First Watch Restaurant Group Inc., the daytime-dining concept with 423 restaurants in 28 states, has filed for a possible initial public offering, the company said Tuesday.
The Bradenton, Fla.-based First Watch, in a Form S-1 statement filed with the Securities and Exchange Commission, said it is applying to trade common stock on the NASDAQ Global Select Market. The number of shares and price range have not yet been determined.
The breakfast-and-lunch-focused First Watch said it intends to use the proceeds from the offering to repay borrowings outstanding under the company’s credit facilities.
The private-equity firm Advent International in August 2017 acquired a majority stake in First Watch from Freeman Spogli & Co. At the time, the chain had more than 300 locations in 26 states.
A wide variety of restaurant companies this year have filed for or announced they are considering public offerings, including Sweetgreen, Portillo’s, Krispy Kreme and Dutch Bros. Coffee.
As of June 27, First Watch had 423 systemwide restaurants, including 335 company-owned units and 88 franchise restaurants. In the first half of the year, the company opened 15 new owned units and three franchise-operated restaurant openings. One company-owned restaurant was relocated and three franchise-owned restaurants were disenfranchised, the company said in its registration statement.
The company posted revenues of $436.4 million in 2019 and $342.4 million in 2020 with losses of $45.4 million in 2019 and $49.7 million in 2020, according to the registration statement.
First Watch CEO Chris Tomasso in June talked about new First Watch stores that have both a dedicated entrance and cookline to meet off-premises demand, as well as renovated outdoor dining spaces and new indoor/outdoor bars to go with brand’s growing alcohol program.
“Despite the challenges of the COVID-19 pandemic, First Watch remained committed to invest in growth throughout 2020 and 2021 and continued to open new restaurants,” the company said in its SEC filing. The company had 42 new restaurant openings in fiscal 2020 and 18 in the first half of 2021.
“Starting in March 2021, we began to consistently report positive same-restaurant sales growth measured against pre-COVID results, including 5.9%, 13.4%, 14.8% and 19.7% same-restaurant sales growth in March, April, May and June of 2021, respectively, relative to March, April, May and June of 2019,” the company said.
Sales and traffic improvements continued into July and August of this year, the company said.
In fiscal 2019, prior to the pandemic, First Watch generated an average unit volume of $1.6 million in a single shift (seven and a half hours daily).
New restaurant openings in the first half of this year, through June 27, have generated annualized average sales of $2 million, the company noted.
First Watch was founded in 1983.
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