The story
Founded by Roy W. Allen in 1919, in Lodi.1
Founding and early years
On June 20, 1919, Roy W. Allen opened his first root beer stand in Lodi, California. The first day was for a homecoming celebration of soldiers who returned from battle in World War I. The following day, his stand was open for regular customers, selling root beer glasses for 5 cents (equivalent to $0.93 in 2025). The following year, Allen opened a second stand in Stockton, California. Shortly afterward, the effect of the period of prohibition that existed in the United States from 1920 to 1933 gave Allen and his stand with a beverage with "beer" in the name a heavy rebound. Four years later, A&W began when Allen and Frank Wright opened their drive-in restaurant in Sacramento, California, combining both of their initials for the name, and selling the root beer from Allen's stand. Curbside service was provided by tray boys and tray girls. In 1924, Allen purchased Frank Wright's stake in the business. In 1925, Allen began franchising the root beer, while the franchisee added the other menu items and operated at their discretion. Most of the restaurants that opened under this scheme were on the highways of the Central Valley region, mainly for travelers. This may have arguably been the first successful food-franchising operation. Allen sold the company in 1950 and retired. A lot of World War I veterans eventually founded A&W franchises throughout the US, while some of their descendants still own franchises.
A&W's initial menu relied heavily on root beer and snacks, such as popcorn and peanuts, as well as sandwiches on sliced bread.
In 1927, J. Willard Marriott gained franchise rights for Washington, D.C., Baltimore and Richmond. Subsequently, he moved to Washington to open a root beer stand with Hugh Colton. These stands subsequently became Hot Shoppes, paving the way for the later creation of one of the largest hospitality corporations in the world. As of 1933, A&W had a total of 171 stands, increasing to 260 by 1941.
A&W survived the Great Depression and labor shortages during World War II but benefitted from the post-war recovery of the American economy, with fast food and drive-in restaurants beginning to take shape. The first franchise convention was held in La Crosse, Wisconsin in 1949, but was limited to Wisconsin franchisees.
Expansion
In the expansion years of the 1950s and 1960s, franchisees were signing 20- or 25-year contracts under the older model. The chain expanded into Canada in 1956, opening restaurants in Winnipeg and Montreal. By 1960, A&W had 2,000 restaurants. In November 1956, F. R. "Fran" Loetterle became the president of the chain.
In 1963, the chain opened its first store on Okinawa, which at the time was under American control. In the following years, the chain branched into other foreign markets, including Guam (first territory outside of the North American continent to open a restaurant, in 1961), opened by Scotty Moylan, Mexico, the Philippines (some sources say it opened in the 1990s) and Malaysia. The first restaurant in Malaysia (Malaya at the time) was opened on December 24 that year by Al and Geri Lieboff, a couple from Las Vegas, who got the franchising rights for Malaysia and Singapore. Setting up the chain seemed to be complicated, as they were unable to find a proper site, and in the recruitment process, Malayans had no consent to adorning Western "cabaret girl" style clothes. Already at the time of setup, kids were starting to favor chicken, burgers, and hot dogs rather than rice and curry, and within the next five years, would also see a rise in new locations up to 22 within five years.
The first restaurant in Europe opened in Mannheim (near Stuttgart), West Germany in 1962. At the time, a city influenced by US military presence, the restaurant was showing signs of success for its novelty, the first drive-in restaurant in Germany, and had already made headlines in German newspapers. At the time, it was the 2283rd overall founded by the chain. There were already plans to introduce restaurants and drive-ins in other key European markets, such as the United Kingdom, according to the chain's president.
Dale Mulder opened up a Lansing, Michigan A&W franchise in 1961. In 1963, Mulder added the bacon cheeseburger to his menu after a customer made repeated orders for bacon to be added to his cheeseburger. Thus A&W is credited with inventing the bacon cheeseburger.
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United Fruit Co. and United Brands Company subsidiary
In 1963, the company was sold again, followed by another sale in 1967 to the United Fruit Co. conglomerate. AMK Corporation purchased United Fruit in 1970. Then AMK formed United Brands Company to hold A&W.
In 1971, A&W Beverages Inc.—a beverage subsidiary—began supplying bottled A&W products to grocery stores. The bottled products would become available nationally. In 1972, A&W's Canadian division was sold to Unilever.
