The Urban Franchise Associate Opportunity IMAGINE

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1 The Urban Franchise Associate Opportunity IMAGINE your own A&W A&W has launched a brand new low-equity franchise model designed specifically for energetic young entrepreneurs like you. The Urban Franchise Associate program makes it possible for Millennials to purchase an A&W restaurant with unencumbered cash of just $125,000-$150,000.

2 Urban Franchise Associate Program Are you a young leader with an entrepreneurial spirit? Do you have a passion for food? Do you want to be your own boss? A&W s Urban Franchise Associate Program puts owning an urban A&W restaurant within your reach. Lower Up-Front Investment We know you re early in your career, so we ve designed an opportunity that allows you to open your own restaurant with unencumbered cash of just $125,000-$150,000. Learn the A&W System The Urban Franchise Associate program starts with extensive training and professional development. We ll teach you what you need to know about running a business and operating an A&W restaurant. Work While You Wait After completing the initial training, you will participate in a structured work experience program that pays you a salary while you wait for your new restaurant to be built. More than Just a Pay Cheque When your restaurant is up and running you ll pay yourself an income and take home profits. As your restaurant sales grow and your business expands, your earning potential will continue to increase. New Urban A&W Restaurants Our new urban restaurants are specifically designed to flourish in busy urban centres. Located in densely populated areas with high pedestrian traffic Open 24-hours Modern look and feel 1,500-2,000 square feet Seating for up to 45

3 You ll benefit from our extensive franchise Support System From initial start-up and training to ongoing operations and marketing, we ll help make sure your restaurant performs at the highest possible standards. Initial development and restaurant design Early decisions about site location and restaurant design will have a major impact on your restaurant s ability to attract customers and operate efficiently. That s why A&W s development experts are fully involved in every aspect of site selection, lease negotiation, site planning, restaurant design, and project consulting during the initial development stage. Training/Orientation We will provide you with intensive restaurant management training followed by a paid work experience program that will allow you to earn while you learn. Our current restaurant owners will be your best resource for learning how to successfully run an A&W they ve done it all before. Financing We have strong pre-existing relationships with Canada s leading lenders that will assist you in achieving your ideal financing arrangements. Operational support As your A&W restaurant settles into its regular routine, A&W business managers provide ongoing guidance on operational aspects of your business, including staffing, cost management and local marketing. Our business managers are an extraordinarily experienced team of senior managers whose job is to help you succeed. Marketing and promotional support At Home Office, we provide additional support to your business by promoting the A&W brand, building traffic for your restaurant and driving sales. Our corporate marketing team manages a national advertising plan that supports all of our restaurants across Canada. This plan is developed with comprehensive input from Brand Communications & Advertising, Market Research & Analysis, Sales Promotions, Menu Innovation & Implementation, Social Media, and Facility Design & Construction. Each year, with a full calendar of national television advertising support, we reach millions of Canadians across the country. A&W is also a leader in digital and social media advertising. Internal standards boards and councils Decisions about ongoing operating standards and menu content are conducted through our Standards Board, an executive body comprised of franchisees selected from their region and a number of senior corporate managers. In a similar way, decisions about advertising expenditures and national promotional programs are made by a group of elected franchisees and corporate personnel who serve on our National Advertising Advisory Council. These two bodies give strong evidence of how, by working together, we are able to develop marketing and operational programs that will help grow your business. You ll also be invited to attend regular regional meetings and national conventions, where you ll gain new knowledge and share ideas with senior management and other A&W franchisees. In no time, you ll become a part of our energetic, results-oriented A&W team.

