First Watch Franchise Cost | Is First Watch a Franchise

Get ready to be swept away by the heavenly smells and flavors of the beloved First Watch franchise, where breakfast, brunch and lunch is elevated to an art form. Beyond its food, First Watch is known for its unique brunch-inspired menu, featuring signatures dishes like the “Sunburst,” “Classic” or the “Farmers Omelette.” It also has a strong focus on sustainability, implementing environmentally friendly practices in their restaurants, and a loyalty program, where regular customers can earn rewards such as free meals and discounts.

How much does a First Watch franchise cost

The cost to franchise a First Watch restaurant is $899,800 to $1,522,000 is the projected total investment needed to open a First Watch restaurant.

First Watch Franchise Initial and On-going Franchise Cost
First Watch Franchise Fee	$40,000
First Watch Franchise Cost	$899,800 to $1,522,000
Royalty Fee	4%
Advertising Fee	2-3 %
Term of Agreement	20 years
Is the franchise term renewable?	Yes
Renewable Franchise Fees	Percentage of gross sales

 

How much do First Watch franchise owners make?

Franchisees’ financial performance information is not publicly available from the First Watch, and it is not disclosed as part of the franchise disclosure document.

As per an estimate, the First Watch franchise owners make  $1 to $1.3 million in revenue and with a profit margin of 10 to 15%, they can expect to make a profit of $100,000 to $185,000 every year.

As I mentioned before, it can be difficult to estimate the profit of a First Watch franchise as it can depend on a variety of factors, such as location, competition, and the franchisee’s own experience and skills. 

First Watch Franchise Requirements

If you’re interested in becoming a First Watch franchisee, there are certain requirements that you will need to meet to be considered for a franchise opportunity. 

Here are some of the main requirements for becoming a First Watch’s franchisee

1. Franchisees of First Watch are frequently required to have a minimum of $1.5 million in net worth, $500,000 in liquid assets, and $3 million in net worth, $1 million in liquid assets, respectively.

2. The company prefers franchisees who have experience in the restaurant industry, although it is not necessarily a requirement.

3. Franchisees will need to attend and complete an extensive training program before opening a restaurant. This training covers everything from operations and management to marketing and customer service.

 

 

What is the First Watch?

First Watch is a breakfast, brunch, and lunch restaurant chain based in the United States. The company was founded in 1983 and has since grown to over 300 locations in 27 states. They primarily operate in the Southeast of the United States, especially in Texas, Ohio, and Florida, with a new opening coming in the Midwest. The company is known for its casual atmosphere and friendly service. First Watch is also well-known for its “brunch-inspired” menu and its signature dishes such as the “Sunburst”, The “Classic” or the “Farmers Omelette”. They also have a loyalty program, where regular customers can earn rewards such as free meals and discounts.

 

Is First Watch a Franchise Opportunity?

First Watch does offer franchisee opportunities for interested individuals and companies. If you’re interested in opening a First Watch franchise, you can find more information on the company’s website, including the company’s franchise disclosure document (FDD) which contains important information about the costs, obligations, and risks of franchising with First Watch. 

Facts That Nobody Told You About First Watch

1. First Watch is considered to be a “daytime cafe,” meaning that it only serves breakfast, brunch, and lunch. The chain does not open for dinner service.
2. The company is known for its focus on healthy, farm-fresh ingredients. On their menu, you will find options such as avocado toast, smoothie bowls, and “healthier sides” like quinoa and sweet potatoes.
3. First Watch is a privately held company, and as such, it is not publicly traded and does not release financial information to the public.

First Watch Franchise Information
Industry Type	Food Franchise Opportunities
Sub Category	Breakfast franchise Opportunities
Year Established	1983
Company Name	First Watch
Founder/Management Head	Ken Pendery, John Sullivan, and Brad Parker
Franchising Started	1995
Franchise Expansion Plan	They plan to expand in more countries and establish their franchise.
Number of Units	420
Number of Franchise Units	94
Social Media Handles	Facebook
	Twitter
	Youtube
	Instagram
Company Office location	Pacific Grove, California.

First Watch Franchise Training 

First Watch provides training for its franchisees to help them successfully open and operate their restaurants. The training program covers a wide range of topics, including Operations, Marketing, Construction, Financial management, and Management. 

