Industry News | August 14, 2013

A&W Looks For Second Round of Growth

As a 94-year-old brand, A&W Restaurants has seen a lot of ups and downs over its history. But after being purchased by Yum! Brands in 2002 and then let go by the company in late 2011, the chain has faced one of the biggest uphill battles it’s ever seen.

Cut off from Yum!’s sophisticated franchise management systems, the brand was left with what COO Paul Martino calls an “archaic” spreadsheet system that loosely kept up with everything from franchisee contracts to communication logs.

“We had this massive, massive amount of data in this spreadsheet form, so we had the need to find a solution to manage all of this data that we had,” Martino says.

To solve its problem, A&W recently formed a partnership with FranConnect, which provides franchise management systems to more than 450 brands. In the seven months since the two companies teamed up, A&W has been able to improve productivity, increase franchisee profitability, and give the brand the boost it needs to grow again.

Not only do FranConnect’s modules provide solutions for franchise information management and administration, but it also helps A&W store contracts and all franchisee information. In addition, the brand is using FranConnect’s financial module to compile complex financial reports.

“Our first goal was reeling in this massive amount of data so we would have one place where we could find whatever information we had relative to a specific franchisee,” whether it was contact information, updated addresses, contracts, or more, Martino says.

Gerson says the system aims to put the entire brand on a centralized platform, while also helping franchisees attract and keep more customers; better manage income and expenses; and have a clearer sense of how they stack up against other franchisees.

Using FranConnects modules, the A&W field team is able to provide franchisees with an up-to-date snapshot of how they’re performing on a day-to-day basis. It also gives them information on how franchisees are doing from a sales perspective, what their quality-assurance inspections look like, what assets they have, when they last remodeled, and even what equipment they’re using, Martino says.

“Our field team now can go out into a particular restaurant or a particular market [and] have all this data at their fingertips to help the franchise partner build their business,” he adds.

“It allows management to make sure that now when they are interacting with franchisees in field visits, telephone conversations, etc., it’s more effective for being able to hold these short, intense meetings … to help franchisees learn from their successes and failures,” says Keith Gerson, president of global operations for FranConnect. “It helps be able to do a better job of planning on a moving-forward basis and basically clears the path now for operators to be able to make the commitment."

The partnership is also helping A&W see benefits and improvements in areas it never expected, Gerson says. For example, the chain’s marketing team can now track promotions, menuboard configurations, and which franchisees are participating in marketing initiatives.

Most importantly, Martino says, partnering with FranConnect has already helped A&W accomplish its No. 1 goal as a brand: improving franchisee profitability.

“Our first year’s sales increase was right around 5 percent, so as we enter into our second year—2013—and our partnership with FranConnect, we were hoping that we could continue that momentum,” he says, adding that the brand has seen positive same-store sales for 18 of the 20 months since it separated from Yum! Brands.

This October, the brand is set to open its first company-owned unit using a new store prototype in Lexington, Kentucky; two additional units are under construction in the area.

“Our goal is to rebuild this brand and start growing it sometime in 2014 aggressively, so we’re looking for FranConnect to help us as we move forward,” Martino says.

“At one point in time, A&W had 3,500 restaurants across the country and now we’re down to—domestically—719 or 720 restaurants,” he adds. “We want to get back in the growth mode and make A&W relevant again, and FranConnect will help us with that.”

By Mary Avant

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.