A team filled with its strongest promoters – including long-time leading executive Kevin Bazner and long-time adorable mascot Rooty the Great Root Bear, have recently returned to iconic QSR chain A&W to make a splash at the company known for its signature root beer, floats, frozen treats, burgers, and hot dogs.
A&W started in 1919 and is one of the first quick-serve restaurant franchises in history. A Great American Brand LLC, a partnership of national and international franchisees representing 1200 restaurants, acquired A&W Restaurants Inc. from Yum! Brands in December 2011, and Kevin Bazner was named CEO.
Rebecca: What have you been up to since the acquisition?
Kevin: First and foremost, in terms of the acquisition, one thing of note is that this brand is essentially now owned by its franchisees, and there’s only a couple of companies in the industry where that’s the case. In our case, the primary ownership is really a partnership of two groups. Our US franchise association is essentially a 50-50 partner with our largest international franchisee from Indonesia. That’s the ownership structure, which again is quite unique in the industry. It’s generally not the case that the franchisees own the parent company.
With Yum selling the business, our franchise partners under that partnership desired to try and ultimately were successful in acquiring the business to protect their own long-term interest. That was their motivating factor.
What we’ve been up to with the brand since 2012 is that we spent the first six months in 2012 just putting the organization together. We did not inherit a people infrastructure. When we acquired the business, we essentially had myself, our COO, and our Chairman. We were the only three employees of the acquiring company, so we spent the first six months putting an organization together, people, getting an office open, transitioning all of the processes, everything from accounting to administration to legal, really transitioning from the previous ownership to the new ownership. That really took up the bulk of our time the first six months.
The second six months, what we really culminated in January of this year, is we worked with our advisors and our corporate team members, and through a fairly rigorous process we put together a long- term brand strategy based on a lot of different conversations we had with A&W consumers through various different quantitative and qualitative research. We did an analysis of all of that a couple of months ago, putting together a comprehensive long-term brand strategy.
Along the way, we managed in year one 12 consecutive months of same store sales increases in 2012 and ended up the year with some nice and positive comp sales for 2012, primarily just supporting our franchise partners efforts and promoting a lot of activities at a local store marketing level.
Rebecca: How were you first involved with A&W?
Kevin: I was with A&W for 18 years prior to the sale to Yum. When Yorkshire Global Restaurants or YGR sold the business along with Long John Silver’s to Yum back in 2002, at the time of the sale, I was the president and COO for A&W, and I left after an agreed upon one year transition with the buyer, with Yum! Brands.
Rebecca: They hired you back?
Kevin: The franchise partners of the business, specifically the Chairman of our US franchise association, called me when they began our conversations with Yum about acquiring the brand and asked if I would assist them in the acquisition and if successful would I run the business with them.
Rebecca: What motivated you to get involved again?
Kevin: A couple of things. One is that I grew up with the brand. Not only the 18 years that I had been with the brand previously, but also as a child and a young man growing up in Michigan. I had a lot of personal fond memories of the brand as a consumer. Number two, over my 18 years, previously ten of which were the international business, I made many, many friends within the brand, many of whom I kept in touch with over that nine-year hiatus from when I left the brand to when I came back. I had a lot of connections with the brand from when I left until when I came back, so the people that called me were good friends of mine that I respect and trusted, so that went along way in piquing my interest.
Rebecca: I understand that the brand has 350 stores in Asia, and you have a lot of experience with development there. What areas are you looking at for future expansion?
Kevin: Our only emphasis at the moment continues to be with our existing stores. We are expanding in all the different international areas where we have a presence. Most of the development we are doing in the US is with existing franchise partners. We have not yet gone out and looked and started to proactively look at growing this business with people from outside our current A&W family. That’s what this year, year two of our ownership is all about, getting the brand ready for growth, and we intend to become proactive in terms with existing franchise partners as well as new franchise partners next year.
Rebecca: You recently reintroduced Rooty the Great Root Bear as a mascot. He’s so adorable.
Kevin: We brought him back. Rooty has been part of A&W since 1974, and the previous ownership for whatever reason that I don’t really know, Rooty did not fit the brand strategy they had for the A&W brand, so they were not using Rooty, and Rooty is pretty beloved within the A&W franchise family, so we brought Rooty back very quickly.
Rebecca: What has Rooty been up to?
Kevin: Rooty is our company spokesbear. Rooty manages a lot of our social media. Rooty has his own Twitter account. Rooty manages a lot of the communication we have with our guests. Rooty has his own corner on our corporate website, so you can watch videos of Rooty on a 24-hour cycle, so depending on what time of day you log in, he may be working, or sleeping, or brushing his teeth, or something in between.
The two major things we are doing with Rooty is that he is a big presence in the concerted efforts we are having with digital media, including all of the social media outlets. Number two is really we are using Rudy and incorporating Rudy a lot in our local store marketing activities and creative. Those are the two ways we are focusing on Rudy.
