First Watch Franchise Owner Salary, Cost & Failure Rate 2024

Whether it’s the fresh aroma of the coffee, the sizzle of breakfast meats, or the savory smell of lunchtime specialties and house-made soups, First Watch is known for delivering an inviting and delicious dining experience.

Serving breakfast, brunch, and lunch, First Watch offers patrons a wide variety of choices to satisfy their cravings.

Considering the popularity of the restaurant and its growing presence in local communities, it’s no surprise that more people are considering opening a First Watch franchise.

By doing so, they’ll be part of a national chain and gain access to the same delicious menu options that have won over customers.

So, what does it take to open a First Watch franchise? Read on to find out.

First Watch Franchise

About First Watch

First Watch is a popular restaurant chain known for serving breakfast, brunch, and lunch.

Their sizeable menu features fresh ingredients that are prepared in generous portions.

Signature dishes of the restaurant include avocado toast as well as other items such as omelets, salads, sandwiches, French toast, and burritos.

The atmosphere at First Watch is warm and inviting. The restaurants have a modern-rustic feel, comfortable seating areas, and plenty of natural light streaming through their windows.

Each location also has a unique local touch, so guests can experience a bit of the hometown charm while they dine.

At First Watch, customer service is a top priority. Patrons can expect to be greeted by friendly staff who are eager to make sure all their needs are met – from ensuring diners get their orders just right to providing refill services with a smile!

Finally, First Watch takes food safety seriously and commits to following government guidelines for food safety handling practices in each of its locations.

This commitment ensures customers a safe and enjoyable dining experience every time they visit one of its restaurants.

As a First Watch franchisee, you will have access to all the benefits of owning a restaurant under this popular brand, including menu items and recipes, operational support, marketing resources, training materials, and more.


History Of First Watch

First Watch traces its roots back to 1983 when John Sullivan and Ken Pendery opened the first location in Pacific Grove, California, after leaving the Le Peep breakfast chain.

The restaurant’s name was a nautical reference to the first work shift in the day since these restaurants are only open from 7:00 AM to 2:30 PM.

A year later, they expanded with a second location in San Mateo, California.

By 2014, First Watch had acquired The Good Egg chain and converted some of its locations into First Watch restaurants.

In 2015, they acquired Egg & I Restaurants chain and converted some of their locations into First Watch restaurants.

In October 2021, First Watch went public and raised $170 million in an initial public offering (IPO).

Currently, there are over 470 restaurants operating in 29 states across the U.S. The majority of these locations are corporate-owned, but there are also over 90 franchises across the country.


First Watch Franchise Model

Cost Or FeesAmount
Initial Investment$899,000–$1,500,000
FranchiseYES
Franchise Fee$40,000
Royalty Fee4%
Liquidity$500,000
Estimated Outlets470+

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How Much Does It Cost To Open A First Watch Franchise?

Opening a First Watch franchise requires a substantial investment. The franchise fee is estimated at around $40,000, and the initial investment can range from $899,000 to $1.5 million. 

This includes costs such as construction, equipment, supplies, accounting fees, staff training, marketing and advertising expenses, and any other necessary costs. 

In addition to the initial investment, franchisees are also required to pay an ongoing royalty fee of 4% of their gross sales as well as an advertising fee of up to 3%. 

These fees help cover the cost of national advertising campaigns and other promotional activities that benefit all franchisees. 

By investing in a First Watch franchise opportunity, you will gain access to one of the most popular breakfast chains in the United States. 

You’ll also benefit from both local and national marketing campaigns as well as operational support from corporate headquarters so you can focus on running your business without worrying about every detail associated with launching a restaurant chain.


First Watch Franchise Revenue, Profit & Owner Salary

In 2020, First Watch made $337 million in sales from its 321 company-owned stores, with an estimated average of $1.12 million per restaurant.

Assuming a profit margin of 10%, each franchise owner’s salary can be around $112,000 in profit.

