A&W enjoys renewed success in the crowded quick-service category

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Business

In the past six years, Lexington-based A&W Restaurants has staged an impressive comeback on the quick-service scene. Average same-store sales are up by more than 28 percent since 2012. In 2015, the brand grew its topline sales for the first time in almost a decade, and this year will mark the first time the company has increased both its U.S. and international store count in nearly 12 years.

How has A&W managed such a turnaround? Quite simply, it brought the nearly 100-year-old brand back to the people who never left it.

In 2011, Yum! Brands, Inc., announced its intent to sell A&W, along with Long John Silver’s, stating at the time that the two concepts no longer fit with the company’s long-term growth strategy. Rather than leaving the concept’s leadership to the highest bidding private equity firm, A&W franchisees joined forces to make their own play for the business. The company was purchased by the newly formed A Great American Brand, LLC, a partnership of both domestic and international A&W Restaurant franchisees, and Kevin Bazner, who had served as A&W’s president prior to its purchase by YUM!, came back to serve as CEO.

Bazner, described as a man with “root beer in his veins,” had worked for A&W for more than 18 years, including a stint in Malaysia in the 1980s in support of the brand’s international growth.

“We acquired a troubled brand with a franchise community that was very apathetic, having been neglected for many years,” Bazner said. “Our initial goal was to grow profitable sales, one restaurant at a time, and we’ve accomplished that.”

The acquisition was a watershed moment, said Sarah Blasi, A&W’s vice president of marketing, and one that instantly transformed the company’s priorities to put its franchise partners front and center.

One of the first changes at the time, Blasi said, was to make sure a live human being would answer every call into the company’s main phone line.

“This might seem like a small thing, but it means that our franchise partners can always get ahold of someone at the office,” Blasi said. “Our A&W corporate team holds hands with our franchise advisory board on each of the decisions that we make, and while this process might take a bit longer, we ultimately think it gets us and the brand in a better place.”

The new perspective led to a host of additional changes, including a concentration on local store marketing and back-to-basics operations. The company made new investments in social media marketing, too, and initiated product launches for key items, including hand-breaded chicken tenders and mini Polar Swirls.

“The goal has been to get franchisees re-engaged in the brand again, and positive sales are a huge indicator of that,” Blasi said.

“The goal has been to get franchisees re-engaged in the brand again, and positive sales are a huge indicator of that.” —Sarah Blasi, A&W vice president of marketing

With franchise partners fully on board, the company looked toward reinvigorating the oldest brand in the industry. The company signed up Lexington-based Cornett Integrated Marketing Solutions as its agency of record, and starting in October 2013, it began testing its new “Burgers Chicken Floats” prototype in its company-owned Lexington stores. With a signature orange-and-brown palette, clean lines and repurposed interpretations of wistful memorabilia, the new design leveraged the company’s storied past into a “hip nostalgia” sensibility with double-whammy appeal for both millennials and baby boomers.

“The best thing about A&W is we have nearly 100 years of history … and we can look back and pick and choose those elements that we want to move forward,” Blasi said. “We are an original. We don’t have to create a new story to tell our consumers. We own that history.”

And the food takes the spotlight, Blasi added. The company borrowed a 20-year-old recipe for hand-breaded chicken tenders from an A&W restaurant in Michigan and rolled it out restaurant by restaurant, along with a variety of premium sauces. It has since become one of the company’s top-selling products nationwide, Blasi said. And while most of its restaurants were already making their signature root beer fresh on-site, the company started doing it at every location in May, with a strong marketing push to let consumers know. The company has now assigned its own “Burger Task Force” to ensure the company hits the high-quality mark in that category, as well.

And because root beer triggers a lot of happy memories, A&W has been able to use social media to tap into an unusually high level of emotional attachment to the brand among a large customer base, Blasi said. In November, the company plans to bring back one of its more popular social promotions of recent years, Float-A-Friend, in which fans can share their A&W experiences and nominate a friend to win free root beer floats for a year.

“It is so much fun to read the submissions that come in,” Blasi said. “Our fans simply love to tell us their A&W stories, and that engagement has propelled us to new heights online.”

Response to the redesigned concept has been very positive, Blasi said, but don’t expect to see an immediate sweeping reinvention systemwide. The company is instead helping its franchise partners make the incremental investments that best suit their restaurants, with the understanding that as sales increase, the grander plans will be ready for them to institute. In the meantime, the company’s fresh look and focused energy have caught the attention of more new players in the game.

“We are actively franchising again for the first time in years, which is very exciting for this brand, and it means we can start going back into markets we may have left over the years, bringing A&Ws to new consumers throughout the country,” Blasi said.

The company will open a total of 17 new restaurants in the United States this year, and roughly 30 more locations in southeast Asia. A&W’s preliminary plans for next year include even more openings than that, Blasi said. The 10-year picture calls for the addition of hundreds of new stores.

“Little by little, we are reshaping the system,” Blasi said, “and in combination with the new restaurants we have and will build, you will be seeing a very different A&W across the country.”

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