A&W Restaurants

• 1. Introduction

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  A&W Restaurants began with a glass of root beer sold for 5 cents. On the 20th of June 1919, Roy W. Allen opened a roadside stand in Lodi, California. That first day coincided with a homecoming parade for soldiers returning from World War I. Ordinary customers started arriving the day after.

  From that small stand grew a chain with outlets on several continents. Its history includes a rapid rise, a painful collapse, a long line of corporate owners and one very unusual bear. How did a drink stand become one of the earliest franchise systems? Why did a brand once so widespread struggle so badly? And who owns it today?

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• 2. Roots of a Franchise

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  Stockton, California, received Allen's second stand in 1920, just as the country began a long ban on alcohol. Prohibition lasted from 1920 to 1933, and a soft drink with the word beer in its name enjoyed a strong rebound.

  In 1922, Allen's employee Frank Wright became his partner. In 1923 the pair opened a drive-in restaurant in Sacramento, selling the root beer from Allen's original stand. They built the name from the initials of their last names, Allen and Wright. Tray boys and tray girls carried orders out to cars at the curb.

  The earliest menu was modest. It leaned on root beer, with popcorn, peanuts and sandwiches on sliced bread as company. The frosty mug became the signature touch. Mugs sat in a freezer, and root beer went in only moments before a customer received one.

  In 1924, Allen bought out Wright's share of the business. In the mid-1920s he began franchising, and the arrangement was unusual. He supplied the root beer, while each franchisee added other food and ran the place as they saw fit. Most of these restaurants stood along highways in California's Central Valley, serving travelers. The setup has been called, with some hedging, the first successful food franchise. Many returning World War I veterans became franchisees, and some of their descendants still own restaurants.

  In 1927, J. Willard Marriott gained the rights for Washington, D.C., Baltimore and Richmond. He moved to Washington and opened a root beer stand with Hugh Colton. Those stands turned into Hot Shoppes, an early step toward one of the largest hospitality corporations in the world.

  The chain counted 171 stands in 1933 and 260 by 1941. It survived the Great Depression and the labor shortages of World War II, then gained from the postwar boom in drive-ins and fast food. The first franchise convention met in La Crosse, Wisconsin, in 1949, though only Wisconsin franchisees attended. Allen sold the company in 1950 and retired.

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• 3. Boom and Slump

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  By 1960, A&W counted 2,000 restaurants. The 1950s and 1960s were years of rapid growth, and franchisees typically signed contracts lasting 20 or 25 years. In November 1956, F. R. "Fran" Loetterle became president, and that same year the chain crossed into Canada with restaurants in Winnipeg and Montreal.

  Dale Mulder opened a franchise in Lansing, Michigan, in 1961. In 1963, a customer kept asking for bacon on his cheeseburger, so Mulder added the combination to his menu. For this reason, A&W is credited with inventing the bacon cheeseburger.

  Ownership began changing hands in 1963, and again in 1967 when the conglomerate United Fruit Co. bought the chain. AMK Corporation acquired United Fruit in 1970 and created United Brands Company to hold A&W. In 1971, a subsidiary called A&W Beverages Inc. started supplying bottled A&W drinks to grocery stores, and they eventually reached shelves nationwide. In 1972, the Canadian division went to Unilever. Canadian restaurants have been a separate, unaffiliated chain ever since.

  The year 1974 brought the peak, with 2,400 units, and during the 1970s A&W had more stores than McDonald's. Trouble followed. A standard menu for every American restaurant arrived in 1978, but inconsistency was a deeper problem. Jim Brajdic, a franchise manager in Oshkosh, Wisconsin, recalled: "Problems back then, including a lawsuit, franchisee discontent, and inconsistencies in the operation, caused the chain to flounder and branches to close."

