First Watch announced on Monday that the Bradenton, Fla.-based breakfast and brunch concept will be completing its second-largest franchisee acquisition deal in company history. First Watch has agreed to acquire 16 franchise-owned restaurants (including one restaurant currently under construction), as well as development rights in North Carolina and South Carolina for $49 million.
“Strategic acquisitions of franchise-operated restaurants like this one continues to be an important part of our long-term growth and value creation strategy,” Chris Tomasso, First Watch CEO and president, said in a statement. “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.”
The 16-unit acquisition is expected to be completed by April 2025, with the restaurant under construction likely to open before then.
The 16 restaurants included in this transaction will bring the number of formerly franchised First Watch locations re-acquired by the company since May 2023 to 45 restaurants. These 45 acquisitions have occurred over the span of six transactions that have been in the works since before First Watch went public in October 2021. The largest franchisee transaction in First Watch history occurred in January, when the company agreed to acquired 21 restaurants in North Carolina.
“We expect these restaurants will generate unit volumes and restaurant-level operating profit margins in line with our company-owned restaurants, and we look forward to welcoming the teams from these restaurants into our organization,” Tomasso said.
The acquisition was announced shortly after First Watch released its third quarter earnings, , in which the company announced a decline in both same-store sales and traffic, driven largely by the consumer spending environment. The company noted a positive trend of lower employee turnover rates and announced that it will be leaning into aggressive growth strategies and targeted marketing in order to pick up new customers in new markets nationally.
First Watch has 547 restaurants, including 81 franchisee-owned, and 466 company-owned.
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