Owning an A&W Restaurant Franchise
When it started with a roadside stand, hundreds of A&W franchise locations should be just a dream. these should be totally dreaming. Today, approximately after a century, the company continues with both experiences of the years and excitement of the first day.
Information About A&W
A&W is a long-standing and very experienced company established in 1919 as A&W Root Beer stand. At 1925, the company sells the first franchise. Thus, the Company established the first franchise restaurant chain in the US. By 1956, it has already internationalized and opens first international franchise in Canada. It is followed by Malaysia and Japan. A&W reached its 100th international restaurant in Thailand.
In 2011, the Company bought by a group of Franchisees. It is the main proud of the A&W, being owned by franchisees. Now the Company is governed by a board of franchise representatives who serve two-year terms on the National A&W Franchisees Association (NAWFA) Board. In other words, the value of the franchisees is not only a slogan but it is totally true in practice too. Today A&W has more than 625 restaurants in the US and Alaska and nearly 340 international units.
Advantages Of Being A&W Franchisee
- The Company owned by Franchisees.
- There is a franchisee association board (NAWFA) for the management and coordination of the Company. Representatives serve for two terms.
- As a result, you have the opportunity to directly participate in the decisions of your Company.
- The Company is guided by the franchisees and the decisions present answers to franchisees’ needs.
- Equality and empathy are the main guides. Every member working in the office should also work in an A&W restaurant at least once a quarter.
- The original hand-crafted beverage, A&W Root Beer is still the star of the Company.
- A&W has an extended marketing strategy and support. The company professionally uses social media and other digital marketing strategies. Online video platforms are popular which increase the real traffic to the restaurant on the one hand and compared to TV campaigns making it with lower cost on the other hand.
- Free initial training up to three people per each new franchisee.
- A&W has flexible store footprint. It means you can open the store nearly any place. This is an advantage for many people since most of the people require strict qualifications for the location that is not so easy to meet by many. Even if you have a great space, you may stay out of the game. A&W has made many successful businesses in small towns. If you want to start your business in your own town, certainly A&W is the best alternative. Even in out-of-the-way areas, the distribution system developed by the Company provides to keep operating costs low.
What Should I Pay?
If you want to start the A&W franchise, you can run a single store or prefer to operate multiple units. The startup cost of your business varies based on the type of the restaurant you are planning to buy. Mainly, we can mention about three types of the restaurant. Co-Brand Restaurant is the cheapest type which costs between $266,500 – $610,500. You may prefer an independent restaurant which costs the highest. You may pay between $838,500 – $1,211,000 for this kind of freestanding restaurant. Lastly, you may prefer an inline restaurant which is required $413,500 – $825,000 investment.
One of the A&W franchise requirements is having a minimum liquidity of $150,000. Moreover, you should have at least $350,000 net worth.
How Much Could I Earn?
Since 2011, same-store sales grew almost 33%. Most of the single unit owners today expand their business to multi-unit ownership. The revenue opportunity of the Company is growing. The profit you will make depends on many factors. However, A&W provide you to keep in touch with franchisees to learn more about the profit possibilities.
Since the Company owned by franchisees themselves, instead of short-term gains for a small portion of the investors, NAWFA should consider the gains of all.
One advantage of increasing your profit is the low operating costs. The restaurant gets into a strategic brand partnership with Restaurant Supply Chain Solutions (RSCS). It is a supplier and distributor also for three biggest restaurant chains in the US which are Pizza Hut, KFC and Taco Bell. The company benefits from the RSCS reach and buying power. RSCS has the scale and reaches to support franchisees in any small town. In these places, real estate costs are lower while revenue opportunities and A&W franchise income are high.
Training and Support
Once you make the necessary preparation for the business, within six months two managers responsible for direct management of the restaurant are required to attend Training Courses. Up to three personal, the franchisor offers a free training program. The courses take place in specific locations. The courses last between 8 to 10 days. Any member of the franchisee’s organization is allowed to attend. On-the-job training is also offered. The rotation schedule ensures the time is spent in each of the Restaurant’s stations. The rotation program also includes operational activities like the opening, closing, maintenance and the production of A&W Root Beer.
Managerial staff may also be offered additional training programs. Moreover, franchisees may request additional courses like on-site training or support for any other issue at any time needed.
Other than financial requirements, there are some operational requirements. In each restaurant, there should be a Restaurant Manager who is responsible for the day-to-day management of the Restaurant. She should devote full-time to Restaurant and personal practice. She is not required to be the franchisees. In other words, franchisees may not be responsible for actively full-time working of the restaurant. However, there should be a Restaurant Manager for sure.
Franchises are required to offer the entire menu included in the Operations Manual and/or Franchise Agreement. In the case of selling the items not included in these documents, the franchise should take the approval of the franchisor.
The initial term of the Agreement for In-line and Co-Brand Restaurant is generally 20 years. On the other hand, it is 10 years for Independent Restaurants. However, there is no renewal option for this type. For In-line or Co-Brand Restaurant two additional renewals period is available if the Restaurant is successful. The renewal terms are five years for each.