LEXINGTON, Ky. — A&W Restaurants recently added to its growing convenience-store footprint with a new location in Hot Springs, Ark.
Franchisee Mohammad Lone converted an independent restaurant to a 45-seat A&W that includes a drive-thru and gas station. Initial sales are exceeding expectations, the company said.
There are nearly 100 A&Ws in gas and c-stores and travel centers. C-store unit sales through September are up 11%, following a 6% annual increase last year.
A&W is experiencing growing interest from c-store operators, CEO Kevin Bazner said, with some looking to convert nonbranded food operations to A&W and others exploring leasing space to A&W franchisees. The chain has commitments for 22 new restaurants, with at least nine expected to be convenience and gas. Locations in California and Arizona are scheduled to open before the end of 2021.
“C-store retailers are rethinking their businesses, and, at the same time, there are significant headwinds that make building new freestanding restaurants difficult,” Bazner said, adding that A&W is taking a two-prong approach to developing c-store locations.
“We’re working with current c-store operators to bring the A&W brand to their communities while also helping prospective franchisees find sites to build an A&W,” he said. “Given the high cost of real estate and how long it takes to get a traditional location permitted and built, c-stores are a very cost-effective alternative.”
A&W’s sales performance, with average unit sales up more than 50% since franchisees acquired it in late 2011, also is driving interest in the brand, Bazner said.
One of the top-performing c-store units is in Montrose, Colo., generating nearly $1 million in annual sales. Franchisee Greg Parish, who operates Parish Oil Co. c-stores and self-serve gas stations, opened it in 2003. It was the first time one of his c-stores included a quick-service restaurant.
“In analyzing our demographic studies for that location, we determined that a quality quick-service restaurant would be a great fit,” Parish said. “This is a needed offering to local residents as well as travelers.”
It was also important to offer a branded venue to ensure profitability, he said. “A&W is an iconic brand with invaluable training and support for franchisees, and advertising to promote its legendary quality to customers,” he said. “Opening our A&W franchise gave us an opportunity to provide a famous, quality food offering that’s recognized nationwide.”
The Montrose c-store covers 6,000 square feet, about half of which A&W occupies. Each business is independently owned and operated, which Parish said is necessary for each to do well. The restrooms, water heater and ice machine are shared. The A&W can close off from the c-store to operate different opening and closing times.
“I consider it to be a freestanding unit that draws individual customers and families into the facility to choose their beverages, snacks and food,” Parish said. “A nonbranded restaurant outlet can’t do that.”
Now in its 102nd year, Lexington, Ky.-based A&W is America’s first franchised restaurant chain. There are more than 900 A&Ws in the United States and Asia and 1,200 locations worldwide.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.