In 2019, First Watch had $429 million in sales from 299 company-owned stores, with an estimated average of $1.78 million per restaurant.

Assuming a profit margin of 15%, each franchise owner likely made $267,000 in profit.

However, due to the investment required to open a First Watch restaurant and the time it takes to become profitable, it may take 5-6+ years to recoup your initial capital investment.

If you’re considering opening a First Watch franchise, it’s important to explore factors like the First Watch breakfast menu and the associated costs.

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1780000.00
Rent10.63%(189125.00)
Insurance5.31%(94562.50)
Salaries21.25%(378250.00)
Franchise Royalty Fees5.31%(94562.50)
Utilities2.13%(37825.00)
Cost of Goods Sold (COGS)26.56%(472812.50)
Labor (Variable)13.81%(245862.50)
Total (Expenses)85.00%(1513000.00)
Net Profit15.00%267000.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


First Watch Franchise Payback Period

With an investment of 1,199,500 and an estimated 15% profit margin on the revenue, the yearly profit would be $267,000.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $1,199,500 / $267,000 = 4.4 years

Based on these figures, it will take approximately 4-5 years to pay back the initial investment for First Watch. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Failure Rate Of First Watch

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20206988+19
20218894+6
202294108+14

For the Franchised outlets:

  • In 2020, the growth rate was (19)/69×100≈27.53%
  • In 2021, the growth rate was (6)/88×100≈6.81%
  • In 2022, the growth rate was (14)/94×100≈14.89%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020299321+22
2021321341+20
2022341366+25

For the Company-Owned outlets:

  • In 2020, the growth rate was (22)/299×100≈7.35%
  • In 2021, the growth rate was (20)/321×100≈6.23%
  • In 2022, the growth rate was (25)/341×100≈7.33%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020368409+41
2021409435+26
2022435474+39

For Total outlets:

  • In 2020, the growth rate was (41)/368×100≈11.14%
  • In 2021, the growth rate was (26)/409×100≈6.35%
  • In 2022, the growth rate was (39)/435×100≈8.96%

According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.

We can see that the franchised outlets for First Watch grew from 2020 to 2022, showing a growth rate between 27.53% and 14.89%. On the other hand, for company-owned outlets, the growth rate of First Watch was lying in the range between 7.35% and 7.33% for the same period of time.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the First Watch franchise has expanded in the years 2020-2022 showing a total growth rate between 11.14% and 8.96%.


First Watch Franchise Requirements

First Watch Franchise Requirements

First Watch requires potential franchisees to have a net worth of at least $1.5 million and liquid assets of at least $500,000.

While experience in the restaurant industry is preferred, they are open to considering candidates with relevant business experience or a passion for hospitality. 

Franchisees must also be dedicated to providing excellent customer service and creating an inviting atmosphere in their restaurants.

They must also have the financial resources and operational expertise necessary to ensure the success of their locations. 

In addition to having the right financial qualifications and operational know-how, potential franchisees must also complete a thorough franchisor evaluation process, including an extensive background check and interviews with First Watch corporate representatives. 

After completing this evaluation process, successful applicants will enter into a Franchise Agreement, which outlines all relevant terms and conditions of operation as a First Watch franchisee. 

Lastly, potential franchisees must attend an extensive training program at the corporate office in Bradenton, Florida, prior to launching their own location.

The training program covers all aspects of operating a First Watch restaurant, from menu design to operational systems and staff management. 


First Watch Franchise Training And Support

In order to ensure the success of their franchisees, First Watch provides comprehensive training and support. 

The training program consists of four to six weeks of classroom instruction, online courses, and hands-on activities that are held at one of the First Watch training facilities. 

During this period, new franchisees learn about operational systems, menu design, marketing strategies, customer service excellence standards, staff management, and more.

While the specifics of the training program may vary depending on the franchisee’s experience level, all franchisees will receive a comprehensive overview of all aspects of running a First Watch restaurant. 

