How Much Can You Make as an A&W Franchisee?

Since its first roadside stand opened in 1919, quintessential fast food brand A&W Restaurants has presented strong franchising opportunities across the country. At the end of 2020, there were 537 franchised restaurants in A&W’s system. Its top reporting, drive-thru-equipped unit brought in more than $2.3 million in 2020 net sales, while its average net sales (using data from 54 drive-thru equipped units) topped $1.1 million.

The brand has successfully navigated more than 100 years of updates and advancements. In the past year alone, when the restaurant industry had to get creative to stay ahead during the pandemic, A&W wrapped up 2021’s Q2 with 14 new restaurant commitments and 20 new deals, proving the growth of the company is on an upswing. This expansion is good news for a prospective franchisee looking to capitalize on a reputable brand.

“You can’t always guarantee results for a new franchisee, but we feel confident in our business model that has stood the test of time,” said John Palumbo, senior director of A&W franchise development. “We also feel our industry will recover from a tough year, and we continue to update our business model with the times. We strive to help new owners find the continued success that has helped our brand for more than a century.”

A&W also saw a 13.5% increase in sales during October of 2020 compared to one year prior, which set a record for year-after-year sales.

“Even during the pandemic, my A&W locations were really, really busy,” said Minnesota multi-unit franchisee Julie Glenz. “But I think what really contributed to my success - and the success of other locations according to what I’m hearing from other A&W owners - is that customers like to see an owner caring about their restaurants. They see me in the store cleaning and involved with employees. Having that element visible to the customer kept them coming back.”

Additionally, 17 reporting freestanding A&W restaurants (with drive-thrus) have released profit-and-loss data, which shows that 59% of A&W units have attained or exceeded their average EBITDA as a percentage of their net sales. According to A&W’s Franchise Disclosure Document, its EBITDA as a percentage of New Sales was above-average.

Now more than ever, Palumbo praises the brand’s adaptiveness and its ability to respond to adversity. “Our franchise owners have stayed on their toes through a lot of tough times, and our support center team sets out to ensure they have what they need,” he said. “We knew a pandemic would alter our revenue figures, but we’re pleased to see that our franchisees have been able to outlast challenges and continue to bring in revenue.”

A&W has proven a mission to sustain its brand for more than 100 years, offering franchisees stable revenue and a stable ROI. That stability continues to prove itself, and franchisees can anticipate increased revenue in the coming years if the brand continues to expand

The total investment necessary to begin an A&W 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.