Rebecca: I read that some of the stores brew the root beer fresh. What makes A&W root beer different?
Kevin: The majority of our stores make the root beer fresh in the stores on a daily basis. The difference in A&W root beers from not only most root beers but other soft drinks is that there are no preservatives in the made-fresh root beer, which is why we pretty much have to make it on a daily basis. With the made- fresh root beer, it is 100% cane sugar. We don’t use any high fructose corn syrup or any artificial sweeteners. And there is no caffeine in A&W root beer as there is in most soft drinks.
Rebecca: Does it have all natural ingredients?
Kevin: It has all natural ingredients and virtually the same formula since it was first formulated in 1919. No artificial ingredients and no preservatives.
Rebecca: Interesting. I read that the original formula has a unique blend of juices from 16 different herbs, spices, barks, and berries.
Kevin: That’s correct. It’s essentially the same formula as when it was first introduced in 1919.
Rebecca: I’m impressed.
Kevin: Well, good. That’s one of our key factoids as we move the brand forward, that not many things are the same as they were 94 years ago.
Rebecca: You’ve been doing a lot of hiring recently. What do you look for when you are recruiting people for your team?
Kevin: The key things we look for is fit, for lack of a better term, a cultural fit. A passion not only for this industry but a passion for the A&W brand. We have a number of people such as myself that had worked with the brand previously. We brought them back because they had this inherent passion for the brand, and others we’ve added from outside the world of A&W for the most part had good fond memories of the brand as a consumer. We really assembled a group of people that are very passionate about the A&W brand specifically.
Rebecca: I find it interesting that you have these Midwestern roots and you spent 10 years living in Malaysia. How did it influence you living in Malaysia?
Kevin: I lived in Malaysia and traveled quite extensively throughout Asia Pacific and the Middle East as we grew these two brands. I would say a couple of things that impacted me is that often there is not a language barrier but certainly things that get lost in translation as you deal with individuals who speak English as a second language, and I did not likely speak more than a few words of their language. I think for me, I learned to listen more closely to what people were saying because of the potential language barrier.
Relationships, which I always felt were absolutely key in a franchisee-franchisor relationship, were that much more important and meaningful in the international arena and dealing with franchise partners. You have a franchise agreement to protect both parties’ interest, but hopefully that agreement never has to come out of the drawer, and you certainly don’t like to use it to manage the relationship. Internationally, it’s just that much more important. Most international markets, particularly Asia Pacific and the Middle East, where we have most of our international business, their societies and their mindset isn’t as litigious as ours is. So while they understand the need to have a contract, it’s circumstances and relationships they believe should direct the business relationship and not the contract. That just sort of put a fine point on my personal beliefs about the franchising industry.
Rebecca: I find it interesting that you did a stint a few years back as CEO of It’s Just Lunch. Like everyone, I’m familiar with the company, and I read their ads on the in-flight magazines every time I get on a plane. Tell me something you learned working there.
Kevin: My only real stint outside of food service, although I got involved with It’s Just Lunch because at the time I got involved the company was 100% franchised. When the private equity group that bought it were having some challenges figuring out what to do with the business going forward, I was brought in on a consulting assignment, and then they asked to come on board and run it and transition the business from what was a 100% franchise model to what today is about two-thirds company, more owned and operated as opposed to franchised. That was one of the big learnings is that the exit costs to the operator, if they were struggling, were fairly insignificant. So the franchisees could walk away from the business. The bulk of costs was on the front end with advertising and the administrative. If they got tired of the business or were struggling, it was too easy for them to walk away from an office which obviously could be brand damaging, so we put together a plan to transition to more of a company owned model.
Rebecca: Do you have any dating advice?
Kevin: I’ve been married for 30 years, so I don’t really have any dating advice, except to call the folks over at It’s Just Lunch because it’s a pretty good personalized model as opposed to the hunt and search on an online dating service. The It’s Just Lunch model is much more personalized and customized to an individual’s needs than any of the online dating sites, that’s for sure.
Rebecca: As a recruiter myself, I can appreciate that. Anything else you’d like to add about what you’ve got brewing with A&W?
Kevin: There are a lot of things we are doing tactically with the brand as an outcome of our brand strategy exercise, and we are going to be testing a number of things in the coming months and year to have an updated version of the A&W concept and start proactively growing next year. We looked at all the consumer trends and have talked to our customers about what they will give us permission to do as a brand and we feel very good about the future with updating the brand and modernizing for today’s consumer. We’ve got three prototype locations we are working on in Lexington, KY, and if all goes according to plan in a year from now we hope to have our growth vehicle for the future.
Rebecca Patt specializes in executive recruiting for the restaurant industry. Need to recruit a CEO, spokesbear, or any leading talent for your team? Contact her at email@example.com