First Watch reaches $75M deal to buy back 21 franchise locations

First Watch, a leading national daytime dining concept, has reached a $75 million agreement to acquire 21 of its franchise locations in North Carolina.

The deal, expected to close by the end of April pending completion of certain customary closing conditions, includes corresponding development rights, according to a statement. The deal is with east Manatee County-based First Watch’s largest franchisee partner, the release adds. The name of the franchisee wasn't disclosed. 

Buying franchise locations is part of a long-term strategy at First Watch, which serves breakfast, lunch and brunch through a chef-driven menu that includes elevated executions of classic favorites along with specialties, such as the Quinoa Power Bowl, Farm Stand Breakfast Tacos, Avocado Toast, Spiked Lavender Lemonade and its signature Million Dollar Bacon.

The company, the release states, will have acquired 44 total franchised restaurants across five accretive acquisitions since May with this latest deal. In November, for example, it announced it had acquired six franchise locations in the Florida Panhandle. Each of these acquisitions was subject to a purchase option negotiated prior to First Watch’s initial public offering on Oct. 1, 2021.

“Our acquisition of franchise-operated restaurants is an important part of our long-term growth and value creation strategy, and this represents our most significant transaction to date,” First Watch CEO & President Chris Tomasso says in the statement. “We expect these 21 restaurants in one of our key markets will generate average unit volumes and restaurant level operating profit margins in line with our company-owned restaurants and provide us with additional territories in which to grow organically for years to come.”

Company officials say they will provide additional information regarding the 21-franchise acquisition when it reports results of the first fiscal quarter ended March 31. As of Dec. 31, First Watch had 524 system-wide restaurants, consisting of 425 company-owned restaurants and 99 franchise-owned restaurants, across 29 states. First Watch reported $730.2 million in revenue in 2022.