The duration of the training program might vary based on the size and complexity of the restaurant, but it typically lasts 4-6 weeks. It is conducted both online and at one of First Watch’s training facilities. After the training is finished, the business offers franchisees ongoing support and help.

First Watch Franchise Operations 

As a First Watch franchisee, you will be required to operate your restaurant according to the company’s standards, policies, and procedures. This includes following the company’s menu, pricing, and marketing strategies, as well as maintaining the company’s high standards for customer service, food quality, and cleanliness.

The company will provide ongoing support to help you operate your restaurant, including regular visits from a field consultant, regular communication with other franchisees, and access to the company’s online support system.

 

How is First Watch Franchise Territory Granted

First Watch, like most franchise businesses, grants territory to franchisees through a franchise agreement. This agreement outlines the specific rights and responsibilities of both the franchisor (First Watch) and the franchisee (the individual or entity purchasing the franchise) about the territory in which the franchise will operate. 

The agreement will include the details of the territory, including its boundaries and exclusivity. The franchisee will typically be granted exclusive rights to operate within a specific geographic area, such as a certain radius around a specific location or a certain number of zip codes. This agreement will also specify the duration of the franchise, and the royalties and other fees that the franchisee must pay to the franchisor.

 

What is the First Watch Franchise Term of Agreement and Renewal?

According to the information available on First Watch’s website, the initial term of the franchise agreement for a First Watch restaurant is 20 years. The agreement can be renewed for an additional 10-year term, at the end of the initial term and any approved renewal term, the franchisee has an option to renew the agreement for additional terms on mutually agreed terms and conditions.

Does First Watch provide Financial Assistance to Franchises?

It is not explicitly mentioned on the First Watch website if they provide financial assistance to their franchisees.

Pros & Cons of Owning a First Watch Franchise

Pros

1. Established brand

First Watch has been in business for over 30 years and has a strong reputation in the breakfast, brunch, and lunch restaurant industry. 

2. Proven business model

First Watch has a successful business model that has been tested and refined over time. This can give franchisees a greater chance of success as they can follow a tried-and-true formula for operating the business.

3. Marketing and advertising

First Watch will handle the national marketing and advertising for the chain, which can help promote the brand and drive customers to the franchise.

4. Buying power

Franchisees will benefit from the buying power of the First Watch chain as it would allow them to purchase products at discounted prices that an independent operator may not be able to achieve.

5. Low startup costs

First Watch has lower startup costs compared to some other restaurant concepts which can make it more accessible for some people with lower financial resources.

Cons

1. Limited autonomy

As a franchisee, you will be required to follow the franchisor’s guidelines and rules for operating the business. This can limit your ability to make certain decisions about the business, such as menu choices or pricing.

2. Royalties and ongoing fees

Franchisees are typically required to pay ongoing royalties and other fees to the franchisor. These fees can add up over time and can have a significant impact on the franchisee’s bottom line.

3. Limited territory exclusivity

Some franchise agreements have limited territory exclusivity, which can make it more challenging to establish a successful business in a highly competitive market.

4. Limited creative control

Franchisees may have limited creative control in terms of the restaurant design and may have to conform to the design standards of the franchisor.

5. Limited ability to sell

Some franchise agreements have a clause that requires a franchisee to sell the business back to the franchisor or an approved buyer if they decide to leave the business, This can limit the franchisee’s ability to sell the business at fair market value.

 

 

Franchise Deck Analysis and Overview

First Watch has been in business for over 30 years and has a strong reputation in the breakfast, brunch, and lunch restaurant industry. This can help attract customers to the franchise and make it easier for the franchisee to establish themselves in the local market. This can give franchisees a greater chance of success as they can follow a tried-and-true formula for operating the business.  

It’s important to note that opening and running a restaurant, whether it is a franchise or an independent one, can be risky and the financial performance can be impacted by many factors. It’s always good for prospective franchisees to have realistic expectations and perform their due diligence by talking to other franchisees, researching the market, and consulting with a financial advisor before deciding to invest in a franchise.

Is the First Watch Franchise Profit Worth the Franchise Cost?

It can be difficult to determine if the potential profit from a First Watch franchise is worth the franchise cost, as it will depend on a variety of factors such as location, competition, the franchisee’s own experience and skills, and the specific terms of the franchise agreement. 

