0001789940-24-000012 | 10-K | XBRL Viewer | First Watch Restaurant Group INC

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Supplemental Information Related to Leases

The following table includes a detail of lease assets and liabilities:


(in thousands)	Consolidated Balance Sheets Classification	DECEMBER 31, 2023		DECEMBER 25, 2022
Operating lease right-of-use assets	Operating lease right-of-use assets	$	420,001	$	352,373
Finance lease assets	Property, fixtures and equipment, net	1,033		1,332
Total lease assets		$	421,034	$	353,705

Operating lease liabilities (1) - current	Current portion of operating lease liabilities	40,281		38,936
Operating lease liabilities - non-current	Operating lease liabilities	441,290		366,113
Finance lease liabilities - current	Current portion of long-term debt	628		632
Finance lease liabilities - non-current	Long-term debt, net	448		801
Total lease liabilities		$	482,647	$	406,482

_____________

(1) Excludes all variable lease expense.

Supplemental information related to leases was as follows:


	FISCAL YEAR
	2023		2022
Weighted-average remaining lease term (in years)
Operating leases	13.8		14.6
Finance leases	2.8		2.8
Weighted-average discount rate (1)
Operating leases	8.3	%	8.6	%
Finance leases	6.9	%	7.6	%

____________

(1) Based on the Company’s incremental borrowing rate.

Supplemental Cash Flow Information

The components of lease expense were as follows:


(in thousands)	Consolidated Statements of Operations and Comprehensive Income (Loss) Classification	FISCAL YEAR
		2023		2022		2021
Operating lease expense	Other restaurant operating expenses Occupancy expenses Pre-opening expenses General and administrative expenses	$	56,129	$	49,620	$	44,906
Variable lease expense	Food and beverage costs Occupancy expenses General and administrative expenses	17,158		14,642		12,811
Finance lease expense:
Amortization of leased assets	Depreciation and amortization	507		521		543
Interest on lease liabilities	Interest expense	92		130		174
Total lease expense (1)		$	73,886	$	64,913	$	58,434

_____________

(1) Includes contingent rent expense of $2.1 million and $1.6 million and $1.1 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

Supplemental cash flow information related to leases was as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	47,930	$	39,546	$	40,601
Operating cash flows - finance leases	$	92	$	130	$	174
Financing cash flows - finance leases	$	558	$	514	$	507

Operating Lease Maturity

As of December 31, 2023, future minimum lease payments for operating and finance leases consisted of the following:


(in thousands)	OPERATING LEASES		FINANCE LEASES
Fiscal year
2024	$	42,043	$	657
2025	60,891		271
2026	60,532		84
2027	59,834		72
2028	59,392		60
Thereafter	563,874		40
Total future minimum lease payments (1)	846,566		1,184
Less: imputed interest	(364,995)		(108)
Total present value of lease liabilities	$	481,571	$	1,076

_____________

(1) Excludes approximately $109.5 million of executed operating leases that have not commenced as of December 31, 2023.

Finance Lease Maturity

As of December 31, 2023, future minimum lease payments for operating and finance leases consisted of the following:


(in thousands)	OPERATING LEASES		FINANCE LEASES
Fiscal year
2024	$	42,043	$	657
2025	60,891		271
2026	60,532		84
2027	59,834		72
2028	59,392		60
Thereafter	563,874		40
Total future minimum lease payments (1)	846,566		1,184
Less: imputed interest	(364,995)		(108)
Total present value of lease liabilities	$	481,571	$	1,076

_____________

(1) Excludes approximately $109.5 million of executed operating leases that have not commenced as of December 31, 2023.

Stock-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended
	Sep. 19, 2021 USD ($) anniversary	Aug. 31, 2021 anniversary	Oct. 31, 2021 USD ($)	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 25, 2022 USD ($) $ / shares	Dec. 26, 2021 USD ($) $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares) \| shares				0
Fair value of vested stock options				$ 7,100	$ 7,400	$ 900
Options granted, grant date fair value (in dollars per share) \| $ / shares				$ 0	$ 6.81	$ 6.35
Stock-based compensation expense				$ 7,600	$ 10,400	$ 8,600
Share-based payment arrangement, expense, tax benefit				600	2,100	900
Proceeds from exercise of stock options, net of employee taxes paid				5,827	1,425	0
Share-based payment arrangement, exercise of option, tax benefit				1,600	300
Share-based compensation arrangement by share-based payment award, options, exercises in period, intrinsic value				$ 5,700	$ 1,100	$ 0
Vesting on first anniversary of initial public offering
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting amount, percentage		33.33%
Vesting on second anniversary of initial public offering
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting amount, percentage	33.33%
Vesting on 273rd day following second anniversary of initial public offering
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual vesting amount, percentage	33.33%
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares) \| shares				543,270
Options granted, grant date fair value (in dollars per share) \| $ / shares				$ 15.70
Share-based compensation arrangement by share-based payment award, equity instruments other than options, aggregate intrinsic value, vested				$ 700
Restricted stock units \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				1 year
Restricted stock units \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				3 years
2021 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for issuance (in shares) \| shares				5,218,292
Total common stock shares issued and outstanding on last day of fiscal year, percentage				2000.00%
Requisite service period				3 years
Share-based payment award, expiration period				10 years
2017 Options Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period		3 years
Number of anniversary of initial public offering \| anniversary	2	2
Fair value of vested stock options	$ 300
2017 Options Plan \| Performance-based option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period				5 years
Share-based payment award, expiration period				10 years
Shares authorized for grant (in shares) \| shares				6,138,240
Time based award and stock compensation expense, amount			$ 2,400
Performance based option awards forfeited			$ 5,600

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Leases [Abstract]
Operating cash flows - operating leases	$ 47,930	$ 39,546	$ 40,601
Operating cash flows - finance leases	92	130	174
Financing cash flows - finance leases	$ 558	$ 514	$ 507

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Revenues:
Total revenues			$ 891,551	$ 730,162	$ 601,193
Restaurant operating expenses (exclusive of depreciation and amortization shown below):
Food and beverage costs			197,374	172,561	134,201
Labor and other related expenses			294,010	238,257	189,167
Other restaurant operating expenses			134,477	114,476	94,847
Occupancy expenses			68,400	59,919	55,433
Pre-opening expenses			7,173	5,414	3,310
General and administrative expenses			103,121	84,959	70,388
Depreciation and amortization			41,223	34,230	32,379
Impairments and loss on disposal of assets			1,359	920	381
Transaction expenses (income), net			3,147	2,513	(1,156)
Total operating costs and expenses			850,284	713,249	578,950
Income from operations			41,267	16,913	22,243
Interest expense			(8,063)	(5,232)	(20,099)
Other income (expense), net			2,871	910	(1,774)
Income before income taxes			36,075	12,591	370
Income tax expense			(10,690)	(5,684)	(2,477)
Net income (loss)	$ 25,385	$ 6,907	$ 25,385	$ 6,907	(2,107)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Unrealized loss on derivatives	(889)	0			0
Income tax related to other comprehensive loss	222	0			0
Other comprehensive loss	(667)	0			0
Comprehensive income (loss)	$ 24,718	$ 6,907			$ (2,107)
Net income (loss) per common share - basic (in dollars per share)			$ 0.43	$ 0.12	$ (0.04)
Net income (loss) per common share - diluted (in dollars per share)			$ 0.41	$ 0.11	$ (0.04)
Weighted average common shares outstanding - basic (in shares)			59,531,404	59,097,512	48,213,995
Weighted average common shares outstanding - diluted (in shares)			61,191,613	60,140,045	48,213,995
Accumulated Deficit
Restaurant operating expenses (exclusive of depreciation and amortization shown below):
Net income (loss)			$ 25,385	$ 6,907	$ (2,107)
Restaurant sales
Revenues:
Total revenues			877,092	719,181	592,343
Franchise revenues
Revenues:
Total revenues			$ 14,459	$ 10,981	$ 8,850

Intangible Assets, Net

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

Intangible assets, net consisted of the following:


		DECEMBER 31, 2023
(in thousands)	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Registered trademarks, trade names, domains, liquor licenses	Indefinite	$	139,103	$	—	$	139,103
Franchise rights	8 years	18,813		(6,730)		12,083
		$	157,916	$	(6,730)	$	151,186


		DECEMBER 25, 2022
(in thousands)	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Registered trademarks, trade names, domains, liquor licenses	Indefinite	$	139,258	$	(316)	$	138,942
Franchise rights	9 years	9,404		(5,195)		4,209
		$	148,662	$	(5,511)	$	143,151

Total amortization expense related to definite-lived intangible assets was $1.5 million, $1.0 million and $1.0 million in Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

Estimated future amortization of definite-lived intangible assets as of December 31, 2023 is as follows:


Fiscal year	(in thousands)
2024	$	2,452
2025	$	2,452
2026	$	2,124
2027	$	1,716
2028	$	1,124
Thereafter	$	2,215

Defined Contribution Plan (Details) - USD ($) $ in Millions	12 Months Ended
Defined Contribution Plan (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employers matching contribution, annual vesting percentage	50.00%	25.00%
Defined contribution plan, employer matching contribution, percent of employees' gross pay	6.00%
Define contribution 401(k) saving plan vesting period	5 years
Other Postretirement Benefits Plan
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, cost	$ 1.1	$ 0.6	$ 0.5

Stock-Based Compensation - Schedule of Unrecognized Stock-based Compensation Expense (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock compensation expense	$ 3,512
REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)	10 months 24 days
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock compensation expense	$ 5,823
REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)	2 years 1 month 6 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Condensed Financial Information of Registrant (Parent Company Only) CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021	Dec. 27, 2020
Assets
Investment in subsidiaries	$ 561,284	$ 523,135	$ 504,429	$ 320,866
Equity
Preferred stock; $0.01 par value; 10,000,000 shares authorized; none issued and outstanding	0	0
Common stock; $0.01 par value; 300,000,000 shares authorized; 59,891,705 and 59,211,019 shares issued and outstanding at December 31, 2023 and December 25, 2022, respectively	599	592
Additional paid-in capital	634,099	620,675
Accumulated deficit	(72,747)	(98,132)
Accumulated other comprehensive loss	(667)	0
Total equity	561,284	523,135	$ 504,429	$ 320,866
Parent Company
Assets
Investment in subsidiaries	561,284	523,135
Equity
Preferred stock; $0.01 par value; 10,000,000 shares authorized; none issued and outstanding	0	0
Common stock; $0.01 par value; 300,000,000 shares authorized; 59,891,705 and 59,211,019 shares issued and outstanding at December 31, 2023 and December 25, 2022, respectively	599	592
Additional paid-in capital	634,099	620,675
Accumulated deficit	(72,747)	(98,132)
Accumulated other comprehensive loss	(667)	0
Total equity	$ 561,284	$ 523,135

- Definition

Amount, after tax, of accumulated increase (decrease) in equity from transaction and other event and circumstance from nonowner source.

+ References + Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(31))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 14: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 310
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 4.E)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480418/310-10-S99-2

+ Details

Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Income Taxes Valuation Allowance [Roll Forward]
Deferred tax assets, valuation allowance, beginning balance	$ (41,754)	$ (35,863)	$ (30,214)
Increase	(6,357)	(5,891)	(5,649)
Deferred tax assets, valuation allowance, ending balance	$ (48,111)	$ (41,754)	$ (35,863)

Revenues (Tables)

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Contract with Customer, Contract Asset, Contract Liability, and Receivable

The following tables include a detail of liabilities from contracts with customers:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Deferred revenues:
Deferred gift card revenue	$	5,224	$	4,897
Deferred franchise fee revenue - current	275		296
Total current deferred revenues	$	5,499	$	5,193
Other long-term liabilities:
Deferred franchise fee revenue - non-current	$	1,786	$	2,472

Changes in deferred gift card contract liabilities were as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Deferred gift card revenue:
Balance, beginning of period	$	4,897	$	4,410	$	4,024
Gift card sales	12,329		9,627		8,286
Gift card redemptions	(11,198)		(8,225)		(7,152)
Gift card breakage	(1,081)		(915)		(748)
Gift card liabilities assumed through acquisitions	277		—		—
Balance, end of period	$	5,224	$	4,897	$	4,410

Changes in deferred franchise fee contract liabilities were as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Deferred franchise fee revenue:
Balance, beginning of period	$	2,768	$	2,536	$	2,274
Cash received	288		530		537
Franchise revenues recognized	(388)		(298)		(275)
Business combinations - franchise revenues recognized	(607)		—		—
Balance, end of period	$	2,061	$	2,768	$	2,536

Disaggregation of Revenue

Revenues recognized disaggregated by type were as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Restaurant sales:
In-restaurant dining sales	$	716,960	$	571,048	$	452,989
Third-party delivery sales	91,433		82,049		70,486
Take-out sales	68,699		66,084		68,868
Total restaurant sales	$	877,092	$	719,181	$	592,343

Franchise revenues:
Royalty and system fund contributions	$	13,464	$	10,683	$	8,575
Initial fees	388		298		275
Business combinations - revenues recognized	607		—		—
Total franchise revenues	$	14,459	$	10,981	$	8,850
Total revenues	$	891,551	$	730,162	$	601,193

Schedule of Deferred Revenues Expected to be Recognized

Deferred revenues as of December 31, 2023 are expected to be recognized as follows:


Fiscal year	(in thousands)
2024	$	5,499
2025	$	321
2026	$	298
2027	$	279
2028	$	243
Thereafter	$	645

Commitments and Contingencies - Recorded Unconditional Purchase Obligations (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 2,315
2025	2,486
Recorded Unconditional Purchase Obligation	$ 4,801

Intangible Assets, Net - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1.5	$ 1.0	$ 1.0

Condensed Financial Information of Registrant (Parent Company Only) (Tables)

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

CONSOLIDATED BALANCE SHEETS

FIRST WATCH RESTAURANT GROUP, INC.

(PARENT COMPANY ONLY)

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


	DECEMBER 31, 2023		DECEMBER 25, 2022
Assets
Investment in subsidiaries	$	561,284	$	523,135

Equity
Preferred stock; $0.01 par value; 10,000,000 shares authorized; none issued and outstanding	$	—	$	—
Common stock; $0.01 par value; 300,000,000 shares authorized; 59,891,705 and 59,211,019 shares issued and outstanding at December 31, 2023 and December 25, 2022, respectively	599		592
Additional paid-in capital	634,099		620,675
Accumulated deficit	(72,747)		(98,132)
Accumulated other comprehensive loss	(667)		—
Total equity attributable to First Watch Restaurant Group, Inc.	$	561,284	$	523,135

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FIRST WATCH RESTAURANT GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


	FISCAL YEAR
	2023		2022		2021
Equity in net income (loss) of subsidiaries
Net income (loss) and comprehensive income (loss)	$	24,718	$	6,907	$	(2,107)

Net income (loss) per common share attributable to First Watch Restaurant Group, Inc. - basic	$	0.43	$	0.12	$	(0.04)
Net income (loss) per common share attributable to First Watch Restaurant Group, Inc. - diluted	$	0.41	$	0.11	$	(0.04)
Weighted average number of common shares outstanding -basic	59,531,404		59,097,512		48,213,995
Weighted average number of common shares outstanding - diluted	61,191,613		60,140,045		48,213,995

Business Acquisitions - Schedule of Business Acquisitions, by Acquisition (Details) $ in Thousands					12 Months Ended
	Nov. 13, 2023 USD ($) restaurant	Aug. 09, 2023 USD ($) restaurant	Jun. 26, 2023 USD ($) restaurant	May 01, 2023 USD ($) restaurant	Dec. 31, 2023 USD ($) restaurant	Dec. 25, 2022 USD ($)	Dec. 26, 2021 USD ($)
Business Acquisition [Line Items]
Number of acquired restaurants \| restaurant					23
Deferred franchise fees recognized as a result of termination of pre-existing franchise agreement					$ 607	$ 0	$ 0
Goodwill					$ 359,883	$ 345,219	$ 345,219
Series of Individually Immaterial Business Acquisitions
Business Acquisition [Line Items]
Number of acquired restaurants \| restaurant	6	6	5	6
Number of acquired restaurants under development \| restaurant	0	1	0	0
Purchase price (cash)	$ 9,568	$ 14,129	$ 8,651	$ 8,177
Transaction costs incurred	327	400	352	362
Deferred franchise fees recognized as a result of termination of pre-existing franchise agreement	206	200	123	78
Cash	9	16	6	9
Inventory	70	102	62	57
Prepaid rent and other assets	51	89	26	67
Property, fixtures and equipment	5,185	6,364	3,783	1,840
Reacquired rights	1,405	4,358	2,304	1,342
Goodwill	2,837	3,888	2,667	5,272
(Unfavorable)/Favorable leasehold positions, net	30	(530)	(70)	(330)
Accounts payable	0	(35)	0	0
Deferred tax liability	0	(72)	0	0
Deferred revenues - gift card liabilities assumed	$ (19)	$ (51)	$ (127)	$ (80)

