Company: FWRG
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001789940-25-000072
Chunk: 40

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 2024 and June 29, 2025, (ii) $7.0 million from 19 restaurants acquired from franchisees between June 30, 2024 and June 29, 2025, (iii) menu price increases and (iv) an increase in same-restaurant traffic, partially offset by increased promotional usage.

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Franchise Revenues

Franchise revenues are comprised of sales-based royalty fees, system fund contributions and the amortization of upfront initial franchise fees, which are recognized as revenue on a straight-line basis over the term of the franchise agreement. Franchise revenues in any period are directly influenced by the number of open franchise-owned restaurants.

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeFranchise revenues:Royalty and system fund contributions$2,451 $2,661 (7.9)%$5,038 $5,670 (11.1)%Initial fees55 60 (8.3)%117 162 (27.8)%Business acquisitions - franchise revenues recognized398 $383 3.9 %398 $413 (3.6)%Total Franchise revenues$2,904 $3,104 (6.4)%$5,553 $6,245 (11.1)%

The decrease in franchise revenues during the thirteen and twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year was primarily driven by the Company’s acquisitions of 19 franchise-owned restaurants, partially offset by franchise revenues from the nine franchise-owned NROs between June 30, 2024 and June 29, 2025.

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.

THIRTEEN WEEKS ENDEDTWENTY-SIX WEEKS ENDED(in thousands)JUNE 29, 2025JUNE 30, 2024ChangeJUNE 29, 2025JUNE 30, 2024ChangeFood and beverage costs$71,978 $55,803 29.0 %$138,625 $107