To determine if a First Watch franchise is a good investment, it’s important to carefully review and understand the franchise agreement. It is also important to have realistic expectations of the income and expenses and to understand how they would impact the profitability of the business. 

Also, as per the estimated First watch profit of $ 125K, it will take 7 to 8 years to recover the franchise cost. I shall not recommend this opportunity to everyone, will recommend it to those who open the real estate or those who can reduce the franchise cost.

First Watch Franchise Sucess and Failure Rate

The company appears to have grown consistently over the years, which may point to a high success rate for its franchises. They’ve garnered accolades for being the “Best family-friendly restaurants,” “Best brunch,” “Best breakfast,” etc., which may also indicate that customers approve of their reputation and business models.

The below table will highlight on First Watch franchise’s success and failure rate for the last 3 years. This will supplement your decision-making process.

Year	Format	Start	End	Change
2018	Franchise Owned	47	55	+8
Company Owned	193	240	+47
2019	Franchise Owned	55	69	+14
Company Owned	240	299	+59
2020	Franchise Owned	69	88	+19
Company Owned	299	321	+22

Is the First Watch franchise worth the investment?

Your unique situation and objectives will determine whether or not a First Watch franchise is worthwhile. Like every franchise opportunity, there are advantages and disadvantages to weigh before making a purchase. As a franchisee, you’ll be required to adhere to the company’s standards, policies, and procedures, which can limit your flexibility to make certain business decisions. It’s also worth noting that, like any investment, the success of a franchise depends on many factors, including the local economy, your management skills, and your ability to build a loyal customer base.

Overall, if you have the financial resources, experience, and passion for running a restaurant, and an understanding of the risks involved, a First Watch franchise can be a great opportunity. It’s important to carefully consider your goals, resources, and qualifications before making any decision.

Competition Analysis of First Watch Franchise
Franchise Brand	Cost to Franchise	Franchisee Fees	Royalty + Ad fees	Expected Profit	Recoup of Capital	FD Rating
First Watch Franchise	$$899,800 to $1,522,000	$40,000	5% + 1-2%	$100 to $175K	7 to 8 years	4.0/5.0
IHOP (International House of Pancakes)	$1,152,954 to $6,089,550	$40,000	4.5% + 3.5%	15% profit margin	13 years	3.5/4.0
Denny’s	$1.2 million to $2.6 million	$35,000	4.5% – 7% + 3% – 3.25%	23.78%		3.5/5.0
Waffle House	$600,000-$1,000,000	$37,500	6% + 1%	15% profit margin	10.5 years	2.5/5.0
Cracker Barrel Old Country Store	$250-$10,000			3.96%		2.0/5.0
Bob Evans	$9,250	$9,250				1.5.5.0

The Franchise Deck rating for the First Watch franchise is 4.0/5.0. 

 

Conclusion 

Considering the results of my research, First Watch Restaurants may be located close to you. Always think about where the best place for your business would be while making your franchise acquisition. Examine the possible audience to determine whether there is a need for this franchise in your city. Even the most well-known franchises experience failure in some states. There are several reasons why a particular franchised location can fail. You must examine not only the franchised business itself but also the areas where you think it has a better chance of making more money. I would recommend the First Watch franchisee opportunity to experienced franchise owners.

Entrepreneurs who want to open a franchise in the donuts and desserts  franchise opportunities categories can look at 

1. Original Pancake House
2. The Egg & I
3. Jack in the Box franchise 
4. Denny’s
5. Whataburger franchise
6. Black Bear Diner
7. Five Guys Franchise
8. Sonic Franchise 

 

Frequently Asked Questions (FAQs)

1. Is the First Watch’s franchise profitable?

Yes, First Watch’s franchise is profitable. 

2. Can you make money owning a First Watch?

Yes, you can make money owning a First Watch. 

3. Is  First Watch a franchisee?

No, it is not franchising now. 

4. How much does the First Watch franchise cost?

On average, the total investment to open a First Watch franchisee ranges from $899,800 to $1,522,000.

5. How do First Watch franchises make money?

First Watch franchises generate revenue through the sale of food and drinks, and by charging customers for the dining experience.