Stock-Based Compensation - Details of Weighted-Average Grant-Date Fair Values and Assumptions Used for Estimating Fair Values (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average expected volatility	0.00%	52.40%	50.30%
Risk-free interest rate	0.00%	2.60%	1.00%
Expected dividend yield	$ 0	$ 0	$ 0
Weighted Average
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average expected term (years)	0 years	6 years 6 months	4 years 7 months 6 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Receivables [Abstract]
Receivables from third-party delivery providers	$ 1,559	$ 974
Receivables from franchisees	1,390	1,076
Receivables from vendors	873	920
Receivables related to gift card sales	1,585	1,565
Other receivables	125	1,629
Total accounts receivable	$ 5,532	$ 6,164

Commitments and Contingencies - Narrative (Details) $ in Millions	1 Months Ended
	Jul. 31, 2022 gal	Dec. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Long term purchase commitment, maximum gallons to be purchased \| gal	585,940
Long-term purchase commitment, period	5 years
Purchase commitment, remaining minimum amount committed		$ 7.7
Loss contingency, estimate of possible loss		$ 0.8

Leases - Supplemental Information Related to Leases (Details)	Dec. 31, 2023	Dec. 25, 2022
Weighted-average remaining lease term (in years)
Operating leases	13 years 9 months 18 days	14 years 7 months 6 days
Finance leases	2 years 9 months 18 days	2 years 9 months 18 days
Weighted-average discount rate
Operating leases	8.30%	8.60%
Finance leases	6.90%	7.60%

Condensed Financial Information of Registrant (Parent Company Only) Parenthetical (Detail) - $ / shares	Dec. 31, 2023	Dec. 25, 2022
Condensed Balance Sheet Statements, Captions [Line Items]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares outstanding (in shares)	0	0
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	59,891,705	59,211,019
Common stock, shares outstanding (in shares)	59,891,705	59,211,019
Parent Company
Condensed Balance Sheet Statements, Captions [Line Items]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares outstanding (in shares)	0	0
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	59,891,705	59,211,019
Common stock, shares outstanding (in shares)	59,891,705	59,211,019

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Construction liabilities	$	13,944	$	6,908
Sales tax	6,163		3,791
Self-insurance and general liability reserves	1,593		1,529
Utilities	1,657		1,468
Interest payable	401		1,506
Credit card fees	1,706		1,043
Property tax	922		951
Contingent rent	1,160		811
Common area maintenance	749		680
Other	7,335		4,042
Total accrued liabilities	$	35,630	$	22,729

Property, Plant and Equipment - Schedule of Property, Fixtures and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Property, Plant and Equipment [Line Items]
Financing lease assets	$ 3,144	$ 3,066
Total property, fixtures and equipment	427,089	330,355
Accumulated depreciation	(181,481)	(145,720)
Construction-in-progress	17,474	10,482
Total property, fixtures and equipment, net	263,082	195,117
Building and land improvements
Property, Plant and Equipment [Line Items]
Total property, fixtures and equipment	1,354	1,354
Leased land asset
Property, Plant and Equipment [Line Items]
Total property, fixtures and equipment	1,190	1,190
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property, fixtures and equipment	240,976	178,893
Furniture, fixtures and equipment (including capitalized software)
Property, Plant and Equipment [Line Items]
Total property, fixtures and equipment	179,965	145,397
Vehicles
Property, Plant and Equipment [Line Items]
Total property, fixtures and equipment	$ 460	$ 455

Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Indefinite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, accumulated amortization	$ (6,730)	$ (5,511)
Gross Carrying Value	157,916	148,662
Net Carrying Value	$ 151,186	$ 143,151
Franchise Rights
Indefinite-Lived Intangible Assets [Line Items]
Weighted Average Useful Lives	8 years	9 years
Finite-lived intangible assets, gross	$ 18,813	$ 9,404
Finite-lived intangible assets, accumulated amortization	(6,730)	(5,195)
Finite-lived intangible assets, net	12,083	4,209
Trademarks and Trade Names
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	139,103	139,258
Finite-lived intangible assets, accumulated amortization	0	(316)
Indefinite-lived intangible assets, net	$ 139,103	$ 138,942

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Disaggregation of Revenue [Line Items]
Total revenues	$ 891,551	$ 730,162	$ 601,193
Restaurant sales
Disaggregation of Revenue [Line Items]
Total revenues	877,092	719,181	592,343
In-restaurant dining sales
Disaggregation of Revenue [Line Items]
Total revenues	716,960	571,048	452,989
Third-party delivery sales
Disaggregation of Revenue [Line Items]
Total revenues	91,433	82,049	70,486
Take-out sales
Disaggregation of Revenue [Line Items]
Total revenues	68,699	66,084	68,868
Franchise revenues
Disaggregation of Revenue [Line Items]
Total revenues	14,459	10,981	8,850
Royalty and system fund contributions
Disaggregation of Revenue [Line Items]
Total revenues	13,464	10,683	8,575
Initial fees
Disaggregation of Revenue [Line Items]
Total revenues	388	298	275
Business combinations - revenues recognized
Disaggregation of Revenue [Line Items]
Total revenues	$ 607	$ 0	$ 0

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Building and land improvements	$	1,354	$	1,354
Leased land asset	1,190		1,190
Leasehold improvements	240,976		178,893
Furniture, fixtures and equipment (including capitalized software)	179,965		145,397
Financing lease assets	3,144		3,066
Vehicles	460		455
Total property, fixtures and equipment	427,089		330,355
Accumulated depreciation	(181,481)		(145,720)
Construction-in-progress	17,474		10,482
Total property, fixtures and equipment, net	$	263,082	$	195,117

Depreciation expense was $39.7 million, $33.3 million and $31.3 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

The Company recognized impairment losses of $0.5 million in Fiscal 2023 which primarily related to the long-lived assets of two company-owned restaurants due to their approved closures. In Fiscal 2023, the Company also recognized $0.8 million in loss on disposals primarily related to write-offs of assets retired as a result of replacement of assets.

In Fiscal 2022 and Fiscal 2021, there were no impairment losses recorded. Loss on disposals of assets of $0.9 million and $0.4 million recognized in Fiscal 2022 and Fiscal 2021, respectively, primarily related to the write-off of assets retired as a result of restaurant closures or replacements of assets.

As of December 31, 2023 and December 25, 2022, Property, fixtures and equipment, net included $1.2 million in land related to sale and leaseback transactions accounted for as financing obligations.

Net Income (Loss) Per Common Share (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Computations of Basic and Diluted Net Income (Loss) Per Common Share

The following table sets forth the computations of basic and diluted net income (loss) per common share:


	FISCAL YEAR
(in thousands, except share and per share data)	2023		2022		2021
Numerator:
Net income (loss)	$	25,385	$	6,907	$	(2,107)
Denominator:
Weighted average common shares outstanding - basic	59,531,404		59,097,512		48,213,995
Weighted average common shares outstanding - diluted	61,191,613		60,140,045		48,213,995
Net income (loss) per common share - basic	$	0.43	$	0.12	$	(0.04)
Net income (loss) per common share - diluted	$	0.41	$	0.11	$	(0.04)
Stock options outstanding not included in diluted net income (loss) per common share as their effect is anti-dilutive	13,656		1,787,517		4,409,331
Restricted stock units outstanding not included in diluted net income (loss) per common share as their effect is anti-dilutive	355		—		—

Stockholders’ Equity	12 Months Ended
Stockholders’ Equity	Dec. 31, 2023
Equity [Abstract]
Stockholders’ Equity	Stockholders’ Equity The Company is authorized to issue 300,000,000 common stock shares with a par value of $0.01 per share and 10,000,000 preferred stock shares with a par value of $0.01 per share pursuant to the Company’s Amended and Restated Certificate of Incorporation. Each share of common stock entitles the holder to one vote for each share of common stock held and common stockholders will not have cumulative voting rights. Common stockholders are entitled to receive dividends, as and if declared by the board of directors. In addition, all common stockholders are entitled to share equally on a share-for-share basis in any assets available for distribution to common stockholders upon liquidation, dissolution, or winding up of the Company after payment is made to the preferred stockholders. During Fiscal 2023, funds managed by Advent International L.P. sold 3,500,000 and 3,000,000 shares through Secondary Offerings that were completed on May 18, 2023 and June 13, 2023, respectively. The selling stockholders sold an additional 525,000 and 450,000 shares of common stock on May 18, 2023 and July 3, 2023, respectively, pursuant to the terms of the underwriter’s option associated with each secondary public offering. All net proceeds from the sale of the shares of common stock were distributed to the selling stockholders. During Fiscal 2022, funds managed by Advent sold 4,500,000 shares of the Company’s common stock through a Secondary Offering. The selling stockholders sold an additional 675,000 shares of common stock on October 6, 2022 pursuant to the terms of the underwriters option associated with the Secondary Offering. All net proceeds from the sale of the shares of common stock were distributed to the selling stockholders. No cash dividends were declared or paid in Fiscal 2023, Fiscal 2022 and Fiscal 2021.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Nature of Business and Organization	12 Months Ended
Nature of Business and Organization	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business and Organization	Nature of Business and Organization First Watch Restaurant Group, Inc. (collectively with its wholly-owned subsidiaries, “the Company” or “Management”) is a Delaware holding company. The Company operates and franchises restaurants in 29 states operating under the “First Watch” trade name, which are focused on made-to-order breakfast, brunch and lunch. The Company does not operate outside of the United States and all of its assets are located in the United States. The Company’s outstanding stock was purchased by funds affiliated with or managed by Advent International L.P. on August 21, 2017 (the “Advent Acquisition”). The Company operates restaurants through its wholly owned subsidiary, First Watch Restaurants, Inc., and is a franchisor through its wholly owned subsidiary, First Watch Franchise Development Co. As of December 31, 2023 and December 25, 2022, the Company operated 425 company-owned restaurants and 366 company-owned restaurants, respectively, and had 99 franchise-owned restaurants and 108 franchise-owned restaurants, respectively. Initial Public Offering The Company completed its initial public offering (“IPO”) on October 5, 2021, in which the Company sold 10,877,850 shares of common stock, which included the underwriters’ full exercise of their option to purchase up to an additional 1,418,850 shares of common stock, at the initial public offering price of $18.00 per share. The Company received aggregate net proceeds of $182.1 million after deducting underwriting discounts and commissions of $13.7 million.

Revenues - Detail of Contract Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Revenue from Contract with Customer [Abstract]
Deferred gift card revenue	$ 5,224	$ 4,897
Deferred franchise fee revenue - current	275	296
Total current deferred revenues	5,499	5,193
Deferred franchise fee revenue - non-current	$ 1,786	$ 2,472

Goodwill (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying value of goodwill were as follows:


(in thousands)
Balance as of December 26, 2021	$	345,219
Additions - acquisitions	—
Balance as of December 25, 2022	345,219
Additions - acquisitions	14,664
Balance as of December 31, 2023	$	359,883

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
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-Publisher FASB
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Section 50
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
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-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

Leases - Operating and Finance Lease Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
OPERATING LEASES
2024	$ 42,043
2025	60,891
2026	60,532
2027	59,834
2028	59,392
Thereafter	563,874
Total future minimum lease payments	846,566
Less: imputed interest	(364,995)
Total present value of lease liabilities	481,571
FINANCE LEASES
2024	657
2025	271
2026	84
2027	72
2028	60
Thereafter	40
Total future minimum lease payments	1,184
Less: imputed interest	(108)
Total present value of lease liabilities	1,076	$ 1,433
Executed operating leases that have not commenced	$ 109,500

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

The Company reports financial information on a 52- or 53-week fiscal year ending on the last Sunday of each calendar year. The fiscal years ended December 31, 2023 (“Fiscal 2023”), December 25, 2022 (“Fiscal 2022”) and December 26, 2021 (“Fiscal 2021”) contained 53 weeks, 52 weeks and 52 weeks, respectively. The accompanying consolidated financial statements of the Company have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Out of Period Adjustment

Management identified an error relating to the deferred tax asset associated with accrued compensation in Fiscal 2021. This out-of-period adjustment resulted in an increase of approximately $0.4 million in income tax expense on the Consolidated Statements of Operations and Comprehensive Income for Fiscal 2023. Management assessed the materiality of this error on the previously issued consolidated financial statements and concluded that the error was not material to the previously issued consolidated financial statements and the impact of correcting the error in Fiscal 2023 is not material to the consolidated financial statements as of and for the fiscal year ended December 31, 2023.

Principles of Consolidation

The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

The Company does not hold ownership interests in any franchisee and does not provide financial support to franchisees. As a result, the Company’s franchise relationships are not variable interest entities and are not consolidated.

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates and such differences could be material.

Segment Reporting

Management determined the Company’s single operating segment on the basis that the Company’s Chief Operating Decision Maker (the “CODM”), the Chief Executive Officer, assesses performance and allocates resources at the Company's consolidated level. The Company does not have any customer that represents more than 10.0% of total revenues for the periods presented.

Business Combinations

The Company’s business combinations are accounted for using the purchase method of accounting. The consideration transferred in a business combination, identifiable assets acquired and liabilities assumed are measured at their estimated fair value as of the date of the acquisition. Goodwill is recognized for the amount by which the purchase consideration exceeds the fair values of the net assets acquired. Costs incurred in connection with business combinations are expensed as incurred. The results of operations of the businesses that were acquired are included as of their respective dates of acquisition.

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable inputs and the last is considered unobservable. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.


Level 1			Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2			Observable inputs available other than quoted prices included in Level 1
Level 3			Unobservable inputs based on assumptions that cannot be determined by observable market data

The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable, accrued expenses, note payable and other current liabilities, approximate their fair values due to their short-term maturities.

Interest Rate Swaps

As an element of the Company’s interest rate risk management strategy, Management uses interest rate swaps. The intent of these instruments is to reduce cash flow exposure to variability in expected future interest rates on the Company’s debt. Management has elected to designate and qualify the interest rate swaps as cash flow hedges. As such, the instruments are recorded on the balance sheet at fair value. Thereafter, gains or losses on the instruments are recognized in equity as changes to Other Comprehensive Income (Loss) and subsequently reclassified into earnings at the time of the Company’s debt-interest payments. The Company has elected to record cash flows from interest rate swaps within operating activities, the same category as the items being hedged, in its Consolidated Statements of Cash Flows.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. Amounts receivable from credit card processors are considered cash equivalents because they are highly liquid and are typically converted to cash within three business days.

Amounts included in restricted cash represent those required to be set aside by a contractual agreement for the settlement of insurance claims.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of market and credit risk, are cash and cash equivalents and restricted cash. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses to date as a result of these risks. Management periodically assesses the quality of the financial institutions and believes that the risk related to these deposits is minimal.

Accounts Receivable

Accounts receivable consist primarily of receivables from franchisees, receivables from third-party delivery providers, receivables from gift card sales and vendor rebates. The Company believes all amounts to be collectible based on a variety of factors it evaluates, including historical experience, current economic conditions and other factors. Accordingly, no allowance for credit losses or doubtful accounts has been recorded as of December 31, 2023 and December 25, 2022.

Inventory

Inventory consists primarily of food and beverage costs and is stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Adjustments are not deemed necessary to reduce inventory to net realizable value due to the rapid turnover and utilization of inventory.

Leases

The Company’s restaurant facilities, corporate offices and certain restaurant equipment are leased under various agreements having initial terms expiring between 2024 and 2037. Restaurant facility leases generally have renewal periods of five to 20 years, exercisable at the option of the Company. At the commencement of each lease, an evaluation is performed to determine whether (i) the contract involves the use of property or equipment, (ii) the Company controls the use of the asset and (iii) the Company has the right to direct the use of the asset. Management determines the classification of lease contracts as operating or finance leases. The majority of the Company’s real estate leases are classified as operating leases and the majority of the Company’s equipment leases are classified as finance leases.

For operating leases with lease terms greater than twelve months, a lease liability is recognized for future fixed lease payments and a corresponding right-of-use asset is recognized representing the Company’s right to use the underlying asset during the lease term. The lease liability is initially measured as the present value of the future fixed lease payments that will be made over the lease term using the Company’s incremental borrowing rate as there are no implicit rates provided in the lease contracts. The Company’s incremental borrowing rate is based on a market yield implied by the Company’s outstanding secured term loan interpolated for various maturities using the Company’s synthetic credit rating, which was determined using a regression analysis of rated publicly-traded comparable companies and their financial data. Occupancy expense, which includes the effects of free rent periods and rent escalation clauses within certain of the Company’s leases, is recognized on a straight-line basis over the lease term. Tenant improvement allowances are amortized on a straight-line basis over the term of the lease as a reduction of lease expense. The lease term, which commences on the date the Company has the right to control the use of the property, includes the Company’s options to extend the lease to the extent it is reasonably certain that the renewal options will be exercised.