  Management moved to a modern franchise agreement with royalty payments and new standards. Many franchisees refused the new terms as their original 20- or 25-year contracts ran out. By 1980, only 1,300 restaurants remained across the United States, Asia and Europe. In the United States they sat mostly in the Midwest and the Northwest. Negotiations to sell the chain began in November 1981.

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• 4. The Taubman Reset

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  In 1982, A. Alfred Taubman bought A&W and placed it under Taubman Investment Co. He purchased only the restaurant company and left the beverage business behind.

  By the mid-1980s, fewer than 500 locations remained. Taubman froze the issuing of new franchises and set out to shed what he saw as an outdated image. Franchisees, he believed, had been neglected under United Fruit. He cancelled agreements with 100 poorly performing franchisees and removed 80% of the workforce. Management then split the restaurants into two formats: the conventional orange-roof A&W, which was still the majority, and A&W Great Food Restaurants.

  The Great Food concept was a sit-down, upscale, family-themed restaurant with a large salad bar and homemade ice cream. Ten corporate-owned locations tested it. The first opened in Gaithersburg, Maryland, at the Lake Forest Shopping Mall in 1978, though some sources say 1979. The menu stressed low-calorie food. By 1986, planners hoped for 250 to 300 locations within ten years.

  In 1985, A&W introduced the Third Pounder to compete with McDonald's Quarter Pounder. As advertised, it beat the rival in taste tests and cost less by weight. It still failed to catch on. In his 2007 memoir, Taubman claimed research had traced this to a widespread struggle with fractions. Many Americans, he said, judged one third to be smaller than one quarter because 3 is less than 4. The burger returned in 2021 as the 3/9 Pound burger, a joke aimed at that famous story.

  A push in 1986 added 60 franchise units, and the freeze ended. By 1987 the company was headquartered in Livonia, Michigan, with Mulder as CEO and president. In March 1989, A&W reached a deal with Minnesota's Carousel Snack Bars to convert its 200 stores, mostly mall kiosks, into A&W Hot Dogs & More. Some still operate. The same year, A&W bought Burger City and turned its nine drive-thru kiosks into A&W units.

  George E. Michel, who had spent twenty years with the Canadian chain, became president in January 1991 and CEO in January 1992. He used the brand's long history to sell nostalgia at home and abroad.

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• 5. Across the Oceans

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  Guam received an A&W in 1961, opened by Scotty Moylan. It was the first restaurant outside the North American continent. The next year, the first European branch opened in Mannheim, West Germany. The city had a strong American military presence, and the restaurant was Germany's first drive-in. German newspapers covered it, and the chain's president spoke of plans for other European markets, including the United Kingdom.

  Okinawa, then under American control, got its first store in 1963. That same decade, Malaysia joined the list. Al and Geri Lieboff, a couple from Las Vegas, held the rights for Malaysia and Singapore and opened the first Malaysian restaurant on Christmas Eve. Setup proved difficult. They struggled to find a proper site, and Malayan recruits objected to wearing the Western cabaret-style outfits the franchisors expected. Yet local children already preferred chicken, burgers and hot dogs to rice and curry, and the chain reached 22 locations within five years.

  Mainland Japan was a harder sell. In the early 1970s the chain tried Fukuoka prefecture and the Kanto and Kansai regions, but sales were sluggish, and the 1973 oil crisis prompted a withdrawal. Japanese operations are still run from Okinawa. Later attempts also fizzled. In the 1980s the Okinawan branch briefly tried Kagoshima Prefecture, a Tokyo pilot restaurant in the 2000s was soon withdrawn, and an Osaka restaurant at Festivalgate lasted from 1997 to 1999.

  Bangkok's Central Ladprao shopping mall hosted the first Thai restaurant in 1983. In 1994, the hundredth international location opened at a crocodile farm in Bangkok. Indonesia followed on the 21st of April 1985 with a restaurant in the Melawai area of South Jakarta. It became the largest international market, with 243 restaurants in 30 cities by February 2023.

