As A&W Restaurants Racks Up Frothy First Quarter Franchise Sales, It’s on Track to Sell 20 Units This Year

After the first three months of 2021, A&W Restaurants, the legacy franchise brand that has more than 500 existing units in the U.S., has already awarded five new units, setting itself up to hit its development growth goal of 20 new stores by the end of the year.

“It’s a very exciting time to be involved with A&W,” said John Palumbo, senior franchise director of the Lexington, Kentucky-based brand. “Americans have always craved comfort, convenience and quality, and very few brands are able to deliver with the robust legacy that we can.”

Palumbo says the brand is on track to sign another four to seven new franchises in the second quarter. 

The expansion comes after the 102-year-old brand posted strong 2020 sales numbers, racking up a 10% comp sales increase for the second year in a row. On the development side, A&W had 18 stores in the development pipeline, with 12 deals signed at the end of last year.

Customers began rediscovering the brand in 2011 when a group of franchisees bought the brand back from YUM! Brands. Now owned by a partnership of international and domestic franchisees, the brand has experienced tremendous growth, boasting a 33% growth compared to 2011. 

Not only has the company invited fresh leadership — three members of its board are under the age of 40 — it also provided customers with improved quality. For instance, its signature Root Beer is once again made fresh in each of the stores, and the product focus has shifted to quality items like Hand-Breaded Chicken Tenders. 

The strong growth last year was in part due to the rapid A&W response to challenges from the pandemic. As other brands struggled to keep up with demand for curbside pickup, A&W’s restaurants were ahead of the curve. Demand for A&W’s style of classic and inexpensive QSR fare — particularly its fan-favorite Root Beer, which is famously served in a frosty mug in A&W restaurants — is not simply a reaction to the pandemic. Sales jumped 15% in May and 16% in June, and the brand offered drive-thru at most of its locations, with about a quarter remaining drive-in and the original using a curbside pickup. 

A&W offered customers the ability to pick up their orders safely, while at the same time fulfilling a surge in demand for comfort fare and legacy brands.

“Right from the start of the pandemic, A&W was offering customers the perfect solution for ordering,” said Kevin Bazner, A&W’s CEO. “What everyone called a ‘new normal’ was our old normal. People came around to us, not the other way around. We’ve been here the whole time.”

The brand plans to continue franchise sales to build on the strong operator foundation it has established. It is also hiring additional staff for its development team, which includes Palumbo. 

A&W will also continue to focus on targeting franchises in smaller markets in the upper Midwest, including Ohio, Indiana, Michigan, Minnesota, Iowa and Wisconsin. The company is also looking to expand through the Pacific Northwest and the Rocky Mountain region. 

“Last year, we were able to demonstrate the strength of the strategy we’ve been building for the last several years,” said Bazner. “In 2021, we’re excited to see how much higher we can climb.”

The total investment to franchise with A&W Restaurants ranges from $276,000 to $1,397,000, including a $15,000 to $30,000 franchise fee. For more information on franchising with A&W, please visit https://franchising.awrestaurants.com/