Leases with indexed rent escalation clauses are recorded using the index that existed at lease commencement or upon the latest modification requiring remeasurement. Subsequent changes in the index are recorded as variable lease expense. Contingent rent payments, which are based on a percentage of sales for certain restaurant facilities, are recorded as variable lease expense when the Company determines that such sales levels will be achieved. In addition to fixed lease payments, certain of the Company’s real estate leases also require payment of a proportionate share of property taxes, insurance and maintenance costs, which are expensed as incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss) and future variable rent obligations are not included within the lease liabilities on the Consolidated Balance Sheets.

The operating lease right-of-use asset is measured at the amount of the lease liability with adjustments for (i) rent prepayments made prior to or at lease commencement, (ii) landlord incentives and (iii) favorable and unfavorable leasehold positions. The depreciable life of an operating lease right-of-use asset is limited by the lease term. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

Fixed lease and non-lease components of the Company’s restaurant facility leases are accounted for as a single lease component. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets, however, they are recognized on a straight-line basis over the lease term in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Finance lease liabilities and corresponding finance lease assets are recognized at an amount equal to the present value of the minimum lease payments over the lease term. The amortization of finance lease assets is recognized over the shorter of the lease term or useful life of the underlying asset within Depreciation and amortization. The interest expense related to finance leases, including any variable lease payments, is recognized in Interest expense. Finance lease assets are classified in Property, fixtures and equipment, net and current maturities and long-term portions of finance lease liabilities are classified within Current portion of long-term debt and Long-term debt, net, respectively.

Property, Fixtures and Equipment

Property, fixtures and equipment, including capitalized software, are stated at cost less accumulated depreciation. Refurbishments and improvements that increase the productive capacity or extend the useful life of assets are capitalized and depreciated over their estimated useful lives. Repair and maintenance costs are expensed as incurred. Leasehold improvements are depreciated over the shorter of their useful life or the lease term. The carrying amount of assets sold, replaced or retired and the related accumulated depreciation are eliminated at the time of disposal and any resulting gains and losses on disposal are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Direct internal costs associated with the acquisition, development, design and construction of company-owned restaurants are capitalized as these costs have a future benefit to the Company. Once a restaurant opens, these costs are depreciated and recorded in Depreciation and amortization. Direct internal costs of $1.0 million and $0.7 million were capitalized in Fiscal 2023 and Fiscal 2022, respectively.

Depreciation is computed using the straight-line method over the following estimated useful lives:


Building and land improvements			30 to 40 years
Leasehold improvements			3 to 20 years
Furniture and fixtures			2 to 10 years
Equipment (including capitalized software)			2 to 15 years
Vehicles			3 to 10 years

Goodwill and Indefinite-lived Intangible Assets

Goodwill and indefinite-lived intangible assets are evaluated for impairment annually on the first day of the fourth quarter of the fiscal year, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company has one reporting unit for goodwill impairment testing purposes.

Management may elect to perform a qualitative assessment to determine whether it is more likely than not that the reporting unit and/or asset group is impaired. If the qualitative assessment is not performed, or if it is not more likely than not that the estimated fair value of the reporting unit and indefinite-lived intangible assets exceeds the respective carrying value, a quantitative analysis is required.

The fair value of the indefinite-lived intangibles is determined through a relief from royalty method using certain unobservable inputs that fall within Level 3 of the fair value hierarchy. The respective carrying values are compared to the related estimated fair values and an impairment loss is recognized in an amount equal to the excess of the carrying value over estimated fair values.

Management performed a qualitative annual impairment assessment for goodwill and indefinite-lived intangible assets as of the first day of the fourth quarter of Fiscal 2023 and Fiscal 2022 and concluded that impairment of both goodwill and indefinite-lived intangible assets was not more likely than not. As a result, a quantitative assessment was not required.

Definite-Lived Intangible Assets

Intangible assets with definite lives consist of franchise rights which arose from the purchase price allocation in connection with the Advent Acquisition and also include reacquired rights from the Company’s acquisitions of franchised restaurants. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

When evaluating the carrying amount for recoverability, the total future undiscounted net cash flows expected to be generated by the asset are compared to the carrying amount. If the total future undiscounted net cash flows are less than the carrying amount, this may be an indicator of impairment. An impairment loss is recognized when the asset’s carrying value exceeds its estimated fair value. Fair value is generally estimated using a discounted cash flow model using unobservable inputs that fall within Level 3 of the fair value hierarchy. No impairment loss was recorded for definite-lived intangible assets in Fiscal 2023, Fiscal 2022 and Fiscal 2021.

Impairment Assessment of Long-lived Assets

Long-lived assets deployed at company-owned restaurants include (i) property, fixtures and equipment, (ii) operating lease right-of-use asset, net of the related operating lease liability and (iii) reacquired rights to the extent the restaurant had been previously acquired by the Company.

When circumstances indicate that the carrying value may not be recoverable, an evaluation for impairment is performed at the lowest level of identifiable cash flows, which is at the individual restaurant level. If the total future undiscounted net cash flows are less than the carrying value of the long-lived assets at the individual restaurant level, the fair value is determined based on discounted future net cash flows expected to result from the use and eventual disposition of the assets, which are unobservable inputs that fall within Level 3 of the fair value hierarchy. An impairment loss is recognized in an amount equal to the excess of the carrying value over the estimated fair value.

Insurance Reserves

The Company is self-insured primarily for employee group health claims and for workers’ compensation in Ohio. The Company holds stop-loss insurance which funds individual health claims in excess of $125,000 per occurrence and workers’ compensation claims in Ohio in excess of $500,000 per occurrence annually. The Consolidated Statements of Operations and Comprehensive Income (Loss) include expenses related to the costs of claims reported and an estimate of claims incurred but not reported for health and general liability claims. In addition, the Company’s insurance program includes specific retention levels or per-claim deductibles with respect to general liability.

Estimated unpaid claims and other insurance liabilities of $2.3 million and $1.5 million were recorded within Accrued liabilities and Other long-term liabilities as of December 31, 2023 and December 25, 2022, respectively.

Revenue Recognition

Revenues from food and beverage sales are reported, net of discounts and taxes. For in-restaurant dining and take-out sales, revenues are recognized when payment is tendered. For delivery sales made through the Company’s mobile application and website, the Company controls the delivery services and recognizes revenue, including delivery fees, when the delivery partner transfers the food and beverage to the customer. With respect to sales made through the delivery partner’s mobile application or website, the Company recognizes revenue, excluding delivery fees collected by the delivery partner, when control of the food and beverage is transferred to the delivery partner. Payment is received from the delivery partner subsequent to the transfer of food and beverage and the payment terms are short-term.

Franchise revenues include initial franchise fees and ongoing sales-based royalty and system fund contributions, which are used for advertising, marketing and public relations programs and materials. The license granted to develop and operate a restaurant is the distinct performance obligation that is transferred to the franchisee. Ancillary promised services, such as training, which are not considered distinct within the context of the franchise agreement, are combined with the franchise license and are considered one distinct performance obligation. Payments for initial franchise fees are received either upon execution of the franchise agreement and/or upon opening of the restaurant. These payments are deferred and recognized as revenue throughout the contractual term of the related franchise agreement. Unamortized deferred franchise fees are recognized as revenue upon the termination of franchise agreements with franchisees. The short-term and long-term unamortized portion of these liabilities are included in Deferred revenues and in Other long-term liabilities, respectively.

Royalty and system fund contributions from franchisees are based on a percentage of sales and are recognized as revenue in the period the sales occurred.

Gift cards are sold at restaurants and certain retail venues. Deferred revenues include liabilities established for the value of the gift cards when sold. Revenue is recognized from gift card sales upon redemption by the customer. Management estimates the amount of gift cards for which the likelihood of redemption is remote, referred to as “breakage,” using historical gift card redemption patterns. The estimated breakage, less an administrative fee, is recognized over the expected period of redemption as the remaining gift card values are redeemed, which is generally over a period of two years. Utilizing this method, Management estimates both the breakage and the time period of redemption. If actual redemption patterns vary from these estimates, actual gift card breakage income may differ from the amounts recorded. Estimates of the redemption period and breakage rate applied are updated periodically. Gift card liabilities are included in Deferred revenues.

Food and Beverage Costs

The components of food and beverage costs at company-owned restaurants fluctuate directly with sales volumes and are impacted by changes in commodity prices or promotional activities.

Pre-opening Expenses

Pre-opening expenses are costs incurred to open new company-owned restaurants. Pre-opening expenses include pre-opening rent expense, which is recognized during the period between the date of possession of the restaurant facility and the restaurant opening date. In addition, pre-opening expenses include manager salaries, recruiting expenses, employee payroll and training costs, which are recognized in the period in which the expense was incurred. Pre-opening expenses can fluctuate from period to period, based on the number and timing of new company-owned restaurant openings.

Consideration Received from Vendors

The Company receives consideration from certain vendors for volume rebates and allowances. The Company accounts for consideration from a vendor as a reduction of the purchase price of the goods or services acquired from the vendor.

Advertising Costs

Advertising costs are recognized as incurred or, in the case of advertisements, when the advertisement occurs. Advertising costs were $7.2 million, $6.4 million and $4.8 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively, and are included in General and administrative expenses, Other restaurant operating expenses and Pre-opening expenses.

Debt Discount and Deferred Issuance Costs

Debt discount and deferred issuance costs incurred in connection with the issuance of long-term debt are recorded as reductions of long-term debt and are amortized over the term of the related debt. Amortization expense of debt discount and deferred issuance costs is included in Interest expense.

Income Taxes

Income taxes are accounted for under the asset and liability method of accounting. Under this method, deferred tax assets or liabilities are recognized for the estimated future tax effects attributable to temporary differences between the carrying value and the tax basis of assets and liabilities as well as tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applicable in the years in which the differences are expected to be recovered or settled. Changes in deferred tax assets or liabilities are recognized in Income tax expense.

Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable income will be available against which the deductible temporary differences can be utilized. Realization of deferred tax assets is dependent upon the availability of taxable income and a valuation allowance for deferred tax assets is provided when it is more likely than not that a portion of the deferred tax assets will not be realized. In the assessment for realization of deferred tax assets, Management considers all sources of taxable income including (i) taxable income in any available carry back period, (ii) scheduling of anticipated reversal of taxable temporary differences, (iii) tax-planning strategies and (iv) taxable income expected to be generated in the future other than from reversing temporary differences and carryforwards. Management continues to evaluate the rationale for recording a valuation allowance on its deferred tax assets and as the Company increases earnings and utilizes deferred tax assets, it is possible the valuation allowance could be reduced or eliminated.

Interest and penalties, when incurred, are recognized in Other (expense) income, net.

Stock-Based Compensation

Stock-based compensation expense is recognized for stock option awards granted and is based on the fair value of the stock option awards on the date of grant. The fair value of stock option awards is determined using the Black-Scholes option pricing model. The fair value of performance-based stock option awards is recognized as expense when the achievement of the performance condition is probable. Forfeitures of stock option awards are recognized as they occur. Determining the fair value of stock option awards at the grant date requires judgment, including estimating the expected term that the stock option awards will be outstanding prior to exercise, volatility, dividend yield and risk-free interest rate. Stock-based compensation expense is included in General and administrative expenses. Stock option exercises are settled with authorized but unissued shares of the Company’s common stock.

Fair Value of Common Stock

In Fiscal 2021, prior to the IPO, the Company’s equity value was determined using the probability weighted expected return method (“PWERM”), or the hybrid method. Under the hybrid method, multiple valuation approaches are used and then combined into a single probability weighted valuation using a PWERM, which considers the probability of an initial public offering and sale scenarios. The results of the valuation approaches were weighted based on a variety of factors, including the current macroeconomic environment, current industry conditions and length of time since arms-length market transaction events. Additionally, a discount for lack of marketability was applied to account for the lack of access to an active public market. The resulting value was then allocated to outstanding equity using an option-pricing model. This process involved the use of estimates, judgments, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future events. The assumptions underlying these valuations represented Management’s best estimate, which involved inherent uncertainties and the application of Management’s judgment. As a result, if Management had used significantly different assumptions or estimates, the fair value of our common stock and our stock-based compensation expense could have been materially different.

Summary of Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In the first quarter of Fiscal 2023, the Company amended its Credit Agreement to replace the London interbank offer rate (“LIBOR”) with a secured overnight financing rate (“SOFR”) pursuant to the terms and LIBOR fallback language in the Credit Agreement and we adopted the Financial Accounting Standards Board (“FASB”) ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). The guidance provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The adoption of the new guidance did not have a material impact on the Company’s financial statements.

New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, which requires incremental disclosures related to a public entity’s reportable segments but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments. The new guidance requires that a public entity disclose, on an annual and interim basis, disaggregated expense information that is regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss. The disclosures are also required for public entities that have a single reporting segment. The new guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and should be adopted retrospectively. Early adoption is permitted. Management is currently evaluating the impact of this new standard.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which establishes new income tax disclosure requirements including disaggregated information about a reporting entity’s effective tax rate reconciliation as well as disaggregated information on income taxes paid. The new guidance is effective for fiscal years beginning after December 15, 2024 and should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. Management is currently evaluating the impact of this new standard.

Recent accounting guidance not discussed herein is not applicable, did not have, or is not expected to have a material impact to the Company.

Condensed Financial Information of Registrant (Parent Company Only) Basic of Presentation (Details)	Dec. 31, 2023	Dec. 25, 2022
Regulation S-X
Condensed Balance Sheet Statements, Captions [Line Items]
Noncontrolling interest, ownership percentage by parent	25.00%	25.00%

Revenues

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenues

The following tables include a detail of liabilities from contracts with customers:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Deferred revenues:
Deferred gift card revenue	$	5,224	$	4,897
Deferred franchise fee revenue - current	275		296
Total current deferred revenues	$	5,499	$	5,193
Other long-term liabilities:
Deferred franchise fee revenue - non-current	$	1,786	$	2,472

Changes in deferred gift card contract liabilities were as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Deferred gift card revenue:
Balance, beginning of period	$	4,897	$	4,410	$	4,024
Gift card sales	12,329		9,627		8,286
Gift card redemptions	(11,198)		(8,225)		(7,152)
Gift card breakage	(1,081)		(915)		(748)
Gift card liabilities assumed through acquisitions	277		—		—
Balance, end of period	$	5,224	$	4,897	$	4,410

Gift cards are combined in one homogeneous pool and are not separately identifiable. As such, the revenue recognized consists of gift cards that were part of the deferred revenue balance at the beginning of the period as well as gift cards that were issued during the period.

Changes in deferred franchise fee contract liabilities were as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Deferred franchise fee revenue:
Balance, beginning of period	$	2,768	$	2,536	$	2,274
Cash received	288		530		537
Franchise revenues recognized	(388)		(298)		(275)
Business combinations - franchise revenues recognized	(607)		—		—
Balance, end of period	$	2,061	$	2,768	$	2,536

Revenues recognized disaggregated by type were as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Restaurant sales:
In-restaurant dining sales	$	716,960	$	571,048	$	452,989
Third-party delivery sales	91,433		82,049		70,486
Take-out sales	68,699		66,084		68,868
Total restaurant sales	$	877,092	$	719,181	$	592,343

Franchise revenues:
Royalty and system fund contributions	$	13,464	$	10,683	$	8,575
Initial fees	388		298		275
Business combinations - revenues recognized	607		—		—
Total franchise revenues	$	14,459	$	10,981	$	8,850
Total revenues	$	891,551	$	730,162	$	601,193

Deferred revenues as of December 31, 2023 are expected to be recognized as follows:


Fiscal year	(in thousands)
2024	$	5,499
2025	$	321
2026	$	298
2027	$	279
2028	$	243
Thereafter	$	645

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Net Income (Loss) Per Common Share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

The following table sets forth the computations of basic and diluted net income (loss) per common share:


	FISCAL YEAR
(in thousands, except share and per share data)	2023		2022		2021
Numerator:
Net income (loss)	$	25,385	$	6,907	$	(2,107)
Denominator:
Weighted average common shares outstanding - basic	59,531,404		59,097,512		48,213,995
Weighted average common shares outstanding - diluted	61,191,613		60,140,045		48,213,995
Net income (loss) per common share - basic	$	0.43	$	0.12	$	(0.04)
Net income (loss) per common share - diluted	$	0.41	$	0.11	$	(0.04)
Stock options outstanding not included in diluted net income (loss) per common share as their effect is anti-dilutive	13,656		1,787,517		4,409,331
Restricted stock units outstanding not included in diluted net income (loss) per common share as their effect is anti-dilutive	355		—		—

Diluted net income (loss) per common share is calculated by adjusting the weighted average shares outstanding for the theoretical effect of potential common shares that would be issued for preferred stock using the two-class method, as well as for stock options and restricted stock units outstanding and unvested as of the respective periods using the treasury method.

