The “dining concept” posts mixed financial results in Q3.
By Andrew Carlo
First Watch Restaurant Group, which bills itself as a “leading Daytime Dining concept serving breakfast, brunch and lunch,” announced that it is acquiring 15 of its franchise-owned restaurants.
The deal calls for the group, along with its subsidiaries, to purchase the locations in North Carolina and South Carolina for $49 million on a cash-free, debt-free basis, the company said. This includes a restaurant currently under construction, which is expected to open prior to the transaction.
First Watch is funding the buy through a combination of cash on hand and borrowings from its credit facility. A document detailing the transaction
According to First Watch, the deal is expected to close by mid-2025 and is subject to closing conditions. This move also represents “a significant incremental addition” to the 45 total franchised restaurants acquired across six accretive acquisitions since May 2023. First Watch noted in a statement issued by the Bradenton, Florida-based company.
“Strategic acquisitions of franchise-operated restaurants like this one continues to be an important part of our long-term growth and value creation strategy,” said Chris Tomasso, First Watch CEO and president. “These 16 restaurants and the corresponding development rights will help solidify corporate ownership of First Watch restaurants along the East Coast – and provide us with additional territories in which to grow organically for years to come.”
In its most recent quarterly financial report issued on Nov. 7, First Watch reported that sales for the third quarter 2024 increased nearly 15% to $251.6 million compared to sales of $219.2 million for the same period a year ago.
Same-restaurant sales declined 1.9% and same-restaurant traffic fell 4.4%, however. The company also reported that its net income for the period decreased to $2.1 million from $5.4 million in the prior third quarter marking a 61% falloff in profits.
During the third quarter, First Watch moved ahead with the opening of new locations. The company welcomed nine new restaurants in eight states. This brought its total to 547 restaurants with 466 company-owned and 81 franchise-owned in 29 states.
This past January, First Watch began the year by acquiring 21 franchise-owned restaurants and corresponding development rights in North Carolina for $75 million.