4 Changing the face of fast food In 2013, A&W embarked on a journey to source simple, great-tasting ingredients, farmed with care. Our guests were asking us for more natural ingredients, and we made it our mission to deliver on this request. In late 2013, we launched our Beef Guarantee, becoming the first national burger chain to serve beef raised without the use of hormones or steroids. In 2014, we followed up with the launch of our Egg and Chicken Guarantees, becoming the first national burger chain to serve eggs from hens fed a vegetarian diet without animal by-products, and chicken raised without the use of antibiotics. In 2015 we introduced certified organic and Fairtrade coffee, brewed by Van Houtte. Consumer measures indicate that these changes are successfully building our recognition for food quality. We are increasing our market share every single month, winning with guests who are thrilled with the changes we ve made. Our commitment to sustainability doesn t end with our ingredients. We also have a strong focus on reducing the environmental footprint of our restaurants. In 2014 we introduced ceramic plates and stainless steel cutlery in all of our restaurants that have their own dining rooms over 560 restaurants across the country. We are also always looking for ways to reduce our waste to landfills. One of the biggest changes we implemented was switching from foil burger bags to compostable paper bags. We are steadily working towards our goal to eliminate waste completely from our restaurants. A recent waste audit showed that only 12% of waste in our restaurants is true landfill waste, everything else is either compostable or recyclable. With the changes we ve made, we are able to eliminate over 1,000,000 pounds of waste from landfills each year. Bacon_Guarantee_Wornout_Vert_Rev_EN The FAIRTRADE Certification Mark is the intellectual property of Fairtrade International and is internationally registered as a trademark. Trade-mark of / marque de commerce de Keurig Canada Inc. used under licence / utilisée sous permis. Available at participating restaurants.

5 Strategy & climate A powerful combination of Strategy and Climate has been the foundation for A&W s success over the last 40 years. A&W has been using the same process for strategic renewal since the mid 1970 s. A central principle in this process is that strategic renewal and organizational Climate are twins. Climate A&W s success is built on its ability to harness the energy, commitment and excellence of all people associated with the business, including its employees, franchisees, and suppliers. The core element that enables this is the Climate Goal process. A&W Climate Goals focus the organization on key behaviours and practices to successfully achieve our strategic objectives. The Climate Goals are an articulation of how we work together here. They define the ideal Climate in which we, as a group of diverse human beings, will work to carry out our strategy. To instill the benefits of Climate into their everyday operations, franchise operators receive training on how to effectively run Climate Building Meetings with their employees, and how to equip their supervisors and managers with excellent Climate skills. New employee training introduces Climate using video interviews with franchisees and staff, followed by detailed discussion during the orientation process. The Climate Goals are used in the twice-annual Climate meetings held by every restaurant, management, departmental and functional team at A&W. Practicing excellent Climate builds better working relationships in the restaurant, resulting in more productive employees, lower turnover, and higher profitability. These initiatives allow operators to lead by example to maximise the strategic advantage of Climate, particularly in today s challenging labour environment.

6 ABOUT US A&W may have a long and rich history, but our success comes from our ability to adapt to the changing times, constantly innovating to meet changing consumer needs s 1970s The first A&W drive-in opens in Winnipeg. The concept takes off, thriving in the cars-and-music culture of the late 50s and 60s. A&W restaurant locations continue to multiply, reaching over 200 drive-ins by the end of the decade. Fundamental shifts in the marketplace and the rapid growth of retail shopping centres lead A&W to embark on a new strategy, becoming the leader in food court restaurant service. 1980s 1990s Focusing on its recognized strengths of taste and food quality, A&W accelerates expansion with freestanding restaurants in Western Canada. Following a major overhaul of the menu, operating systems, and facilities design, A&W commences an aggressive expansion program. 2000s 2010s A&W initiates freestanding expansion plans in Ontario and Quebec, offering, for the first time franchises as a multi-unit offering. A&W unveils a brand new concept the Urban restaurant as well as a brand new high-visibility freestanding restaurant design. A&W also innovates its menu with the Buddy Burger line-up, thick-cut Russet fries, sweet potato fries, and Spicy Chipotle Chubby Chicken sandwiches and wraps. A&W launches its Beef Guarantee, becoming the first national burger chain to serve beef raised without the use of hormones or steroids. A&W launches its Egg and Chicken Guarantees, once again becoming the first national burger chain to serve eggs from hens fed a vegetarian diet without animal by-products and chicken raised without the use of antibiotics. A&W opened its 200th restaurant in Ontario, in the heart of downtown Toronto. A&W launches its Organic Coffee Guarantee, introducing certified organic and Fairtrade coffee brewed by Van Houtte. A&W launches the Urban Franchise Associate program; a brand new low-equity franchise model designed specifically for energetic young entrepreneurs. A&W launches its Bacon Guarantee, becoming the first national burger restaurant to serve bacon from pork raised without the use of antibiotics.

