Company: FWRG
Filing Date: 2025-04-08
Form Type: ARS
Source: 0001789940-25-000033
Chunk: 72

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-04-08
Form: ARS
Chunk 72
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restaurant sales growth of 0.5% and (ii) the 53rd week of sales in 2023. Results of Operations The discussion that follows includes a comparison of our results of operations for 2024 and 2023. The following table summarizes our results of operations and the percentages of items in our Consolidated Statements of Operations and Comprehensive Income (Loss in relation to Total revenues or, where indicated, Restaurant sales for 2024 and 2023: 44

FISCAL YEAR (in thousands) 2024 2023 Change Franchise revenues: Royalty and system fund contributions $ 10,864 $ 13,464 $ (2,600) (19.3) % Initial fees 278 388 (110) (28.4) % Business combinations - revenues recognized 413 607 (194) — % Total Franchise revenues $ 11,555 $ 14,459 $ (2,904) (20.1) % The decrease in franchise revenues during 2024 as compared to 2023 was primarily driven by (i) the Company’s acquisitions of franchise-owned restaurants and (ii) $0.6 million of deferred franchise revenues recognized in 2023 in connection with the acquisitions of restaurants from franchisees. The decrease was partially offset by (i) revenues from franchise-owned NROs and (ii) $0.4 million of deferred franchise revenues recognized in 2024 in connection with the acquisitions of restaurants from our franchisees. Food and Beverage Costs The components of food and beverage costs at company-owned restaurants are variable by nature, change with sales volume, are impacted by product mix and are subject to increases or decreases in commodity costs. FISCAL YEAR (in thousands) 2024 2023 Change Food and beverage costs $ 223,097 $ 197,374 $ 25,723 13.0 % As a percentage of restaurant sales 22.2 % 22.5 % (0.3)% Food and beverage costs as a percent of restaurant sales decreased during 2024 as compared to 2023 primarily due to leveraging menu price increases. The decrease was partially offset by commodity inflation of 3.2%. Food and beverage costs increased during 2024 as compared to 2023 primarily as a result of (i) the 14.5% increase in restaurant sales, (ii) opening and acquiring restaurants in 2024, (iii) recognizing a full year of costs for restaurants opened and acquired in 202