Starting this year, the fast-food franchiser plans to offer territorial franchise rights to new franchisees. It's a significant shift for the company, which has thus far offered only single-site franchises in its 52-year history.
"We think this approach will help us and our franchisees grow the A&W business more quickly," said
Graham Cooke, A&W's vice-president of new restaurant expansion.
The company plans to make available about 25 multi-site development agreements in Ontario and a handful in Quebec and Atlantic Canada. Each franchise agreement will give a franchiser the opportunity to open up to six restaurants over a prescribed period in a geographical area.
A&W has seen expanding across Canada in the past few years. It opened 20 new restaurants last year, nine in Ontario and the rest in Quebec, Atlantic Canada and Western Canada. It opened 16 restaurants in 2007, bringing the total number across the country to 695.
If the territorial franchise approach is successful, it could bode well for the long-term prospects of A&W Revenue Royalties Income Fund (TSX:AW.UN), the publicly traded part of the business that gives cash distributions to unit holders.
Seventeen of the 36 new restaurants opened in the last two years have been added to the fund's revenue royalty pool. The income fund plans to report its annual results next week.