A&W Restaurants
A&W Restaurants, Inc. franchises quick-service restaurants (Freestanding, In-line, or Captive) featuring draft A&W Root Beer and classic American fast food items like hamburgers, hot dogs, chicken tenders, fries, and soft serve ice cream. Franchisees operate in high-traffic locations, often with drive-thru service, targeting customers for lunch, dinner, and evening meals. The business model involves granting 20-year (or 10-year for Captive) franchise agreements, with options to renew, and initial investments ranging from $298,899 to $1,639,906 depending on restaurant type.
Franchise Costs
5% royalty + 5% ad fund (2% for Captive Restaurants) + $4,000-$10,000 annual insurance reimbursement (approx. $333-$833/mo)
Financial Performance
Item 19 Financial Performance
Data Based On: Data from 59 franchised Freestanding Restaurants and 53 franchised Convenience & Gas Stations Restaurants that were open and operating for the entire 12 months of 2024 for revenue data. P&L data is from 17 of these Freestanding Restaurants.
* Average gross revenue calculated as a weighted average of 59 Freestanding Restaurants ($1,326,392 average) and 53 C&G Restaurants ($815,962 average). Median gross revenue, revenue top quartile, and revenue bottom quartile cannot be accurately determined for the combined group and are set to null. Average gross profit and average EBITDAR are based on Table III data for 17 Freestanding Restaurants (average Net Sales $1,564,638). EBITDAR margin calculated as average EBITDAR ($244,286) divided by average Net Sales for the P&L sample ($1,564,638). Best guess profit range is set to null due to explicit FDD warning against interpreting EBITDAR as final profit and lack of data for quantifying additional necessary deductions (interest, taxes, depreciation, unlisted operating expenses).
Extracted Item 19 Section
How A&W Restaurants Compares
Key Insights
- Higher investment than 81% of Fast Food franchises
- Higher than average SBA loan default rate in Fast Food
| Franchise | Investment | Fee | Royalty | Locations |
|---|---|---|---|---|
A&W Restaurants Current | $894K – $1.6M | $30K | 5.0% | 427 |
| MCDONALD'S | $1.5M – $2.6M | $45K | N/A | 12,772 |
| AFC | $45K – $151K | $6K | 9.5% | 3,572 |
| SONIC DRIVE-IN | $1.7M – $3.1M | $15K | 5.0% | 3,441 |
| JIMMY JOHN'S | $366K – $728K | $35K | 6.0% | 2,647 |
| ARBY'S | $645K – $2.5M | $38K | 4.0% | 2,316 |
Fast Food Average 126 franchises | $594K – $1.5M | $35K | 6.1% | – |
* Comparison based on latest FDD filings. Investment ranges from Item 7, fees from Item 5. Showing top 5 of 126 Fast Food franchises by location count.
Locations & Growth
Outlet Growth Over Time
Total outlets at end of each year
Geographic Distribution (2024)
Outlets by state across the United States
+19 more states
SBA Loan History
Historical SBA 7(a) loan data for A&W Restaurants franchisees (2010 – 2012)
Loans by Year
SBA 7(a) loan activity over time
* Data sourced from SBA 7(a) FOIA loan records. Default rate calculated from charged-off loans.
Franchisee Contacts
427 franchisee contacts on file from official FDD filings.
| Name | SBA Loan |
|---|---|
John Smith ABC Franchise LLC | $350,000 2023 · Active |
John Smith ABC Franchise LLC | $350,000 2023 · Active |
John Smith ABC Franchise LLC | $350,000 2023 · Active |
John Smith ABC Franchise LLC | $350,000 2023 · Active |
John Smith ABC Franchise LLC | $350,000 2023 · Active |
427 Contacts Available
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Due Diligence
Litigation (Item 3)
Bankruptcy (Item 4)
System Health (Item 20)
Franchise system changes reported in the most recent fiscal year
Frequently Asked Questions
The total initial investment to open a A&W Restaurants franchise ranges from $894,434 to $1,639,906. This includes a franchise fee of $30,000. Ongoing royalty fees are 5.0% of gross sales.
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