First Watch Acquires 16 Franchise Restaurants in North and South Carolina

Rhea-AI Summary

First Watch Restaurant Group has completed the acquisition of 16 franchise-owned restaurants in North and South Carolina for $49 million, marking its second-largest franchisee deal in company history. The strategic purchase includes locations in the Charlotte and Concord markets in North Carolina, and the Columbia and Greenville markets in South Carolina.

Key highlights of the acquisition:

• Strengthens corporate ownership along the East Coast
• Adds over 500 new employees to the corporate system
• Secures additional territories for future organic growth
• Expected to generate unit volumes and restaurant-level operating profit margins aligned with company-owned locations

This transaction continues First Watch's expansion strategy, bringing their total franchise acquisitions to 64 restaurants across eight deals since May 2023. The deal was completed on a cash-free, debt-free basis, reinforcing the company's position as a leading Daytime Dining concept serving breakfast, brunch and lunch.

Positive

• Strategic acquisition of 16 franchise restaurants for $49 million strengthens corporate presence on East Coast
• Acquisition includes valuable development rights in North and South Carolina markets
• Company expects acquired restaurants to generate unit volumes and margins in line with existing corporate-owned locations
• Demonstrates consistent execution of growth strategy with 64 franchise acquisitions since May 2023
• Expands presence in key metropolitan areas: Charlotte, Concord, Columbia, and Greenville

Negative

• Significant cash outlay of $49 million for acquisition may impact short-term liquidity
• Integration risks associated with absorbing 500+ new employees into corporate system
• Increased operational complexity from managing additional corporate-owned locations

Insights

Financial Analyst

First Watch's $49M acquisition of 16 Carolina franchises strengthens East Coast presence, continuing strategic franchise consolidation for long-term growth.

First Watch Restaurant Group's $49 million acquisition of 16 franchised restaurants in the Carolinas represents a significant strategic development in the company's growth trajectory. This transaction, described as their second-largest franchisee deal historically, demonstrates systematic execution of their franchisee consolidation strategy, having acquired 64 franchise locations across eight separate deals since May 2023.

The acquisition serves dual strategic purposes: It strengthens First Watch's corporate-owned restaurant presence along the East Coast while simultaneously securing territorial rights that enable future organic expansion in these markets. The company has explicitly stated expectations that these acquired restaurants will generate unit volumes and restaurant-level operating profit margins comparable to their existing corporate locations.

From an operational perspective, this move brings over 500 employees into First Watch's corporate system, creating both opportunities and responsibilities for cultural integration. The transaction structure (cash-free, debt-free basis) suggests a clean acquisition designed to facilitate smooth integration into existing operations.

The geographic footprint of this acquisition spans key demographic market areas (DMAs) including Charlotte and Concord in North Carolina, and Columbia and Greenville in South Carolina. This regional consolidation should provide operational efficiencies through increased density in these markets.

This move aligns with a broader industry trend where established restaurant concepts reacquire franchise operations to gain greater operational control, ensure brand consistency, and capture the full economic benefit of successful locations. For First Watch, which specializes in the daytime dining segment, securing direct ownership in these markets reflects confidence in both their operational model and the long-term potential of these territories.

Acquisition Marks Second Largest Franchisee Deal in First Watch’s History, Underscores Long-term Growth Strategy

BRADENTON, Fla., April 28, 2025 (GLOBE NEWSWIRE) -- First Watch Restaurant Group, Inc. (NASDAQ: FWRG) (together with its subsidiaries “First Watch” or the “Company”), the leading Daytime Dining concept serving breakfast, brunch and lunch, today completed its previously announced acquisition of 16 of its franchise-owned restaurants and corresponding development rights in North Carolina and South Carolina for an aggregate purchase price of $49 million on a cash-free, debt-free basis.

“The acquisition of these 16 locations helps solidify corporate ownership of First Watch restaurants along the East Coast – and provides us with additional territories to grow organically for years to come,” said Chris Tomasso, First Watch CEO & President. “The strategic acquisition of franchise-operated restaurants continues to be an important part of our long-term growth and value creation strategy, and we expect these restaurants will generate unit volumes and restaurant-level operating profit margins in line with our Company-owned restaurants. Beyond that, though, this acquisition fortifies our organization and strengthens our ranks as we welcome more than 500 new employees into our corporate-owned system and ‘You First’ culture — an incredible responsibility that’s very important to us.”

The 16 acquired restaurants are located in the Charlotte and Concord DMAs in North Carolina, and the Columbia and Greenville DMAs in South Carolina.

First Watch has acquired 64 total franchised restaurants across eight acquisitions since May 2023.

