Lexington, Ky. — A&W Restaurants is expanding from California to New York and from Louisiana to Minnesota, the result of agreements signed with 10 new franchisees. The latest multi-unit deal, signed this month, will bring three locations to Lafayette, La. The popular fast food chain has opened 12 restaurants in the last 18 months. It now has 16 in development, with four being built by current franchisees. 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 recently reported double-digit comp-store sales growth in May, despite nearly all dining rooms being closed due to coronavirus. 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,” says CEO Kevin Bazner. He noted that in a recent national poll of 15,000 respondents, 74% had eaten at an A&W.
Freestanding restaurants in Beaverton, Mich., near Midland, and the St. Louis suburb of Belleville, Ill., 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 says. “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:
- Kimball Township, Mich.
- Lewiston, Idaho
- Mountain Lake, Minn.
Convenience stores with drive-thrus under development:
- Albany, N.Y.
- Berkeley, Calif.
- Cody, Wyo.
- Hot Springs, Ark.
- Howard Lake, Minn.
- Prescott Valley, Ariz.
- Yermo, Calif.
To help new owners succeed, 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.