How to Sell an A&W Restaurant Franchise

Sell an A&W Restaurant Franchise

The A&W restaurant franchise is a well-established brand, and it is seen by many investors within the fast food space as a sound investment. This is good news for A&W franchise restaurant owners who are planning their exit strategy. Sigma Mergers and Acquisitions discusses how to determine the worth of your restaurant, the steps that are involved in the sale process, and the role the business broker plays in your sale in this review. Here’s how you can sell an A&W restaurant franchise.

About The A&W Restaurant Franchise

a&w restaurant logo

There are approximately 520 A&W restaurants. They offer food services, which include dine-in, take-out, and delivery. They are also categorized as a fast food restaurant and offer drive thru services at many of their locations. A&W has also become famous for their 1919 Root Beer recipe, which is made fresh in their locations. This signature recipe makes them unique for individuals who are interested in investing in a fast-food franchise.  

How Much is My A&W Restaurant Worth?

The first step to any business sale is a valuation. Specifically, you will need a market-based valuation approach for your A&W restaurant franchise business. This approach seeks to determine the fair market value (FMV) for your restaurant. Your valuation includes the use of industry or acquisition multiples (also called rule of thumb data). The acquisition multiple for the A&W restaurant franchise includes:

  • A&W restaurants sold between 2.16 and 3.91 times the Seller’s Discretionary Earnings (SDE)
  • A&W restaurants sold between 2.73 and 9.85 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
  • A&W restaurants sold between 0.57 and 0.73 times the annual net sales

 

Other factors may have a strong impact on your valuation, such as your reason for selling your franchise, growth potential, and local reputation. Your broker should personalize the valuation and ensure all intrinsic value of your franchise is recognized and factored in when determining your worth. 

A Step-by-Step Guide to Selling an A&W Restaurant Business

Although the process may seem complex, you can sell with confidence and stay in control by following a structured process and working with an experienced business broker. The notable steps that are included in the sales process for A&W restaurant franchise owners include:

  • Prepare your sales strategy
  • Find a buyer in a confidential manner
  • Complete the due diligence process
  • Attend closing and sign the purchase agreement

 

Below is a brief overview of each step. We ask that you speak with a business broker for more specific details about the sales process you may experience. 

Step 1: Prepare Your Sales Strategy

As discussed, your valuation is the first step of the sales process as it determines your entire sales strategy, including when you sell, how much you ask for in the sale, and more. Your business broker can help you plan your strategy. You will also need to prepare all documents you will need. Notably, this includes your:

  • Franchise agreement
  • Three years of tax returns
  • Profit and loss (P&L) statements
  • Balance sheets and cash flow statements
  • Employee lists

Step 2: Find a Buyer in a Confidential Manner

You will need to find a buyer in a confidential manner to avoid unnecessarily causing a disruption to your business operations or influencing the offers you receive. Your broker ensures you are able to sell discretely by utilizing private and confidential sales channels. As you receive offers, you and your broker can review them, negotiate with potential buyers, discuss contingencies, and end the marketing stage with a signed letter of intent (LOI)

Step 3: Complete The Due Diligence Process

The buyer will need an opportunity to review all information before they officially purchase your A&W restaurant. This may involve a detailed review of your company’s financial information and legal information, along with a review of the franchise agreement and a visit to see the daily operations of your restaurant. 

Step 4: Attend Closing and Sign The Purchase Agreement

Lastly, you will schedule a time for closing. During closing, several things will take place. First, your attorney will review the purchase agreement a final time; the buyer’s attorney will likely do the same to ensure all information is accurate according ot the discussions that took place and the LOI. Secondly, after review, the purchase agreement is signed. Next, the franchise (A&W) may be notified and all requirements as established in the purchase agreement are fulfilled. The seller also will transfer access to the business over to the buyer. Lastly, employees are notified of the new ownership.

Contact The Business Brokerage Team at Sigma Mergers and Acquisitions

Sigma Mergers and Acquisitions help business owners sell successfully and in a stress-free manner. If you own an A&W restaurant and are planning your exit strategy to retire or pursue other business ventures, then schedule a consultation to discuss your strategy.

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Scot Cockroft Business Broker
Hi, I’m Scot Cockroft.

When I founded Sigma Mergers and Acquisitions back in 2003, I had sold my business the year prior.

Now, that can sound good, but let me tell you, back in 2003, it was not easy to sell a business. Not that I’m saying in modern day times it’s easy to sell a business, but back then I interviewed broker after broker after broker, and no one was interested in actually seeing the value that my business brought to the table.

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Sigma is a the leading business broker in with Corporate offices in Dallas/Fort Worth with roots from 1984. Over 600 businesses sold in Dallas, Fort Worth, Texas, Oklahoma and across the South. Sigma provides full business brokerage services with NO upfront fees. We provide Market approach business valuations for business sales. Sigma is passionate about helping business owners achieve their goal of financial security. Contact us today for a free no obligation business valuation. We are here to help you achieve your goals.

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