First Watch, a prominent daytime dining company, is set to expand its corporate ownership by acquiring 16 restaurants in North and South Carolina. This strategic move, valued at $49 million, includes 15 franchise restaurants and one currently under construction, which is expected to open before the deal’s conclusion. This acquisition is anticipated to finalize by mid-April 2025, as per First Watch’s announcement.
First Watch, headquartered in east Manatee County, currently operates over 540 restaurants nationwide, with 466 of these under corporate ownership and 81 franchised. The newly announced acquisition aligns with the company’s strategy to incorporate franchise-operated restaurants into its corporate framework, a key component of its long-term growth and value creation strategy. CEO and President Chris Tomasso emphasized the importance of these acquisitions in a recent statement, noting the company’s ambitious goal of reaching 2,200 locations over time.
In the past 18 months, First Watch has acquired 45 franchise restaurants through six transactions, including a significant $75 million deal which closed in April. This previous deal involved 21 restaurants and development rights from a franchisee in the Raleigh-Durham area of North Carolina. The current acquisition will further bolster First Watch’s presence along the East Coast and enhance its ability to grow organically in the region.
The sellers in this transaction include Good Morning Carolinas LLC, composed of entities such as Houston Pizza Venture, HPV-C LLC, FV3 LLC, and individuals including Christopher Osborn, Michael White, and Joseph Sea, as per a recent SEC filing. Tomasso stated that these restaurants and the corresponding development rights would solidify corporate ownership and provide additional growth territories.
Financially, First Watch plans to fund this $49 million acquisition through available cash and borrowings under its credit facility. The company reported $891.6 million in revenue for 2023, demonstrating its strong financial position. Tomasso expressed confidence that the new acquisitions would generate similar unit volumes and operating profit margins as existing company-owned stores.
This acquisition highlights First Watch’s ongoing efforts to streamline operations and enhance profitability by bringing more restaurants under direct management. The company is poised to integrate the newly acquired restaurant teams into its organization seamlessly, solidifying its footprint and operational efficiency.
First Watch’s strategic acquisition of 16 restaurants marks a significant step in its expansion along the East Coast. By bringing these franchise operations into the corporate fold, the company not only strengthens its presence but also positions itself for continued organic growth. This move reflects First Watch’s broader strategy to achieve its long-term goals and reinforce its standing in the competitive restaurant industry.
Source: BusinessObserverFL
