Company: FWRG
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001789940-25-000072
Chunk: 64

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 64
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4ChangeJUNE 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 $107,987 28.4 %As a percentage of restaurant sales23.6 %21.8 %1.8 %23.7 %21.8 %1.9 %

Food and beverage costs as a percent 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 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 twenty-six weeks ended June 29, 2025 as compared to the same periods in the prior year primarily as a result of (i) the 55 NROs and 19 restaurants acquired from