How A&W Is Maintaining Momentum Despite Labor Challenges

A&W Restaurants, the 500-plus unit all-American restaurant franchise, is facing labor challenges alongside most of the restaurant industry. According to data collected in late 2021, seven in 10 restaurant operators reported not having enough employees to support demand at their restaurants, and few expected any sort of improvement in 2022. The challenges reportedly stem from roughly two years of challenges in the industry, including mistreatment from leadership and customers, lower tips, turmoil surrounding vaccine and masking mandates and a desire for higher pay and consistent schedules that can be offered in other roles.

“The pandemic exacerbated the problem,” said Randy Cordray, A&W’s Senior Director of Operations, “but the quick service restaurant industry as a whole saw some of these trends prior to the pandemic — it was becoming more and more difficult to get that team-member level staff.”

As franchisors and franchisees alike look to the future of restaurant operations, A&W is coming together to implement creative solutions. Hands-on field support has played a huge role in the brand’s ability to maintain its momentum despite these challenges. “Our field team goes into restaurants and talks with managers about things like staffing and menu pricing to ensure that costs are covered,” Cordray said.

“The corporate team has been super flexible,” said Erica Kelly, A&W owner. “Last fall we had to change our operating hours in order to give full time staff a day off, and they were very flexible in allowing us to make changes as needed.”

This collaboration has allowed the brand to continue growing despite the challenges many restaurants have experienced. Q1 growth alone has placed the brand on trajectory to reach its goal of 25 new franchise agreements and 12 new openings in 2022.

"A&W is an iconic brand that's been around for over a century, and if the first quarter of this year shows us anything, it’s that we still have plenty of growth opportunities ahead of us," said John Palumbo, A&W’s senior franchise director.

While there’s no silver bullet to eliminate staffing challenges, Cordray explained that a combination of detail-oriented efforts have supported A&W’s continued growth. 

“The advantage we have is that we are a high-touch organization, so our franchisees see us in the field and talk to us on a regular basis. It’s easy for us to take what’s working with one operator and share it with another — sharing has been a critical part of this entire endeavor,” he explained.

The brand has worked to not only increase compensation but implement other efforts to engage employees. 

“There are little personal touches that used to be a part of the industry but had fallen out… Things like getting a gift for an employee’s birthday,” Cordray said. 

Owners have taken charge of the energy within the workplace as well.

“I try to only be optimistic,” said Kelly. “Being stressed and pessimistic does nothing for my mental health or the morale of my staff, so we’re instead focusing on showing lots of appreciation for the staff right now.” 

Kelly has established an employee of the month program and coworker appreciation initiative that allows staff to submit cards recognizing the hard work of their coworkers.

“I believe in a labor shortage there are two routes you can take,” she explained. “You can hire anyone who comes through the door, but that will require lots of training, and sometimes people don’t last. Or, what we have been doing is being selective with who we bring on staff. We want a staff that works cohesively and is positive and uplifting.” 

When the team is happy together and works well as a unit, the restaurant is able to deliver the dining experience that A&W is known for, exceeding just burgers and floats and instead providing customers with positive memories, associations and family traditions.

Ultimately, quick-service restaurants are about people through and through. Whether that is the people working the restaurant or those dining in. 

“The common denominator among fully-staffed restaurants is that they prioritize great culture within their four walls. That allows them to be successful not only in the present but in the long term,” Cordray added. 

A person-first model that prioritizes connecting with and relating to people is what builds a strong restaurant, and this is what A&W works to instill in franchisees.

Johnny C. Taylor Jr., president and CEO of the Society for Human Resource Management, says the same. “Don’t underestimate the impact of culture,” he wrote. “Workers tend to thrive in workplace cultures that match their values and persona… Be flexible with employees, show empathy and create an inclusive environment to help employees feel engaged and valued.”

As workplace culture becomes increasingly important, A&W has built a foundation of communication, respect and teamwork that will continue to drive success for both its brand as a whole and individual franchisees nationwide.

The total investment necessary to begin operation, not including rent or land costs, is $871,000 to $1,469,554 for a Freestanding Restaurant; $401,000 to $1,051,088 for an Inline Restaurant; and $276,000 to $704,000 for a Captive Restaurant, including a $15,000-$30,000 franchise fee. For more information on franchising with A&W, please visit https://franchising.awrestaurants.com/.