  Kuwait's two units closed in 1988 over security concerns. In August 1990, Kevin Bazner was held hostage in Kuwait when his plane stopped there to refuel. He was released in December.

  The Philippines opened its first conventional A&W at Fiesta Carnival in Cubao on the 6th of March 1988. That branch introduced chicken nuggets, a product the American operation itself wanted. The chain still withdrew in 2004, citing weak interest in the standard menu, high prices and unfamiliarity with local palates.

  Mainland China saw eight Beijing restaurants from 1996, run by the franchisee Aidewei. The franchisee fell behind on fees, lost the A&W trademark in 2002 and went bankrupt in 2003. The restaurants closed one after another between October 2002 and September 2003. Chinese press had called A&W the father of American fast food, but local tastes and rising local competitors won out.

  Singapore welcomed A&W back in April 2019 at Jewel Changi Airport, sixteen years after leaving. Thailand went the other way, as the chain pulled out in March 2022 because of economic losses. The restaurants shut on the 20th of March.

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• 6. Rooty the Root Bear

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  In 1963, A&W introduced the Burger Family: Papa Burger, Mama Burger, Teen Burger and Baby Burger. Each had a cartoon character on its wrapper. During the 1960s a character called Chubby Chicken appeared on every Chubby burger, and Dennis the Menace served as a special mascot, with comics made for the restaurants.

  Rooty, the Great American Root Bear, began as a prototype mascot for kids' meals in the United States. He gained real fame in Canada in 1974, where he served as an answer to McDonald's Ronald McDonald. Focus group research reported a poor reaction to him, and the character nearly died there. The marketing director trusted his instinct and told the researcher to return to Toronto saying he had never delivered the report. The researcher complied, and franchisees saw Rooty exactly as designed. He became a hit.

  Outside Canada, Rooty's arrival meant the end of the Burger Family and new names for almost every burger. Through the 1970s, 1980s and 1990s he was the face of both the bottled drinks and the restaurants. Only one old name came back: Papa Burger, revived at a Dayton restaurant in 2004.

  Rooty all but vanished in the late 1990s, then came out of retirement in 2011 under the new ownership. A bronze statue of him now stands in the lobby of the headquarters. In 2013 he became the first mascot with an official LinkedIn profile. The site shut it down quickly, because Rooty was not considered real.

  On the 24th of January 2023, a parody tweet showed Rooty wearing pants and claimed his lack of them was polarizing. The post referenced a controversy over M&M's characters. Conservative commentators, including Fox News and its sister network Fox Business, reacted with outrage as though it were true. A follow-up tweet admitted the joke. Spokesperson Liz Bazner said the original post was purely in jest and that no outfit change was planned.

  In March 1998, the Blondie comic strip characters, including Dagwood Bumstead, were licensed to A&W franchises for the All American Food campaign. A tie-in burger was scheduled for July of that year.

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• 7. Stunts and Floats

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  The 16th of June 1969 saw A&W's first attempt at a national television commercial. It booked a slot on NBC's Monday Night at the Movies to promote take-home gallons of root beer. The chain generally avoids national advertising, because it has no restaurants in many parts of the country.

  In 1976, A&W restaurants joined the Easter Seals Telethon, collecting money in large root beer mugs for the local station. In 1997 the slogan All American Food was adopted to build wider recognition. On the 19th of June 1999, the eve of the chain's eightieth anniversary, the Lodi restaurant took part in a record attempt for the largest root beer float, at 2562.5 gallons.

  The summer of 2007 brought the Moove to American campaign, created to counter chains that relied only on foreign beef. It began on the 28th of June with 35 cows sent by barge to the Statue of Liberty. The goal was to petition the National Cattlemen's Beef Association to back the use of American beef.

  Papa Burgers sold for 85 cents in Green Bay restaurants whenever Packers receiver Greg Jennings scored a touchdown. That partnership began in 2009, and its success took it statewide across Wisconsin in 2010. Jennings also signed on as a pitchman for the state, and A&W gave $10,000 to The Greg Jennings Foundation.

