Company: FWRG
Filing Date: 2025-04-08
Form Type: ARS
Source: 0001789940-25-000033
Chunk: 74

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-04-08
Form: ARS
Chunk 74
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 a percentage of restaurant sales. The increase in other restaurant operating expenses during 2024 as compared to 2023 was primarily due to the increase in the number of restaurants driving increases in certain expenses including (i) $7.5 million of additional credit card, delivery, and license fees, (ii) $4.6 million increase in utilities and repair and maintenance expenses, (iii) $3.4 million related to operating supplies and (iv) $1.3 million related to restaurant advertising costs. The increase was partially offset by a decrease in to-go supplies costs of $0.3 million. Occupancy Expenses Occupancy expenses primarily consist of rent expense, property insurance, common area expenses and property taxes. FISCAL YEAR (in thousands) 2024 2023 Change Occupancy expenses $ 82,694 $ 68,400 $ 14,294 20.9 % As a percentage of restaurant sales 8.2 % 7.8 % 0.4% The increase in occupancy expenses as a percentage of restaurant sales during 2024 as compared to 2023 was primarily due to higher rent expense and the deleverage associated with negative same-restaurant sales growth. The increase in occupancy expenses during 2024 as compared to 2023 was primarily due to the increase in the number of company-owned restaurants. Pre-opening Expenses Pre-opening expenses are costs incurred to open new company-owned restaurants. Pre-opening expenses include pre- opening rent expense, which is recognized during the period between the date of possession of the restaurant facility and the restaurant opening date. In addition, pre-opening expenses include manager salaries, recruiting expenses, employee payroll and training costs, which are recognized in the period in which the expense was incurred. Pre-opening expenses can fluctuate from period to period, based on the number and timing of new company-owned restaurant openings. FISCAL YEAR (in thousands) 2024 2023 Change Pre-opening expenses $ 10,109 $ 7,173 $ 2,936 40.9 % The increase in 2024 pre-opening expenses as compared to 2023 was primarily due to (i) the higher number of restaurants opened and under construction and (ii) the increase in rents. 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