Company: FWRG
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001789940-25-000086
Chunk: 66

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 66
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7,939 $8,889 (10.7)%

The decrease in franchise revenues during the thirteen and thirty-nine weeks ended September 28, 2025 as compared to the same periods in the prior year was primarily driven by the Company’s acquisitions of franchise-owned restaurants, partially offset by franchise revenues from the franchise-owned NROs.

Food and Beverage Costs

Food and beverage costs at company-owned restaurants vary with sales volume and are subject to increases and declines in commodity costs.

THIRTEEN WEEKS ENDEDTHIRTY-NINE WEEKS ENDED(in thousands)SEPTEMBER 28, 2025SEPTEMBER 29, 2024ChangeSEPTEMBER 28, 2025SEPTEMBER 29, 2024ChangeFood and beverage costs$69,730 $55,865 24.8 %$208,355 $163,852 27.2 %As a percentage of restaurant sales22.2 %22.4 %(0.2)%23.2 %22.0 %1.2 %

Food and beverage costs as a percent of restaurant sales decreased during the thirteen weeks ended September 28, 2025 compared to the same period in the prior year primarily as a result of leverage associated with menu price increases, partially offset by commodity inflation experienced in bacon and coffee.

Food and beverage costs as a percent of restaurant sales increased during the thirty-nine weeks ended September 28, 2025 as compared to the same period in the prior year primarily due to (i) commodity inflation experienced in eggs, coffee, bacon and avocados, and (ii) increased portion size in certain menu items, partially offset by the leverage associated with menu price increases.

Food and beverage costs increased during the thirteen and thirty-nine weeks ended September 28, 2025 as compared to the same periods in the prior year primarily as a result of (i) the increase in the number of company-owned restaurants, (ii) commodity inflation and (iii) increased portion size of meat in certain menu items.

Labor and Other Related Expenses

Labor and other related expenses 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 ENDEDTHIRTY-NINE WEEKS ENDED(in thousands)SEPTEMBER