After completing the training program, franchisees are given ongoing support from corporate headquarters.

This includes assistance with site selection and construction planning as well as operational support such as regular check-ins to ensure that the franchisee is meeting all of the standards set forth in their Franchise Agreement. 

First Watch also provides marketing and advertising materials, both local and national, to help new franchises promote their businesses. 


First Watch Franchise Terms Of Agreement & Renewal

First Watch Franchise Terms Of Agreement & Renewal

The initial agreement with First Watch comes with a ten-year term that can be renewed for two additional consecutive five-year terms upon meeting certain criteria.

Franchisees must demonstrate that they are in compliance with all applicable terms and conditions of their Franchise Agreement as well as any applicable local, state, and federal laws in order to renew their agreement. 

In addition to maintaining compliance with these regulations, franchisees must also prove their financial stability and ability to remain successful throughout the renewal period.

This includes providing evidence of ongoing positive cash flow and ensuring that all sales targets and other performance metrics outlined in the Franchise Agreement are met. 


First Watch Franchise Obligations And Restrictions

As with any franchise, there are a number of obligations and restrictions that come along with owning a First Watch. 

Franchisees must follow all applicable local, state, and federal laws as well as the terms set forth in their Franchise Agreement.

This includes following proper food safety measures, adhering to hiring requirements and wage regulations, meeting sales targets and performance metrics, maintaining cleanliness standards in the restaurant, providing excellent customer service at all times, etc. 

Furthermore, franchisees cannot transfer ownership of their location without prior approval from the franchisor, nor can they operate more than one location under their name without explicit written consent from First Watch corporate representatives. 

Lastly, franchisees are not allowed to sell or promote competing products inside or outside of their restaurants without permission from the company’s management team.

If a franchisee is found to be in violation of any of these restrictions, they may face disciplinary action up to and including termination of their Franchise Agreement. 


First Watch Franchise Financial Assistance

First Watch does not offer direct or indirect financing to its franchisees, nor does the company guarantee notes, leases, or obligations. 

If you’re looking for financing to help with your initial investment, you may be able to take advantage of the Small Business Administration’s (SBA) 7a loan program. 

The SBA loans offer competitive rates and terms that could make it easier for you to obtain the necessary capital to open a First Watch franchise.

However, it’s important to note that the SBA does not make loans directly; instead, they guarantee a portion of the loan, so lenders are more likely to offer them. 


First Watch Comparison

CompanyFirst WatchWaffle House
Year Founded19831955
Franchise Fee$40,000$200,000–$300,000
Initial Investment$899,000–$1,500,000$600,000–$1,000,000
Number of Outlets470+2100+

Conclusion 

First Watch’s iconic breakfast, brunch, and lunch restaurants have become a beloved staple in communities nationwide.

Their franchising program offers entrepreneurs a chance to become part of an established brand that has been around for almost 40 years. 

Now that you know the basics of what it takes to become a First Watch franchisee, including the costs and requirements, you can determine whether or not this opportunity is right for you. 


Frequently Asked Question

Does First Watch Offer Franchising?

As of 2023, First Watch has stopped signing on new franchisees. You might be able to open their franchise in the future whenever they start accepting new applicants again though.

Is Opening A First Watch Franchise A Good Investment?

Opening a First Watch franchise can be an excellent investment, as the brand has been successful for nearly four decades.

Who Founded First Watch?

First Watch was founded in 1983 by John Sullivan and Ken Pendery.

How Many First Watch Locations Are There?

There are over 470 First Watch locations across 29 states in the U.S.

Where is the headquarters of First Watch?

The headquarters of First Watch is located in Bradenton, Florida, United States.

2 thoughts on “First Watch Franchise Owner Salary, Cost & Failure Rate 2024”

  1. I contacted First Watch about purchasing a franchise. They are no longer looking for franchisees. You may want to update and remove.

    Reply

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