About First Watch

First Watch is an award-winning Daytime Dining concept serving made-to-order breakfast, brunch and lunch using fresh ingredients. A recipient of hundreds of local “Best Breakfast” and “Best Brunch” accolades, First Watch’s award-winning chef-driven menu rotates five times a year and includes elevated executions of classic favorites alongside specialties such as its Quinoa Power Bowl, Lemon Ricotta Pancakes, Chickichanga, Morning Meditation fresh juice and signature Million Dollar Bacon. After first appearing on the list in 2022 and 2023, First Watch was named 2024’s #1 Most Loved Workplace^® in America by Newsweek and the Best Practice Institute. In 2023, First Watch was named the top restaurant brand in Yelp’s inaugural list of the top 50 most-loved brands in the U.S. In 2022, First Watch was awarded a sought-after MenuMasters honor by Nation's Restaurant News for its seasonal Braised Short Rib Omelet. First Watch operates more than 570 First Watch restaurants in 30 states. For more information, visit www.firstwatch.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to any historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “outlook,” “potential,” “project,” “projection,” “plan,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other similar expressions. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed herein, in our Annual Report on Form 10-K, including “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our other filings with the SEC, accessible on the SEC’s website at www.sec.gov and the Investors Relations section of the Company’s website at https://investors.firstwatch.com/financial-information/sec-filings. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: uncertainty regarding the Russia-Ukraine war, Israel-Hamas war and the related impact on macroeconomic conditions, including inflation, as a result of such conflicts or other related events; our vulnerability to changes in economic conditions and consumer preferences; our inability to successfully open new restaurants or establish new markets; our inability to effectively manage our growth; potential negative impacts on sales at our and our franchisees’ restaurants as a result of our opening new restaurants; a decline in visitors to any of the retail centers, lifestyle centers, or entertainment centers where our restaurants are located; lower than expected same-restaurant sales growth; unsuccessful marketing programs and limited time new offerings; changes in the cost of food; unprofitability or closure of new restaurants or lower than previously experienced performance in existing restaurants; our inability to compete effectively for customers; unsuccessful financial performance of our franchisees; our limited control over our franchisees’ operations; our inability to maintain good relationships with our franchisees; conflicts of interest with our franchisees; the geographic concentration of our system-wide restaurant base in the southeast portion of the United States; damage to our reputation and negative publicity; our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media; our limited number of suppliers and distributors for several of our frequently used ingredients and shortages or disruptions in the supply or delivery of such ingredients; information technology system failures or breaches of our network security; our failure to comply with federal and state laws and regulations relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection, advertising and consumer protection; our potential liability with our gift cards under the property laws of some states; our failure to enforce and maintain our trademarks and protect our other intellectual property; litigation with respect to intellectual property assets; our dependence on our executive officers and certain other key employees; our inability to identify, hire, train and retain qualified individuals for our workforce; our failure to obtain or to properly verify the employment eligibility of our employees; our failure to maintain our corporate culture as we grow; unionization activities among our employees; employment and labor law proceedings; labor shortages or increased labor costs or health care costs; risks associated with leasing property subject to long-term and non-cancelable leases; risks related to our sale of alcoholic beverages; costly and complex compliance with federal, state and local laws; changes in accounting principles applicable to us; our vulnerability to natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism; our inability to secure additional capital to support business growth; our level of indebtedness; failure to comply with covenants under our credit facility; and the interests of our largest stockholder may differ from those of public stockholders. For additional discussion of factors that could impact our operational and financial results, please refer to our filings with the SEC, accessible on the SEC’s website at www.sec.gov and the Investors Relations section of the Company’s website at https://investors.firstwatch.com/financial-information/sec-filings. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual financial condition, results of operations, future performance and business may vary in material respects from the performance projected in these forward-looking statements.

Investor Relations Contact:
Steven L. Marotta
941-500-1918
investors@firstwatch.com

Media Relations Contact:
Jenni Glester
407-864-5823
jglester@firstwatch.com

FAQ

How many restaurants did First Watch (FWRG) acquire in North and South Carolina in April 2025?

First Watch acquired 16 franchise-owned restaurants in North and South Carolina for $49 million on a cash-free, debt-free basis in April 2025.

Where are the newly acquired First Watch (FWRG) restaurants located in the Carolinas?

The 16 acquired restaurants are located in the Charlotte and Concord DMAs in North Carolina, and the Columbia and Greenville DMAs in South Carolina.

How many franchise restaurants has First Watch (FWRG) acquired since May 2023?

First Watch has acquired a total of 64 franchised restaurants across eight acquisitions since May 2023.

What is the expected financial impact of First Watch's Carolina restaurant acquisition?

First Watch expects these acquired restaurants to generate unit volumes and restaurant-level operating profit margins in line with their Company-owned restaurants.

How many new employees joined First Watch (FWRG) through the Carolina acquisition?

The acquisition brought more than 500 new employees into First Watch's corporate-owned system.