A&W attempted to open restaurants in mainland Japan in the early 1970s, specifically in Fukuoka prefecture and the regions of Kanto and Kansai. The chain's performance on the mainland was sluggish in contrast to Okinawa due to several factors, such as the 1973 oil crisis, prompting the chain to withdraw from the market. A&W's Japanese operations are still handled from Okinawa. There were further fruitless attempts to bring the chain to the mainland: in the 1980s, the Okinawan branch briefly attempted to open restaurants in Kagoshima Prefecture but ended up limiting itself to Okinawa, while in the 2000s a pilot restaurant existed in Tokyo, which was quickly withdrawn.
1978 saw the introduction of a standard menu for use in all restaurants in the USA.
In the 1970s, A&W had more stores than McDonald's, with a peak in 1974 of 2,400 units. Oshkosh, Wisconsin, franchise manager Jim Brajdic said: "Problems back then, including a lawsuit, franchisee discontent, and inconsistencies in the operation, caused the chain to flounder and branches to close." A&W moved to a modern-style franchise agreement that introduced royalty payments and new standards. However, many franchisees refused the revised terms as their 20- or 25-year original agreements expired. In 1980, the number of restaurants had fallen to 1,300 in the United States (mostly in the Midwest and the North West), Asia, and Europe. In 1980, the Singaporean franchisee Temenggong Ltd. had increased the number of restaurants in the country, while nine new restaurants were planned in Malaysia. There were also plans to open restaurants in the Philippines and Hong Kong.
Negotiations to sell the chain began in November 1981.
Taubman Investment Co. subsidiary
In 1982, A. Alfred Taubman purchased A&W and placed it under Taubman Investment Co. Taubman only purchased the restaurant company and not A&W Beverages. The chain dropped to fewer than 500 locations in the mid-1980s. A freeze on issuing franchises was put in place. Taubman wanted to restructure the chain by changing its "outdated" image. Franchisees were being neglected in the United Fruit phase. Taubman opted to withdraw agreements with 100 franchisees that were performing poorly and ousted 80% of its workforce. With this, the new management decided to split its fast-food restaurants into two units – the conventional orange roof A&W restaurants, which were still the majority, and A&W Great Food Restaurants.
In 1983, A&W opened its first restaurant in Thailand, at the Central Ladprao shopping mall in Bangkok.
In 1985, A&W began offering the Third Pounder to compete with McDonald's Quarter Pounder. As advertised, the Third beat the Quarter in taste tests and was less expensive by weight. In his 2007 memoir, former owner A. Alfred Taubman claimed research had revealed that it had been unsuccessful in part due to Americans' widespread innumeracy, specifically their inability to understand fractions: 1/3 was perceived as smaller than 1/4 (due to the smaller denominator) despite being a larger quantity. The burger was relaunched in 2021 as the 3/9 Pound burger, humorously attempting to capitalize on the now-popular fractions misunderstanding story.
In 1985, the chain struggled in Singapore, losing its relevance to newer, larger chains and its dominance in the fried chicken area to KFC. The chain was about to amp up its operations in the Asian region, with a possible launch in Hong Kong as well as three new restaurants in Thailand.
On April 21, 1985, its first restaurant opened in Indonesia, in the Melawai area of South Jakarta, its capital. Currently, Indonesia is the chain's largest international market, which as of February 2023 claimed 243 restaurants in 30 cities. A restaurant in Ximending, Taiwan opened on February 22, 1986. Its two units in Kuwait were closed in 1988 owing to security concerns. It was in Kuwait, during a US-Malaysia trip, that Kevin Bazner was held hostage in August 1990 when the plane he was on board was set for refueling; he was released in December.
Negotiations were held with Sonic Drive-In for a potential buying of the chain, but the plans fell in October 1986 due to a decline in franchises. Expansion plans were formulated in August 1987 with the opening of twenty new restaurants in a one-year period.
On March 6, 1988, the first conventional A&W outlet opened in the Philippines at Fiesta Carnival in Cubao, followed by a second at Gift Gate Center on November 26. The second restaurant's reputation was damaged by a fire of unknown origin that broke out in May 1990. Nonetheless, the chain expanded with new outlets and products by the end of 1990. The Philippine chain was the first A&W to introduce chicken nuggets, a product that even the American operations wanted from there. The chain also sponsored a team in the Philippine Basketball League, which they withdrew in 1992.
