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Millennials Tapped to Drive A&W Expansion

Barmil Mallhi will open an A&W in The Junction on Feb. 23, 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.

Her restaurant at Dundas St. W. and Keele St. is near completion.

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, president and chief operating officer, A&W.

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 also 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, foodservice Canada, 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.

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.

“We started with beef . . . and we were really amazed with how positive the response was,” said Senecal.

“I like the idea of better ingredients being offered to our guests,” said Mallhi.

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