  The 20th of June, the anniversary date, was the first day of free root beer floats in 2004. Each year A&W announces a Collectors' Mug with a single design, and the 2005 mug carried a full-color image of The Great Root Bear. By 2010 the event had moved to the 6th of August, and it became the chain's first digital promotion, with a coupon for anyone who liked its Facebook page. Since 2013, that date has been National Root Beer Float Day, and donations support Disabled American Veterans. The 2019 total set a record at $175,000.

  January 2019 brought a tongue-in-cheek campaign, ahead of the hundredth anniversary, that removed the ampersand from the logo. The company lobbied to bring it back as the 27th letter of the alphabet. From October 2020, a series of website quizzes helped make up for losses from restaurant closures. For Halloween that year, A&W released a web stunt called The Onion Ring, a parody of The Ring. A 2024 campaign used the ampersand under the tagline Burgers, Floats & Then Some.

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• 8. Owned by Franchisees

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  December 1994 saw Taubman sell A&W to Sidney Feltenstein, who wanted to push international growth. The chain then had 790 restaurants, 688 in the United States and 102 abroad. In January 1995, Grotech Capital Partners took over operations for $20 million, with Feltenstein as CEO. A 1996 agreement with Walmart put restaurants in seven stores, and a renovation brought what Feltenstein called contemporary nostalgia. In 1997, A&W bought Carousel Snack Bars, including its 175 mall units. The headquarters moved to Farmington Hills on the 30th of March 1998.

  In March 1999, A&W merged with Long John Silver's to form Yorkshire Global Restaurants, based in Lexington, Kentucky. Kevin Bazner became the chain's president that July. By December 2000, it had more than 1,000 locations in 47 states and over 200 abroad in 14 countries. Co-branded restaurants did well. A trial in Butte in 1998 led, in spring 2000, to an announcement of 300 joint KFC-A&W restaurants by 2005.

  In March 2002, Yorkshire merged with Tricon Global Restaurants to form Yum! Brands. In January 2003, Yum! decided to run A&W and Long John Silver's from Louisville rather than Lexington, calling the Lexington arrangement impractical and cost-inefficient. Under Yum!, most new American A&W stores were co-branded with Long John Silver's, Pizza Hut, Taco Bell or KFC. The chain did not try to fight McDonald's and instead carved out a niche of its own.

  In January 2011, Yum! said it wanted to sell A&W and Long John Silver's, citing poor sales and a focus on growth in China. The sale to A Great American Brand, a consortium of franchisees in the United States and overseas, was finalized on the 19th of December 2011. Bazner returned as CEO. The headquarters went back to Lexington with a staff of 30. The chain then had 1,200 restaurants, 850 of them in the United States.

  The new owners launched A&W Burgers Chicken Floats in October 2013. It emphasized fresh, made-to-order food and customer service. Earlier that year, Mini Polar Swirls, a six-ounce version of the soft-serve dessert, became the first product launched on Vine. From summer 2013, 250 restaurants began hand-breading their chicken tenders.

  A&W is now the only major American fast food chain owned entirely by its franchisees, with the National A&W Franchisee Association holding much of the control. Single-brand restaurants matter more than co-branded ones, which numbered 243 and keep declining. The chain had 455 franchised restaurants in the United States at the end of 2023. California has the most, followed by Wisconsin and Michigan. Since 2015, American units have shrunk in number while Asian ones have grown. In the 2024 Franchise 500 ranking, A&W placed 210th, its sixth consecutive year on the list.

  Betsy Schmandt succeeded Bazner as CEO and president on the 4th of March 2025, while he stayed on as chairman. Her strategy, called newstalgia, aims to make the brand more relevant to younger people through sharper marketing and steadier operations. An April 2025 agreement called for three Memphis-area restaurants, with the first, in Millington, due to open by the end of that year.

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