A&W Franchise Cost in the US: Fees, Formats and Earnings

A&W Restaurants in the US

A&W is one of the oldest restaurant franchises in America, known for its root beer, root beer floats and burgers. In the US the brand is franchised by A&W Restaurants, Inc., which sells franchises through its own development team rather than through brokers.

The US franchise offer is built around three formats, each with its own cost range, and a royalty structure that eases new owners in before the full rate applies. The figures below come from A&W's US franchising site and its Franchise Disclosure Document issued April 3, 2026. Request the current FDD and read Item 5, 6, 7 and 19 before you commit.

A&W US Franchise Cost by Format

A&W publishes its start-up cost range by format, excluding rent or land costs:

The freestanding drive-thru is the format A&W reports sales for, and the most expensive to build. Endcap and non-traditional formats cost less but depend on the host site's traffic.

Franchise fee: $30,000 for a first restaurant. Qualified veterans receive a 30% discount, bringing it to $21,000. Multi-unit agreements reduce the fee to $25,000 for the first unit, $15,000 for the second and $12,500 for the third.

Royalty and Marketing Fees

Royalty: 5% of net sales once fully phased in. A&W runs a royalty incentive for new restaurants:

• Months 1 to 3: 0%
• Months 4 to 12: 3%
• Year 2: 4%
• Ongoing: 5%

Confirm in the FDD which agreements and formats qualify for the incentive.

Marketing fee: 5% of net sales, split between 4.5% for local store marketing and 0.5% for the national brand fund. Unusually, most of that marketing money is spent in your own market rather than pooled nationally.

Fully phased in, royalty and marketing together take 10% of net sales.

What A&W Franchisees Sell

A&W's Item 19, from its FDD issued April 3, 2026, covers 59 freestanding restaurants with drive-thrus that reported net sales. Their average annual net sales were $1,297,747, and the highest was $3,035,900.

That figure covers only freestanding drive-thru restaurants; endcap and non-traditional units are not included, and A&W notes individual results vary. Ask for the median, the distribution and the number of restaurants above the average, and build your pro forma from your own site's projected volume rather than the system average.

At $1.3 million in net sales, the fully phased-in 10% royalty and marketing load is about $130,000 a year before rent, food, labour and debt service.

Requirements and Financing

A&W's US franchise inquiry form screens for $700,000 in net worth and $300,000 in liquid assets. Confirm the exact qualification criteria with A&W's development team, along with experience expectations for single-unit and multi-unit applicants.

A&W does not offer direct financing, but works with banks and third-party lenders. Typical structures for a US A&W:

• SBA 7(a) for the business, equipment and working capital. Lenders look for at least a 10% equity injection and a debt service coverage ratio (DSCR) of 1.25x or higher. Check the SBA Franchise Directory for A&W's listing first.
• SBA 504 if you are buying the land and building for a freestanding restaurant.
• Conventional bank debt and equipment financing for endcap and non-traditional formats.

Model the payment against projected sales with the DSCR calculator before you sign a lease.

Frequently Asked Questions

Score a Location