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A&W Restaurants Lowers Franchise Royalties for New Operators

By: A&W Restaurants |  2 Shares     101 Reads

Kicks off ‘Second Century Growth Initiative’

January 23, 2019 // Franchising.com // LEXINGTON, Ky. - A&W, America’s first restaurant chain, is launching a new franchise growth program with reduced royalties as its centennial approaches. The Second Century Growth Initiative reduces royalties for new U.S. franchise partners. An incentive program for current operators will be introduced next month.

The popular quick-service chain, known for its freshly made root beer, burgers and other all-American food, has nearly 1,000 restaurants worldwide, with more than 600 in the United States. Since 2011, A&W has been owned by franchisees.

First-year royalties for new operators will be reduced from five percent to two percent. They are adjusted to three percent in the second year and to four percent in the third, before returning to five percent in the fourth year.

President Paul Martino said the program underscores the company’s long-term focus. “Reducing royalties enables operators to spend more on their operations in those crucial first years,” adding that the discounts will save the owner of a restaurant with $1 million in sales $60,000 in royalties. “As a franchisee-owned brand, A&W is in a unique position to make decisions that are best for the brand and its operators over the long haul, not the next quarter.”

Since being acquired from YUM! Brands in late 2011, A&W has opened more than 60 new U.S restaurants; 15 are planned for 2019. Comp-sales have grown more than 32 percent, with AUVs also up by a third.

As part of the Second Century Growth Initiative, Martino was promoted from COO to president and given development responsibilities. Dave Crowley was hired as director of Franchise Recruitment, and the development department was restructured with resources added. A new franchise training center is planned.

“The last seven years have brought a remarkable turnaround, and we’re very proud to have opened more than 60 restaurants,” said Chief Executive Kevin Bazner. “Now, as we enter our second century, it’s time to really accelerate A&W’s expansion.”

About A&W Restaurants

America’s first and oldest restaurant chain, A&W still makes Root Beer fresh in each restaurant from real cane sugar, water and a proprietary blend of herbs, bark, spices and berries that are served in a frosty mug alongside burgers, fries, chicken tenders and other All American Food® favorites. There are nearly 1,000 locations worldwide.

SOURCE A&W Restaurants

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