Company: FWRG
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001789940-25-000072
Chunk: 65

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 65
---
 franchisees between June 30, 2024 and June 29, 2025, (ii) commodity inflation and (iii) increased portion size of meat in certain menu items.

Labor and Other Related Expenses

Labor and other related expenses are variable by nature and include hourly and management wages, bonuses, payroll taxes, workers’ compensation expense and employee benefits. Factors that influence labor costs include minimum wage and payroll tax legislation, health care costs, the number and performance of our company-owned restaurants and increased competition for qualified staff.

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeLabor and other related expenses$101,310 $83,841 20.8 %$198,064 $163,576 21.1 %As a percentage of restaurant sales33.2 %32.8 %0.4 %33.9 %33.1 %0.8 %

Labor and other related expenses as a percentage of restaurant sales increased during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year primarily as a result of increases in (i) wage rates and (ii) health insurance costs, partially offset by the leverage associated with menu price increases.

The increase in labor and other related expenses during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year was primarily due to (i) the increase in the number of restaurants and related headcount, (ii) wage increases and (iii) increased health insurance costs.

24

Other Restaurant Operating Expenses

Other restaurant operating expenses consist of marketing and advertising expenses, utilities, insurance and other operating variable expenses incidental to operating company-owned restaurants, such as operating supplies (including paper products, menus and to-go supplies), credit card fees, repairs and maintenance, and third-party delivery services fees.

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeOther restaurant operating expenses $46,603 $37,549 24.1 %$90,862 $74