements.

A&W vs. Dunkin’ Donuts

Here’s how our brands stack up in a head-to-head comparison:

 A&W RestaurantsDunkin' Donuts
Year founded19191950
No. of units625+7,550+
Startup costs$266,500 to $1.2 million$228,621 – $1.7 million
Minimum liquidity$150,000$250,000
Minimum net worth$350,000$500,000
Franchising fee$30,000$40,000 – $90,000

*U.S. only
Sources: Dunkinfranchising.com; dunkinbrands.com; entrepreneur.com

A different kind of franchise ownership

While you’re exploring all the best restaurant franchises and considering which one to invest in, we think it’s important to know that A&W Restaurants holds some significant advantages over other food franchises because of how our ownership is structured.

In fact, A&W has averaged nearly 30% sales increases over the past six years.

Most franchises talk about giving franchisees a voice. A&W actually gives them a seat at the table — because they own us. The National A&W Franchisees Association (NAWFA) Board, comprised of franchisee representatives elected by their fellow owners, works with our Executive Leadership Team on every decision.

“Our shareholders are our franchise partners,” says President and CEO Kevin Bazner. “And they have a long-term strategy for the business. There is no exit strategy.”

A bacon cheeseburger with tomato, onion, pickles and lettuce is pictured next to a pile of french fries with a soda cup in the background that reads, “Real Draft Root Beer.”

A&W Restaurants has been serving up delicious burgers, fries and creamy Root Beer, made fresh on premises every day, for 99 years.

Food, paper, savings

A&W has another advantage over many foodservice brands: a best-in-class distribution system. In this case, that’s not just puffery. Our franchise has a vendor relationship with Restaurant Supply Chain Solutions (RSCS), which also provides food, paper and restaurant equipment to Pizza Hut, KFC and Taco Bell.

Because those brands are three of the biggest restaurant franchises in the country, that gives RSCS incredible reach – and helps us get to out-of-the-way locations while keeping distribution costs under control. Having access to such an extended supply chain network allows A&W owners to operate on wider profit margins.

Why invest in A&W franchises now

Our delicious menu, from burgers and fries to cheese curds and our iconic Root Beer brewed fresh in every restaurant, every day, has nostalgic appeal. Guests love our classic American favorites served in a family-friendly atmosphere. It’s a simple formula that has worked for nearly a century.

Our operations-based culture revolves around what’s best for franchisees. We will always prioritize bottom-line profits when we’re thinking about how best to drive top-line sales. A&W understands how to deliver value to our guests without sacrificing profitability, and it bears repeating: Under our current leadership, we’ve experienced a nearly 30% increase in sales on average since 2011.

Learn more

Discover more about the A&W franchise opportunity by exploring our research pages. You can also fill out the no-obligation form on this page to start a conversation. We look forward to hearing from you!