How A&W Is Getting Back to Basics

QSR plots growth with a more traditional concept positioning

LEXINGTON, Ky. -- A&W Restaurants has gone back to its roots. Literally.

All 600-plus restaurants in the Lexington, Ky.-based chain started making their own root beer this past spring, something A&W had historically done but mostly abandoned in recent years in the name of an easier, bag-in-the-box variety.

While the process is more complex, even as automation has taken much of the work out of it, the sales results are worth the effort, reported our colleagues at Restaurant Business.

“At the end of the day, how did the customer respond? Customers have responded terrifically,” CEO Kevin Bazner told RB. “They’re glad to see us back there, making our root beer. It’s been very, very successful for us.”

For the company, shifting back to the old way of doing things and improving quality inside its restaurants simply makes the chain more competitive at a time in which bigger companies dominate the airwaves.

The effort has worked enough to convince executives to get more serious about growth. Global sales increased 4.5% at the brand in 2016, according to Technomic industry data, powered by Ignite.

A&W expected to finish 2017 with another 15 locations in the U.S., which would make its first positive development year domestically in years. The company also expected to finish the year with another 30 international locations.

The company’s efforts to improve that growth include its first proactive franchise-sales effort in years. For instance, A&W has created a new franchise-sales site, something that may seem simple, yet the company didn’t have one.

“We’re going to be a bit more proactive in terms of soliciting prospective franchisees,” Bazner said. “We’re turning the lights on, if you may, to a digital marketing campaign to drive interested franchisees to the site. The investment we’re making this year to strengthen the future pipeline of prospective new franchising partners.”

A&W isn’t planning a major, nationwide push. The company is targeting the types of operators who have been looking at the chain to begin with: convenience-store operators and people in the Midwest. Currently, c-store brands such as Ankeny, Iowa-based Casey's General Stores and Westlake, Ohio-based TravelCenters of America operate A&W units in select locations.

“They were the ones calling us when we weren’t soliciting for new franchisees,” Bazner said of c-store operators. “Obviously there’s a demand there.”

Then there’s the Midwest, where the chain can find a home in smaller towns where other brands are less likely to tread.

“That’s really the roots of the brand,” Bazner said. A&W recently signed an eight-unit deal in Ohio, where the operator plans to open in smaller and midsized towns. The company is also talking with an operator in Iowa who would do the same thing. “That’s our bread and butter,” Bazner said. “At one point we had a lot more stores in Iowa. There’s a lot more white space to develop.”

Click here to read the complete RB report.

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