All stock option awards outstanding were excluded from the calculation of diluted net loss per common share because of their anti-dilutive impact for Fiscal 2021. As a result, there was no difference between basic and diluted net loss per common share attributable to First Watch Restaurant Group, Inc. during Fiscal 2021.

Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Accounts Receivable

Accounts receivable consisted of the following:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Receivables from third-party delivery providers	$	1,559	$	974
Receivables from franchisees	1,390		1,076
Receivables from vendors	873		920
Receivables related to gift card sales	1,585		1,565
Other receivables	125		1,629
Total accounts receivable	$	5,532	$	6,164

Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Current provision:
Federal	$ (217)	$ 0	$ 0
State	(2,158)	(1,007)	(301)
Total current provision	(2,375)	(1,007)	(301)
Deferred provision:
Federal	(8,896)	(4,562)	(1,825)
State	581	(115)	(351)
Deferred income taxes	(8,315)	(4,677)	(2,176)
Income tax expense	$ (10,690)	$ (5,684)	$ (2,477)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Numerator
Net income (loss)	$ 25,385	$ 6,907	$ (2,107)
Net income (loss)	$ 25,385	$ 6,907	$ (2,107)
Denominator
Weighted average common shares outstanding - basic (in shares)	59,531,404	59,097,512	48,213,995
Weighted average common shares outstanding - diluted (in shares)	61,191,613	60,140,045	48,213,995
Net income (loss) per common share - basic (in dollars per share)	$ 0.43	$ 0.12	$ (0.04)
Net income (loss) per common share - diluted (in dollars per share)	$ 0.41	$ 0.11	$ (0.04)
Stock options
Denominator
Stock options and restricted stock units outstanding not included in diluted net income per common share as their effect is anti-dilutive (in shares)	13,656	1,787,517	4,409,331
Restricted stock units
Denominator
Stock options and restricted stock units outstanding not included in diluted net income per common share as their effect is anti-dilutive (in shares)	355	0	0

Commitment and Contingencies (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Recorded Unconditional Purchase Obligations

Future payments under noncancellable unconditional purchase obligations with a remaining term in excess of one year as of December 31, 2023, are as follows:


Fiscal Year	(in thousands)
2024	$	2,315
2025	2,486
	$	4,801

Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debt

Long-term debt, net consisted of the following:


	DECEMBER 31, 2023			DECEMBER 25, 2022
(in thousands)	Balance		Interest Rate	Balance		Interest Rate
Term Facility	$	92,500	7.70%	$	98,125	5.89%
Revolving Credit Facility	30,000		7.72%	—		—%
Finance lease liabilities	1,076			1,433
Financing obligation	3,050			3,050
Less: Unamortized debt discount and deferred issuance costs	(1,231)			(1,683)
Total Debt, net	125,395			100,925
Less: Current portion of long-term debt	(5,628)			(6,257)
Long-term debt, net	$	119,767		$	94,668

Credit Facilities

FWR Holding Corporation, (“FWR”), an indirect subsidiary of the Company, is party to that certain Credit Agreement, dated October 6, 2021, by and among FWR, as the borrower, AI Fresh Parent, Inc., a Delaware corporation and indirect subsidiary of the Company (“Holdings”), the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “Administrative Agent”) which, as of December 31, 2023, provides for (i) a $100.0 million term loan A facility (the “Term Facility”) and (ii) a $75.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Facility, collectively, the “Credit Facilities”). As of December 31, 2023, the Credit Facilities mature on October 6, 2026.

On February 24, 2023, the Company entered into that certain Amendment No. 1 to the Credit Agreement (the “First Amendment”), by and among FWR, the lenders party thereto and the Administrative Agent, which amended the Credit Agreement in order to replace LIBOR with SOFR, and effective as of March 27, 2023, borrowings under the Credit Facilities bear interest, at the option of FWR at either (i) the alternate base rate plus a margin of between 125 and 200 basis points depending on the total rent adjusted net leverage ratio of FWR and its restricted subsidiaries on a consolidated basis (the “Total Rent Adjusted Net Leverage Ratio”) or (ii) SOFR plus a credit spread adjustment of 10 basis points plus a margin of between 225 and 300 basis points depending on the Total Rent Adjusted Net Leverage Ratio.

Prior to March 27, 2023, borrowings under the Credit Facilities bore interest at the option of FWR at either (i) the base rate plus a margin of 125 and 200 basis points depending on the Total Rent Adjusted Net Leverage Ratio or (ii) LIBOR plus a margin of between 225 and 300 basis points depending on the Total Rent Adjusted Net Leverage Ratio.

In addition, an unused commitment fee of between 25 and 50 basis points will be paid on the undrawn commitments under the Revolving Credit Facility, also depending on the Total Rent Adjusted Net Leverage Ratio.

As of December 31, 2023, the Term Facility is subject to amortization of principal, payable in quarterly installments on the last business day of each fiscal quarter, commencing on March 27, 2022, equal to (i) 2.5% of the original principal amount of the term loans in fiscal year ended December 25, 2022, (ii) 5.0% of the original principal amount of the term loans in fiscal year ended December 31, 2023, (iii) 5.0% of the original principal amount of the term loans in fiscal year ended December 29, 2024, (iv) 7.5% of the original principal amount of the term loans in fiscal year ended December 28, 2025 and (v) 10.0% of the original principal amount of the term loans in fiscal year ended December 27, 2026. The remaining aggregate principal amount outstanding (together with accrued and unpaid interest on the principal amount) under the Term Facility is payable at the maturity of the Term Facility.

Principal payments due on the outstanding debt, excluding finance lease liabilities and financing obligations, as of December 31, 2023 are as follows:


Fiscal Year	(in thousands)
2024	5,000
2025	7,500
2026	80,000
	$	92,500

Refer to Note 21, Subsequent Events, for information about the amendment to the Credit Agreement that was executed on January 5, 2024.

Fair Value of Debt

The estimated fair value of the outstanding debt, excluding finance lease obligations and financing obligations, is classified as Level 3 in the fair value hierarchy and was estimated using discounted cash flow models, market yield and yield volatility. The following table includes the carrying value and fair value of the Company’s debt as of the periods indicated:


	DECEMBER 31, 2023				DECEMBER 25, 2022
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Facility	$	92,500	$	92,201	$	98,125	$	97,124
Revolving Credit Facility	30,000		$	29,897	—		$	—

Letter of Credit

The Company utilizes standby letters of credit to satisfy workers’ compensation and general liability insurance requirements. The contract amount of the letters of credit approximates fair value. As of December 31, 2023 and December 25, 2022, the open letters of credit totaled approximately $1.1 million and $0.2 million, respectively, and there were no draws against the letters of credit. The Company pays participation fees for the letters of credit based on a varying percentage of the amount not drawn.

Debt Covenants

The Credit Facilities are guaranteed by all of FWR’s wholly-owned domestic restricted subsidiaries, subject to customary exceptions, and by AI Fresh Parent, Inc., a Delaware corporation and the direct parent company of FWR (“Holdings”), and are secured by associated collateral agreements that pledge a lien on substantially all of FWR’s and each guarantor’s assets, including fixed assets and intangibles, in each case, subject to customary exceptions.

Under the Credit Agreement, FWR (and in certain circumstances, Holdings) and its restricted subsidiaries are subject to customary affirmative, negative and financial covenants, maintenance of certain ratios, restrictions on additional indebtedness and events of default for facilities of this type (with customary grace periods, as applicable, and lender remedies). FWR was in compliance with covenants under the Credit Agreement as of December 31, 2023 and December 25, 2022.

Note Payable

In October 2022, the Company entered into an agreement for the financing of insurance premiums in a total amount of approximately $1.9 million. The note payable bore interest of 6.04% and was payable in monthly installments of $0.2 million through September 30, 2023. The note payable was paid in full in Fiscal 2023.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Stock-Based Compensation - Schedule of Stock Options Roll Forward (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022
NUMBER OF OPTIONS
Options outstanding, beginning of period (in shares)	5,115,674
Options granted (in shares)	0
Options forfeited (in shares)	(126,113)
Options exercised (in shares)	(642,375)
Options outstanding, end of period (in shares)	4,347,186	5,115,674
Options exercisable, end of period (in shares)	3,113,155
WEIGHTED AVERAGE EXERCISE PRICE
Options outstanding, beginning of period, weighted average exercise price (in dollars per share)	$ 10.12
Options granted, weighted average exercise price (in dollars per share)	0
Options forfeited, weighted average exercise price (in dollars per share)	12.12
Options exercised, weighted average exercise price (in dollars per share)	9.07
Options outstanding, end of period, weighted average exercise price (in dollars per share)	10.22	$ 10.12
Options exercisable, end of period, weighted average exercise price (in dollars per share)	$ 9.71
AGGREGATE INTRINSIC VALUE (in thousands)
Options outstanding, beginning of period, aggregate intrinsic value	$ 20,981
Options outstanding, end of period, aggregate intrinsic value	42,965	$ 20,981
Options exercisable, end of period, aggregate intrinsic value	$ 32,337
WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (in years)
Options, outstanding, weighted average remaining contractual term	5 years 1 month 6 days	6 years 1 month 6 days
Options, exercisable, weighted average remaining contractual term	4 years 7 months 6 days

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Options Roll Forward

A summary of stock option activity during Fiscal 2023 is as follows:


	NUMBER OF OPTIONS	WEIGHTED AVERAGE EXERCISE PRICE		AGGREGATE INTRINSIC VALUE (in thousands)		WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (in years)
Outstanding, December 25, 2022	5,115,674	$	10.12	$	20,981	6.1
Granted	—	$	—
Forfeited	(126,113)	$	12.12
Exercised	(642,375)	$	9.07
Outstanding, December 31, 2023	4,347,186	$	10.22	$	42,965	5.1

Exercisable, December 31, 2023	3,113,155	$	9.71	$	32,337	4.6

Schedule of Fair Value Non-vested Options at Grant Dates

A summary of the non-vested stock option activity during Fiscal 2023 is as follows:


	NUMBER OF OPTIONS	WEIGHTED AVERAGE GRANT DATE FAIR VALUE
Nonvested, December 25, 2022	2,324,316	$	7.31
Granted	—	$	—
Vested	(964,172)	$	7.36
Forfeited	(126,113)	$	6.47
Nonvested, December 31, 2023	1,234,031	$	7.36

Details of Weighted-Average Grant-Date Fair Values and Assumptions Used for Estimating Fair Values

The assumptions utilized to estimate the grant date fair value of the stock option awards granted were as follows:


	FISCAL YEAR
	2023		2022		2021
Weighted average expected term (years)	0		6.5		4.6
Weighted average expected volatility	—	%	52.4	%	50.3	%
Risk-free interest rate	—	%	2.6	%	1.0	%
Expected dividend yield	—		—		—

Schedule of Nonvested Restricted Stock Units Activity


	RESTRICTED STOCK UNITS	WEIGHTED AVERAGE GRANT DATE FAIR VALUE		AGGREGATE INTRINSIC VALUE (in thousands)
Outstanding, December 25, 2022	38,311	$	14.36	$	544
Granted	543,270	$	15.70
Vested	(38,311)	$	14.36
Forfeited	(22,228)	$	15.52
Outstanding, December 31, 2023	521,042	$	15.71	$	10,473

Schedule of Unrecognized Stock-based Compensation Expense

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of December 31, 2023:


	UNRECOGNIZED STOCK-BASED COMPENSATION EXPENSE (in thousands)		REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)
Stock options	$	3,512	0.9
Restricted stock units	$	5,823	2.1

Intangible Assets, Net - Schedule of Estimated Future Amortization of Definite-lived Intangible Assets (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 2,452
2025	2,452
2026	2,124
2027	1,716
2028	1,124
Thereafter	$ 2,215

Leases - Sale-Leaseback Transactions - Narrative (Details) - USD ($)	1 Months Ended	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2023	Dec. 25, 2022	Dec. 27, 2015
Leases [Abstract]
Sale and leaseback transaction, cash proceed	$ 1,000,000.0			$ 3,100,000
Sale leaseback transaction, finance obligation		$ 3,100,000	$ 3,100,000

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor name	PricewaterhouseCoopers LLP
Auditor location	Tampa, Florida
Auditor firm ID	238

Interest Rate Swaps	12 Months Ended
Interest Rate Swaps	Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Interest Rate Swaps	Interest Rate Swaps On June 23, 2023, the Company entered into variable-to-fixed interest rate swaps to hedge a portion of the cash flows of the Company’s variable rate debt. The interest rate swaps have an aggregate notional amount of $90.0 million and mature on October 6, 2026. Under the terms of the interest rate swaps, the Company will pay a weighted average fixed rate of 4.16% on the notional amount and will receive payments from the counterparties based on the three-month SOFR rate. The fair value measurement of the interest rate swaps was based on the contractual terms and used observable market-based inputs. The interest rate swaps were valued using a discounted cash flow analysis on the expected cash flows using observable inputs including interest rate curves and credit spreads. Although the majority of the inputs used to value the instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and the counterparties. The Company has determined that the impact of the credit valuation adjustments was not significant to the overall valuation. As a result, the derivative was classified as Level 2 of the fair value hierarchy. Amounts reported in Other comprehensive income (loss) related to the interest rate swaps will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the fiscal year ended December 31, 2023, a total of $0.5 million was reclassified from Other comprehensive income (loss) as a reduction to interest expense. Over the next 12 months, the Company estimates that $0.5 million will be reclassified as a reduction to interest expense.

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022
Operating Loss Carryforwards [Line Items]
Deferred tax assets, operating loss carryforwards, state	$ 26.0
Contingent consideration liability	0.9	$ 1.2
Contingent consideration liability, current	0.7	0.6
Contingent consideration liability, noncurrent	0.2	$ 0.6
Effective income tax rate reconciliation, change in deferred tax assets valuation allowance, amount	(1.2)
Advent Acquisition
Operating Loss Carryforwards [Line Items]
Contingent consideration liability	$ 1.2

Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Debt Disclosure [Abstract]
2024	$ 5,000
2025	7,500
2026	80,000
Total long-term debt	$ 92,500

Subsequent Events (Details) $ in Thousands							12 Months Ended
Subsequent Events (Details) $ in Thousands	Jan. 22, 2024 USD ($) restaurant	Jan. 05, 2024 USD ($) restaurant	Nov. 13, 2023 USD ($) restaurant	Aug. 09, 2023 USD ($) restaurant	Jun. 26, 2023 USD ($) restaurant	May 01, 2023 USD ($) restaurant	Dec. 31, 2023 USD ($) restaurant	Jun. 29, 2025
Subsequent Event [Line Items]
Number of acquired restaurants \| restaurant							23
Term Facility \| New Facilities \| Line of Credit
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity							$ 100,000
Revolving Credit Facility \| New Facilities \| Line of Credit
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity							$ 75,000
Subsequent Event \| New Term Facility \| New Facilities \| Line of Credit
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		$ 100,000
Subsequent Event \| New Revolving Credit Facility \| Line of Credit
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		125,000
Subsequent Event \| New Revolving Credit Facility \| New Facilities \| Line of Credit
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		75,000
Line of credit facility, increase (decrease), net		50,000
Subsequent Event \| New Delayed Draw Term Loan \| New Facilities \| Line of Credit
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		125,000
Line of credit facility, minimum draw amount		$ 5,000
Line of credit facility, expiration period		18 months
Debt instrument, loan commitment fund percentage		50.00%						100.00%
Series of Individually Immaterial Business Acquisitions
Subsequent Event [Line Items]
Number of acquired restaurants \| restaurant			6	6	5	6
Purchase price (cash)			$ 9,568	$ 14,129	$ 8,651	$ 8,177
Series of Individually Immaterial Business Acquisitions \| Subsequent Event
Subsequent Event [Line Items]
Number of acquired restaurants \| restaurant	1	21
Purchase price (cash)	$ 3,000	$ 75,000

Stock-Based Compensation - Schedule of Fair Value Non-vested Options at Grant Dates (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
NUMBER OF OPTIONS
Nonvested options, beginning balance (in shares)	2,324,316
Options granted (in shares)	0
Options vested (in shares)	(964,172)
Options forfeited (in shares)	(126,113)
Nonvested options, ending balance (in shares)	1,234,031	2,324,316
WEIGHTED AVERAGE GRANT DATE FAIR VALUE
Nonvested grant date fair value, beginning balance (in dollars per share)	$ 7.31
Options granted, grant date fair value (in dollars per share)	0	$ 6.81	$ 6.35
Options vested, grant date fair value (in dollars per share)	7.36
Options forfeited, grant date fair value (in dollars per share)	6.47
Nonvested grant date fair value, ending balance (in dollars per share)	$ 7.36	$ 7.31

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Purchase Commitments

We enter into various purchase obligations in the ordinary course of business, generally of a short-term nature. These purchase obligations include commitments for inventory purchases, marketing-related contracts, corporate sponsorships, software/license commitments and service contracts. We also enter into long-term, exclusive contracts with vendors to supply us with certain goods and services, however, they generally do not include firm minimum purchase commitments.

