First Watch serves up substantial move

East Manatee County-based breakfast-brunch-lunch chain First Watch was in business more than 20 years before it opened its first franchise location.

That was in 2008. The past six-plus years have seen some noteworthy successes in that area, including expansions into North Carolina and Kentucky. But the firm's latest agreement, for 15 locations in the Dallas/Fort Worth area over the next five years, is its biggest franchise move to date. It's the largest in number of stores, and will mark the debut in fast-growing Texas.

Even more significant: The new franchisee is a subsidiary of Dallas-based Sun Holdings, one of the largest franchise firms in the country, with 400 multibrand restaurants and nearly $450 million in annual sales. Sun Holdings, just like its First Watch franchise unit, Best Choice Restaurants LLC, is run by prominent Latino-American franchisor Guillermo Perales. Burger King, Popeye's and Golden Corral are among the brands in the Sun Holdings portfolio.

The deal's heft isn't lost on First Watch executives. “There's certainly a level of validation with this,” First Watch Chief Marketing Officer Chris Tomasso tells Coffee Talk. “(Perales') competitors might take a look at what he's doing and say 'we should take a look at First Watch.'”

Those firms would find one of the fastest-growing daytime-only chains in the country, both through company-owned locations and franchises. First Watch, with corporate offices in University Park, has more than 120 locations in 17 states. The company also operates 19 restaurants under the Good Egg name in Arizona and one Bread & Co. restaurant in Nashville. The company had $100 million in sales in 2013.

Perales and his Sun Holdings team met First Watch franchise officials at a trade show in early 2014. Conversations went hot and cold for a few months, says Tomasso, but things got serious late last year.
Tomasso says other deals are in the works with potential franchisees, but, like in the last six years, the firm isn't in a rush. The right fit, he says, is more important than finances. “We've actually turned down a lot of candidates who were well-capitalized,” says Tomasso, “who we didn't think fit our vision and culture.”