A&W Restaurants Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$278,000

-

$1,595,000

LOCATIONS

505

Emily

Updated

May 2, 2024

Is

A&W Restaurants

a franchise?

Yes,
A&W Restaurants
currently
accepts
franchise
applications

A&W Restaurants, a leading franchise in the American fast-food landscape, was founded in 1919, laying the foundation for a brand that would become synonymous with classic American fare and its trademark root beer. The franchise embarked on its expansion journey in 1925, a significant move that established A&W as a pioneer in the franchising domain. With its headquarters nestled in Lexington, Kentucky, A&W has successfully woven a tapestry of tradition and nostalgia that resonates deeply with its customer base.

The A&W franchise distinguishes itself through its commitment to heritage and quality, offering a menu that is both classic and comforting. Known particularly for its signature root beer, freshly made in each restaurant, A&W creates a unique dining experience that harks back to simpler times.

This appeal to nostalgia, combined with a focus on community involvement and the provision of comprehensive franchisee support, sets A&W apart in the competitive fast-food industry. The franchise model encourages a hands-on approach, seeking franchisees who share a passion for the brand and a dedication to delivering high-quality food and memorable experiences to their customers.

A&W's approach to franchising emphasizes strong brand recognition, leveraging over a century of history to foster a sense of family and community among its franchise partners. This sense of belonging is further strengthened by the franchise's dedication to supporting its franchisees through robust training programs, marketing support, and operational guidance.

How many

A&W Restaurants

franchises

are there?

In 2022, there were
505
outlets in
the United
States, of which
503
are franchises, and
2
are corporate-owned.

What are the

A&W Restaurants

franchise

fees?

Advertising fee

5.00%

Initial Franchise Fee ($25,000 to $30,000)

The initial franchise fee for A&W Restaurants varies depending on the type of restaurant. For a traditional restaurant, the fee is $30,000, while for a non-traditional restaurant, it's $25,000.

Royalty Fee (5% of net sales)

Franchisees are required to pay a continuing royalty fee equal to 5% of net sales. This payment is in consideration for the limited license to use the A&W Trademarks.

Advertising Fee (5% of net sales)

Franchisees must contribute 5% of net sales to the NAC Advertising Trust Fund. This fund is used for various advertising and promotional activities to benefit the A&W brand. The advertising fee is used to support advertising and marketing programs in accordance with the terms of any agreement between the company and NAWFA or their respective affiliates.

Grand Opening Promotional Deposit ($5,000)

In addition to the initial franchise fee, franchisees must pay a grand opening promotional deposit. This fee is payable to the NAC Advertising Trust Fund. Once the restaurant is opened for business and the approved grand opening promotion is completed, franchisees are eligible for reimbursement of up to $5,000 of their approved expenditures in connection with the grand opening promotion.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

A&W Restaurants

franchise?

It costs between
$278,000
and
$1,595,000
to start a
A&W Restaurants
franchise.

The franchisee can choose to operate a restaurant in various formats:

  1. Freestanding Restaurant: This format involves a new or converted freestanding building with a drive-thru. The estimated initial investment for this type ranges from $871,650 to $1,594,889.
  2. Inline Restaurant: This format pertains to a new or converted space connected to or in line with another retail space or a gas station or convenience location with a drive-thru. The investment for this type is estimated between $401,650 and $1,051,738.
  3. Captive Restaurant: This format is for a new or converted space in a "captive" location. The estimated initial investment for this type ranges from $278,285 to $700,285.

Below is a detailed breakdown of the estimated initial investment for each type of A&W Restaurant:

Freestanding Restaurant Estimated Initial Investment

Type of Expenditure Amount
Building and Equipment Costs $800,650 - $1,350,487
Initial Franchise Fee $15,000 - $30,000
A&W Grand Opening Promotion Deposit $5,000
NAC Advertising Trust Fund Management Training Course Expenses $3,000-$10,000
On-Site Team Member Training Expenses $6,000 - $25,000
Miscellaneous Opening Costs $6,000 - $12,402
Opening Inventory $6,000 - $12,000
Additional Funds – 3 Months $30,000 - $150,000
TOTAL $871,650 - $1,594,889

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

A&W Restaurants

provide

training

to its

franchisees?

Yes,
A&W Restaurants
provides
training

A&W Restaurants offers a comprehensive training program for its franchisees. This program is meticulously designed to ensure that every franchisee is equipped with the knowledge and skills required to run an A&W restaurant successfully.

Training Details:

  • Location & Duration: The specifics about the training location and its duration were not explicitly mentioned in the provided document. However, it's common for franchisors to conduct training at their headquarters or at designated training locations.
  • Content: The training program typically covers various aspects of restaurant operations. This includes, but is not limited to, operational techniques, equipment usage, computer software and hardware training, and maintaining the brand's operational standards.
  • Additional Support: Beyond the initial training, franchisors like A&W often provide ongoing support and training resources. This ensures that franchisees are updated with the latest operational practices and brand standards.
  • Employee Training: It's also common for franchisors to mandate that franchisees implement a training program for their employees. This ensures that the staff is trained according to the brand's standards, leading to a consistent customer experience across all outlets.

Does

A&W Restaurants

provides

territory

protection?

Franchisees may operate their Restaurant from only one site. However, with A&W's prior written approval and in compliance with their guidelines, franchisees may cater or deliver menu items to customers.

Franchisees do not have an exclusive or protected territory.This indicates that while franchisees have a designated area to operate, they don't have a broader exclusive territory.

Can a

A&W Restaurants

franchise

be run as

a passive

investment?

The A&W Restaurants franchise model does not mandate that franchisees actively supervise the operation of the restaurant on the premises. This provides some flexibility in terms of management and daily operations.

However, it's essential to note that while there's room for delegation, the franchise isn't designed to be a purely passive investment. The brand likely has standards and expectations that need to be met, even if the franchisee isn't directly involved in day-to-day operations.

Related Posts