First Watch, Advent Pursue ‘Thoughtful Growth’ After Acquisition


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Courtesy of Advent International

One of the largest global private equity firms now has a majority stake in First Watch. The breakfast, brunch and lunch concept based in University Park, Florida, is now a part of the Advent International portfolio.

The brand retains its management team and a “meaningful equity stake” in operations that include about 200 First Watch restaurants and another 100 locations of The Egg & I, The Good Egg and Bread & Company.

Tricia Patrick, a managing director at Advent who focuses on retail and consumer sectors, said the firm had been looking at First Watch for years.

“We actually got caught in the restaurant a couple years ago, we were apparently over dressed and we hit multiple restaurants in one region,” said Patrick.

She said the breakfast category is an attractive place to invest and First Watch has a fresh, modern take on the service, design and the menu. Their deep research ahead of an opportunity made it easy.

“We were really attracted by the growth of the company at first, that got out attention. But once we ate the food, we were attracted by the modern and fresh positioning of the menu of the restaurants, and so we identified First Watch as a company we wanted to track and pay attention to,” said Patrick. “So once there was an openness to the process, we wanted to move very quickly, and we were better able to because of the time spent studying the concept over the years.”

For Chris Tomasso, president at First Watch, private equity is nothing new. He has been at the brand since 2006—he first served as CMO before becoming president in 2015. He first served under Catterton Partners, then under Freeman Spogli & Company, which became the financial sponsor in 2011. He said it’s another great cultural fit for the brand.

“It goes beyond transactional for us, it’s more relational. It would have been very easy with our track record and success to find any number of financial sponsors, but to find a firm that aligns with us philosophically, culturally and really backs management is what we found in Advent,” said Tomasso.

Of course, the resources of a top-six PE firm (according to Private Equity International) would fuel ongoing growth plans.

“The resources and experience that come with Advent I think will be very beneficial to a company our size. Maybe in the restaurant industry we’re quite large, but in this global economy, we’re not that large, so anything we can learn from their experiences or portfolio companies would be a tremendous advantage to us,” said Tomasso.

Patrick said making those connections is a “fun part of the business,” but despite their global footprint, don’t look for a 20-pack of First Watch franchises in Dubai just yet. Both Tomasso and Patrick still see plenty of room to grow in the U.S.

“We have tremendous white space here in the U.S.,” said Tomasso. “We’re right at 300 restaurants now, but we can see our way clear to 1,200 to 1,500 restaurants in the U.S. under the same criteria we use now.”

He said the company will continue to strive for 15% to 20% unit growth on the company side, plus more franchising and further growth through acquisition if well-aligned opportunities arise. He said that trajectory is robust, but not too fast.

“I think you’ll see us with very measured, very thoughtful growth so we can maintain our strong service philosophy and, more importantly, our strong culture as we grow,” said Tomasso.

For Advent, First Watch fits one of the many themes they are investing in, notably the shift toward healthy lifestyles. Advent also has a stake in Noosa Yoghurt, Lulemon (NASDAQ: LULU), Michael Angelo’s Gourmet Foods and Rao’s Specialty Foods. Patrick said plugging First Watch into the portfolio would help capitalize on that shift.

“We think a lot about just the changing of the customer landscape in the U.S. and globally, so certainly it feels better to be investing in and growing into a position which is increasingly important in the U.S,” said Patrick. “That doesn’t mean this modern millennial customer is the only thing we look for. But always better to have those tailwinds than headwinds.”

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