Unconditional Purchase obligations

The Company has entered into certain off–balance sheet commitments that require the future purchase of goods or services

(“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of payments for subscriptions and marketing-related platforms. Future payments under noncancellable unconditional purchase obligations with a remaining term in excess of one year as of December 31, 2023, are as follows:


Fiscal Year	(in thousands)
2024	$	2,315
2025	2,486
	$	4,801

In July 2022, Management entered into an agreement with a vendor to purchase product. The agreement will remain in effect through the later of (i) the purchase of 585,940 gallons of product or (ii) 5 years from the effective date of the agreement. The remaining minimum purchase commitment as of December 31, 2023 was approximately $7.7 million.

Legal Proceedings

The Company is subject to legal proceedings, claims and liabilities that arise in the ordinary course of business. The amount of the ultimate liability with respect to these matters was not material as of December 31, 2023. In the event any litigation losses become probable and estimable, the Company will recognize any anticipated losses.

Unclaimed Property

The Company is subject to unclaimed or abandoned property (escheat) laws which require it to turn over to state governmental authorities the property of others held by the Company that has been unclaimed for specified periods of time. Property subject to escheat laws generally relates to uncashed checks, trade accounts receivable credits and unredeemed gift card balances. During the first quarter of 2022, the Company received a letter from the Delaware Secretary of State inviting the Company to participate in the Delaware Secretary of State’s Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program to avoid being sent an audit notice by the Delaware Department of Finance. On August 31, 2022, the Company was accepted into Delaware’s Voluntary Disclosure Agreement Program, entitling it to certain benefits and protections offered to participants in the program. The Company intends to work in good faith to complete a review of its books and records related to unclaimed or abandoned property during the periods required under the program. The Company will continue to examine its options regarding the escheat laws of Delaware including completing Delaware’s Voluntary Disclosure Agreement Program or proceeding to audit. In the fourth quarter of 2023, the Company recorded $0.8 million in General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss) for estimated probable losses that might arise from this matter. The Company may ultimately be subject to greater losses resulting from this matter.

As of the beginning of Fiscal 2023, Management believes the Company is not currently required to remit any amounts relating to future unredeemed gift cards to states as the Company’s subsidiary that is the issuer of our gift cards was re-domiciled in Florida, which exempts gift cards from the abandoned and unclaimed property laws.

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 27, 2020		266,667	45,013,784
Beginning balance at Dec. 27, 2020	$ 320,866	$ 3	$ 450	$ 423,345	$ (102,932)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share issuance (in shares)			10,877,850
Share issuance	177,074		$ 109	176,965
Conversion of preferred shares (in shares)		(266,667)	3,156,812
Conversion of preferred shares	0	$ (3)	$ 31	(28)
Net income (loss)	(2,107)				(2,107)
Stock-based compensation	8,596			8,596
Ending balance (in shares) at Dec. 26, 2021		0	59,048,446
Ending balance at Dec. 26, 2021	504,429	$ 0	$ 590	608,878	(105,039)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under stock-based compensation plans, net (in shares)			162,573
Common stock issued under stock-based compensation plans, net	1,425		$ 2	1,423
Net income (loss)	6,907				6,907
Stock-based compensation	10,374			10,374
Ending balance (in shares) at Dec. 25, 2022		0	59,211,019
Ending balance at Dec. 25, 2022	$ 523,135	$ 0	$ 592	620,675	(98,132)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under stock-based compensation plans, net (in shares)	642,375		680,686
Common stock issued under stock-based compensation plans, net	$ 5,827		$ 7	5,820
Net income (loss)	25,385				25,385
Stock-based compensation	7,604			7,604
Other comprehensive loss, net of tax	(667)					(667)
Ending balance (in shares) at Dec. 31, 2023		0	59,891,705
Ending balance at Dec. 31, 2023	$ 561,284	$ 0	$ 599	$ 634,099	$ (72,747)	$ (667)

Debt - Schedule of Estimated Fair Value of the Outstanding Debt, Excluding Finance Lease Liabilities and Financing Obligations (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Debt Instrument [Line Items]
Carrying Value	$ 92,500
Term Facility \| New Facilities \| Line of Credit
Debt Instrument [Line Items]
Carrying Value	92,500	$ 98,125
Term Facility \| New Facilities \| Line of Credit \| Fair Value, Inputs, Level 3
Debt Instrument [Line Items]
Fair Value	92,201	97,124
Revolving Credit Facility \| New Facilities \| Line of Credit
Debt Instrument [Line Items]
Carrying Value	30,000	0
Revolving Credit Facility \| New Facilities \| Line of Credit \| Fair Value, Inputs, Level 3
Debt Instrument [Line Items]
Fair Value	$ 29,897	$ 0

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Statement of Financial Position [Abstract]
Accumulated depreciation	$ 181,481	$ 145,720
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	59,891,705	59,211,019
Common stock, shares outstanding (in shares)	59,891,705	59,211,019

Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consisted of the following:


		DECEMBER 31, 2023
(in thousands)	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Registered trademarks, trade names, domains, liquor licenses	Indefinite	$	139,103	$	—	$	139,103
Franchise rights	8 years	18,813		(6,730)		12,083
		$	157,916	$	(6,730)	$	151,186


		DECEMBER 25, 2022
(in thousands)	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Registered trademarks, trade names, domains, liquor licenses	Indefinite	$	139,258	$	(316)	$	138,942
Franchise rights	9 years	9,404		(5,195)		4,209
		$	148,662	$	(5,511)	$	143,151

Schedule of Indefinite-Lived Intangible Assets

Intangible assets, net consisted of the following:


		DECEMBER 31, 2023
(in thousands)	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Registered trademarks, trade names, domains, liquor licenses	Indefinite	$	139,103	$	—	$	139,103
Franchise rights	8 years	18,813		(6,730)		12,083
		$	157,916	$	(6,730)	$	151,186


		DECEMBER 25, 2022
(in thousands)	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Registered trademarks, trade names, domains, liquor licenses	Indefinite	$	139,258	$	(316)	$	138,942
Franchise rights	9 years	9,404		(5,195)		4,209
		$	148,662	$	(5,511)	$	143,151

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Estimated future amortization of definite-lived intangible assets as of December 31, 2023 is as follows:


Fiscal year	(in thousands)
2024	$	2,452
2025	$	2,452
2026	$	2,124
2027	$	1,716
2028	$	1,124
Thereafter	$	2,215

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income tax expense consisted of the following:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Current provision:
Federal	$	(217)	$	—	$	—
State	(2,158)		(1,007)		(301)
Total current provision	(2,375)		(1,007)		(301)
Deferred provision:
Federal	(8,896)		(4,562)		(1,825)
State	581		(115)		(351)
Total deferred provision	(8,315)		(4,677)		(2,176)
Income tax expense	$	(10,690)	$	(5,684)	$	(2,477)

A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows:


	FISCAL YEAR
	2023		2022		2021
Income taxes at federal statutory rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax effect	5.8		12.5		2.4
FICA tip credit	(19.9)		(44.2)		(1,200.2)
Valuation allowance for federal and state	17.6		46.7		1,528.2
Stock-based compensation	3.4		4.2		275.9
Secondary Offerings - costs	0.6		3.2		—
Other permanent items	0.5		0.6		57.6
Rate change	0.6		1.7		(17.3)
Other	—		(0.6)		1.9
Total	29.6	%	45.1	%	669.5	%

The effective income tax rate for Fiscal 2023, Fiscal 2022 and Fiscal 2021 was different than the blended federal and state statutory rate mainly due to (i) the change in the valuation allowance, (ii) the benefit of tax credits for FICA taxes on certain employees’ tips, (iii) impacts of executive stock-based compensation and (iv) non-deductible costs associated with the Secondary Offerings and the Registration Statement on Form S-3.

The effective income tax rate for Fiscal 2021 was also different than the blended federal and state statutory rate as a result of the pre-vesting forfeiture of performance-based stock option awards for which the market condition was not satisfied upon the Company’s IPO (see Note 17, Stock-Based Compensation, for additional information).

The components of deferred tax assets and liabilities were as follows:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Deferred income tax assets
FICA tip credit	$	49,946	$	41,556
Net operating loss	22,964		30,672
Operating lease liabilities	123,718		101,927
Organizational costs	477		549
Interest limitation	383		797
Accrued compensation	2,758		1,750
Deferred revenues	522		682
Stock-based compensation	3,552		3,693
Interest rate swaps	221		—
Other	1,665		1,210
Valuation allowance	(48,111)		(41,754)
Total deferred income tax assets	158,095		141,082
Deferred income tax liabilities
Operating lease right-of-use assets	(104,810)		(87,154)
Depreciation	(41,583)		(34,577)
Intangible assets	(37,033)		(36,517)
Total deferred income tax liabilities	(183,426)		(158,248)
Net deferred income tax liabilities	$	(25,331)	$	(17,166)

Tax Carryforwards

The amount and expiration dates of tax carryforwards as of December 31, 2023 are as follows:


(in thousands)	Expiration Date	Amount
Federal net operating loss carryforwards	Indefinite	$	103,425
General business tax credits (carried forward 20 years)	2028 - 2043	$	50,117

The Company also has state net operating loss carryforwards of $26.0 million.

There were certain federal loss carryforward, state loss carryforward and general business credits that were accumulated from operations prior to the Advent Acquisition in August 2017. To the extent that these are utilized to reduce taxes payable, the Company is required to pay the previous stockholders an amount equal to tax savings. This requirement lapses with respect to any tax year, or portion thereof, beginning after December 31, 2024, or if a change in control event occurs. In connection with the Advent Acquisition, a contingent consideration liability of $1.2 million was initially recognized for expected payments to be made to the previous stockholders. As of December 31, 2023, the contingent consideration liability was $0.9 million, of which $0.7 million was recorded within Accrued liabilities and $0.2 million was recorded within Other long-term liabilities. As of December 25, 2022, the contingent consideration liability was $1.2 million, of which $0.6 million was recorded within Accrued liabilities and $0.6 million was recorded within Other long-term liabilities.

Valuation Allowance

Based upon an evaluation of the Company's deferred tax assets, Management has recognized a valuation allowance of $48.1 million and $41.8 million as of December 31, 2023 and December 25, 2022, respectively. The valuation allowance primarily relates to the Company’s federal tax credit carryforwards that are not expected to be realized prior to the statutory expiration of the carryforward.

Management continues to monitor and evaluate the rationale for recording a valuation allowance for deferred tax assets. As the Company’s future taxable earnings increase and deferred tax assets are utilized, it is possible that a portion of the valuation allowance will no longer be needed. Release of any portion of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense in the period of the release. The timing and amount of any release related to future taxable income is currently indeterminable. During the year ended December 31, 2023, a release of the valuation allowance related to certain state loss carryforwards decreased income tax expense by approximately $1.2 million.

Changes in the deferred tax asset valuation allowance were as follows:


(in thousands)
Balance as of December 27, 2020	$	(30,214)
Increase	(5,649)
Balance as of December 26, 2021	(35,863)
Increase	(5,891)
Balance as of December 25, 2022	(41,754)
Increase	(6,357)
Balance as of December 31, 2023	$	(48,111)

The Company is subject to examination by federal, state and local jurisdictions, where applicable. As of December 31, 2023, the tax years that remain subject to examination by major tax jurisdictions under the statute of limitations are from the year 2013 and forward.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Interest Rate Swaps (Details) - Interest Rate Swap - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Jun. 23, 2023
Derivative [Line Items]
Derivative, notional amount		$ 90.0
Derivative, average fixed interest rate		4.16%
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, after tax	$ (0.5)
Cash flow hedge gain (loss) to be reclassified within 12 months	$ (0.5)

Business Acquisitions

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Business Acquisitions

During Fiscal 2023, the Company acquired substantially all the assets associated with 23 franchise operated First Watch restaurants. The purchase price was allocated to the fair value of assets acquired and liabilities assumed, which are based on preliminary valuations and are subject to adjustment as additional information is available. The details of each acquisition are as follows:


(dollars in thousands)
Date of acquisition	May 1, 2023		June 26, 2023		August 9, 2023		November 13, 2023
Number of acquired restaurants	6		5		6		6
Number of acquired restaurants under development	—		—		1		—
Purchase price (cash)	$	8,177	$	8,651	$	14,129	$	9,568
Transaction costs incurred	$	362	$	352	$	400	$	327
Deferred franchise fees recognized as a result of termination of pre-existing franchise agreement	$	78	$	123	$	200	$	206
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	9	$	6	$	16	$	9
Inventory	$	57	$	62	$	102	$	70
Prepaid rent and other assets	$	67	$	26	$	89	$	51
Property, fixtures and equipment	$	1,840	$	3,783	$	6,364	$	5,185
Reacquired rights	$	1,342	$	2,304	$	4,358	$	1,405
Goodwill (primarily expected synergies and assembled workforce; tax deductible)	$	5,272	$	2,667	$	3,888	$	2,837
(Unfavorable)/Favorable leasehold positions, net	$	(330)	$	(70)	$	(530)	$	30
Accounts payable	$	—	$	—	$	(35)	$	—
Deferred tax liability	—		$	—	$	(72)	$	—
Deferred revenues - gift card liabilities assumed	$	(80)	$	(127)	$	(51)	$	(19)

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021	Dec. 27, 2020
Deferred income tax assets
FICA tip credit	$ 49,946	$ 41,556
Net operating loss	22,964	30,672
Operating lease liabilities	123,718	101,927
Organizational costs	477	549
Interest limitation	383	797
Accrued compensation	2,758	1,750
Deferred revenues	522	682
Stock-based compensation	3,552	3,693
Interest rate swaps	221	0
Other	1,665	1,210
Valuation allowance	(48,111)	(41,754)	$ (35,863)	$ (30,214)
Total deferred income tax assets	158,095	141,082
Deferred income tax liabilities
Operating lease right-of-use assets	(104,810)	(87,154)
Depreciation	(41,583)	(34,577)
Intangible assets	(37,033)	(36,517)
Total deferred income tax liabilities	(183,426)	(158,248)
Net deferred income tax liabilities	$ (25,331)	$ (17,166)

Debt - Long-Term Debt, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Debt Instrument [Line Items]
Carrying Value	$ 92,500
Finance lease liabilities	1,076	$ 1,433
Less: Unamortized debt discount and deferred issuance costs	(1,231)	(1,683)
Total Debt, net	125,395	100,925
Less: Current portion of long-term debt	(5,628)	(6,257)
Long-term debt, net	119,767	94,668
Financing Obligations \| Other Debt
Debt Instrument [Line Items]
Carrying Value	3,050	3,050
Term Facility \| New Facilities \| Line of Credit
Debt Instrument [Line Items]
Carrying Value	$ 92,500	$ 98,125
Interest rate	7.70%	5.89%
Revolving Credit Facility \| New Facilities \| Line of Credit
Debt Instrument [Line Items]
Carrying Value	$ 30,000	$ 0
Interest rate	7.72%	0.00%

Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

The following table includes a detail of lease assets and liabilities:


(in thousands)	Consolidated Balance Sheets Classification	DECEMBER 31, 2023		DECEMBER 25, 2022
Operating lease right-of-use assets	Operating lease right-of-use assets	$	420,001	$	352,373
Finance lease assets	Property, fixtures and equipment, net	1,033		1,332
Total lease assets		$	421,034	$	353,705

Operating lease liabilities (1) - current	Current portion of operating lease liabilities	40,281		38,936
Operating lease liabilities - non-current	Operating lease liabilities	441,290		366,113
Finance lease liabilities - current	Current portion of long-term debt	628		632
Finance lease liabilities - non-current	Long-term debt, net	448		801
Total lease liabilities		$	482,647	$	406,482

_____________

(1) Excludes all variable lease expense.

The components of lease expense were as follows:


(in thousands)	Consolidated Statements of Operations and Comprehensive Income (Loss) Classification	FISCAL YEAR
		2023		2022		2021
Operating lease expense	Other restaurant operating expenses Occupancy expenses Pre-opening expenses General and administrative expenses	$	56,129	$	49,620	$	44,906
Variable lease expense	Food and beverage costs Occupancy expenses General and administrative expenses	17,158		14,642		12,811
Finance lease expense:
Amortization of leased assets	Depreciation and amortization	507		521		543
Interest on lease liabilities	Interest expense	92		130		174
Total lease expense (1)		$	73,886	$	64,913	$	58,434

_____________

(1) Includes contingent rent expense of $2.1 million and $1.6 million and $1.1 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

Supplemental cash flow information related to leases was as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	47,930	$	39,546	$	40,601
Operating cash flows - finance leases	$	92	$	130	$	174
Financing cash flows - finance leases	$	558	$	514	$	507

Supplemental information related to leases was as follows:


	FISCAL YEAR
	2023		2022
Weighted-average remaining lease term (in years)
Operating leases	13.8		14.6
Finance leases	2.8		2.8
Weighted-average discount rate (1)
Operating leases	8.3	%	8.6	%
Finance leases	6.9	%	7.6	%

____________

(1) Based on the Company’s incremental borrowing rate.

