Company: FWRG
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001789940-25-000010
Chunk: 90

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 7
Chunk 90
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25,723 13.0 %As a percentage of restaurant sales22.2 %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 2023 and (iv) commodity inflation. The increase was partially affected by the additional 53rd week in 2023.

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.

FISCAL YEAR(in thousands)20242023ChangeLabor and other related expenses$335,038 $294,010 $41,028 14.0 %As a percentage of restaurant sales33.4 %33.5 %(0.1)%

Labor and other related expenses as a percentage of restaurant sales decreased during 2024 as compared to 2023 primarily  as a result of (i) menu price increases and (ii) improved hourly labor efficiency. This decrease was partially offset by (i) wage increases and (ii) higher health insurance costs.

The increase in labor and other related expenses during 2024 as compared to 2023 was primarily due to (i) the increase in staffing levels to support the increase in corporate-owned restaurants (ii) wage increases and (iii) higher health insurance costs. The increase was partially offset by (i) hourly labor efficiency and (ii) the additional 53rd week in 2023.

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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.

FISCAL YEAR(in thousands)20242023ChangeOther restaurant operating expenses $151,