Buying an A&W franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 5 7(a) loans to buy an existing A&W (classified mostly as Limited-Service Restaurants), totaling $6M. The median loan was $1,410,000, 119% higher than the $645,250 median for all SBA-financed acquisitions. 1 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of A&W resale loans landed between $1,027,000 and $1,500,000.
- Lender experience exists. Clare Bank, National Association alone has financed 2 A&W resales.
- Guaranty. The SBA guaranteed 75% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing an A&W resale
The median SBA 7(a) loan for an A&W resale was $1,410,000 across 5 loans (FY2018 to FY2026). Clare Bank, National Association, The Bancorp Bank National Association and Atlantic Union Bank have financed the most A&W resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
A&W acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 1 | $450K | $450,000 | |
| FY2019 | 0 | $0 | - | |
| FY2020 | 0 | $0 | - | |
| FY2021 | 2 | $2.4M | $1,218,500 | |
| FY2022 | 0 | $0 | - | |
| FY2023 | 1 | $1.6M | $1,600,000 | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 1 | $1.5M | $1,500,000 | |
| FY2026 | 0 | $0 | - |
How often do these acquisition loans fail?
Fewer than 20 A&W acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
Terms signed in the LOI shape the purchase agreement that follows.
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Lenders financing A&W resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Clare Bank, National Association | 2 | 40.0% | $1.5M | |
| 2 | The Bancorp Bank National Association | 1 | 20.0% | $1.6M | |
| 3 | Atlantic Union Bank | 1 | 20.0% | $1.5M | |
| 4 | Hometown Bank | 1 | 20.0% | $1.4M |
States where A&W units are bought
Terms signed in the LOI shape the purchase agreement that follows.
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How lenders classify A&W
Lenders code each loan to a NAICS industry. For A&W the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Limited-Service Restaurants | 4 | 80.0% | $4.6M | |
| 2 | Gasoline Stations with Convenience Stores | 1 | 20.0% | $1.4M |
Questions buyers ask
How much do buyers borrow to buy an A&W franchise?
The median SBA 7(a) loan for an A&W resale was $1,410,000 across 5 loans (FY2018 to FY2026). The middle half of loans ran from $1,027,000 to $1,500,000. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance A&W acquisitions?
Clare Bank, National Association has made the most SBA acquisition loans for A&W (2, 40% of the total). The Bancorp Bank National Association, Atlantic Union Bank, Hometown Bank follow.
What interest rate and term do A&W acquisition loans carry?
The average initial rate at approval was 6.85% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 25 years.
Is an A&W resale riskier than other SBA-financed acquisitions?
Too few A&W acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are A&W units being bought with SBA loans?
Iowa (2), Wisconsin (2), Colorado (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
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Related
- All Limited-Service Restaurants acquisitions
- Iowa acquisitions
- Wisconsin acquisitions
- Colorado acquisitions
- The Bancorp Bank National Association
- All franchise brands
Brand name as recorded by lenders in the SBA file: "A&W" (franchise code S0029). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.