As of December 31, 2023, future minimum lease payments for operating and finance leases consisted of the following:


(in thousands)	OPERATING LEASES		FINANCE LEASES
Fiscal year
2024	$	42,043	$	657
2025	60,891		271
2026	60,532		84
2027	59,834		72
2028	59,392		60
Thereafter	563,874		40
Total future minimum lease payments (1)	846,566		1,184
Less: imputed interest	(364,995)		(108)
Total present value of lease liabilities	$	481,571	$	1,076

_____________

(1) Excludes approximately $109.5 million of executed operating leases that have not commenced as of December 31, 2023.

Sale-Leaseback Transactions

In 2015, Management entered into an agreement relating to the sale and leaseback of the land for use in restaurant operations and received cash proceeds of $3.1 million. As the Company had continuing involvement with the property, the sale of the land did not qualify for sale accounting. As a result, the cash proceeds were recorded as a financing obligation. The balance of the financing obligation was $3.1 million as of December 31, 2023 and December 25, 2022.

Leases

The following table includes a detail of lease assets and liabilities:


(in thousands)	Consolidated Balance Sheets Classification	DECEMBER 31, 2023		DECEMBER 25, 2022
Operating lease right-of-use assets	Operating lease right-of-use assets	$	420,001	$	352,373
Finance lease assets	Property, fixtures and equipment, net	1,033		1,332
Total lease assets		$	421,034	$	353,705

Operating lease liabilities (1) - current	Current portion of operating lease liabilities	40,281		38,936
Operating lease liabilities - non-current	Operating lease liabilities	441,290		366,113
Finance lease liabilities - current	Current portion of long-term debt	628		632
Finance lease liabilities - non-current	Long-term debt, net	448		801
Total lease liabilities		$	482,647	$	406,482

_____________

(1) Excludes all variable lease expense.

The components of lease expense were as follows:


(in thousands)	Consolidated Statements of Operations and Comprehensive Income (Loss) Classification	FISCAL YEAR
		2023		2022		2021
Operating lease expense	Other restaurant operating expenses Occupancy expenses Pre-opening expenses General and administrative expenses	$	56,129	$	49,620	$	44,906
Variable lease expense	Food and beverage costs Occupancy expenses General and administrative expenses	17,158		14,642		12,811
Finance lease expense:
Amortization of leased assets	Depreciation and amortization	507		521		543
Interest on lease liabilities	Interest expense	92		130		174
Total lease expense (1)		$	73,886	$	64,913	$	58,434

_____________

(1) Includes contingent rent expense of $2.1 million and $1.6 million and $1.1 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

Supplemental cash flow information related to leases was as follows:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	47,930	$	39,546	$	40,601
Operating cash flows - finance leases	$	92	$	130	$	174
Financing cash flows - finance leases	$	558	$	514	$	507

Supplemental information related to leases was as follows:


	FISCAL YEAR
	2023		2022
Weighted-average remaining lease term (in years)
Operating leases	13.8		14.6
Finance leases	2.8		2.8
Weighted-average discount rate (1)
Operating leases	8.3	%	8.6	%
Finance leases	6.9	%	7.6	%

____________

(1) Based on the Company’s incremental borrowing rate.

As of December 31, 2023, future minimum lease payments for operating and finance leases consisted of the following:


(in thousands)	OPERATING LEASES		FINANCE LEASES
Fiscal year
2024	$	42,043	$	657
2025	60,891		271
2026	60,532		84
2027	59,834		72
2028	59,392		60
Thereafter	563,874		40
Total future minimum lease payments (1)	846,566		1,184
Less: imputed interest	(364,995)		(108)
Total present value of lease liabilities	$	481,571	$	1,076

_____________

(1) Excludes approximately $109.5 million of executed operating leases that have not commenced as of December 31, 2023.

Sale-Leaseback Transactions

Stock-Based Compensation

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock Option Awards

Stock-based awards are granted to employees and non-employee directors. The Company has two compensation plans that provide for the granting of stock options and other share-based awards to key employees and non-employee members of the board of directors. The 2017 Omnibus Equity Incentive Plan (the “2017 Equity Plan”) and the 2021 Equity Incentive Plan (the “2021 Equity Plan”) provide for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, stock appreciation rights and stock-based awards.

2021 Equity Plan

The number of shares of common stock reserved for issuance under the 2021 Equity Plan is 5,218,292 common shares (“Share Reserve”) at December 31, 2023. The number of shares of common stock that may be issued under the 2021 Equity Plan will automatically increase on the first day of each fiscal year, beginning on December 26, 2022 and continuing for each fiscal year until, and including, the fiscal year ending on (and including) December 29, 2030, equal to the least of (i) 2.0% of the total number of shares of common stock actually issued and outstanding on the last day of the preceding fiscal year, (ii) a number of shares of common stock determined by the board of directors; and (iii) the number of shares of common stock equal to the Share Reserve. If any award granted under the 2021 Equity Plan is cancelled, expired, forfeited, or surrendered without consideration or otherwise terminated without delivery of the shares to the participant, then such unissued shares will be returned to the 2021 Equity Plan and be available for future awards under the 2021 Equity Plan. Shares that are withheld from any award in payment of the exercise, base or purchase price or taxes related to such an award, not issued or delivered as a result of the net settlement of any award, or repurchased by the Company on the open market with the proceeds of a stock option will be deemed to have been delivered under the 2021 Equity Plan and will not be available for future awards under the 2021 Equity Plan. There were no stock option awards granted under the 2021 Equity Plan during Fiscal 2023. The stock option awards granted in Fiscal 2022 vest over a three-year requisite service period from the date of grant and expire 10 years after the grant date. A total of 543,270 restricted stock units (“RSU”) were granted, at a value equal to the market price of the Company’s common stock on the date of grant, which will vest ratably over a period of 1 to 3 years from grant date. Stock-based compensation expense is recognized on a straight-line recognition method over the requisite service period.

2017 Equity Plan

The 2017 Equity Plan authorizes stock-based awards to be granted for up to 6,138,240 shares of common stock. The awards granted under the 2017 Equity Plan consisted of non-qualified stock options that generally vest based over a five-year requisite service period from the date of grant (the “time-based option awards”), as well as upon the occurrence of certain events and if certain market conditions were achieved, the (“performance-based option awards”). Stock-based compensation expense related to the stock option awards issued under the 2017 Plan is recognized on an accelerated recognition method over the requisite service period. All stock options have an exercisable life of no more than 10 years from the date of grant. No awards were granted under the 2017 Equity Plan during Fiscal 2023 and Fiscal 2022 and the Company does not intend to grant any further awards under the 2017 Equity Plan.

Modification of Performance-Based Option Awards - 2017 Equity Plan

On August 31, 2021, the Company’s board of directors amended the 2017 Equity Plan such that the performance-based option awards that convert into time-based option awards upon an initial public offering no longer vest over a period of three years, but instead vest one-third (1/3rd) on each of the first two anniversaries of an initial public offering and one-third (1/3rd) on the 273rd day following the second anniversary of an initial public offering. This was accounted for as a modification, resulting in a new fair value for all the performance-based option awards using an option-pricing model as of the modification date.

On September 19, 2021, the Company’s board of directors modified performance-based option awards that contained a market condition granted under the 2017 Equity Plan, such that the vesting terms for one such tranche were amended to waive the market condition. Accordingly, upon the Company’s IPO, such tranche converted into time-based option awards and vest one-third (1/3rd) on each of the first two anniversaries of the Company’s IPO and one-third (1/3rd) on the 273rd day following the second anniversary of the Company’s IPO. This was accounted for as a modification resulting in a new fair value using the option-pricing model for such performance-based option awards as of the modification date.

On September 19, 2021, the Company’s board of directors modified the terms of performance-based option awards granted under the 2017 Equity Plan to the Company’s Chairman Emeritus. The modification accelerated the vesting period of the performance-based option awards that convert into time-based option awards upon an initial public offering such that they no longer vest one-third (1/3rd) on each of the first two anniversaries of an initial public offering and one-third (1/3rd) on the 273rd day following the second anniversary of an initial public offering, but instead will vest on August 1, 2022. Additionally, the exercise period of these time-based and performance-based vested option awards was modified such that any vested option may be exercised at any time prior to the 10th anniversary of the original grant date. These actions were accounted for as modifications and resulted in an increase of $0.3 million to the fair value of these awards.

Upon the consummation of the Company’s IPO in October 2021, certain performance-based option awards converted into time-based option awards and stock compensation expense of $2.4 million was recognized in the fourth quarter of Fiscal 2021. The remaining expense is being recognized on an accelerated recognition method over the remaining service period. An immediate one-time charge of $5.6 million was recognized upon closing of the IPO, which included (i) the expense from the date of the modifications through the IPO date and (ii) the expense related to performance-based option awards for which the market condition was not satisfied upon the IPO.

A summary of stock option activity during Fiscal 2023 is as follows:


	NUMBER OF OPTIONS	WEIGHTED AVERAGE EXERCISE PRICE		AGGREGATE INTRINSIC VALUE (in thousands)		WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (in years)
Outstanding, December 25, 2022	5,115,674	$	10.12	$	20,981	6.1
Granted	—	$	—
Forfeited	(126,113)	$	12.12
Exercised	(642,375)	$	9.07
Outstanding, December 31, 2023	4,347,186	$	10.22	$	42,965	5.1

Exercisable, December 31, 2023	3,113,155	$	9.71	$	32,337	4.6

The aggregate intrinsic value is based on the difference between the exercise price of the stock option and the closing price of the Company’s common stock on the Nasdaq Global Select Market.

A summary of the non-vested stock option activity during Fiscal 2023 is as follows:


	NUMBER OF OPTIONS	WEIGHTED AVERAGE GRANT DATE FAIR VALUE
Nonvested, December 25, 2022	2,324,316	$	7.31
Granted	—	$	—
Vested	(964,172)	$	7.36
Forfeited	(126,113)	$	6.47
Nonvested, December 31, 2023	1,234,031	$	7.36

The weighted average grant date fair value of options granted during Fiscal 2022 and Fiscal 2021 was $6.81 and $6.35, respectively. The total fair value of stock options vested during Fiscal 2023, Fiscal 2022 and Fiscal 2021 was $7.1 million, $7.4 million and $0.9 million, respectively.

Fair value of Stock Options

The fair value of stock option awards is estimated on the date of grant using the Black-Scholes valuation model. The assumptions utilized to estimate the grant date fair value of the stock option awards granted were as follows:


	FISCAL YEAR
	2023		2022		2021
Weighted average expected term (years)	0		6.5		4.6
Weighted average expected volatility	—	%	52.4	%	50.3	%
Risk-free interest rate	—	%	2.6	%	1.0	%
Expected dividend yield	—		—		—

The Company does not have sufficient historical stock option exercise activity and therefore the expected term of stock options granted in Fiscal 2022 was estimated using the simplified method, which represents the mid-point between the vesting period and the contractual term for each grant. In Fiscal 2021, the expected term of stock option awards had been determined based on data from publicly traded companies. For Fiscal 2022 and Fiscal 2021, the expected volatility of stock options is based on the historical volatilities of a set of publicly traded peer companies in a similar industry as the Company lacks company-specific historical or implied volatility information. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the expected term of the stock option award. The expected dividend yield is based on the fact that the Company has never paid cash dividends and does not have intentions of paying dividends in the foreseeable future.

Restricted Stock Units


	RESTRICTED STOCK UNITS	WEIGHTED AVERAGE GRANT DATE FAIR VALUE		AGGREGATE INTRINSIC VALUE (in thousands)
Outstanding, December 25, 2022	38,311	$	14.36	$	544
Granted	543,270	$	15.70
Vested	(38,311)	$	14.36
Forfeited	(22,228)	$	15.52
Outstanding, December 31, 2023	521,042	$	15.71	$	10,473

Stock-Based Compensation Expense

Stock-based compensation expense was $7.6 million, $10.4 million and $8.6 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

The total related income tax benefit for stock-based compensation expense was $0.6 million, $2.1 million and $0.9 million for Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

Cash received from stock options exercised was $5.8 million and $1.4 million for Fiscal 2023 and Fiscal 2022, respectively. The tax benefit realized from stock option exercises and vesting of restricted stock units was $1.6 million and $0.3 million in Fiscal 2023 and Fiscal 2022, respectively. The total intrinsic value of stock options exercised was $5.7 million and $1.1 million during Fiscal 2023 and Fiscal 2022, respectively. There were no stock option exercises in Fiscal 2021. The total intrinsic value of restricted stock units that vested in Fiscal 2023 was $0.7 million.

Unrecognized Stock-Based Compensation Expense

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of December 31, 2023:


	UNRECOGNIZED STOCK-BASED COMPENSATION EXPENSE (in thousands)		REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)
Stock options	$	3,512	0.9
Restricted stock units	$	5,823	2.1

Nature of Business and Organization - Additional Information (Details)	Dec. 31, 2023 state restaurant	Dec. 25, 2022 restaurant
Franchisor Disclosure [Line Items]
Number of states where company operates and franchises restaurants \| state	29
Company-owned restaurants
Franchisor Disclosure [Line Items]
Number of restaurants	425	366
Franchise-owned restaurants
Franchisor Disclosure [Line Items]
Number of restaurants	99	108

Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Property, Plant and Equipment [Line Items]
Depreciation	$ 39.7	$ 33.3	$ 31.3
Tangible Asset Impairment Charges	0.5
Loss on disposal of assets	0.8	0.9	$ 0.4
Sale leaseback transaction, finance obligation	3.1	3.1
Leased land asset
Property, Plant and Equipment [Line Items]
Sale leaseback transaction, finance obligation	$ 1.2	$ 1.2

Accrued Liabilities

12 Months Ended

Dec. 31, 2023

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Construction liabilities	$	13,944	$	6,908
Sales tax	6,163		3,791
Self-insurance and general liability reserves	1,593		1,529
Utilities	1,657		1,468
Interest payable	401		1,506
Credit card fees	1,706		1,043
Property tax	922		951
Contingent rent	1,160		811
Common area maintenance	749		680
Other	7,335		4,042
Total accrued liabilities	$	35,630	$	22,729

Transaction Expenses (Income), Net - Narrative (Details)	1 Months Ended	12 Months Ended
	Dec. 31, 2021 USD ($)	Dec. 31, 2023 USD ($) restaurant	Dec. 25, 2022 USD ($) shares	Dec. 26, 2021 USD ($)	Dec. 27, 2015 USD ($)	Dec. 31, 2022 USD ($)
Business Acquisition [Line Items]
Acquisition-related costs		$ 2,062,000	$ 0	$ 0
Secondary offering costs		1,031,000	$ 1,957,000	0
Sale of stock, maximum shares \| shares			5,000,000
Income (expense), contingent consideration liability revaluation		0	$ (165,000)	(801,000)
Gain on lease modification		$ 0	0	1,961,000
Sale and leaseback transaction, cash proceed	$ 1,000,000.0				$ 3,100,000
Sale leaseback transaction, deferred gain upon vacating, gross						$ 1,000,000.0
Franchise-owned restaurants
Business Acquisition [Line Items]
Number of restaurants with lease modification \| restaurant		1
Previously Reported \| Advent Acquisition
Business Acquisition [Line Items]
Income (expense), contingent consideration liability revaluation			$ 200,000	$ (800,000)

Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
Goodwill (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 345,219	$ 345,219
Additions - acquisitions	14,664	0
Goodwill, ending balance	$ 359,883	$ 345,219

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Leases - Lease Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Leases [Abstract]
Operating lease right-of-use assets	$ 420,001	$ 352,373
Finance lease assets	1,033	1,332
Total lease assets	421,034	353,705
Operating lease liabilities - current	40,281	38,936
Operating lease liabilities - non-current	441,290	366,113
Finance lease liabilities - current	628	632
Finance lease liabilities - non-current	448	801
Total lease liabilities	$ 482,647	$ 406,482
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, fixtures and equipment, net of accumulated depreciation of $181,481 and $145,720, respectively	Property, fixtures and equipment, net of accumulated depreciation of $181,481 and $145,720, respectively
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Current portion of long-term debt	Current portion of long-term debt
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Long-term debt, net	Long-term debt, net

Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Income Tax Disclosure [Abstract]
Income taxes at federal statutory rate	21.00%	21.00%	21.00%
State income taxes, net of federal tax effect	5.80%	12.50%	2.40%
FICA tip credit	(19.90%)	(44.20%)	(1200.20%)
Valuation allowance for federal and state	17.60%	46.70%	1528.20%
Stock-based compensation	3.40%	4.20%	275.90%
Secondary Offerings - costs	0.60%	3.20%	0.00%
Other permanent items	0.50%	0.60%	57.60%
Rate change	0.60%	1.70%	(17.30%)
Other	0.00%	(0.60%)	1.90%
Total	29.60%	45.10%	669.50%

Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property, Fixtures and Equipment, Net


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Building and land improvements	$	1,354	$	1,354
Leased land asset	1,190		1,190
Leasehold improvements	240,976		178,893
Furniture, fixtures and equipment (including capitalized software)	179,965		145,397
Financing lease assets	3,144		3,066
Vehicles	460		455
Total property, fixtures and equipment	427,089		330,355
Accumulated depreciation	(181,481)		(145,720)
Construction-in-progress	17,474		10,482
Total property, fixtures and equipment, net	$	263,082	$	195,117

Revenues - Schedule of Deferred Revenues Expected to be Recognized (Details) $ in Thousands	Dec. 31, 2023 USD ($)
2024
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 5,499
2025
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	321
2026
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	298
2027
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	279
2028
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	243
Thereafter
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 645

Defined Contribution Plan	12 Months Ended
Defined Contribution Plan	Dec. 31, 2023
Retirement Benefits [Abstract]
Defined Contribution Plan	Defined Contribution Plan The Company sponsors a defined contribution 401(k) savings plan (“401(k) Plan”) which requires the Company to match contributions for participants. In Fiscal 2023 and Fiscal 2022, 50% and 25%, respectively, of the first 6% of the employees’ wages are contributed by the Company into the 401(k) Plan. The 401(k) Plan also allows for additional profit-sharing contributions by the Company at the sole discretion of Management. All Company contributions vest over a five-year period. Total expense for the Company’s contributions to the 401(k) Plan was $1.1 million, $0.6 million and $0.5 million in Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively.

