What Are Operating Procedures of First Watch Franchise
Curious about how the First Watch franchise operates and what it takes to become a franchisee? Discover the key elements of this popular breakfast, brunch, and lunch concept, from initial investment to ongoing support, and see if it aligns with your entrepreneurial goals. Explore the potential and learn what makes this franchise model a compelling opportunity for many, and find out how our First Watch Franchise Business Plan Template can be your roadmap to success.
| # | Operating Procedure | Description |
|---|---|---|
| 1 | Franchise Agreement Term | The standard agreement spans an initial 10-year term, with an option for franchisees in good standing to renew for an additional 10 years. This renewal is subject to a fee, which as of the 2025 FDD, is 25% of the then-current initial franchise fee. |
| 2 | Territorial Rights | Franchisees are granted an exclusive, protected territory, the size of which is determined by demographic data and traffic patterns. This exclusivity ensures that neither the franchisor nor other franchisees will operate a First Watch within this designated area during the agreement's term. |
| 3 | Site Selection and Approval | While franchisees are responsible for finding a location, First Watch's real estate team provides extensive support and must approve all sites. Target locations are high-visibility end-caps or freestanding units of 3,500 to 4,200 square feet in areas with strong daytime populations and household incomes exceeding $75,000. |
| 4 | Pre-Opening Support | A dedicated opening team provides approximately 14 days of on-site support for staff training and operational setup before the grand opening. This crucial support, included in the initial franchise fee, ensures correct implementation of the First Watch business model. |
| 5 | Grand Opening Marketing | A coordinated marketing blitz, funded by a required spend of $15,000 to $20,000, is executed in the weeks leading up to the opening. This initiative aims to build community awareness and drive initial customer traffic to the new unit. |
The financial commitment for a First Watch franchise is substantial, with an initial investment ranging from $1,210,150 to $2,028,800. This includes an initial franchise fee of $40,000. Franchisees are also required to maintain a minimum of $500,000 in cash and a net worth between $500,000 and $1,500,000. Ongoing financial obligations include a royalty fee of 4% and a marketing fee of 1.50% of gross sales.
First Watch's financial performance data indicates a potential for significant revenue, with the average annual revenue per unit reported at $6,674,000, though the median annual revenue is $1,000,000. The brand highlights a relatively quick breakeven time of 14 months and an investment payback period of 16 months. Cost of goods sold (COGS) represents approximately 23.6% of revenue, and operating expenses account for about 97.7% of revenue, leading to an EBITDA of 2.3% on average. The growth of franchised units has been steady, increasing from 69 in 2020 to 94 in 2022, while the number of corporate units has also seen consistent growth, reaching 366 in 2022.
Key Takeaways
- First Watch operates on a unique 'Daytime Dining' model, exclusively serving breakfast, brunch, and lunch from 7:00 am to 2:30 pm, offering a significant lifestyle advantage for franchisees and staff.
- The total estimated investment for a First Watch franchise ranges from $1,210,150 to $2,028,800, with an initial franchise fee of $40,000.
- Franchisees pay a 4% royalty fee on gross sales and a 1.50% marketing fee, contributing to the brand's national and regional marketing efforts.
- Financial requirements include $500,000 - $950,000 in cash and a net worth of $500,000 - $1,500,000 per restaurant.
- The brand seeks experienced multi-unit operators with a proven track record in the food service industry, requiring a commitment to developing 3-5 restaurants.
- First Watch provides an extensive 8-week training program for primary operators and managers, alongside ongoing support from a dedicated Franchise Business Consultant.
- The average annual revenue per unit is $6,674,000, with a median of $1,000,000, and an estimated EBITDA of $16,913, or 2.3% of revenue, based on the latest FDD data.
What Is The First Watch Business Model Structure?
What defines the First Watch business model?
The core of the First Watch franchise business model is its unique 'Daytime Dining' concept. This means they operate exclusively between 7:00 am and 2:30 pm. This focused operating window is a significant draw for franchise owners and staff, offering a distinct lifestyle advantage over many other restaurant franchise opportunities. The single-shift operation also contributes to more streamlined operations and potentially lower labor costs compared to businesses with extended or 24-hour service. In fact, restaurant-level operating profit margins have been reported in their latest FDD to be around 18-20%.
The menu is specifically designed around fresh, made-to-order breakfast, brunch, and lunch items, eliminating the complexities and overhead associated with dinner service. As of early 2025, the commitment to freshness is evident, with over 95% of ingredients being fresh. This focus on quality, coupled with a rotating seasonal menu, aims to drive repeat customer visits and has contributed to consistent growth, with same-store sales showing an estimated 5-7% year-over-year increase.
