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How Profitable are A&W Franchises: Sales, Costs & Profits [2023]

Do you know that you can make $851,212 in sales on average with a A&W franchise? Yet if you decide to own a A&W Restaurants franchise, you would also have to invest $786,750 upfront.

Before you prepare a business plan, make sure you understand the profit potential of owning a A&W franchises. This means looking into the different costs you would need to pay upfront (the investment) and the royalties you would have to pay every year to the franchisor.

In this article we’re looking at the information provided in the Franchise Disclosure Document of A&W Restaurants to find out how much money you can really make with this business and whether you should invest in this franchise. Let’s find out!

A&W Restaurants franchises: key financials

Franchise fee$30,000
Royalty fee5.0%
Marketing fee5.0%
Investment (mid-point)$786,750
Median annual sales$851,212
Investment to sales ratio1.1x
Investment payback*6.2 years (average)
* using 15% net profit margin

🔎 How does A&W Restaurants compare vs. other franchises? Check the ranking

What is A&W Restaurants?

A&W Restaurants is an American fast-food chain best known for its burgers, draft root beer, and root beer floats.

It was founded by Allen, and he and his employee Frank Wright partnered to open the first store in Lodi, California, in 1919. A & W Restaurants is derived from the initials of Allen and Wright.

It also serves hamburgers, hot dogs, chicken, cheese curds, soft serve, and milkshakes.

A & W Restaurants started franchising in 1923 as a subsidiary of Great American Brands LLC, with headquarters in Lexington, Kentucky, and has over 900 stores in the US and worldwide.

Should you open a A&W franchise? Pros and cons


  • Exclusive territory: The franchisor grants franchisees a protected territory where they operate their business. As long as the agreement is in place, the franchisor will not grant or establish franchises to operate in the trading area.
  • Passive investment opportunity: A & W Restaurant does not require franchisees to actively participate in the daily operations of their restaurants. Therefore, franchisees can pursue other investments.
  • Franchise support: The parent company gives its franchisees solid support in their operations so that they can grow and succeed. Their support includes security and safety operations, grand openings, online support, and field operations.
  • Restaurant development: The brand offers real estate expert advice to franchisees on how to select a convenient location for the restaurant and design it. Also, franchisees get helpful guidance on site selection, lease negotiation, site planning, and construction at low costs.
  • Marketing support: The franchisor has elaborate and effective market planning support and promotional campaigns. These include national media, regional advertising, ad templates, website development, social media, and email marketing.
  • Operational excellence: The brand has a proven and successful business model. Franchisees are guaranteed the best infrastructure and guidance in establishing their restaurants, hiring qualified staff, reducing operating costs, avoiding waste, and improving their profitability.


  • No financing: The brand does not directly or indirectly finance its franchisees’ development or ongoing costs. It also does not guarantee any lease, note, or obligation on behalf of the franchisees.
  • Competition: Despite the brand being an all-American menu franchise, it faces stiff competition from brands in the same industry. These are McDonald’s, Dairy Queen, Taco Bell, and Burger King.
  • Not a part-time business: The A&W Restaurant franchise is not a good option for a part-time business. Franchisees are required to open full-time.

How much does a A&W Restaurant franchise cost?

You may need to invest around $786,750 to open an A&W Restaurant.

This amount is an average that can vary based on the type of restaurant format you choose. For example, you would need to pay 2 times as much for a free-standing restaurant than for a captive restaurant. According to the latest Franchise Disclosure Document, the investment amount range is as follows:

  • Free-standing restaurant: $871,000 – $1,454,750
  • Inline restaurant: $401,000 – $1,013,750
  • Captive restaurant: $276,000 – $704,000

Why are paying this amount, you may ask? This amount covers all types of startup costs that may occur when opening a restaurant. Indeed, In addition to an initial franchise fee, the investment covers:

  • Building and equipment costs: professional fees, licenses & permits, building costs including site work, signs,  furnishings, fixtures & equipment, etc.
  • Marketing fees: grand opening promotion deposit
  • Pre-opening costs: management training course expenses, on-site team member training expenses, miscellaneous opening costs, etc.
  • Operating costs: opening inventory, additional funds as first 3 months’ working capital, etc. 
Free-standing restaurantInline restaurantCaptive restaurant
Initial franchise fee$22,500$22,500$15,000
Building and equipment$1,006,375$550,875$351,750
Marketing fees$5,000$5,000$2,500
Pre-opening costs$30,000$30,000$30,000
Operating costs$99,000$99,000$90,750
Source: 2022 Franchise Disclosure Document

What’s the average turnover of a A&W franchise?

