Additional Cost Breakdown
The following costs are part of the upfront costs included in the initial investment. And many of these are one-time fees that are needed to launch the franchise.
Additional Cost Breakdown
Leasehold Improvements | $475,000 – $680,000 |
Leasehold Expense | $0 – $30,000 |
Furniture, Fixtures and Equipment | $230,000 – $325,000 |
Initial Inventory | $7,000 – $10,000 |
Small Wares | $30,000 – $35,000 |
Point of Sale Computer Hardware & Software | $30,000 – $35,000 |
Travel and Living Expenses During Training | $1,000 – $20,000 |
Initial Training Fee | $0 – $15,000 |
Opening Crew Costs | $5,000 – $25,000 |
Business Permits | $7,000 – $12,000 |
Insurance Deposits and Premiums (for first year) | $2,000 – $10,000 |
Architect Fees | $20,000 – $25,000 |
Utility Deposits | $0 – $5,000 |
Grand Opening Advertising and Promotion | $5,000 – $35,000 |
Liquor Licensing | $2,800 – $80,000 |
Signage and Graphics | $15,000 – $40,000 |
Additional Funds (3 months) | $30,000 – $100,000 |
Total | $899,800 – $1,522,000 |
Ongoing Costs and Fees
Royalty Fee: 4% of Gross Sales once a month
System Fund Contributions: Maximum – 3% of Gross Sales monthly; currently 1.5% of Gross Sales monthly.
How Much Do Franchise Owners Make?
First Watch Franchise Sales Figures
First Watch does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or affiliate-owned or franchised outlets. The company also does not authorize employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, First Watch may provide you with the actual records of that outlet.
However, let’s look at the performance of their corporate locations.
Performance
In 2020, Total restaurant sales were $337 million on 321 company-owned stores. And taking the 2019 year end company store count of 299 (as the new restaurants were in ramp-up mode), we can guestimate average sales of a First Watch restaurant of $1.12M. Assuming a profit margin of 10%, it is expected that the average First Watch restaurant made $112,000 in profit in 2020.
In 2019, Total restaurant sales were $429 million on 299 company-owned stores. So, taking the 2018 year end company store count of 240 (as the new restaurants were in ramp-up mode), we can guestimate average sales of a First Watch restaurant of $1.78M. Assuming a profit margin of 15%, it is also expected that the average First Watch restaurant made $268,000 in profit in 2019.
Based on a midpoint investment of $1.3M on $250k of profit and time to scale up, it is expected to take 5-6+ years to recoup your initial capital investment in a First Watch restaurant.
This is just an estimated sales based on the franchisor’s income statement and can vary greatly depending on the length that the particular franchise location has been open.