Franchising

A&W signs development agreements with 10 franchisees

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June 24, 2020

A&W Restaurants is expanding in at least six states after signing deals with 10 franchisees, a news release said.

The new locations will be in major cities, such as Chicago and St. Louis, as well as mid-size and smaller communities. Seven will be located in convenience stores or travel centers.

A&W, which recently reported double-digit comp-store sales growth in May, has opened a dozen restaurants in the last 18 months and has 16 in development, with four being built by current franchisees. Average unit sales have increased by 38% since franchisees acquired the company from YUM Brands in 2011.

"A&W truly is an all-American business opportunity that performs very well in all areas of the country," CEO Kevin Bazner said in the release.

Freestanding restaurants in Beaverton, Michigan near Midland, and the St. Louis suburb of Belleville, Illinois are scheduled to open in the coming weeks. Both are in former banks.

"The pandemic is sadly forcing many stores, as well as independent and other chain restaurants, to close permanently," Bazner said. "We expect more new franchisees will capitalize on these real estate opportunities and convert facilities that once housed other restaurant brands or businesses to A&Ws."

Additional freestanding locations with drive-thrus under development include locations in Chicago, Kimball Township in Michigan, as well as Lewiston, Idaho and Mountain Lake, Minnesota. Convenience stores with drive-thrus under development include locations in:

• Albany, New York.
• Berkeley, California.
• Cody, Wyoming.
• Hot Springs, Arkansas.
• Howard Lake, Minnesota.
• Prescott Valley, Arizona.
• Yermo, California.

A&W is lowering royalties in the first year of all new franchise agreements from the standard 5% to 3%. Second-year royalties are 4%. Initial fees on multi-unit agreements also are being discounted, according to the release.

A&W, based in Lexington, Kentucky, has more than 900 units in the U.S. and Asia.