Plans for eight new franchised C-store restaurants announced
Royalties lowered for new franchisees
Lexington, KY (RestaurantNews.com) Same-store sales at A&W Restaurants’ franchised gas and convenience store locations jumped by double digits in June, although Americans were driving fewer miles and buying less gas than usual. Sales at A&W’s more than 90 C-store locations were up 10.5%, following an 8.3% increase in May. They were an average of 11% higher during the January-February period before falling off in March and April, the result of the coronavirus pandemic.
The strong performance comes as the iconic brand prepares to expand its convenience store and travel center presence from coast to coast with eight new franchised locations.
“At a time when Americans were staying off the road, it’s remarkable that sales at A&W convenience store locations were so strong,” said CEO Kevin Bazner. “This shows the tremendous value that A&W brings to C-stores and travel centers.”
The company recently announced development agreements with eight new C-store franchisees. Locations, all of which will feature drive-thrus, are being developed in:
- Albany, New York
- Berkeley, California
- Cody, Wyoming
- Hot Springs, Arkansas
- Howard Lake, Minnesota
- Jefferson, Wisconsin
- Prescott Valley, Arizona
- Yermo, California
“A&W truly is an all-American business opportunity that performs very well in all areas of the country,” Bazner added. He noted that in a recent national poll of 15,000 respondents, 74% had eaten at an A&W.
To help new C-store 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.
System-wide, A&W experienced double-digit comp-store sales growth in May and June, 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.
“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.”
Now in its 101st year, A&W is America’s first franchised restaurant chain. Known for Root Beer that is made fresh in each restaurant and served in frosty mugs, there are more than 900 A&Ws in the U.S. and Asia.