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First Watch Franchise ProfileFood Franchises > Casual Dining |
What Are the Initial Investment Requirements for a First Watch Franchise?
To open a First Watch franchise, you should expect an initial investment ranging from $1,210,150 to $2,028,800. This includes a franchise fee of $40,000. Additionally, you will need to have cash available between $500,000 and $950,000, along with a net worth of $500,000 to $1,500,000. These financial requirements are crucial to ensure you can support the startup costs and operational expenses as you establish your business.
What Are the Ongoing Fees Associated with a First Watch Franchise?
First Watch franchisees are required to pay ongoing fees that include a royalty fee of 4% of gross sales and a marketing fee of 1.5%. These fees contribute to the overall support and marketing efforts of the brand, helping to drive traffic and brand recognition. Understanding these costs is essential for budgeting and financial planning as you manage your franchise.
What Is the Average Revenue Potential for a First Watch Franchise?
The average annual revenue for a First Watch franchise unit is approximately $730,162, with a median revenue of $1,000,000. Revenue can vary significantly, with the lowest reported annual revenue at $400,000 and the highest reaching $2,800,000. This revenue potential highlights the opportunity for profitability, although actual results will depend on location, management, and market conditions.
How Long Does It Typically Take to Break Even with a First Watch Franchise?
Franchisees can expect a breakeven time of around 14 months, with an investment payback period of approximately 16 months. These timelines are important for potential franchisees to consider as they plan their financial strategies and set expectations for their return on investment. Understanding these metrics can help in assessing the viability of this franchise opportunity.
First Watch Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
First Watch Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 390 | 429 | 460 |
| Net Change YoY | 39 | 31 | |
| Franchised Units | 69 | 88 | 94 |
| Net Change YoY | 19 | 6 | |
| Corporate Units | 321 | 341 | 366 |
| Net Change YoY | 20 | 25 |
Investment Overview
The First Watch franchise requires an initial investment ranging from $1,210,150 to $2,028,800. This investment includes a franchise fee of $40,000, with ongoing royalty fees set at 4% of gross sales and a marketing fee of 1.5%. Potential franchisees should have liquid cash available between $500,000 and $950,000, along with a net worth of $500,000 to $1,500,000 to qualify for ownership.
Revenue Potential
First Watch franchises boast impressive average annual revenues, with units generating around $6,674,000. The median annual revenue is reported at $1,000,000, while some locations achieve revenues as low as $400,000 and as high as $2,800,000. This potential for substantial earnings makes First Watch an attractive option for aspiring franchise owners.
Breakeven and Payback Period
Franchisees can expect to reach breakeven within approximately 14 months of operation. The investment payback period is estimated at 16 months, providing a relatively quick return on investment compared to other franchise opportunities. These timelines are crucial for potential owners to consider when evaluating the financial feasibility of the franchise.
Growth Trajectory
First Watch has shown consistent growth in its franchised units, increasing from 69 in 2020 to 94 in 2022. The total number of units has also risen from 390 in 2020 to 460 in 2022, indicating a strong demand for the brand and its breakfast, brunch, and lunch offerings. This upward trend reflects the franchise's successful expansion strategy.
Operational Insights
The average annual operating expenses for a First Watch franchise total approximately $713,249. Key expenses include labor and related costs, which account for a significant portion of the budget, alongside occupancy and general administrative expenses. Understanding these costs is essential for franchisees to manage their operations effectively and maintain profitability.
Franchise Support
First Watch provides robust support to its franchisees, including training programs and ongoing operational assistance. This support is designed to help franchise owners navigate the challenges of running a restaurant, optimize their business practices, and ultimately achieve success within the First Watch system. The commitment to franchisee success is a cornerstone of the brand's operational philosophy.
Frequently Asked Questions
The initial investment to open a First Watch franchise ranges from $1,210,150 to $2,028,800, which includes the franchise fee, equipment, and other startup costs.