There’s something magical about surviving 100 years.
Even though more people are living to see 100, it remains a notable event worth celebrating. And it’s even rarer for an American business to join the century club.
A&W All-American Food became the first quick-service restaurant to reach that milestone in June. The enterprise began in 1919 when founder Roy Allen set up a stand to sell nickel-a-mug root beer during a homecoming parade for World War I veterans in Lodi, California. In the century that has passed, the operation expanded and contracted, changed hands numerous times, and shifted business models. But one thing has remained constant: the brand’s root beer—a proprietary blend of 16 herbs, bark, spices, and berries—made fresh with real cane sugar and water and served in a frosty mug.
These days, A&W is continuing on a path started eight years ago when a group of domestic and international franchisees acquired it from quick-serve giant Yum! Brands—the parent of KFC, Pizza Hut, and Taco Bell—for an undisclosed sum. The new owners are focused on the long-term development of restaurants, widening the web of franchisees, and boosting the A&W brand, which some say was diluted by Yum’s previous philosophy of combining two or more of its brands within the same building.
“Our shareholders are taking no money out of the business,” says A&W CEO Kevin Bazner, who was an executive with the brand prior to Yum’s ownership and returned at the bequest of the new backers. “They want everything reinvested to stabilize and grow the businesses.”
Since the owners want to protect their interests as A&W franchisees, there is no exit strategy. “It allows us, as management, to make decisions for the long-term,” he says.
One result has been an increase in new A&W-only stores, while numerous cobranded operations are falling away upon expiration of their franchise contracts. The store count stands at about 600 restaurants from coast to coast and in Alaska—some 350 are cobranded with KFC or Long John Silver’s units—with another 375 in Asia. Canadian operations are owned by another entity.
The number of multi-branded units has declined by one-eighth over the past four years. Bazner estimates the company will probably end up with between 200 and 250 stores that are cobranded—mostly with KFC—but will remain committed to the A&W brand.
“We will probably close more units than we open this year, but our single-brand business will open a net gain of probably 10 in the U.S. and 25 in our international business,” the CEO says. “We expect to grow by another 50 next year, and that’s a good number.” With more restaurants in the pipeline for the brand, future annual store gains could rise to 60–70 new stores.