How does First Watch generate revenue?
The primary revenue driver for a First Watch franchise is, unsurprisingly, the sale of food and beverages to dine-in customers. As of 2025, this in-restaurant dining accounts for approximately 85% of the total sales across the franchise system. This highlights the brand's strength in creating an appealing in-person dining experience.
However, off-premises sales are a growing and important revenue stream. This includes online ordering for pickup and utilizing third-party delivery services. This channel is projected to represent between 15-18% of total sales in 2025, showing a notable increase from around 12% in 2023. The brand also actively uses a robust loyalty program and targeted marketing campaigns. These initiatives have been effective in boosting customer engagement, with data suggesting an increase in average check size by an estimated 8% among loyal members, which directly enhances the First Watch franchise income potential.
Tips for Maximizing Franchise Revenue
- Focus on the Core: While off-premises sales are growing, continue to prioritize the dine-in experience that defines the 'Daytime Dining' concept.
- Leverage Loyalty Programs: Actively promote and engage customers with the loyalty program to encourage repeat business and increase average check sizes.
- Optimize Off-Premises: Ensure a smooth and efficient process for online orders and deliveries to capture a larger share of this growing market.
What Is The Total First Watch Franchise Investment?
What is the estimated First Watch franchise cost?
When considering a First Watch franchise, understanding the total investment is crucial for aspiring owners. Based on the latest available data, the total estimated initial investment for a First Watch franchise can range significantly. For early 2025 projections, this range falls between $989,450 and $1,800,900. This comprehensive figure accounts for various startup expenses, including real estate acquisition or leasehold improvements, kitchen and dining equipment, initial inventory, and the franchise fee itself. It's important to note that this investment level positions it as a premium restaurant franchise opportunity. For context, comparable fast-casual franchises in 2025 typically require startup costs that can span from $750,000 to upwards of $15 million.
The specific location chosen for a First Watch franchise plays a significant role in determining the final investment cost. For instance, urban areas with high foot traffic and prime real estate will generally fall at the higher end of the investment spectrum due to inflated property values and associated build-out costs. Conversely, locations in less competitive or suburban markets might offer a more modest entry point.
What are the specific First Watch franchise fees?
- The initial franchise fee to secure a First Watch franchise is a one-time payment of $40,000. This fee is typically paid upon the signing of the franchise agreement and is a standard benchmark for brands of this stature in the current market.
- In addition to the initial fee, franchisees are obligated to pay ongoing royalty fees. The royalty rate for a new First Watch franchise unit is 4% of gross sales. This rate is competitive within the full-service restaurant sector, where royalty fees commonly range from 4% to 6%.
- Furthermore, a marketing fee contribution is required, set at 1.50% of gross sales. This contribution supports national and regional marketing initiatives designed to enhance brand visibility and drive customer traffic, offering significant First Watch franchise benefits to its network.
Key Financial Considerations for a First Watch Franchise
- Initial Investment Range: Be prepared for an investment between $989,450 and $1,800,900.
- Initial Franchise Fee: A flat fee of $40,000 is required upfront.
- Ongoing Royalty: A 4% royalty on gross sales is paid to the franchisor.
- Marketing Contribution: An additional 1.50% of gross sales supports marketing efforts.
- Liquidity Requirements: Prospective franchisees typically need a minimum of $500,000 to $950,000 in liquid cash.
- Net Worth Requirement: A minimum net worth of $500,000 to $1,500,000 is generally expected.
Understanding these financial components is a critical step in evaluating the viability of a First Watch franchise for your investment portfolio. For a deeper dive into the earning potential, explore How Much Does a First Watch Franchise Owner Make?
How Profitable Is a First Watch Franchise?
What is the First Watch franchise income potential?
The income potential for a First Watch franchise can be quite substantial. For established, company-owned locations, the average unit volume (AUV) was reported to be around $2.1 million as of the end of 2024. If a franchise location can achieve this AUV and maintain a restaurant-level operating profit margin between 18% and 20%, it could potentially generate an operating profit ranging from $378,000 to $420,000. This figure is before considering debt servicing, royalty payments, and overall corporate expenses. For a deeper dive into the specifics and to understand your potential earnings, it's crucial to review Item 19 in the 2025 Franchise Disclosure Document (FDD).
Is First Watch a good franchise investment?
