A&W to ex­pand in On­tario, Que­bec

Burger chain sees mil­len­ni­als as key to growth in Canada

The Hamilton Spectator - - BUSINESS - FRANCINE KOPUN

TORONTO — Barmil Mallhi will open an A&W in The Junc­tion neigh­bour­hood in Toronto, un­der a new franchising model with the burger chain aimed at get­ting more mil­len­ni­als into the busi­ness.

“I al­ways wanted to run my own busi­ness and I love food. I am a foodie per­son,” said Mallhi, 30, a wife and mother of a 5-year-old, whose ed­u­ca­tional back­ground is in com­mu­ni­ca­tions and pub­lic re­la­tions.

Mallhi moved to Toronto from Win­nipeg to take ad­van­tage of the new fran­chise model, which of­fers mil­len­ni­als the op­por­tu­nity to own a restau­rant with an ini­tial in­vest­ment of $125,000 to $150,000, or about half the cost of a typ­i­cal fran­chise.

“We launched it last year to re­ally re­cruit younger mil­len­nial fran­chisees, who have en­ergy, a lot of busi­ness ex­pe­ri­ence, but re­ally didn’t have all of the busi­ness back­ground and maybe not all of the capital that our tra­di­tional fran­chisee might have, and we wanted to cre­ate a pro­gram that re­ally worked for them,” said Su­san Senecal, A&W’s pres­i­dent and chief op­er­at­ing of­fi­cer.

Un­der the mil­len­nial fran­chisee pro­gram, A&W in­vests in build­ing the restau­rant, low­er­ing the amount of the capital con­tri­bu­tion re­quired from the fran­chisee.

“It comes back in rent, but the idea is that the fran­chisee doesn’t need to come up with as much eq­uity to start them­selves out,” said Senecal, who de­fines mil­len­ni­als as those born be­tween 1980 and 2000.

In ad­di­tion to the reg­u­lar train­ing pro­gram, the new fran­chisees also work for be­tween four months and a year at an A&W to learn the ropes. That way, they can con­tinue to earn an in­come while their restau­rant is un­der con­struc­tion. It also pro­vides them with a men­tor.

“We thought it was an es­sen­tial part of the pro­gram,” said Senecal.

Mil­len­ni­als make up the largest share of restau­rant con­sumers in to­day’s mar­ket­place — they go out per capita more of­ten than any other con­sumer, ac­cord­ing to Robert Carter, ex­ec­u­tive di­rec­tor, food ser­vice Canada for The NDP Group Inc.

“All restau­rant op­er­a­tors are look­ing at ‘how do we cre­ate more loy­alty,’ par­tic­u­larly for the mil­len­ni­als. Get­ting mil­len­ni­als at the busi­ness level, with the thought that it’s go­ing to at­tract more mil­len­ni­als to the busi­ness — I think that’s a re­ally great strat­egy,” said Carter.

Founded in Win­nipeg in 1956, A&W is plan­ning to ex­pand by 200 restau­rants in Canada over the next few years, from the cur­rent 879.

The ex­pan­sion is fo­cused on On­tario and Que­bec, where the chain is un­der-rep­re­sented rel­a­tive to Western Canada. A&W’s Cana­dian op­er­a­tions have no cor­po­rate con­nec­tion to the chain in the United States.

McDon­ald’s leads the burger mar­ket in Canada, with 1,450 restau­rants.

While sat­u­ra­tion is an on­go­ing con­cern for chains as they ex­pand, with the right menu mix a chain like A&W can meet with suc­cess, said Erik Thore­sen, prin­ci­pal, Tech­nomic, a re­search and con­sult­ing firm fo­cused on food and re­lated prod­ucts and ser­vices.

“Chains like A&W of­ten de­velop a highly loyal cus­tomer base, which may prove ben­e­fi­cial as well,” he added.

Senecal said busi­ness in On­tario and Que­bec has been grow­ing in double dig­its for the past num­ber of years. She said one rea­son is the chain’s com­mit­ment in 2013 to serve only beef raised with­out the use of hor­mones and steroids and chicken raised with­out an­tibi­otics and fed a diet free of an­i­mal byprod­ucts.

Senecal said the burger chain saw the rise in in­ter­est in where food comes from in gro­ceries and in restau­rants, and looked for a way to in­cor­po­rate that in­ter­est into its own menu.

I al­ways wanted to run my own busi­ness and I love food. BARMIL MALLHI A&W FRAN­CHISEE

AN­DREW FRAN­CIS WALLACE, TORONTO STAR

Founded in Win­nipeg in 1956, A&W is plan­ning to ex­pand by 200 restau­rants in Canada over the next few years.

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