7 Business & Ownership History A&W may have a long and rich history, but our success comes from our ability to adapt to the changing times, constantly innovating to meet changing consumer needs A&W Food Services of Canada Inc (A&W) is acquired by Unilever Canada Limited and becomes a Canadian owned and operated business, separate from A&W operations in the United States. A&W management, together with a group of institutional investors, purchases the A&W restaurant business from Unilever Canada Limited. A&W management acquires the interests of the institutional investors, making A&W a 100% Canadian owned and operated company. The A&W Revenue Royalties Income Fund is listed on the Toronto Stock Exchange (TSX: AW.UN) by way of an initial public offering. The fund owns the A&W trademarks and licenses them to A&W, which continues to operate as a separate company. In the first quarter of 2015, A&W reaches the $1 billion system sales threshold on an annualized basis. Industry Awards & Recognition A&W is a highly successful leader in Canada s Quick Service (QSR) industry. We are a member of the Canadian Franchise Association s Hall of Fame, and the marketer of Canada s number one retail Root Beer brand. In 2015, A&W was named Marketer of the Year by the British Columbia chapter of the American Marketing Association, and received Food Service and Hospitality Magazine s Pinnacle Award for National Company of the Year. In 2016, A&W was awarded the prestigious Maillon d Or in the Franchisor of the Year category by the Conseil québécois de la franchise. A&W has been a Platinum Member of Canada s Best Managed Companies since 2009.

8 Getting started You ve already begun the application process by visiting our website and downloading this document. It s our objective to position the right people for success in our business, and a rigorous franchisee approval process helps to ensure that we do. If you re interested in learning more about the Urban Franchise Associate Program, fill in our short contact form at urban.aw.ca. Once you ve submitted the form, you ll be contacted by a member of our Franchise Sales team.

9 Frequently Asked Questions I don t have any business experience, can I really own and operate an A&W restaurant? Absolutely! The Urban Franchise Associate program is specifically designed for energetic young Millennials. We ll provide you with extensive training and professional development, teaching you what you need to know about running a business and operating an A&W restaurant. How much money do I need to be eligible for this opportunity? The Urban Franchise Associate program makes it possible for young entrepreneurs to purchase an A&W restaurant with unencumbered cash of just $125,000-$150,000. We have strong relationships with Canada s major banks, and will connect you with one of these banking partners if additional financing is required. What is included in this cost? This investment will cover your initial franchise fee, equipment, and start-up costs. Not included in the initial investment are inventory costs and working capital of existing facilities. When will I be required to make this investment? Once approved as a franchisee, you will pay a franchise fee of $55,000 before your training starts. The remainder of the investment is used for equipment and is due once a site for your restaurant has been identified. Who is responsible for finding a location and negotiating the lease? We will help you find the right location for your new restaurant. We ll provide ongoing support during the initial development process, guiding you through site selection, lease negotiation, site planning, and restaurant design. How long does it take to build a new A&W restaurant? The typical restaurant construction period can last 5-12 months. What kind of training and support will I receive? Along with business skills training and other professional development, we will provide you with six weeks of intensive in-store training. You ll learn everything from how to batter and bread A&W s handmade onion rings, to how to operate your restaurant and create a positive work environment. As your A&W restaurant settles into its regular routine, A&W business managers provide ongoing guidance on operational aspects of your business, including staffing, cost management and local marketing. You ll also be invited to attend regular regional meetings and national conventions, where you ll gain new knowledge and share ideas with senior management and other A&W franchisees.

10 Frequently Asked Questions How long is the training program? Training for the Urban Franchise Associate program will last between 5-12 months. How much will I earn while training? You can expect to earn an average annual salary of $44,000 while participating in the Urban Franchise Associate training program. Where will I buy equipment and supplies? You will purchase equipment and supplies from our approved network of trusted vendors. Will I be required to pay service and marketing fees? Yes, as an A&W franchisee you will pay a service fee of 2.5% of net sales, and contribute 2.5% of net sales to a national advertising fund. Where is A&W currently offering Urban Franchise Associate opportunities? We are currently looking for new franchisees to open Urban restaurants in Toronto. I m interested in learning more about becoming an Urban Franchise Associate, what are the next steps? If you d like to learn more about becoming an Urban Franchise Associate, please complete and submit our contact form at urban.aw.ca. You can also view a list of our upcoming events A&W Trade Marks Limited Partnership