For those who meet the qualifications, investing in a First Watch franchise is generally considered a solid opportunity. This is due to its distinct position in the market, a well-recognized brand, and strong unit economics, which set it apart in the 2024 franchise landscape. The brand has shown consistent growth, with system-wide sales growing by an average of 15% annually between 2022 and 2024. By June 2025, the company anticipates having over 500 locations in operation. A significant advantage of the First Watch business model is its 'one-shift' operation. This approach not only enhances work-life balance for employees but can also lead to a reduction in staff turnover by as much as 25% when compared to industry averages, ultimately contributing to long-term profitability.
To understand more about the financial aspects of owning a First Watch franchise, you can explore How Much Does a First Watch Franchise Owner Make?
Key Considerations for First Watch Franchise Investment
- Initial Investment: The total initial investment for a First Watch franchise can range from approximately $1.21 million to $2.03 million. This includes the initial franchise fee of $40,000.
- Cash Requirements: You'll need liquid cash ranging from $500,000 to $950,000, with a required net worth between $500,000 and $1.5 million.
- Ongoing Fees: Expect a royalty fee of 4% on gross sales and a marketing fee of 1.50%.
- Revenue Potential: The average annual revenue per unit was reported at $730,162 based on the provided P&L data, with a gross profit margin of 76.4%.
- Breakeven and Payback: On average, a First Watch franchise can reach breakeven within 14 months and offer an investment payback in about 16 months.
Fulfilling First Watch Franchise Requirements
What are the financial requirements?
When considering a First Watch franchise, prospective franchisees must meet substantial financial criteria. A key component of how to buy a franchise of this scale involves having a minimum liquid capital of $500,000. This ensures you have readily available funds to cover initial costs and immediate operational needs.
Beyond liquid capital, the overall First Watch franchise requirements mandate a minimum net worth of $1,500,000 per restaurant to be developed. These figures, updated for 2025, are in place to confirm that candidates possess the financial stability necessary to manage the significant startup costs associated with opening a restaurant. This financial preparedness is crucial for sustained operation and growth.
| Minimum Liquid Capital | $500,000 |
| Minimum Net Worth Per Restaurant | $1,500,000 |
| Initial Investment Range | $1,210,150 - $2,028,800 |
| Franchise Fee | $40,000 |
What are the operational requirements?
The First Watch business model typically seeks experienced, multi-unit restaurant operators. This means it is generally not an entry-level restaurant franchise. Candidates must demonstrate a proven track record of successfully owning or operating multiple food service businesses to be considered for a First Watch franchise.
Franchise partners are also required to commit to developing a minimum of three to five restaurants within a designated territory over an agreed-upon timeline. This is a standard stipulation within the multi-unit development agreement, reflecting the brand's growth strategy and the commitment expected from its franchisees.
Furthermore, candidates must exhibit a genuine passion for the brand's culture and a strong commitment to its 'You First' philosophy. While not a financial metric, this is a critical requirement evaluated closely during the application process. Understanding how much a First Watch franchise owner makes is important, but so is fitting into the brand's ethos.
Key Operational Considerations
- Experience: Prior multi-unit restaurant operations experience is essential.
- Development Commitment: A commitment to opening multiple units (3-5) is standard.
- Brand Alignment: Demonstrating alignment with the brand's culture and customer service philosophy is vital.
| Royalty Fee | 4% of Gross Sales |
| Marketing Fee | 1.50% of Gross Sales |
| Franchised Units (2022) | 94 |
| Corporate Units (2022) | 366 |
Navigating The First Watch Franchise Application Process
For aspiring entrepreneurs interested in the First Watch franchise, understanding the application process is crucial. This journey is designed to ensure a mutual fit between the candidate and the brand, aligning with the First Watch business model.
How do you start the application process?
- The First Watch franchise application process begins by submitting an initial inquiry form on the official First Watch franchising website, which is the first formal step for all franchise opportunities.
- Following the initial inquiry, a franchise development representative will contact qualified candidates within 5-7 business days to schedule an introductory call and provide a preliminary overview of the opportunity.
- Candidates who move forward will be required to complete a detailed confidential application, providing proof of their financial standing and operational experience for the 2025 review cycle. This typically includes demonstrating a net worth of $500,000 to $1,500,000 and liquid cash of $500,000 to $950,000.
What are the key stages of approval?
- After application review, candidates participate in a series of calls with the development team, followed by a 'Discovery Day' at the First Watch headquarters in Bradenton, Florida. This immersive experience is key to understanding the franchise First Watch.