A&W Great Food Restaurants
A new format concept, A&W Great Food Restaurants, was developed. Ten corporate-owned locations were opened to test the concept: a sit-down, upscale, family-theme restaurant with a large salad bar and homemade ice cream. The first such branch opened in 1978 (1979, according to some sources) at the Lake Forest Shopping Mall in Gaithersburg, Maryland. Emphasis in these restaurants was made on low-calorie foods that covered almost the entirety of the foods found in the fast-food spectrum, except pizza. By 1986, there were plans to have 250 to 300 locations within ten years.
In 1987, the company was headquartered in Livonia, Michigan, and Mulder became CEO and president. The freeze was lifted, and a push occurred in 1986, adding 60 franchise units. In March 1989, A&W made an agreement with Minnesota-based Carousel Snack Bars to convert that chain's 200 stores (mostly kiosks in shopping malls) to A&W Hot Dogs & More, Some A&W Hot Dogs & More are still operating. aiming to finish the conversion within two years. In the same year, A&W bought the Burger City chain, converting its nine drive-thru kiosks to A&W units.
George E. Michel, who had worked with the Canadian chain for twenty years, was appointed president of the American A&W Restaurants in January 1991, becoming CEO in January 1992. His presidency used its long history as a pretext for nostalgia both in the United States and abroad.
Sale to Sidney Feltenstein; Grotech subsidiary
In December 1994, Taubman sold A&W to Sidney Feltenstein, with the aim of pushing the chain's international expansion further, while still maintaining its headquarters in Livonia. At the time, there were 790 restaurants (688 in the United States and 102 abroad), with the bulk of the international locations located in Malaysia, Thailand and Japan, as well as in Mexico and the United Arab Emirates. Earlier in 1994, its hundredth international location opened at a tourist attraction in Bangkok: a crocodile farm. In January 1995, operations were taken over by Grotech Capital Partners, for a sum of $20 million, with Feltenstein as the chain's new CEO.
An agreement was signed in 1996 with Walmart to provide restaurants in seven locations. The menu would add items depending on the region, with the rest being its standard fare. That year, its restaurants were renovated to feature an aesthetic referred to by Feltenstein as "contemporary nostalgia". The move mirrored that of Dairy Queen, which had also opened a test location with a similar feel. A&W also operated restaurants in Monterrey, a key city in northern Mexico. In 1997, A&W acquired Carousel Snack Bars, including its 175 units in malls. The agreement made the chain the owner of these units, while continuing to franchise restaurants.
The chain aimed to increase its presence in the second half of 1996 by opening co-branded locations and nontraditional sites such as gas stations, while abroad it planned an increase in the number of units, having signed development agreements in Oman and had already opened stores in Dubai. There were also plans for the opening of units in Seoul and increasing its presence in Singapore, as well as attempting to target the Latin American market. For the Middle East, it made a licensing comeback after approximately a decade, after leaving the market in the late 80s due to political uncertainties. In early 1997, it announced the opening of locations in colleges and universities. The chain relocated its corporate headquarters to Farmington Hills on March 30, 1998. As part of an $80 million expansion plan, there were plans to open 500 restaurants in two years and close 100 outdated restaurants. A new location, which had previously housed an A&W site in Fargo from 1971 to 1980, opened in mid-March 1997 as a pilot restaurant for a new design to be implemented in new locations.
A&W entered the mainland Chinese market in 1996, the franchisee for the country being Aidewei, and had eight restaurants in Beijing. Later, due to arrears of franchise fees since 2000, Aidewei lost the A&W trademark in 2002. The eight restaurants weren't operating well and were plagued by mismanagement. An outlet in Yansha with 140 seats in a crowded, strategic location turned out to have limited business, while the restaurant in Anzhen had few customers. Following the buyout of the parent chain by Yum! Brands in 2002, it was announced in March 2003 that negotiations with Aidewei had broken down, leading to the franchisee's bankruptcy that same year. The restaurants closed successively from October 2002 to September 2003. The "father of American fast food", as dubbed by the Chinese press, didn't convince the local culture and tastes, especially with the rise of local fast food. There were also concerns about the Chinese branch operating without authorization, refusing to pay franchise fees since September 2000.
In 1997 a small A&W restaurant opened in Festivalgate in Osaka, offering standard A&W fare. The restaurant closed in 1999.
