JOC ARCHIVES

March 16, 2009

BRADLEY FEHR

Twenty new A&W restaurants were built last year and the company has plans to build more in 2009.

Commercial Development

New construction behind aggressive expansion in Ontario and Western Canada

A&W Food Services of Canada, headquartered in Vancouver, is planning an aggressive 2009 expansion in Ontario and Western Canada despite the economic downturn.

A&W’s vice-president of new restaurant expansion sees it as simply as one bear waddling along in the wake of another.

“We see this as an opportunity,” said Graham Cooke.

He said he believes that the downstream market lies with returning the huge baby-boomers market to the fast-food outlet of their youth, as they leave empty-nests and move to smaller or retirement communities.

The economic downturn is an ideal time to expand, as the cost of construction and land is moderated, plus many regular restaurant patrons trade down to fast-food outlets, he said.

“2009 will not be as good as 2008, but good enough,” he said, adding that A&W is more recession proof than higher-end food outlets.

“In 2009 we are expanding again and will be similarly as aggressive with growth in Ontario. We hope to add nine to 12 outlets in Ontario,” Cooke said.

A few more are planned for Quebec and the rest, about 20 outlets, will be in Western Canada.

Twenty new restaurants were added last year.

The company is tracking baby-boomers, who are returning to the restaurant of their youth, with carefree memories of chrome-heavy cars, car-hops, sock-hops and cruising the hometown drag to the Dub.

Rural, suburban, and smaller cities are all prime focal points for development, said Cooke, adding that larger centres have not been taken completely out of the mix.

A&W has been driving its brand into Eastern Canada and focusing on larger population provinces such as that in Ontario.

“In Ontario, we hope to open 80 new restaurants in the next five years,” Cooke said.

In Western Canada, the figure is 80 to 100 over five to 10 years.

“Our standard restaurant is 1,760 square feet with 55 seats. Almost half of the business is the drive-thru window and the other half comes into the restaurant,” he said. The site usually has enough parking to accommodate 25 vehicles.

The company, which sells franchises, has also announced that in Ontario it will be offering territorial franchise rights to new areas, where a buyer will be able to build up to six outlets.

A total of 25 multi-site development agreements will be offered in Ontario.

An undisclosed number will be offered in Quebec and Atlantic Canada.

Cooke maintained that they will be a rapid way of expanding the fast-food chain.

In all provinces, except Ontario, the franchise purchaser is responsible for the construction of the facility.

In Ontario, two major firms are used: Tap Construction of Winnipeg and Berkim Construction Inc. of Ontario.

An annual review of construction firms for Ontario projects is carried out by the restaurant.

In other provinces, contractors need to be aware of what is going on in their communities, as it is up to the individual owner to arrange for construction, he said.

Prime spots for A&Ws are corner lots, areas close to large traffic generators such as highways, transit stations, or malls.

When a new area is being considered, the community and it’s demographics are thoroughly analyzed before a new franchise is awarded.

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