First Watch
First Watch offers full-service breakfast, brunch, and lunch restaurants in a casual dining atmosphere. Known for its diverse menu options, the brand operates in the casual dining restaurant sector.
About First Watch
First Watch Restaurants, Inc., commonly referred to as First Watch, is an American restaurant chain, known for breakfast, brunch and lunch, based in Bradenton, Florida. As of August 2024, the chain has more than 630 locations in 32 states and 16,000 employees. First Watch is also the owner of Sun & Fork by First Watch, a fast-casual café concept located in Nashville, Tennessee.
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First Watch franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to begin operation of a First Watch® Restaurant ranges from $1,265,150 to $2,078,800. This includes an initial franchise fee of $40,000 and estimated opening crew expenses ranging from $5,000 to $25,000 [p.9, p.1].
What is the initial franchise fee?
The initial franchise fee is $40,000, which is due and fully earned upon signing the Agreement. This fee is nonrecurring and nonrefundable [p.68, p.9].
What are the ongoing royalty and advertising fees?
The franchisee agrees to pay a royalty of 4% of their restaurant's gross sales during each accounting period [p.68]. Advertising costs are recognized as incurred or when advertisements occur, with expenses ranging from $3.3 million to $6.4 million annually across fiscal years 2020-2022 and included in general and administrative expenses and other restaurant operating expenses [p.131]. The System Fund supports advertising programs for franchisees and all First Watch® Restaurants, but the specific advertising fees are not detailed in these excerpts [p.24].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires paying a Transfer fee equal to 50% of the then-current initial franchise fee [p.89]. This applies whether the transfer is among your owners or not.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement based on grounds stated in the Franchise Agreement, but such grounds must constitute 'reasonable cause' as defined by Virginia law [p.182]. Additionally, competition from the franchisor and operating restrictions are also relevant factors that could impact the agreement [p.3, p.3].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
Yes, you are granted an exclusive territory as long as you comply with the Franchise Agreement. However, this exclusivity does not extend to special venues such as airports, train stations, stadiums, and other specified locations [p.35, p.61]. Additionally, you may face competition from other franchisees or outlets owned by the company outside these special venues [p.37, p.60].
What training and ongoing support does the franchisor provide?
The franchisor provides initial management and new owner training at no cost for the first or second restaurant (excluding travel and living expenses), covering operating principal, general manager, and operations manager. For subsequent restaurants, a $5,000 fee per person may apply [p.9]. The training includes manuals, marketing materials, videos, and handouts [p.33], conducted at their locations or virtually as determined [p.71]. Ongoing support is included in the franchise agreement, though specific details are not provided in these excerpts.
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if you are purchasing one, but they do not make representations about a franchisee's future financial performance or the past performance of company-owned, affiliate-owned, or franchised outlets. Additionally, the franchisor does not share financial support with franchisees and does not prepare annual or periodic financial statements regarding Co-ops. [p.45, p.126]
What am I restricted to selling, and where must I buy supplies?
You are required to sell only the menu items, food products, and other products and services as approved by the franchisor. You cannot deviate from their standards without written consent [p.41]. Currently, you are not required to buy anything from the franchisor or its affiliates, but certain proprietary products may require you to use specific recipes and purchase them only from designated sources if they become part of the system [p.16]. For supplies like computers and point-of-sale systems, you must obtain these from an approved supplier as specified in the franchise agreement [p.28].