A&W Restaurants Franchise Costs, Fees & FDD

Year Business Began: 1919

Franchising Since: 1925

Headquarters: Lexington, Kentucky

Estimated Number of Units: 865

Franchise Description: A&W Restaurants, Inc. is the franchisor. A&W is a wholly owned subsidiary of A Great American Brand, LLC. Currently, the franchisor operates restaurants and grants licenses to operate restaurants under the “A&W” and “A&W All American Food” trademarks. The franchisee will operate a quick-service restaurant featuring A&W Root Beer and other approved items in a new or converted freestanding building (freestanding restaurant), a new or converted space connected to or in line with another retail space or a gas station or convenience location (an inline restaurant) or a new or converted space in a captive location (a captive restaurant).
Training Overview: Prior to attending the management training course, each attendee must become certified, or hold current certification, as a food safety manager. Within one to two months before the restaurant opening for business, the restaurant general manager and one other manager devoted to the full-time, day-to-day direct operation of the restaurant will be required to attend and complete the management training course to the franchisor’s reasonable satisfaction. The management training course is provided by the franchisor through AW University at A&W’s Restaurant Support Center in Lexington, Kentucky and at A&W’s company-owned Restaurant in Richmond, Kentucky, which is used as a training restaurant, and may last between 8 and 14 days. The franchisor is currently providing the training course for up to three individuals free of cost but will charge $200 per day for each additional trainee the franchisee would like to attend. Restaurant on-the-job training may use a rotation schedule to ensure that time is spent in each of the restaurant’s stations. Non-guest related activities, such as station opening, closing, root beer dispensing, maintenance and the production of A&W Root Beer may also be scheduled as part of the rotation. In addition to the management training course, the franchisor requires all team members to complete digital training modules. After completing the digital training modules, the franchisor requires all team members to attend onsite training during the week prior to the restaurant’s opening. This will be facilitated by two A&W Field Trainers at the franchisee’s restaurant and may last 5 to 10 days. Additional in-person or online training courses may be offered or required for restaurant management teams and above store managers.

Territory Granted: Franchisees may operate their restaurant from only one site, except that franchisees may cater or deliver menu items to customers with A&W’s prior written approval and in compliance with the franchisor’s procedures, policies and standards. The site means a location the franchisee selects and the franchisor approves, where the franchisee will operate the restaurant. If franchisees operate a freestanding or inline restaurant, the Franchise Agreement will designate a trading area consisting of the smaller of (a) a 1.5 mile radius around the restaurant and (b) whatever radius around the restaurant includes a combined number of 30,000 residing and working people, within which the franchisor will not, so long as franchisees are in compliance with the Franchise Agreement, establish or grant a franchise for A&W restaurants that are not located at so-called “captive locations.” If franchisees operate a captive restaurant or are the transferee of a co-brand restaurant, they will not receive a trading area.

Obligations and Restrictions: Franchisees are not required to actively supervise the operation of the restaurant on premises, although active on premises supervision is strongly encouraged. If franchisees are individuals, they must either serve as or designate a restaurant general manager. An entity franchisee must designate a restaurant general manager. The restaurant general manager, who will have day-to-day management responsibility for the restaurant, must exercise on-premises supervision and personally participate in, and be devoted to the full-time, day-to-day direct operation of the restaurant. Franchisees are required to offer for sale all of the menu items specified in the operations manual and/or the Franchise Agreement, prepared from ingredients, meeting A&W's specifications, and purchased from approved sources. Items not listed in the operations manual are not permitted to be sold unless authorized in writing.

Term of Agreement and Renewal: The length of the initial term for freestanding and in-line restaurants is generally 20 years. The initial term of the franchise agreement for captive restaurants is 10 years. If franchisees are in good standing and satisfy the renewal criteria in the Franchise Agreement, they may renew for two additional renewal terms of five years each.

Financial Assistance: The franchisor does not offer, directly or indirectly, any arrangements to franchisees for financing the initial investment or the continuing operation of their A&W business. The franchisor does not guaranty a franchisee’s note, lease or obligation. If franchisees meet the veteran incentive qualifications, the $30,000 initial franchise fee will be reduced to $21,000.

Estimated Initial Investment

Name of Fee	Low	High
Real Estate	Not included
Professional Fees, Licenses & Permits	$5,000	$84,000
Building Costs including Site Work	$50,000	$869,484
Signs	$5,000	$87,658
Technology System	$30,864	$69,723
Furnishings, Fixtures & Equipment	$136,535	$275,639
Initial Franchise Fee	$15,000	$30,000
Grand Opening Promotion Deposit	$2,500	$5,000
Management Training Course Expenses	$3,000	$10,000
On-Site Team Member Training Expenses	$8,000	$30,000
Miscellaneous Opening Costs	$6,000	$12,402
Opening Inventory	$7,000	$16,000
Additional Funds - 3 Months	$30,000	$150,000
ESTIMATED TOTAL*	$298,899	$1,639,906

*The estimated initial investment range covers from captive restaurants up to freestanding restaurants, including conversion and inline restaurants (retail space, gas station, and convenience store). The range does not include real estate costs. See FDD for more details.

 
Other Fees

Type of Fee	Amount
Royalty Fee	5% of net sales (subject to royalty incentives for new restaurants).
Advertising Fee	5% of net sales for all restaurants except captive restaurants, and 5% of net sales for transferees of co- brand restaurants that are signing new franchise agreements; 2% of net sales for captive restaurants.
Management Training Course	Additional and subsequent trainee charge: $200 per person per day.
Training Materials and Fees	Actual costs for training materials.
Multi-Unit Training Course	The then-current training fee and actual costs for training materials.
Additional On-Site Training or Assistance Fee	$200 per day.
Interest on Late Payments	Lesser of 18% per annum or highest legal rate allowable under state law.
Renewal Fee	$2,500
Transfer	A $5,000 fee is payable in connection with an approved transfer of each Franchise Agreement for an A&W restaurant.
Audit	All costs of audit and underpaid fees plus 18% interest on underpayment from date due.
Insurance	$4,000 - $10,000 (estimate).
Supplier Approval	The franchisor’s actual costs.
Indemnification	Will vary under circumstances.
Inventory Replacement	Will vary depending upon sales level.
Food Standards and Safety Review Audit	The franchisor may cause a third party vendor to conduct food standards consultations of the restaurant. The franchisor currently does not charge franchisees any fees for initial inspections, but it may do so in the future. The franchisor reserves the right to charge franchisees for any subsequent inspection that is necessary due to a failed initial inspection or franchisee's failure to allow an initial inspection.

The above information has been compiled from the FDD of A&W Restaurants. Year of FDD: 2025.
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