A&W returning headquarters to Lexington

Root beer headquarters returning to Lexington

ssloan@herald-leader.comDecember 9, 2011 

The new owners of the Long John Silver's and A&W restaurant announced Thursday that they will continue to run the companies from Kentucky after the purchase from Louisville-based Yum Brands is completed later this month.

In a twist, though, Long John Silver's, which was founded in Lexington, will continue to be based in Louisville. A&W will return to Lexington, where it was based for a time before being acquired by Yum.

Behind A&W's return to Lexington is Kevin Bazner, who is leading the company named A Great American Brand that is acquiring A&W Restaurants.

Bazner came to work in Lexington when A&W moved its headquarters here after buying Long John Silver's in the late 1990s.

"I've maintained my residence here, even though for the past five or six years, I've worked outside of the state," said Bazner, whose most recent work was with franchising for Smoothie King.

"There are a lot of talented professionals in town," Baz ner said. The headquarters will employ roughly 30 people to start, he said. The company's ownership is a partnership among the national A&W franchisee association, the brand's largest overseas franchisee and Bazner.

On Thursday, the Kentucky Economic Development Finance Authority approved state tax incentives for the ownership, which estimated costs of $1.89 million to place its headquarters in Lexington, according to state documents. Assuming the company hires 30 people within 10 years, the tax incentive deal will allow it to keep $600,000 that it would otherwise pay in taxes.

The company could potentially double its employee base to 60 in Lexington in the next five years, though, as it seeks to get its footing in its first year and then focus on growth after that, Bazner said.

"When we sold the business to Yum ... we had a corporate staff here closer to 85 to 90 people," said Bazner, who was president and chief operating officer at the time of A&W's sale to Yum Brands in 2003.

To learn about applying for jobs at the headquarters, go to AWrestaurants.com.

Since the sale to Yum, A&W and Long John Silver's have been overshadowed by Yum's KFC, Pizza Hut and Taco Bell brands. A&W and Long John Silver's accounted for less than 5 percent of Yum's 37,000 restaurants worldwide when the company announced its intention earlier this year to sell the chains and focus on its core brands.

And therein lies the opportunity, Bazner said: There are 1,200 A&Ws worldwide, roughly 850 in the United States and the rest overseas, primarily in the Asia-Pacific region.

"The opportunity is having a dedicated team of professionals focusing on a singular brand rather than being the smallest of a five-brand portfolio," he said. "That will present a tremendous opportunity for us."

Bazner said he sees growth potential in smaller cities and non-traditional locations, including shopping malls, airports or universities.

"Instead of trying to battle it out on the ground with the big guys, the real core strength of A&W has always been and continues to be really Smaller Town USA," he said.

Meanwhile, the new ownership of Long John Silver's, a group of franchisees and other investors called LJS Partners, anticipates employing 60 in Louisville at its headquarters. The state approved incentives of $1.5 million for the company, which was started in Lexington in 1969, when a prototype Long John Silver's Fish 'n' Chips was built on Southland Drive.

The company thrived for years under the ownership of Jerrico, which bought it in 1975. Jerrico also operated Jerry's restaurants and founded Fazoli's. Jerrico was taken private in 1989 in a $626 million leveraged buyout, leaving Long John Silver's with $275 million in high-interest debt. The company struggled with the debt, and Long John Silver's sought bankruptcy protection in June 1998. A year later, A&W bought the chain for $220 million and then was bought by Yum several years later.

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