The first Qatari restaurant opened on December 18, 1997 (Qatar's National Day) with Al-Muftah Group as the franchisee. There were also plans to open a second restaurant in the country, as well as two restaurants in Cairo and six more in the UAE during 1998. The fare was similar to most A&W restaurants, with the addition of local items. At the end of the month, it opened a unit in Seoul (owned by 2F Enterprises) and one in Brunei (owned by a subfranchise of A&W Singapore). As of June 1998, A&W only had two restaurants in Mexico. The Cairo branch opened on August 1, 1998, under local franchise American Egyptian Foreign Investments, with Egypt becoming the seventeenth country outside of the United States to open a location.
The first co-branded A&W restaurant, tied with Mexican food chain Amigos, opened in Lincoln in 1997. There were plans to increase the amount of co-branded locations across Nebraska by four in the second half of 1998. The goal of the co-branded restaurant was to allure more customers who did not prefer Mexican food. On March 16, 1999, it announced the opening of a restaurant in Dhaka with franchisee Global Supplies Limited due in September that year, with four more planned. The restaurant in Lodi took part in a world record for the largest root beer float of 2562.5 gallons on June 19, 1999, the eve of the eightieth anniversary of the chain. That same year, the chain attempted to enter the Korean market by finding local partners, aiming to grow in the Korean market in the first half of 2000. The plan was ultimately shelved.
A&W merged with Long John Silver's to form Yorkshire Global Restaurants based in Lexington, Kentucky in March 1999. Kevin Bazner was promoted president of the chain in July. In 2000, Yorkshire agreed to test multi-branded locations with Tricon Global Restaurants. A grocery location opened in February that year in Idaho. By March 2002, the Yorkshire-Tricon multi-branding test consisted of 83 KFC/A&Ws, six KFC/Long John Silver's, and three Taco Bell/Long John Silver's and was considered successful by the companies.
In December 2000, A&W announced new openings in less conventional locations, such as casinos, airports, gas stations, convention centers and convenience stores, for 2001, as part of its growth plans. At the time, the chain had more than 1,000 locations in 47 states and over 200 international locations in 14 countries. The chain around the time emphasized its aesthetics on "contemporized nostalgia". It also saw a success in co-branded restaurants, following the success of a trial in Butte in 1998, which, owing to its success, in the spring of 2000 led to the announcement of the opening of 300 joint KFC-A&W restaurants by 2005.
Tricon bought both A&W and LJS in March 2002, shortly before the merger with Yorkshire was finalized.
Yum! Brands subsidiary
In March 2002, Yorkshire merged with Tricon Global Restaurants to form Yum! Brands. A few weeks later, Malaysian company KUB took over the franchises in Southeast Asia, aiming to restore its prestige in Malaysia alone and increasing its market share. Subsequently, in January 2003, Yum! announced that A&W and Long John Silver's would move their operational base from Lexington to Louisville, as operating the chains from Lexington was considered "impractical and cost-inefficient", preferring to operate all of its chains from Louisville. Under Yum's management, A&W added franchises with a nostalgic look and modern technology. They have a carhop design with drive-thrus, and some have picnic tables. The chain didn't seek to compete against McDonald's, instead preferring to carve up its own niche. 2004 saw the return of the Papa Burger brand at a restaurant in Dayton - the Burger Family brand originally retired in the United States in the 1980s, being replaced by the Deluxe Burgers - and was the only name of the old line that was reinstated, with the other burgers having new names.
In September 2001 the Singapore branch was taken over by KUB, who also oversaw the restaurants in Malaysia. At the time of takeover, it had twelve restaurants, but by November 2002, the number had dwindled to eight. Its restaurants had already been downgraded: the Ang Mo Kio restaurant shut down, the Tampines restaurant refused to repair its air conditioning systems, and cable TV was switched off in all outlets. Food sales had decreased by about 5-12%. The chain quit the Philippine market in 2004 owing to several factors: lack of interest in its standard fare, lack of interest among locals, expensive cost and a general sense of unfamiliarity with local palates. The chain failed to adapt to local tastes and quietly shut down in the summer of 2004.
The chain attempted to enter large European markets thanks to joints with KFC. In Germany the first non-military A&W restaurant opened in Garbsen near Hanover on May 27, 2003 followed by a second in Cologne in July. A third in Berlin was scheduled for early September.
From Wikipedia’s article on A&W Restaurants, shared under CC BY-SA 4.0.4