A&W Opens 400th International Location, Plans For More Growth Abroad

Just before the end of 2021, A&W, the iconic American-food franchise known for its superior food and frosted mugs of root beer, opened its 400th international location. The Surabaya, Indonesia restaurant represents a major landmark for the century-old brand and an indication of A&W’s growth strategy for 2022 and beyond, as the brand doubles down on its efforts to take advantage of white space abroad and establish successful restaurants in new markets around the world.

“A&W has been a popular franchise concept in international markets for decades,” said CEO Kevin Bazner, who ran the brand’s international division from 1988 until 2000. “There is a deep affection for the American way of life in so many countries, and A&W is the perfect example of that way of life, so people really see it as a taste of America.”

A&W was the first American quick-service brand to open in a number of international markets, beating even global QSR behemoths like McDonald’s to markets like Okinawa and Malaysia in 1963 and Singapore in 1966. Today, there are more than 370 A&W locations across Asia, including one in Singapore’s new Jewel Changi Airport.

But A&W still has a wealth of valuable white space available to franchisees across Asia, and the brand is actively pursuing development opportunities throughout Southeast Asia, including markets in Cambodia, Thailand, Vietnam, Myanmar and Laos.

Tellingly, all of the brand’s growth in international markets belongs to existing A&W franchise owners, suggesting that owners are finding their most substantial growth opportunities after their initial signing with the brand.

“We aren’t even recruiting new franchise partners in many of these markets,” Bazner said. “All of the growth we’re seeing is from existing operators who are reinvesting their profits and scaling their businesses to take advantage of the demand they are seeing in their markets.”

Bazner says that growth among existing franchisees is a critical indicator of the health of the franchise. “Selling franchises is easy, but that’s not our primary goal,” he said. “We want to ensure that each and every one of our franchise owners is set up to succeed, so when we see the bulk of our growth coming from existing owners who have made the decision to expand, that tells us that we are moving in the right direction.”

The health of A&W’s franchise system is also evident in the brand’s sales numbers, which continue to climb year after year both in the U.S. and abroad. In 2021, year-over-year same-store sales were up a whopping 10.2% across the franchise system, following the previous year’s 9.2% leap. Over the past decade, average unit volume has climbed by over 67%.

“By every available metric, we are continuing not only to grow but to experience exactly the type of growth that is going to contribute to the success of our franchise owners,” Bazner said. 

In addition to A&W’s development efforts across Southeast Asia, the brand is also eying expansion opportunities in the Middle East, Canada and at home in the U.S.

“This franchise model has proven successful everywhere we’ve taken it, and even after more than a hundred years, we continue to experience increased demand,” Bazner said. “So we’re continuing to grow strategically in the markets where we see the most opportunity and where our franchise owners are best-positioned for success.”

The total investment necessary to begin operation, not including rent or land costs, is $871,000 to $1,454,750 for a Freestanding Restaurant; $401,000 to $1,013,750 for an Inline Restaurant; and $276,000 to $704,000 for a Captive Restaurant, including a $15,000-$30,000 franchise fee. To learn more about franchise opportunities with A&W Restaurants, please visit https://franchising.awrestaurants.com/.