On average, an A&W Restaurants franchise makes $851,212 in sales per year.

The sales number is the annual median sales of 113 franchised restaurants operating in 2020. Sales can vary depending on the type of restaurant. According to the latest Franchise Disclosure Document, a free-standing restaurant makes 1.5x more sales than a C&G restaurant.

How much profits can you make with a A&W franchise?

On average, an A&W Restaurants franchise makes $212,803 in profits per year. This represents a 25% adjusted EBITDA margin.

The 25% adjusted EBITDA margin is in line compared to similar franchises as per our intelligence (~25-27% industry average). Note that to estimate EBITDA here we used industry average numbers for rent expenses (8% sales) as A&W doesn’t disclose such information in its FDD.

Profit-and-lossAmount ($)As % of sales
Royalty + marketing fees$(85,121)10.0%
Adjusted EBITDA$212,803~25%
* industry average
Source: 2022 Franchise Disclosure Document

Download the A&W business plan and get your franchise funded

Including a 5-year financial plan built with the latest Franchise Disclosure Document numbers

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)S/I RatioPayback (years)Min. net worth ($)Min. liquid capital ($)
Dunkin' Donuts,0001,056,5211.44.9500,000250,000
Krispy Kreme,0003,400,0004.11.62,000,000300,000
Little Caesars,022,850798,1130.88.5350,000150,000
Steak 'n Shake, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookies,2241,582,0903.12.1300,000150,000
Taco Bell,4131,650,0003.61.91,500,000750,000
Smoothie King,108573,2690.88.0300,000100,000
Jersey Mike's,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakes,6501,307,2802.42.7600,000150,000
Jimmy John's,650874,8451.73.9300,00080,000
Texas Roadhouse,209,5002,955,5340.79.5n.a.200,000
Kung Fu Tea tea250,125353,2371.44.7n.a.25,000
Burger King,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-In,467,0831,617,0001.16.01,000,000500,000
Panera Bread,290,5002,599,4321.15.97,500,0003,000,000
Pizza Hut,575906,9111.06.9700,000350,000
Dairy Queen Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Box,195,8001,755,5030.812.51,000,000250,000
Papa John’s,6951,101,1273.12.1750,000250,000
Five Guys,2251,203,3662.42.8500,000250,000
Carl’s Jr.,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbins Cream465,100316,8150.79.8250,000125,000
Applebee’s American5,137,9662,356,9650.514.51,000,000500,000
Denny's American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy's,174580,4411.35.0275,000125,000
Auntie Anne's,692343,1351.55.6300,000100,000
Firehouse Subs,186888,3561.44.6350,000100,000
Tropical Smoothie Cafe,500961,9692.23.0350,000125,000
Marco’s Pizza,625895,5232.03.3400,000100,000
Cold Stone Creamery Cream310,956417,5881.35.0250,000100,000
Church’s Chicken,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grill,3701,013,3611.35.21,000,000100,000
Tim Hortons,242,7501,188,2401.07.0500,000100,000
Checkers & Rally's,8471,039,7731.25.4750,000250,000
Charleys Philly Steaks,806786,2331.54.3500,000100,000
Buffalo Wild Wings,546,9002,534,1480.79.31,500,000750,000
Rita's Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurants,750851,2121.16.2350,000150,000
Hungry Howie’s Pizza,682806,8991.93.5750,000200,000
McAlister’s Deli,424,9631,865,8611.35.11,000,000500,000
Round Table Pizza,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eats,250972,9621.54.5
Taco John’s,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffee,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagels,075885,0111.25.71,000,000536,500
Great American Cookies,275452,7711.25.7250,000100,000
Wienerschnitzel dogs873,300880,9801.06.6600,000250,000
Blaze Pizza,4501,096,4321.37.9500,000300,000
Wetzel's Pretzels,571748,8572.03.4300,00050,000
Pizza Ranch,268,3001,174,0880.418.61,000,000297,000
Del Taco,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’s, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’s,7781,067,8160.419.01,000,000350,000
Biggby Coffee,575648,3520.320.0300,000100,000
Which Wich,375281,8860.322.2500,000150,000
Marble Slab Creamery Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizza,900865,7130.320.0300,000100,000
Huddle House,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecue,350612,9210.333.3500,000150,000
Chicken Salad Chick, Salads651,0001,202,0200.320.0750,000250,000
Golden Chick,975917,6092.52.62,000,000425,000
Waba Grill,000466,5361.06.51,000,000250,000
Bruster’s Ice Cream Cream663,925466,6960.79.5375,000150,000