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Roy Allen purchased a root beer formula from a Arizona pharmacist and in June of 1919 he created the first mug of A&W Root Beer. Well actually, it wasn't until 1922 that this secret blend of herbs, barks, and other ingredients would be known as A&W Root Beer. After mixing up his first batch in 1919 Allen opened a road side root beer stand in Lodi, California. He then opened a second stand in Stockton, California. This was one of the first drive-in restaurants that featured curb side service. Initially A&W used "tray boys" but soon changed to using "tray girls." A&W also popularized the big heavy glass mug. In 1922, Allen and one of his employees from the Lodi stand started a partnership. They combined the first letters from their last names (the partners name was Frank Wright) and created the name A&W Root Beer. They opened three more stands in Sacramento, and then continued expanding throughout Northern & Central California. In 1924, Allen bought out Wright and then he aggressively started franchising his concept. By 1933 he had over 170 franchised outlets. Allen sold the franchisees the root beer concentrate, and the franchises produced their root beer right there on the premises. During the Second World War all expansion plans had to be put on hold, but after the war ended the company once again began expanding and by 1950 it had grown to 450 franchises. 1950 was also the year that Roy Allen decided to retire, and sold his interest in A&W Root Beer to Gene Hurtz. Mr. Hurtz took advantage of the booming economy of the 1950s and by 1960 A&W Root Beer had expanded to over 2,000 franchises. He also took advantage of the widespread use of automobiles as they went well with the drive-in concept.

Over the years A&W Root Beer would see it's corporate ownership pass from one organization to organization. In 1971, A&W Beverages, Inc was created to bottle A&W Root Beer. A&W Restaurants, Inc. is the other entity. Now owned by Cadbury Schweppes

 In 1963, the A&W Root Beer Company was sold to the J. Hungerford Smith Company, the firm which had manufactured A&W Root Beer concentrate since 1921.