You used to be A&R president - what made you come back in 2011?
An overall affinity for the brand but, more importantly, the group that wanted to acquire the business [from Yum! Brands] asked me to help with the acquisition. It was made up of our primary shareholders, the U.S. Franchisee Association, which is our largest international franchisee group. I had key relationships with those groups.
The Atlantic declared you dead. What made you believe in the brand?
We knew the heart and soul of the brand: the people and the franchisees. We have a lot of mom and pop franchisees. They’re in their stores literally every day. If we could get those people excited and engaged, they would take care of the customer. That’s our biggest key to success, in addition to providing them with tools and resources. The brand wasn’t dead - it just needed some TLC.
What did the franchisees tell you?
They felt neglected. They hadn’t seen a representative of the brand in years. Their connection to management was primarily through emails and newsletters.
When we talk about our brand and franchise partners, we’re high-touch. It’s local store marketing, individual operators working their stores every day. Supporting that requires a lot of face-to-face engagement.
Yum! is a great organization full of smart people that treated me extremely well when we sold the business – and when we acquired the business back. But A&W got lost in that massive organization.
How was strategy communicated to the public?
We don’t have a national media presence and we won’t have one anytime soon. Communicating to the customer was easy. We developed support systems organizationally, but everything has to be local. We also knew we had to own social and digital as a fundamental value of our system. We had to do it in-house. We don’t use an agency. Getting our operators educated so they could manage their own Facebook page, communicating and targeting digital messages, was part of our marketing strategy.
How does A&W’s halo of nostalgia affect you in attracting millennials?
Everyone has an A&W story. Millennials have heard those stories, but haven’t necessarily experienced them.
We have authenticity. Under previous ownership, two-thirds of the stores were selling a bag-in-the-box premade product for root beer, our signature product, because it was easy. We made a concerted effort to reverse that. Five years later, 100% of our stores [1,100 locations worldwide] are making the root beer fresh daily [with a mug, not a plastic cup.]
Since we brought back hand-breaded chicken tenders and eliminated the freezer and fryer product in 2014, sales growth exceeded 60%. And who’s buying that? Millennials. We’re communicating the quality and authenticity in the store, on social, and on digital media. We take millennials as seriously as anyone else, a little more seriously because it’s a generation we almost lost.
However, our core customer is the boomer. So we have to have a foot in both camps. We’re moving into the future by reaching into our past. We don’t have to fabricate a story around the brand - we’ve got 98 years of history. We retain that familiarity with boomers and attract millennials with authenticity and heritage.
Would it make sense to merge with A&W Canada? [The companies split in 1956.]
It would be wonderful, but it likely would never happen, considering the way A&W Canada is structured legally and financially. A&W Canada is inspirational to what the future can hold for us and continues to grow average unit volume in the high-single/low-double digits year after year. We pay a lot of attention and have a good relationship with them.
What’s the strategy going forward?
Our value proposition has to be true quality. We look at every menu item and what we can do to enhance the quality and charge a fair, full price. No dollar menu. No value menu. We can’t compete because we don’t have the share of voice. We have to go with the quality message.
Given our ownership structure, there is no exit strategy. This is a long-term generational plan, which allows us to do the right things for the long term. We’d rather open one store tomorrow that’s successful for the next 50 years than open 50 stores that are open for one year.
What PR agencies do you work with?
We started working with our PR AOR Ritter Communications in Columbus, Ohio in December last year.