A&W Saw a 9% Comp Sales Increase in 2020. Now The Franchise is Focusing on its Standalone Model to Drive Growth in 2021

A&W, the 500-plus-unit restaurant franchise with nearly 300 standalone restaurants in markets across the country, thrived in 2020, seeing a 9% increase in year-over-year sales across its system. The brand’s standalone drive-thru model saw a 14% increase in average unit volume in 2020 as well, separating the brand from the crowd during a year when most foodservice brands were suffering from dramatic sales dips. Now, A&W is leveraging that momentum to support a wealth of new growth opportunities, focusing primarily on establishing new standalone restaurants throughout the U.S. In the first quarter of 2021, A&W sold five new units, putting the franchise on pace to reach its goal of 20 new units by the end of the year.

“A&W was a true comfort to people during a difficult year,” said John Palumbo, A&W’s senior director of franchise development. “This is a brand that goes way back. It’s familiar, it’s reliable, it’s indulgent — it’s everything people are looking for during a stressful time. That is a huge part of what carried us through not just 2020, but all of the economic ups and downs of the past 100 years.”

A&W’s Decade of Sales Growth

A&W’s growth streak didn’t begin in 2020. The brand has seen nine straight years of positive growth, including near-double-digit comparative sales growth for the past two years. That record suggests demand for A&W’s style of classic 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.

“The growth we’re seeing is not pandemic momentum; it’s A&W momentum,” Palumbo said. “Our restaurants appeal to virtually every demographic in every generation, and as we grow our footprint, our sales have grown right along with it.”

Still, A&W’s success throughout 2020 puts it on a short list of foodservice brands that are coming out of the pandemic even stronger than they went in, and that success can largely be attributed to some bold operational choices that have set the brand apart from competitors in the segment, starting with the brand’s restaurant buildout.

Providing Diverse Revenue Streams and Improved Customer Experiences With Dining Rooms and Drive-Thrus 

For years, QSR brands have been scaling down their buildouts in response to rising costs in real estate and building materials. A&W has resisted that trend, carving out a lane for itself as one of the few full-dining-room models left in the QSR space. According to Palumbo, that model has been essential to A&W’s ongoing growth.

“When people think of A&W, they think of the frosty mug, and that’s something you can only get in the dining room,” Palumbo said. “But that’s just the most tangible example. A&W has been around for a century, and people have very strong emotional associations with the brand. Those associations are not just about the food; they are about the experience. And that’s something we’ve worked very hard to maintain in a landscape that increasingly prioritizes convenience over experience.”

That is not to say that A&W hasn’t also developed convenient service options for customers. The brand can thank its drive-thru model for much of the success it found throughout 2020, when dining rooms were closed in cities across the country. 

“It’s no surprise that drive-thru orders surged in 2020, but it says a lot that our franchise owners were fully equipped to make the pivot seamlessly,” said Liz Bazner, A&W’s director of digital. “As this franchise has grown and evolved, we’ve taken great care to ensure that we can provide multiple points of access for customers and multiple revenue streams for franchise owners. Last year showcased the importance of that level of flexibility.”

How the Brand’s Century of Success Will Help Shape Its Future 

A&W’s success throughout the pandemic is likely due in part to the nostalgia the brand evokes. As Bazner points out, the brand “has literally been around longer than sliced bread,” and for many of its fans, A&W isn’t just a restaurant, it’s a family tradition. But Bazner says the brand’s leadership team remains forward-thinking.

“We’ve been around for 102 years, which says a lot about how strong this brand is, but we’re not stuck in the past,” she explained. “We have a real history — not a manufactured old-timey aesthetic you find at other brands. And that history is important to us and to our guests, but the reason we’ve got longevity is because we know how to give guests what they want today. We know that styles and preferences change, and we’re always prepared to roll with the changes. It’s what we call hip nostalgia. That’s the balance we’re creating.”

That balance is something that franchisees are eager to bring to their communities as well. Anthony Walker, one of A&W’s newest board members, is also a third-generation franchise owner. “I grew up in these restaurants — I’ve spent my whole life here,” he said. “I think of it as a family business, and I know that everything we do as a business is aimed at growing in line with the same values that the company has adhered to for decades while also prioritizing innovation and taking advantage of new opportunities.”

A&W Prepares for 20 New Freestanding Restaurants in 2021

Now, after nearly a decade of year-over-year sales growth and a successful 2020, A&W is preparing to welcome new franchisees into its family, starting with target development markets in Ohio, Michigan, Iowa and Minnesota. 

“A&W is a brand that does well just about anywhere you put it,” Palumbo said. “We’ve established restaurants in markets that most brands wouldn’t touch — towns with just a few thousand people — and they do a million in sales.” 

By the end of 2021, Palumbo says his team is aiming for 20 new freestanding restaurants. With a number of new sites already in development, he says he expects to hit that number easily.

“The question isn’t really if we can get to 20 new units by the end of the year; it’s who we decide to bring into our system,” he said. “So many of our existing franchisees are fully prepared to grow their businesses and take on additional units, but as we look into new markets, we also want to bring in new talent, so we’re actively seeking qualified, passionate entrepreneurs who understand our brand and our model and who want to help us grow our footprint across the country.”

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/