Why 2016 is important: Firm aims to integrate more than 100 restaurants it acquired in 2015.
Restaurant chain First Watch is aggressively trying to grow nationwide, with a plan to open between 20 and 25 new restaurants per year.
That number was inflated in 2015, when First Watch, with a corporate headquarters in east Manatee County, acquired 114 The Egg and I restaurants. First Watch had 153 total locations at the time of the acquisition of Centennial, Colo.-based The Egg and I. It now has about 280, says Chris Tomasso, who was recently named president of the firm. Terms of the deal weren't disclosed.
First Watch's business plan revolves around being a daytime cafe — restaurants that serve breakfast, brunch and lunch and close at 2:30 p.m. The Egg and I restaurants use a similar scheduling strategy.
“Prior to the acquisition, we were competing in the same space,” Tomasso says. “We each knew a lot about each other.”
The acquisition also gave First Watch an immediate presence in two states it had not previously penetrated: Colorado and Texas. It has since opened a new location in Denver, Tomasso says.
First Watch now has to integrate the two chains into one smoothly run operation. First Watch officials didn't make any significant changes the first 90 days after the acquisition because they wanted to understand The Egg and I's operations, people and overall approach to business before switching things up, Tomasso says.
“One of the great outcomes for us has been realizing how similar the cultures really were,” Tomasso says. “We have a 'you first' philosophy; they have 'serving our friends daily.'”
During the integration process, First Watch's goal was to avoid any alterations to the customer experience, Tomasso says. Most of the challenges were behind the scenes, he says, such as how the accounting system is managed or how to train and prepare new employees.
To avoid any surprises for customers, First Watch initially delayed menu changes following the acquisition. But the chain recently implemented its fresh juice program into The Egg and I locations “with great success,” Tomasso says.
The daytime cafe is also starting to implement design changes. Tomasso says the current wood-type floor in First Watch restaurants will be installed in The Egg and I locations that need carpet replacements.
The biggest advantage for First Watch in acquiring The Egg & I will come from simply being bigger. The deal, for one, bolsters First Watch's impact as a national player, Tomasso says, because “it's easier to open new locations near areas you've already entered.”
There's also newfound industry influence.
“The scope and scale of 280 restaurants versus 150 has been tremendous,” Tomasso says. “With an acquisition like this, you get to integrate a whole new team of people into the organization. It gives us a greater scale with purchasing ability and our leverage.”
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