Stock-Based Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested options, beginning balance (in shares)	2,324,316
Options granted (in shares)	0
Options vested (in shares)	(964,172)
Options forfeited (in shares)	(126,113)
Nonvested options, ending balance (in shares)	1,234,031	2,324,316
WEIGHTED AVERAGE GRANT DATE FAIR VALUE
Nonvested grant date fair value, beginning balance (in dollars per share)	$ 7.31
Options granted, grant date fair value (in dollars per share)	0	$ 6.81	$ 6.35
Options vested, grant date fair value (in dollars per share)	7.36
Options forfeited, grant date fair value (in dollars per share)	6.47
Nonvested grant date fair value, ending balance (in dollars per share)	$ 7.36	$ 7.31
Restricted stock units
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested options, beginning balance (in shares)	38,311
Options granted (in shares)	543,270
Options vested (in shares)	(38,311)
Options forfeited (in shares)	(22,228)
Nonvested options, ending balance (in shares)	521,042	38,311
WEIGHTED AVERAGE GRANT DATE FAIR VALUE
Nonvested grant date fair value, beginning balance (in dollars per share)	$ 14.36
Options granted, grant date fair value (in dollars per share)	15.70
Options vested, grant date fair value (in dollars per share)	14.36
Options forfeited, grant date fair value (in dollars per share)	15.52
Nonvested grant date fair value, ending balance (in dollars per share)	$ 15.71	$ 14.36
AGGREGATE INTRINSIC VALUE (in thousands)
Beginning balance outstanding, aggregate intrinsic value	$ 544
Ending outstanding, aggregate intrinsic value	$ 10,473	$ 544

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Current assets:
Cash and cash equivalents	$ 49,632	$ 49,672
Restricted cash	329	251
Accounts receivable	5,532	6,164
Inventory	5,381	5,028
Prepaid expenses	7,494	5,800
Derivative assets, current	457	0
Other current assets	2,365	373
Total current assets	71,190	67,288
Goodwill	359,883	345,219
Intangible assets, net	151,186	143,151
Operating lease right-of-use assets	420,001	352,373
Property, fixtures and equipment, net of accumulated depreciation of $181,481 and $145,720, respectively	263,082	195,117
Other long-term assets	1,703	1,298
Total assets	1,267,045	1,104,446
Current liabilities:
Accounts payable	6,324	7,590
Accrued liabilities	35,630	22,729
Accrued compensation and deferred payroll taxes	21,711	17,899
Deferred revenues	5,499	5,193
Current portion of operating lease liabilities	40,281	38,936
Current portion of long-term debt	5,628	6,257
Note payable	0	1,376
Total current liabilities	115,073	99,980
Operating lease liabilities	441,290	366,113
Long-term debt, net	119,767	94,668
Deferred income taxes	25,331	17,166
Derivative liabilities	1,346	0
Other long-term liabilities	2,954	3,384
Total liabilities	705,761	581,311
Commitments and contingencies (Note 18)
Equity:
Preferred stock; $0.01 par value; 10,000,000 shares authorized; none issued and outstanding	0	0
Common stock; $0.01 par value; 300,000,000 shares authorized; 59,891,705 and 59,211,019 shares issued and outstanding at December 31, 2023 and December 25, 2022, respectively	599	592
Additional paid-in capital	634,099	620,675
Accumulated deficit	(72,747)	(98,132)
Accumulated other comprehensive loss	(667)	0
Total equity	561,284	523,135
Total liabilities and equity	$ 1,267,045	$ 1,104,446

Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2023	Mar. 01, 2024	Jun. 25, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-040866
Entity Registrant Name	First Watch Restaurant Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-4271369
Entity Address, Address Line One	8725 Pendery Place
Entity Address, Address Line Two	Suite 201
Entity Address, City or Town	Bradenton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	34201
City Area Code	941
Local Phone Number	907-9800
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	FWRG
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Small Business	false
Entity Ex Transition Period	true
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 389.6
Entity Common Stock, Shares Outstanding		59,909,786
Entity Central Index Key	0001789940
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY

Debt (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Long-Term Debt, Net

Long-term debt, net consisted of the following:


	DECEMBER 31, 2023			DECEMBER 25, 2022
(in thousands)	Balance		Interest Rate	Balance		Interest Rate
Term Facility	$	92,500	7.70%	$	98,125	5.89%
Revolving Credit Facility	30,000		7.72%	—		—%
Finance lease liabilities	1,076			1,433
Financing obligation	3,050			3,050
Less: Unamortized debt discount and deferred issuance costs	(1,231)			(1,683)
Total Debt, net	125,395			100,925
Less: Current portion of long-term debt	(5,628)			(6,257)
Long-term debt, net	$	119,767		$	94,668

Schedule of Maturities of Long-Term Debt

Principal payments due on the outstanding debt, excluding finance lease liabilities and financing obligations, as of December 31, 2023 are as follows:


Fiscal Year	(in thousands)
2024	5,000
2025	7,500
2026	80,000
	$	92,500

Schedule of Estimated Fair Value of the Outstanding Debt, Excluding Finance Lease Liabilities and Financing Obligations

The following table includes the carrying value and fair value of the Company’s debt as of the periods indicated:


	DECEMBER 31, 2023				DECEMBER 25, 2022
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Facility	$	92,500	$	92,201	$	98,125	$	97,124
Revolving Credit Facility	30,000		$	29,897	—		$	—

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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+ Details

Stockholders’ Equity (Details)					12 Months Ended
Stockholders’ Equity (Details)	Jun. 13, 2023 shares	May 18, 2023 shares	Oct. 06, 2022 shares	Oct. 05, 2021 shares	Dec. 31, 2023 USD ($) vote $ / shares shares	Dec. 25, 2022 USD ($) $ / shares shares	Dec. 26, 2021 USD ($)
Class of Stock [Line Items]
Common stock authorized (in shares)					300,000,000	300,000,000
Common stock, par value (in dollars per share) \| $ / shares					$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)					10,000,000	10,000,000
Preferred stock, par value (in dollars per share) \| $ / shares					$ 0.01	$ 0.01
Number of vote for each shares of common stock entitles \| vote					1
Cash dividends \| $					$ 0	$ 0	$ 0
Secondary Public Offering
Class of Stock [Line Items]
Shares of common stock sold (in shares)	3,000,000	3,500,000			4,500,000
Over-Allotment Option
Class of Stock [Line Items]
Shares of common stock sold (in shares)	450,000	525,000	675,000	1,418,850

Goodwill

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying value of goodwill were as follows:


(in thousands)
Balance as of December 26, 2021	$	345,219
Additions - acquisitions	—
Balance as of December 25, 2022	345,219
Additions - acquisitions	14,664
Balance as of December 31, 2023	$	359,883

Revenues - Change in Contract Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Deferred gift card revenue:
Balance, beginning of period	$ 4,897	$ 4,410	$ 4,024
Gift card sales	12,329	9,627	8,286
Gift card redemptions	(11,198)	(8,225)	(7,152)
Gift card breakage	(1,081)	(915)	(748)
Gift card liabilities assumed through acquisitions	277	0	0
Balance, end of period	5,224	4,897	4,410
Deferred franchise fee revenue:
Balance, beginning of period	2,768	2,536	2,274
Cash received	288	530	537
Franchise revenues recognized	(388)	(298)	(275)
Business combinations - franchise revenues recognized	(607)	0	0
Balance, end of period	$ 2,061	$ 2,768	$ 2,536

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Business Acquisitions On January 5, 2024, the Company executed an asset purchase agreement to acquire from a franchisee 21 operating restaurants, together with other associated assets, including, but not limited to, franchise and development rights for cash of approximately $75.0 million. The close date of the sale is subject to the satisfaction of certain customary closing conditions set forth in the asset purchase agreement. On January 22, 2024, the Company acquired one restaurant from a franchisee, together with associated assets, pursuant to an executed purchase agreement in December 2023 for cash of approximately $3.0 million. Amendment to Credit Agreement On January 5, 2024, (the “Closing Date”), FWR entered into that certain Amendment No. 2 to Credit Agreement (the “Amendment”), by and among FWR, as borrower, AI Fresh Parent, Inc., a Delaware corporation and indirect subsidiary of the Company (“Holdings”), the subsidiaries of FWR party thereto as guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (in such capacities, the “Administrative Agent”), which amended its credit agreement, dated as of October 6, 2021, (as previously amended, and as amended by the Amendment, the “Credit Agreement”), by and among FWR, Holdings, the lenders from time to time party thereto and the Administrative Agent. Pursuant to the terms of the Amendment, (i) the existing $100.0 million Term Facility was replaced with a new $100.0 million term loan A facility, (the “New Term Facility”), on terms substantially identical to the Term Facility, (ii) the $75.0 million Revolving Credit Facility was replaced with a new $75.0 million revolving credit facility (the “New Revolving Credit Facility”) on terms substantially identical to the Revolving Credit Facility, (iii) a new $125.0 million incremental delayed draw term loan facility, (the “New Delayed Draw Term Facility”), was established that will be available to FWR in one or more draws of at least $5.0 million each for a period of 18 months following the Closing Date, and (iv) the New Revolving Credit Facility was increased by $50.0 million in new revolving credit commitments bringing the aggregate committed amount under the New Revolving Credit Facility to $125.0 million. Commitments in respect of the New Delayed Draw Term Facility may be reduced, in whole or in part, at any time prior to 18 months following the Closing Date in the sole discretion of FWR. Loans under the New Term Facility and, once funded, under the New Delayed Draw Term Facility will constitute the same class of term loans for all purposes under the Amendment. The New Term Facility, the New Revolving Credit Facility and the New Delayed Draw Term Facility mature on January 5, 2029. The proceeds of the New Delayed Draw Term Facility may be used by FWR to directly or indirectly finance permitted acquisitions (including working capital, earn-outs and/or purchase price adjustments) of franchisees, directly or indirectly finance new restaurant capital expenditure, repay revolving loans and/or replenish balance sheet cash, in each case, used for such permitted acquisitions or capital expenditures, and to pay related fees and expenses. Commencing on the last day of the first fiscal quarter ending after the date on which 50.0% or more of the New Delayed Draw Term Facility has been funded (the “First DDTL Term Out Date”), loans drawn under the New Delayed Draw Term Facility on or before the First DDTL Term out Date will amortize in equal quarterly installments at the same amortization rate per annum as then applicable to loans under the New Term Facility. Commencing on the last day of the first fiscal quarter ending after the earlier of (i) the date on which 100.0% of the commitments in respect of the New Delayed Draw Term Facility have been funded and (ii) 18 months following the Closing Date (such earlier date, the “Second DDTL Term Out Date”), loans drawn under the New Delayed Draw Term Facility after the First DDTL Term Out Date and on or before the Second DDTL Term Out Date, will amortize in equal quarterly installments at the same amortization rate per annum then applicable to loans under the New Term Facility.

Income Taxes - Summary of Tax Credit Carryforwards (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Income Tax Disclosure [Abstract]
Federal net operating loss carryforwards	$ 103,425
General business tax credits (carried forward 20 years)	$ 50,117

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Cash flows from operating activities:
Net income (loss)	$ 25,385	$ 6,907	$ (2,107)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	41,223	34,230	32,379
Stock-based compensation	7,604	10,374	8,596
Non-cash operating lease costs	19,595	16,122	13,052
Non-cash portion of gain on lease modifications	(123)	(83)	(961)
Deferred income taxes	8,315	4,677	2,176
Amortization of debt discount and deferred issuance costs	452	445	1,088
Loss on extinguishment of debt	0	0	2,403
Impairments and loss on disposal of assets	1,359	920	381
Gain on insurance proceeds	(1,198)	(219)	0
Changes in assets and liabilities:
Accounts receivable	632	(1,714)	(535)
Inventory	(62)	(1,005)	(1,108)
Prepaid expenses	(1,671)	(123)	(3,187)
Other assets, current and long-term	(2,342)	1,072	169
Accounts payable	(1,301)	(3,470)	6,700
Accrued liabilities and other long-term liabilities	6,082	4,739	5,335
Accrued compensation and deferred payroll taxes, current and long-term	3,812	(3,297)	7,007
Deferred revenues, current and long-term	(657)	719	648
Operating lease liabilities	(11,399)	(7,048)	(9,760)
Other liabilities	(368)	(309)	695
Net cash provided by operating activities	95,338	62,937	62,971
Cash flows from investing activities:
Capital expenditures	(84,527)	(62,219)	(35,311)
Business acquisitions, net of cash acquired	39,880	0	0
Purchase of intangible assets	(161)	(1,111)	(371)
Insurance proceeds	1,198	219	0
Net cash used in investing activities	(123,370)	(63,111)	(35,682)
Cash flows from financing activities:
Proceeds from borrowings on revolving credit facility	30,000	0	0
Repayments of long-term debt, including finance lease liabilities	(6,183)	(2,389)	(291,602)
Proceeds from exercise of stock options, net of employee taxes paid	5,827	1,425	0
Repayments of note payable	(1,376)	(2,868)	(522)
Note payable borrowing	0	1,892	2,874
Proceeds from issuance of long-term debt	0	0	100,000
Proceeds from common stock issuance, net of underwriting discounts and commissions	0	0	182,095
Contingent consideration payment	(198)	(78)	(9)
Payment of initial public offering costs	0	0	(4,881)
Payment of debt discount and deferred issuance costs	0	0	(2,226)
Net cash provided by (used in) financing activities	28,070	(2,018)	(14,271)
Net increase (decrease) in cash and cash equivalents and restricted cash	38	(2,192)	13,018
Cash and cash equivalents and restricted cash, beginning of period	49,923	52,115	39,097
Cash and cash equivalents and restricted cash, end of period	49,961	49,923	52,115
Supplemental cash flow information:
Cash paid for interest	8,725	3,368	16,152
Cash paid for income taxes, net of refunds	1,952	915	79
Supplemental disclosures of non-cash investing and financing activities:
Interest converted to long-term debt	0	0	3,063
Leased assets obtained in exchange for new operating lease liabilities	88,819	45,979	33,857
Leased assets obtained in exchange for new finance lease liabilities	249	127	217
Remeasurements and terminations of operating lease assets and lease liabilities	(898)	(2,563)	(3,070)
Remeasurements and terminations of finance lease assets and lease liabilities	(48)	(197)	6
Increase in liabilities from acquisition of property, fixtures and equipment	$ 7,036	$ 2,463	$ 144

Accounts Receivable

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Accounts Receivable

Accounts receivable consisted of the following:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Receivables from third-party delivery providers	$	1,559	$	974
Receivables from franchisees	1,390		1,076
Receivables from vendors	873		920
Receivables related to gift card sales	1,585		1,565
Other receivables	125		1,629
Total accounts receivable	$	5,532	$	6,164

Condensed Financial Information of Registrant (Parent Company Only)

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Registrant (Parent Company Only)

FIRST WATCH RESTAURANT GROUP, INC.

