A&W Restaurants Franchise FDD, Profits, & Costs (2025)
A&W Restaurants is a historic brand in American dining, offering a unique franchise opportunity since 1919. As the oldest restaurant franchise in the U.S., A&W is known for its iconic root beer served in frosty mugs, a tradition that started at a roadside stand in Lodi, California. Roy W. Allen and Frank Wright, who formed the brand name A&W, set the foundation for its enduring success.
The franchise began expanding in 1926 and has grown worldwide while maintaining its core values. Headquartered in Lexington, Kentucky, A&W remains a beloved destination for generations. The brand’s ability to adapt through economic challenges, including the Great Depression, showcases its resilience.
Today, A&W continues to evolve by incorporating modern technology like self-service kiosks and a centralized POS system, enhancing the customer experience while staying true to its century-old heritage.
Initial Investment
How much does it cost to start a A&W Restaurants franchise? It costs on average between $278,000 – $1,595,000 to start a A&W Restaurants franchised restaurant.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of restaurant you choose, the location, and whether the franchisee chooses to lease or purchase the property. Indeed, A&W Restaurants offers 3 types of franchises:
| Restaurant Type | Initial Investment Range |
|---|---|
| Freestanding Restaurant | $883,256 to $1,573,172 |
| In-line Restaurant | $413,256 to $1,084,967 |
| Captive Restaurant | $287,368 to $704,763 |
We are summarizing below the main costs associated with opening a A&W Freestanding Restaurant franchised restaurant. For more information on costs required to start an A&W franchise, refer to the Franchise Disclosure Document (Item 7).
| Type of Expenditure | Amount |
|---|---|
| Building and Equipment Costs | $800,650 – $1,350,487 |
| Initial Franchise Fee | $15,000 – $30,000 |
| A&W Grand Opening Promotion Deposit | $5,000 |
| NAC Advertising Trust Fund Management Training Course Expenses | $3,000-$10,000 |
| On-Site Team Member Training Expenses | $6,000 – $25,000 |
| Miscellaneous Opening Costs | $6,000 – $12,402 |
| Opening Inventory | $6,000 – $12,000 |
| Additional Funds – 3 Months | $30,000 – $150,000 |
| TOTAL | $871,650 – $1,594,889 |
Average Revenue (AUV)
How much revenue can you make with a A&W Restaurants franchise? A A&W Restaurants franchised restaurant makes on average $927,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
This compares to $1,548,000 yearly revenue for similar burger franchises. Below are 10 A&W Restaurants competitors as a comparison:
Download the Franchise Disclosure Document
Frequently Asked Questions
How many A&W Restaurants locations are there?
As of the latest data, A&W Restaurants operates over 900 locations worldwide, with more than 550 of those in the U.S. Nearly all U.S. locations are franchise-owned, with only three company-owned restaurants.
The brand has seen consistent growth, driven largely by its franchisee-owned business model, which allows franchisees to have significant control and input into the brand’s operations and growth strategies.
What is the total investment required to open a A&W Restaurants franchise?
The total investment required to open a A&W Restaurants franchise ranges from $278,000 to $1,595,000.
What are the ongoing fees for a A&W Restaurants franchise?
For an A&W Restaurants franchise, ongoing fees include both a royalty fee and a marketing fee. The royalty fee is 5% of gross sales, which franchisees must pay regularly to the franchisor.
Additionally, A&W requires a 5% marketing fee, which is also based on gross sales.These fees are critical in maintaining the consistency and strength of the A&W brand, ensuring that franchisees benefit from continued brand recognition and growth.
What are the financial requirements to become a A&W Restaurants franchisee?
To become an A&W Restaurants franchisee, the financial requirements include a minimum net worth of $500,000 and liquid assets of at least $250,000.
These financial thresholds are set to ensure that potential franchisees have the necessary resources to cover the initial investment, which includes franchise fees, construction, equipment, and operating expenses, as well as ongoing costs associated with running the business.
How much can a A&W Restaurants franchise owner expect to earn?
The average gross sales for a A&W Restaurants franchise are approximately $0.93 million per location. Assuming a 15% operating profit margin, $0.93 million yearly revenue can result in $139,050 EBITDA annually.
Who owns A&W Restaurants?
A&W Restaurants is owned by A Great American Brand, LLC, which is a group of franchisees who purchased the company from Yum! Brands in 2011.
This unique ownership structure means that the brand is 100% franchisee-owned, making it one of the few major restaurant chains that operates under franchisee control.
Disclaimer
Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.
