A&W Restaurants

A&W Restaurants began on June 20, 1919, when Roy W. Allen opened a root beer stand in Lodi, California, during a parade honoring World War I veterans. He served root beer in glass mugs for 5 cents. In 1922, Allen partnered with Frank Wright, and they opened their first A&W restaurant in Sacramento, California, in 1923. The name came from their last initials. Allen bought Wright’s share in 1924, and A&W became America’s first official franchise chain in 1925. The specific entity tracked by PeerSense reports 69 franchised units. The broader brand reports more than 900 locations across 16 countries, including 460 in the United States. Other reports cite approximately 550 U.S. restaurants and more than 300 standalone international units as of June 2023, for more than 800 locations. As of March 21, 2022, A&W reported 527 domestic U.S. locations and 400 international locations, totaling 927 units operated by 160 U.S. franchise owners and six international franchisees. A&W’s menu includes root beer served in frosty mugs, burgers, hot dogs, and cheese curds, supported by more than a century of brand history.

A&W operates in the limited service restaurant category, with the Quick Service Restaurant market projected to reach $330.56 billion in 2025, up from $311.54 billion in the preceding year. A 7.2% compound annual growth rate is expected to bring that market to $436.07 billion by 2029. The U.S. limited service restaurant market is estimated at $97.85 billion in 2025 and is forecast to reach $133.71 billion by 2030 at a 6.45% compound annual growth rate. Globally, the market was valued at $871.02 billion in 2025 and is projected to grow at 5.7% to approximately $1436 billion by 2034. About 61% of consumers prefer using a kiosk to order food at fast food restaurants. A&W’s fresh root beer, served in frosty mugs, also fits consumer interest in nostalgic brands and familiar experiences. Quick service restaurants can perform well during difficult economic periods and often outperform fine dining. A&W competes in a fragmented burger and quick service segment through its menu and long operating history, while demand for convenient, accessible, value driven meals and technology supported ordering continues to shape the market.

The initial franchise fee is $30,000, with some sources reporting a range of $15,000 to $30,000. Qualified military veterans may pay a reduced fee of $21,000. Total initial investment estimates range from $299,000 to $1,640,000, while other estimates range from $278,285 to $1,594,889. Costs vary by format. A freestanding restaurant requires $894,434 to $1,639,906, an in line restaurant requires $424,434 to $1,129,183, and a captive restaurant requires $298,899 to $724,971. These totals exclude real estate acquisition. For a freestanding restaurant, building costs range from $500,000 to $869,484, and furnishings, fixtures and equipment range from $184,900 to $275,639. Signs cost $70,000 to $87,658, the technology system costs $33,534 to $69,723, and professional fees, licenses and permits cost $30,000 to $84,000. Other expenses include a $5,000 grand opening promotion deposit, management training of $3,000 to $10,000, on site team member training of $8,000 to $30,000, miscellaneous opening costs of $6,000 to $12,402, opening inventory of $7,000 to $16,000, and additional funds for the first three months of $30,000 to $150,000. The royalty is 5% of net sales, although some sources report 3% to 5% or 5% to 6%, with possible incentives for new restaurants. The advertising or national brand fund fee is generally 5% of net sales, or 2% for captive restaurants. Financial requirements include at least $700,000 in net worth and $300,000 in liquid assets. Other sources cite $500,000 in net worth and $250,000 in liquid assets, or $350,000 in net worth and $100,000 in liquid capital. Working capital is estimated at $30,000 to $150,000. A&W was acquired in December 2011 by a consortium of franchisees through A Great American Brand, LLC. The company is 100% franchisee owned.

Franchise operations support single unit and multi unit development across freestanding, in line, and captive formats. The menu includes the Bacon Cheeseburger, introduced in 1963, Cheese Curds, launched in 2003, and Hand Breaded Chicken Tenders, added in 2013. Since 2017, each restaurant has made its root beer fresh daily and served it in frosty mugs. New locations may create up to 100 jobs, which points to a meaningful staffing requirement. The format choices allow franchisees to match the restaurant design and operating model to local market conditions and growth plans.