A&wFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A A&W franchise requires a total initial investment of $299K – $1.6M, including a $30K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.3M[2]. SBA 7(a) loans show a 4.8% charge-off rate across 21 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $299K – $1.6M
- 18th pct Service Resta…
- Avg gross sales
- $1.3M
- 14th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 429
- 47th pct Service Resta…
- SBA default
- 4.8%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Franchised units fell from 487 to 427 over 3 years. Investigate why operators are leaving.
25% cash-on-cash return (based on EBITDAR). Within the 15-30% range most franchise investors consider acceptable.
Bottom line
- Total investment $299K – $1.6M including a $30K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.3M/year (median $1.3M), with an estimated 25% cash-on-cash return (based on EBITDAR).
- Verdict A (Top Quintile) with a risk score of 42/100. SBA loan charge-off rate of 4.8% across 21 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System contracting at -12.3% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- A&W RESTAURANTS, INC.
- Parent company
- A Great American Brand, LLC
- Incorporated in
- MI
- HQ
- 1648 MCGRATHIANA PARKWAY, SUITE 380, LEXINGTON, KENTUCKY 40511
- Auditor
- Dean Dorton Allen Ford, PLLC
- Audited financials
- Franchisor revenue
- $11.7M
- vs $11.9M prior year
Overview
About
A&W franchisees operate quick-service restaurants serving classic American food (burgers, hot dogs, root beer floats) in a casual, family-oriented environment. Day-to-day operations include managing 20-40 employees, inventory procurement, food preparation/service, drive-thru operations, and marketing within their protected territory.
- CEO
- Betsy Schmandt
- Headquarters
- KY
- Founded
- 1950
- FDD year
- 2025
- States available
- 37
FDD Item 7 · 2025 filing · 8 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Real Estate | — | — | |
| Professional Fees, Licenses & Permitsnot refundable | $30K | $84K | |
| Building Costs Including Site Worknot refundable | $500K | $869K | |
| Signsnot refundable | $70K | $88K | |
| Technology Systemnot refundable | $34K | $70K | |
| Furnishings, Fixtures & Equipmentnot refundable | $185K | $276K | |
| Initial Franchise Feenot refundable | $15K | $30K | |
| Grand Opening Promotion Depositnot refundable | $5K | $5K | |
| Total initial investment | $838K | $1.4M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$106K
8.0% margin
Unlevered ROIC
10%
EBITDA / total invested capital
Payback
10.0 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $299K – $1.6M
- Better than avg vs category
- Liquid capital req'd
- $30K – $150K
- Better than avg vs category
- Franchise fee
- $15K – $30K
- Better than avg vs category
- Royalty
- 5.0%
- Gross Sales · typical 6–8%
- Ad fund
- 5.0%
- typical 3–5%
- Total fee load
- 10.0%
- vs 9–13% typical
- Payback period
- 4.0 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 5.0% of gross sales |
| Transfer fee | $5K |
| Renewal fee | $3K |
| Total fee load | 10.0% of rev |
Financial Performance
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.3M
- Avg ebitdar
- $244K
- Reported as EBITDAR in FDD Item 19
- Cash-on-cash
- 25.2%
- Based on EBITDAR / investment midpoint
- Item 19 type
- net_sales
- Sample size
- 59 units
- vs category median 13 · large
- Range (low → high)
- $511K→$3.1M
- Cohort dispersion (min → max)
- Quartile band
- $899K→$1.9M
- Bottom 25% → top 25%
- Transparency tier
- none
- Categorical assessment of disclosure depth
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How A&w Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 429
- Opened
- 9
- Last reporting year
- Closed
- 37
- Turnover rate
- 8.6%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -6.2%
- Net unit change last year
- 3-yr CAGR
- -12.3%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 0
- Terminated (3yr)
- 5
- Non-renewed (3yr)
- 3
- Transfers (3yr)
- 18
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 36 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- California
- Hawaii
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 21
- Loan volume
- $15.2M
- Median loan
- $682K
- 50th percentile
- Charge-off rate
- 4.8%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 87.5%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 16
- Defaults
- 1
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into A&w's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 10 states
- Startup risk premium and job creation velocity
- 9-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
A&W is a contracting legacy QSR franchise with undisclosed financial performance data, declining unit count, and wide-ranging investment requirements that create uncertainty around actual profitability and ROI.
Litigation (Item 3)
0 case reference(s): 3 pending, 0 settled.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Dean Dorton Allen Ford, PLLC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
Score breakdown · what drove the 42 / 100 rating
- 01MEDUnit count declined 6.2% YoY (429 units), indicating system contraction and potential market saturation or brand weakness
- 02MEDNo Item 19 financial performance representations disclosed, making it impossible to verify if average revenue ($1.33M) and net income ($244K) are achievable for typical franchisees
- 03MINORWide investment range ($298K-$1.64M) suggests highly variable unit economics; unclear what drives 5.5x cost differential
- 04MEDNet income of $244K on $1.33M revenue implies 18.4% net margin, which is optimistic for QSR; sustainability unclear without disclosed expenses breakdown
- 05MINOR20-year term locks franchisee into aging brand during rapid industry consolidation and changing consumer preferences
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Kentucky |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 3 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 50 hrs
- On-the-job training
- 65 hrs
- Training location
- On-site and corporate
- Franchisor financing
- Offered
- Item 10
- POS system
- Brink POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Brink POS
Item 20 · call current owners
Franchisee Contacts
268 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
A&W · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a A&W franchise?
The total investment to open a A&W franchise ranges from $299K – $1.6M, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do A&W franchise owners earn?
According to Item 19 of the A&W FDD, the average gross sales per unit is $1.3M. The median is $1.3M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is A&W's franchise failure rate?
Based on SBA 7(a) loan data, A&W has a charge-off rate of 4.8% across 21 loans, meaning 4.8% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many A&W franchise locations are there?
As of their most recent FDD filing, A&W has 429 total units in the United States, including 487 franchised units and 2 company-owned units. 9 new units were opened in the latest reporting year.
Is A&W a good franchise to buy?
FranchiseVerdict rates A&W as a A-grade franchise with a risk score of 42 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.