A&W Restaurants franchise opportunity: Are you considering it?
You should be aware that data released by the Small Business Administration (SBA) indicates that A&W Restaurants franchise owners who qualified for SBA-backed franchise loans have a loan failure rate of 22%.
That qualifies A&W Restaurants for inclusion in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)
Are you familiar with the A&W Restaurants franchise opportunity? If so, please share your experience, opinions or insights with a comment below.
If you are a A&W Restaurants franchise representative or employee, please leave a comment or email us at UnhappyFranchisee[at]gmail.com.
The inability to repay an SBA-backed loan (or any franchise loan, for that matter) indicates a serious situation for the franchisee.
It’s likely that A&W Restaurants franchise owners who received SBA loans may have collateralized their franchise loan with their homes or other personal assets, and many were unable to repay those franchise loans… despite the serious incentive to do so.
A&W Restaurants
| SBA loans granted since 2001: | 43 |
| SBA loan failure rate: | 22% |
| Sources: Coleman report (SBA) |
According to A&W Restaurants’ Franchise Disclosure Document 2012, 167 A&W franchises (18% of the total franchises opened) were either terminated or ceased operation between 2009-2011.
The relatively high franchise termination rate of A&W Restaurants seems to be a franchise red flag.
| A&W Restaurants Franchises 2008-2011 | |
| Franchises open January 2009: | 910 |
| Franchises added 2009-2011: | 31 |
| Franchises terminated/closed 2009-2011 | 167 |
| Franchises terminated/closed (%) | 18% |
| Sources: A&W Franchise Disclosure Documents (FDDs) |
According to the 2012 FDD, A&W Restaurants would appear to have a termination/closure percentage of 18%, which (we believe) could reasonably be called a failure rate. (The 22% figure is a default on SBA loans since 2001, seems to reinforce that approximate failure rate.
In 2011, A&W® was purchased by a partnership of domestic and international franchisees.
A&W® had previously been owned by YUM® Brands.
Are you familiar with the A&W Restaurants franchise opportunity?
What do you think accounts for the high SBA loan failure rate of A&W Restaurants franchise owners?
What steps should A&W Restaurants be taking to stop further franchise failures?
Has A&W Restaurants taken serious action to address the problems that led to these loan failures?
Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.
ARE YOU FAMILIAR WITH THE A&W RESTAURANTS FRANCHISE OPPORTUNITY? ARE YOU A CURRENT OR FORMER A&W RESTAURANTS FRANCHISE OWNER? PLEASE SHARE A COMMENT BELOW.
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What happened to the Grassroots of Allan& Wright ,the drivein has gone out the window witch started with car hop and now you do not support your cars coming to A&W on Sunday EVenings here in Sarnia,This s so sad becauces of Wenn.Your on the wrong track. You are going to ruin the old car Hoppy how many times do we run our Classics to sopport A&W.Ken Abell and alot more of us.