- A critical stage is the review and approval by the franchise committee, which evaluates the candidate's complete profile against the brand's strategic growth plans for 2025 and beyond.
- The final stage before signing is the presentation and review of the Franchise Disclosure Document (FDD) and the First Watch franchise agreement, for which candidates are advised to seek legal and financial counsel. This document details critical information such as the initial franchise fee of $40,000 and ongoing royalty fees of 4%.
Tips for a Successful Application
- Be Prepared with Financials: Have your financial documentation readily available, as the process requires a thorough review of your financial standing.
- Demonstrate Relevant Experience: Highlight any previous experience in restaurant management or business ownership, as this is a key factor in the evaluation.
- Understand the Investment: Familiarize yourself with the total initial investment, which can range from $1,210,150 to $2,028,800, to ensure it aligns with your financial capabilities.
| Financial Requirement | Range |
| Initial Investment | $1,210,150 - $2,028,800 |
| Cash Required | $500,000 - $950,000 |
| Net Worth Required | $500,000 - $1,500,000 |
| Franchise Fees | Amount |
| Initial Franchise Fee | $40,000 |
| Royalty Fee | 4% of Gross Sales |
| Marketing Fee | 1.50% of Gross Sales |
Navigating the First Watch franchise application process is a detailed, multi-step procedure. It's designed to ensure that new franchisees are well-equipped to uphold the brand's standards and contribute to the success of the First Watch business model. Understanding each stage, from initial inquiry to final agreement, is vital for anyone looking to open a First Watch franchise.
Completing First Watch Franchise Training and Support
When considering a franchise opportunity, the depth and quality of training and ongoing support are critical factors. For those looking at the First Watch franchise, understanding this support system is key to evaluating the overall franchise First Watch model.
What training is provided?
- The First Watch franchise training and support program is extensive, requiring the primary operator and up to four managers to complete a comprehensive 8-week training program.
- This program, conducted in a certified training restaurant, covers all aspects of the First Watch business model, from front-of-house service to back-of-house kitchen management and financial controls.
- As of 2025, the training curriculum includes over 300 hours of hands-on and classroom instruction, ensuring mastery of brand standards before the franchisee's first restaurant opens.
What ongoing support is offered?
- Franchisees receive continuous support, including a dedicated Franchise Business Consultant who provides ongoing operational and marketing guidance, a key benefit of the franchise First Watch system.
- The support system includes access to a proprietary technology suite for managing inventory, labor, and sales analytics, with regular software updates and support provided by the corporate IT team.
- First Watch also provides robust marketing support, managing the 25% brand development fund to execute national campaigns and providing franchisees with a toolkit of local marketing materials.
The initial investment for a First Watch franchise can range from $1,210,150 to $2,028,800, with a required cash investment of $500,000 to $950,000. Understanding the comprehensive training and support is vital when considering these franchise costs. For a detailed breakdown, you can explore How Much Does a First Watch Franchise Cost?
| Training Duration | Key Areas Covered | Support Personnel |
| 8 Weeks | Front-of-House, Back-of-House, Financial Controls | Franchise Business Consultant |
Tips for Maximizing Franchise Training
- Actively participate in all training sessions and ask questions.
- Take detailed notes and review them regularly.
- Network with other trainees to share insights and best practices.
- Utilize the provided resources and tools to their fullest potential.
The franchise fee for a new unit is $40,000, with ongoing royalty fees at 4% and marketing fees at 1.50% of revenue. This structured support system is designed to help franchisees achieve operational excellence and leverage the proven First Watch business model.
Executing The First Watch Franchise Agreement
When you decide to move forward with a First Watch franchise, understanding the franchise agreement is paramount. This legally binding document outlines the rights and obligations of both the franchisor and the franchisee. It’s the roadmap for your business relationship.
What is the term of the agreement?
- The standard First Watch franchise agreement has an initial term of 10 years. This is a common duration for established restaurant franchise opportunities, providing a solid foundation for your investment.
- Upon the expiration of the initial term, franchisees who are in good standing have the option to renew the agreement for an additional 10-year term. This renewal is subject to a renewal fee.
- The renewal fee, as detailed in the 2025 FDD, is set at 25% of the then-current initial franchise fee. Based on the current fee, this could be approximately $11,250.
Are there territorial rights?
- Yes, the franchise agreement grants franchisees an exclusive, protected territory for their restaurant. This is one of the most significant First Watch franchise benefits, ensuring you have a dedicated market to operate within.
- The size of the territory is determined based on demographic data, population density, and traffic patterns. It's typically defined by a radius of 1 to 3 miles or by specific zip code boundaries.
