Why small towns and A&W are a great match

An infographic shows a photo of a man in restaurant whites resting his left arm on a ladder. The text on the left reads, “We should be famous for this. In 1963, A&W became the first chain restaurant to serve a Bacon Cheeseburger.” Beneath that is Dale Mulder’s autograph in orange script, and then in print is, “Dale Mulder, A&W, Inventor of the Original Bacon Cheeseburger.” On the right-hand side of the graphic is a photo of a bacon cheeseburger with words underneath that read, “The Original Bacon Cheeseburger.”

Our hip nostalgia attracts new fans, and our stable brand offers long-term recurring cash-flow potential.

A&W has over 625 locations nationwide, and our resurgent brand is experiencing fresh momentum. While we work in many types of locations, from exurbs to more rural areas, we’ve always had an affinity for small towns. Perhaps because that’s where we got started and where we continue to thrive.

We’ve been in business since 1919, when we became the first restaurant franchise in the U.S. Few brands have that kind of history, and we can tell you that people’s connections to our company are far-reaching as well. Our guests are nostalgic for the A&W restaurants they remember from their childhood and relish the chance to introduce it to their own children and grandchildren.

With such a long history, our franchisees – who own the brand – feel confident about our ability to provide recurring cash-flow potential for the long haul. So much so that many of them turn it into a family business that they pass along to the next generation, and the next. Many of them successfully operate these inter-generational franchises in smaller towns.

Our guests are nostalgic for the A&W restaurants they remember from their childhood and relish the chance to introduce it to their own children and grandchildren.

Small-town franchise, big advantage

Exurbs and cities have a seemingly clear advantage when it comes to traffic. They’re more densely populated and therefore more visible in the right location. But small towns have some surprising advantages when it comes to an A&W franchise. Aside from the pull of our nostalgia, we often face less competition, making us among the most profitable fast food franchises for small towns. Competing brands frequently dismiss towns below a certain population density, but A&W recognizes the revenue opportunities. Real estate costs tend to be lower, and our outstanding supply and distribution network keeps prices down.

This opens up an investment strategy that restaurateurs can use to build significant assets on top of hopefully profitable restaurant operations. It’s a particularly strong opportunity for multi-unit operators who no longer have real estate ownership options readily available with their current brands. With A&W, they can bring a well-known brand into suburban and exurban areas of their markets as well as small towns, taking advantage of an opportunity to operate in an area with limited competition and potentially valuable real estate assets.

How we keep supply costs down

Our vendor relationship with Restaurant Supply Chain Solutions (RSCS) is our secret weapon for small-town operators and multi-unit owners with diverse locations. Since RSCS services three other major restaurant brands – Pizza Hut, KFC and Taco Bell – our franchise partners can tap into significant discounts on food, paper and equipment. Their extensive network keeps distribution costs from spiraling, and the system overall helps A&W operate with wider profit margins.

That helps A&W work well for franchisees, even in very small towns. Webster, SD, is a town of only 1,800 people, but A&W franchise owner-operator Benita Baus has been running her 50-seat restaurant there since 2006, when she bought it from the previous franchisee. Her sales have done tremendously well, she says.

“We are situated at the corner of two major highways right out of Minneapolis and straight into Aberdeen,” Baus says. “We get a lot of locals, but we get a lot of traffic from visitors to the area, too. When I bought the place, the owner before me used to close the A&W in the winter, but I had so many requests to keep it open that we stay open all year now. Our business in summer will more than double.”

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