A&W Restaurants
Date of Incorporation: 1919
Franchising Since: 1925
Headquarters: Louisville, Kentucky
Description: A&W is indirectly a wholly-owned subsidiary of Yorkshire Global Restaurants, Inc. Currently, A&W operates restaurants and grants licenses to operate restaurants under the names A&W® and A&W All American Food. The Restaurants are located both in the United States and internationally and offer A&W draft Root Beer® and food products such as hamburgers, hot dogs and fries. The Restaurants are usually located in an area with high traffic volume and typically are open for lunch, dinner and evening business.
Franchise Offer: A&W offers three types of franchises:
1. Drive-in Restaurants
2. Co-brand restaurants: A&W Restaurants that are to be operated in the same facility as another branded restaurant concept
3. A&W Express Units: Restaurants based in so-called "captive audience" locations such as military bases, colleges and universities, airports, interior mall locations and similar venues.
Financial Assistance: A&W does not offer, directly or indirectly, any arrangements to franchisees for financing the initial investment or the continuing operation of an A&W business. A&W does not guaranty a franchisee’s note, lease or obligation.
Training and Assistance: Before the franchisee open his/her restaurant, the franchisee and/or appropriate members of his/her organization are required to attend an initial training program. The training may include classroom instruction and on-site training at designated training facilities. A&W does not charge a fee for the initial training program. The franchisee will be responsible for all compensation, insurance, travel and living expense that he/she and/or the participant incurs in connection with the training program.
Territory: The Franchise Agreement will designate an exclusive trading area surrounding the franchisee’s restaurant within which A&W will not establish or grant a franchise for A&W Restaurants. Generally, the exclusive trading area will approximate a circular area, with the franchisee’s restaurant forming the center point and having a radius of 1.5 miles, or within which 30,000 people work or reside, whichever area is less.
Term of Agreement and Renewal: The initial term of the Franchise Agreement is 20 years with an option to renew for two consecutive five-year options. The franchisee must meet certain criteria to exercise any option to renew, including remodeling the restaurant to A&W's then current standards.
Obligations and Restrictions: The franchisee is not required to actively supervise the operation of the restaurant on premises, although active on premises supervision is strongly encouraged. All restaurant managers are required to have satisfactorily completed the training course prior to assuming management control of the restaurant. The franchisee is required to offer for sale all of the menu items specified in the manual and/or the Franchise Agreement, prepared from ingredients, meeting A&W's specifications, and purchased from approved sources. Items not listed in the Manual are not permitted to be sold unless authorized in writing.
Total Number of Units: There are approximately 360 A&W All-American Food outlets in the US, more than 270 in 11 other countries, and 623 additional points of distribution in multi-brand restaurants.
Investment Tables:
Initial Investment:
(Based on an A&W Co-Brand Restaurant)
| Expenditure | Low | High |
|---|---|---|
| Initial Franchise Fee | $30,000 | $50,000 |
| Building Construction Costs KFC/A&W: LJS/A&W: |
$368,000 $361,000 |
$685,000 $502,000 |
| Equipment, Signage and Décor KFC/A&W: LJS/A&W: |
$385,000 $265,000 |
$511,000 $370,000 |
| Development fee | Varies | Varies |
| Site Work | $168,000 | $254,000 |
| Miscellaneous Permits, Utility Deposits, Licenses and Architectural Costs | $70,000 | $90,000 |
| Start-up Inventory | $5,000 | $8,000 |
| Additional funds- 3 months | $209,000 | $216,000 |
| Total | $1,123,000 | $1,844,000 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty Fee | 6% of gross sales |
| Advertising Fee | 4% of gross sales |
| Training Materials, Labor Costs and Fees | The franchisee must pay A&Ws actual cost for training and materials provided by A&W. |
| Grand Opening Promotion Deposit | $5,000 |
| Interest on Late Payment | Lesser of 18% per annum or highest legal rate |
| Transfer | $2,000 - $5,000 |
| Audit | All costs of audit and underpaid fees plus 18% interest on underpayment from date due |
| Insurance | $4,000-$10,000 (estimate) |
| Support Services Agreement Fees (Optional) | Varies according to services and one-time charges |
| Indemnification | Will vary under circumstances |
| Inventory Replacement | Will vary depending upon sales level |
| Growth Contract Fee | $10,000 - $20,000 per site |
| Food Standards Consultation | A&W may cause a third party vendor to conduct food standards consultations of your Restaurant. A&W currently does not charge franchisees any fees for these inspections, but it may do so in the future. |
Date of FDD: 2009
The above information has been compiled from the FDD of A&W Restaurants along with online sources.
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