- The agreement ensures that the franchisor will not establish another company-owned or franchised First Watch restaurant within this designated territory during the term of the agreement.
For a deeper dive into the financial commitment involved in securing a First Watch franchise, you can explore How Much Does a First Watch Franchise Cost?
Key Considerations When Reviewing the Franchise Agreement
- Understand the Renewal Process: Familiarize yourself with the conditions and fees associated with renewing your franchise agreement to ensure long-term operational continuity.
- Clarify Territory Definition: Ensure the boundaries of your exclusive territory are clearly defined and align with your market analysis and expansion plans.
- Review Support and Obligations: Pay close attention to the franchisor's support structure, including training, marketing, and operational guidance, as well as your own responsibilities.
| Initial Term Length | 10 Years |
| Renewal Term Length | 10 Years |
| Renewal Fee Basis | 25% of Current Initial Franchise Fee |
| Territorial Protection | Exclusive, Protected Territory |
| Territory Definition Basis | Demographics, Population Density, Traffic Patterns |
Opening Your First Watch Franchise Unit
How do you find a location?
Securing the right location is a critical first step in opening your First Watch franchise unit. While you, as the franchisee, are responsible for finding a suitable site, the First Watch real estate team offers comprehensive support throughout this process. They maintain strict approval over all proposed locations to ensure they align with the brand's strategic growth objectives.
The brand provides detailed site selection criteria for 2025, emphasizing high-visibility end-cap or freestanding locations. These ideal sites typically range from 3,500 to 4,200 square feet. Key demographic targets include areas with a strong daytime population and household incomes exceeding $75,000. This focus ensures access to a customer base that aligns with the First Watch business model.
To facilitate this, franchisees collaborate with local brokers who are approved by the corporate office. The internal real estate team also plays a vital role, utilizing sophisticated demographic and site-mapping software. This technology helps validate potential locations before lease negotiations even begin, offering data-driven insights to support your decision-making.
What happens before the grand opening?
The period leading up to your grand opening is intensive, with significant support provided by the franchisor. Franchisees can expect on-site assistance from a dedicated opening team for approximately 14 days. This team is instrumental in guiding staff training, overseeing operational setup, and managing all final preparations to ensure a smooth launch.
This pre-opening support is a cornerstone of successfully implementing the First Watch business model. It’s important to note that this invaluable assistance is included as part of the initial franchise fee, covering the travel and time expenses of the corporate training team. This ensures you are well-equipped to run your new restaurant franchise from day one.
To generate buzz and drive initial customer traffic, a coordinated marketing blitz is executed in the weeks preceding the opening. This effort is supported by a required grand opening marketing spend, typically ranging from $15,000 to $20,000. This investment is crucial for building community awareness and setting your First Watch franchise locations up for success.
Tips for a Successful Franchise Opening
- Early Location Scouting: Begin your site selection process as early as possible, leveraging the franchisor's criteria and support.
- Team Training Focus: Prioritize comprehensive staff training during the pre-opening phase to ensure excellent customer service.
- Marketing Alignment: Work closely with the franchisor's marketing team to maximize the impact of your grand opening campaign.
The initial investment for a First Watch franchise unit can range from $1,210,150 to $2,028,800, with a required cash investment of $500,000 to $950,000. The initial franchise fee is $40,000, with ongoing royalty fees at 4% of revenue and a 1.50% marketing fee. For those considering how to buy a franchise and scale their portfolio, understanding these financial benchmarks is key. Data from 2022 shows 94 franchised units operating alongside 366 corporate units, indicating a robust brand presence.
Average annual revenue per unit is reported at approximately $730,162, with a gross profit margin of 76.4%. While EBITDA is around 2.3%, the average breakeven time is approximately 14 months, with an investment payback period of 16 months. These figures highlight the potential profitability of the First Watch business model, making it an attractive franchise opportunity.
| Initial Investment Range | $1,210,150 - $2,028,800 |
| Required Cash | $500,000 - $950,000 |
| Royalty Fee | 4% |
| Marketing Fee | 1.50% |
| Average Annual Revenue | $730,162 |
| Gross Profit Margin | 76.4% |
| Breakeven Time | 14 Months |
| Investment Payback | 16 Months |
Exploring franchise opportunities requires thorough due diligence, and understanding the specifics of a franchise agreement is paramount. For those interested in the detailed process of launching their own establishment, a step-by-step guide is available: How to Start a First Watch Franchise in 7 Steps: Checklist.