(PARENT COMPANY ONLY)

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


	DECEMBER 31, 2023		DECEMBER 25, 2022
Assets
Investment in subsidiaries	$	561,284	$	523,135

Equity
Preferred stock; $0.01 par value; 10,000,000 shares authorized; none issued and outstanding	$	—	$	—
Common stock; $0.01 par value; 300,000,000 shares authorized; 59,891,705 and 59,211,019 shares issued and outstanding at December 31, 2023 and December 25, 2022, respectively	599		592
Additional paid-in capital	634,099		620,675
Accumulated deficit	(72,747)		(98,132)
Accumulated other comprehensive loss	(667)		—
Total equity attributable to First Watch Restaurant Group, Inc.	$	561,284	$	523,135

FIRST WATCH RESTAURANT GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


	FISCAL YEAR
	2023		2022		2021
Equity in net income (loss) of subsidiaries
Net income (loss) and comprehensive income (loss)	$	24,718	$	6,907	$	(2,107)

Net income (loss) per common share attributable to First Watch Restaurant Group, Inc. - basic	$	0.43	$	0.12	$	(0.04)
Net income (loss) per common share attributable to First Watch Restaurant Group, Inc. - diluted	$	0.41	$	0.11	$	(0.04)
Weighted average number of common shares outstanding -basic	59,531,404		59,097,512		48,213,995
Weighted average number of common shares outstanding - diluted	61,191,613		60,140,045		48,213,995

Statements of cash flows have not been presented as First Watch Restaurant Group, Inc. did not have any cash as of, or for Fiscal 2023, Fiscal 2022 and Fiscal 2021.

Basis of Presentation

The Company is a holding company without any operations of its own (the “Parent Company”). Pursuant to the terms of the Credit Agreement discussed in Note 10, Debt, the Company and certain subsidiaries of the Company have restrictions on their ability to, among other things, (i) incur additional indebtedness, pay dividends or make certain intercompany loans and advances, and (ii) exceed a maximum total rent adjusted net leverage ratio or fall below a minimum fixed charge coverage ratio. As a result of these restrictions, these parent company financial statements have been prepared in accordance with Rule 12-04 of Regulation S-X, as restricted net assets of the Company’s subsidiaries (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the Company’s consolidated net assets as of December 31, 2023 and December 25, 2022.

These condensed financial statements have been prepared on a “parent-only” basis. These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the Company’s consolidated financial statements, with the only exception being that the parent company accounts for its subsidiaries using the equity method. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying financial information

should be read in conjunction with the accompanying Company’s consolidated financial statements and related notes thereto.

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021	Dec. 26, 2021
Leases [Abstract]
Operating lease expense	$ 56,129	$ 49,620		$ 44,906
Variable lease expense	17,158	14,642		12,811
Amortization of leased assets	507	521		543
Interest on lease liabilities	92	130		174
Total lease expense	73,886	64,913		$ 58,434
Contingent rent expense	$ 2,100	$ 1,600	$ 1,100

Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 25, 2022
Payables and Accruals [Abstract]
Construction liabilities	$ 13,944	$ 6,908
Sales tax	6,163	3,791
Self-insurance and general liability reserves	1,593	1,529
Utilities	1,657	1,468
Interest payable	401	1,506
Credit card fees	1,706	1,043
Property tax	922	951
Contingent rent	1,160	811
Common area maintenance	749	680
Other	7,335	4,042
Total accrued liabilities	$ 35,630	$ 22,729

Nature of Business and Organization - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 13, 2023	May 18, 2023	Oct. 06, 2022	Oct. 05, 2021
IPO
Franchisor Disclosure [Line Items]
Shares of common stock sold (in shares)				10,877,850
Initial public offering price (in dollars per share)				$ 18.00
Aggregate net proceeds from IPO				$ 182.1
Underwriting discounts and commissions				$ 13.7
Over-Allotment Option
Franchisor Disclosure [Line Items]
Shares of common stock sold (in shares)	450,000	525,000	675,000	1,418,850

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Fiscal Period, Policy

Principles of Consolidation

The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Segment Reporting

Business Combinations

Fair Value of Financial Instruments


Level 1			Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2			Observable inputs available other than quoted prices included in Level 1
Level 3			Unobservable inputs based on assumptions that cannot be determined by observable market data

Interest Rate Swaps

Cash and Cash Equivalents and Restricted Cash

Amounts included in restricted cash represent those required to be set aside by a contractual agreement for the settlement of insurance claims.

Concentrations of Credit Risk

Accounts Receivable

Inventory

Leases

Property, Fixtures and Equipment

Goodwill and Indefinite-lived Intangible Assets

Definite-lived Intangible Assets

Definite-Lived Intangible Assets

Impairment Assessment of Long-lived Assets

Insurance Reserve

Insurance Reserves

Revenue Recognition

Royalty and system fund contributions from franchisees are based on a percentage of sales and are recognized as revenue in the period the sales occurred.

Food and Beverage Costs

The components of food and beverage costs at company-owned restaurants fluctuate directly with sales volumes and are impacted by changes in commodity prices or promotional activities.

Pre-opening Expenses

Consideration Received from Vendors

Advertising Costs

Advertising costs are recognized as incurred or, in the case of advertisements, when the advertisement occurs.

Debt Discount and Deferred Issuance Costs

Income Taxes

Interest and penalties, when incurred, are recognized in Other (expense) income, net.

Stock-Based Compensation

Fair Value of Common Stock

Summary of Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

New Accounting Pronouncements

Recent accounting guidance not discussed herein is not applicable, did not have, or is not expected to have a material impact to the Company.

Transaction Expenses (Income), Net

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Transaction Expenses (Income), Net

Transaction expenses (income), net consisted of the following:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Acquisition-related costs	2,062		$	—	$	—
Secondary offering costs	$	1,031	1,957		—
Gain on lease modifications	—		—		(1,961)
Credit Agreement modification	127		—		—
Contingent consideration liability revaluation	—		165		801
Conversion costs	—		—		2
(Gain) Loss, net on restaurant closures/relocations	(73)		391		2
Total transaction expenses (income), net	$	3,147	$	2,513	$	(1,156)

During Fiscal 2023, $2.1 million of costs were incurred in connection with the acquisition of certain franchise-owned restaurants, which was partially offset by the gain recognized from the lease modification of one company-owned restaurant.

During Fiscal 2023, $1.0 million of costs were incurred by the Company in connection with underwritten secondary public offerings of the Company’s common stock by entities affiliated with our majority owner, Advent International L.P., (“Secondary Offerings”). During Fiscal 2022, total costs of $2.0 million were incurred by the Company in connection with Secondary Offerings as well as for the Registration Statement on Form S-3 that allows the Company to sell up to 5,000,000 shares of common stock from time to time in one or more offerings.

The Company revalued the contingent consideration liability initially recognized in connection with the Advent Acquisition (see Note 14, Income Taxes, for additional information) and recorded losses of $0.2 million and $0.8 million in Fiscal 2022 and Fiscal 2021, respectively. There was no revaluation adjustment recorded for the contingent liability in Fiscal 2023.

A gain on lease modification of $2.0 million was recognized in Fiscal 2021 in connection with a lease termination for the redevelopment of a restaurant facility by a landlord. Pursuant to the agreement, the Company received $1.0 million in December 2021 and received an additional $1.0 million after vacating the leased restaurant facility in December 2022.

Summary of Significant Accounting Policies - Narrative (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) reportingUnit distinctPerformanceObligation	Dec. 25, 2022 USD ($)	Dec. 26, 2021 USD ($)
Property, Plant and Equipment [Line Items]
Income tax expense	$ 10,690,000	$ 5,684,000	$ 2,477,000
Financing receivable, allowance for credit loss	0	0
Direct operating costs	$ 1,000,000	700,000
Number of reporting units \| reportingUnit	1
Impairment of intangible assets, finite-lived	$ 0	0	0
Health care organization, stop loss insurance recoveries	125,000
Workers' compensation liability	500,000
Liability for unpaid claims and claims adjustment expense, incurred claims	$ 2,300,000	1,500,000
Number of distinct performance obligations \| distinctPerformanceObligation	1
Gift card redeemable period	2 years
Advertising expense	$ 7,200,000	$ 6,400,000	$ 4,800,000
Minimum
Property, Plant and Equipment [Line Items]
Lessee, operating lease, renewal term	5 years
Maximum
Property, Plant and Equipment [Line Items]
Lessee, operating lease, renewal term	20 years
Cumulative Effect, Period of Adoption, Adjustment
Property, Plant and Equipment [Line Items]
Income tax expense	$ 400,000

Business Acquisitions - Narrative (Details) - restaurant					12 Months Ended
	Nov. 13, 2023	Aug. 09, 2023	Jun. 26, 2023	May 01, 2023	Dec. 31, 2023
Business Acquisition [Line Items]
Number of acquired restaurants					23
Series of Individually Immaterial Business Acquisitions
Business Acquisition [Line Items]
Number of acquired restaurants	6	6	5	6

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Schedule of Property Plant and Equipment Useful Life

Depreciation is computed using the straight-line method over the following estimated useful lives:


Building and land improvements			30 to 40 years
Leasehold improvements			3 to 20 years
Furniture and fixtures			2 to 10 years
Equipment (including capitalized software)			2 to 15 years
Vehicles			3 to 10 years

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense consisted of the following:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Current provision:
Federal	$	(217)	$	—	$	—
State	(2,158)		(1,007)		(301)
Total current provision	(2,375)		(1,007)		(301)
Deferred provision:
Federal	(8,896)		(4,562)		(1,825)
State	581		(115)		(351)
Total deferred provision	(8,315)		(4,677)		(2,176)
Income tax expense	$	(10,690)	$	(5,684)	$	(2,477)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows:


	FISCAL YEAR
	2023		2022		2021
Income taxes at federal statutory rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax effect	5.8		12.5		2.4
FICA tip credit	(19.9)		(44.2)		(1,200.2)
Valuation allowance for federal and state	17.6		46.7		1,528.2
Stock-based compensation	3.4		4.2		275.9
Secondary Offerings - costs	0.6		3.2		—
Other permanent items	0.5		0.6		57.6
Rate change	0.6		1.7		(17.3)
Other	—		(0.6)		1.9
Total	29.6	%	45.1	%	669.5	%

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities were as follows:


(in thousands)	DECEMBER 31, 2023		DECEMBER 25, 2022
Deferred income tax assets
FICA tip credit	$	49,946	$	41,556
Net operating loss	22,964		30,672
Operating lease liabilities	123,718		101,927
Organizational costs	477		549
Interest limitation	383		797
Accrued compensation	2,758		1,750
Deferred revenues	522		682
Stock-based compensation	3,552		3,693
Interest rate swaps	221		—
Other	1,665		1,210
Valuation allowance	(48,111)		(41,754)
Total deferred income tax assets	158,095		141,082
Deferred income tax liabilities
Operating lease right-of-use assets	(104,810)		(87,154)
Depreciation	(41,583)		(34,577)
Intangible assets	(37,033)		(36,517)
Total deferred income tax liabilities	(183,426)		(158,248)
Net deferred income tax liabilities	$	(25,331)	$	(17,166)

Summary of Tax Credit Carryforwards

The amount and expiration dates of tax carryforwards as of December 31, 2023 are as follows:


(in thousands)	Expiration Date	Amount
Federal net operating loss carryforwards	Indefinite	$	103,425
General business tax credits (carried forward 20 years)	2028 - 2043	$	50,117

Summary of Valuation Allowance

Changes in the deferred tax asset valuation allowance were as follows:


(in thousands)
Balance as of December 27, 2020	$	(30,214)
Increase	(5,649)
Balance as of December 26, 2021	(35,863)
Increase	(5,891)
Balance as of December 25, 2022	(41,754)
Increase	(6,357)
Balance as of December 31, 2023	$	(48,111)

Business Acquisitions (Tables)

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

The purchase price was allocated to the fair value of assets acquired and liabilities assumed, which are based on preliminary valuations and are subject to adjustment as additional information is available. The details of each acquisition are as follows:


(dollars in thousands)
Date of acquisition	May 1, 2023		June 26, 2023		August 9, 2023		November 13, 2023
Number of acquired restaurants	6		5		6		6
Number of acquired restaurants under development	—		—		1		—
Purchase price (cash)	$	8,177	$	8,651	$	14,129	$	9,568
Transaction costs incurred	$	362	$	352	$	400	$	327
Deferred franchise fees recognized as a result of termination of pre-existing franchise agreement	$	78	$	123	$	200	$	206
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	9	$	6	$	16	$	9
Inventory	$	57	$	62	$	102	$	70
Prepaid rent and other assets	$	67	$	26	$	89	$	51
Property, fixtures and equipment	$	1,840	$	3,783	$	6,364	$	5,185
Reacquired rights	$	1,342	$	2,304	$	4,358	$	1,405
Goodwill (primarily expected synergies and assembled workforce; tax deductible)	$	5,272	$	2,667	$	3,888	$	2,837
(Unfavorable)/Favorable leasehold positions, net	$	(330)	$	(70)	$	(530)	$	30
Accounts payable	$	—	$	—	$	(35)	$	—
Deferred tax liability	—		$	—	$	(72)	$	—
Deferred revenues - gift card liabilities assumed	$	(80)	$	(127)	$	(51)	$	(19)

Summary of Significant Accounting Policies - Schedule of Property Plant and Equipment Useful Life (Details)	Dec. 31, 2023
Minimum \| Building and land improvements
Property, Plant and Equipment [Line Items]
Estimated useful life	30 years
Minimum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Minimum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Estimated useful life	2 years
Minimum \| Equipment (including capitalized software)
Property, Plant and Equipment [Line Items]
Estimated useful life	2 years
Minimum \| Vehicles
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Maximum \| Building and land improvements
Property, Plant and Equipment [Line Items]
Estimated useful life	40 years
Maximum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Estimated useful life	20 years
Maximum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years
Maximum \| Equipment (including capitalized software)
Property, Plant and Equipment [Line Items]
Estimated useful life	15 years
Maximum \| Vehicles
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years

Transaction Expenses (Income), Net (Tables)

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Transaction (Income) Expenses, Net

Transaction expenses (income), net consisted of the following:


	FISCAL YEAR
(in thousands)	2023		2022		2021
Acquisition-related costs	2,062		$	—	$	—
Secondary offering costs	$	1,031	1,957		—
Gain on lease modifications	—		—		(1,961)
Credit Agreement modification	127		—		—
Contingent consideration liability revaluation	—		165		801
Conversion costs	—		—		2
(Gain) Loss, net on restaurant closures/relocations	(73)		391		2
Total transaction expenses (income), net	$	3,147	$	2,513	$	(1,156)

Condensed Financial Information of Registrant (Parent Company Only) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Condensed Statement of Income Captions [Line Items]
Net income (loss)	$ 25,385	$ 6,907	$ 25,385	$ 6,907	$ (2,107)
Comprehensive income (loss)	$ 24,718	$ 6,907			$ (2,107)
Net income (loss) per common share - basic (in dollars per share)			$ 0.43	$ 0.12	$ (0.04)
Net income (loss) per common share - diluted (in dollars per share)			$ 0.41	$ 0.11	$ (0.04)
Weighted average common shares outstanding - basic (in shares)			59,531,404	59,097,512	48,213,995
Weighted average common shares outstanding - diluted (in shares)			61,191,613	60,140,045	48,213,995
Parent Company
Condensed Statement of Income Captions [Line Items]
Net income (loss)			$ 24,718	$ 6,907	$ (2,107)
Comprehensive income (loss)			$ 24,718	$ 6,907	$ (2,107)
Net income (loss) per common share - basic (in dollars per share)			$ 0.43	$ 0.12	$ (0.04)
Net income (loss) per common share - diluted (in dollars per share)			$ 0.41	$ 0.11	$ (0.04)
Weighted average common shares outstanding - basic (in shares)			59,531,404	59,097,512	48,213,995
Weighted average common shares outstanding - diluted (in shares)			61,191,613	60,140,045	48,213,995

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Debt - Narrative (Details) - USD ($)			12 Months Ended
Debt - Narrative (Details) - USD ($)	Mar. 27, 2023	Mar. 26, 2023	Dec. 27, 2026	Dec. 28, 2025	Dec. 29, 2024	Dec. 31, 2023	Dec. 25, 2022	Oct. 31, 2022
Debt Instrument [Line Items]
Letters of credit outstanding, amount						$ 1,100,000	$ 200,000
Letters of credit draws, amount						$ 0	$ 0
Note payable, monthly installment plan								$ 200,000
New Facilities \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate	0.10%
New Facilities \| Minimum \| Adjusted Leverage Rate
Debt Instrument [Line Items]
Variable rate	1.25%	1.25%
New Facilities \| Minimum \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate	2.25%
New Facilities \| Minimum \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable rate		2.25%
New Facilities \| Maximum \| Adjusted Leverage Rate
Debt Instrument [Line Items]
Variable rate	2.00%	2.00%
New Facilities \| Maximum \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Variable rate	3.00%
New Facilities \| Maximum \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable rate		3.00%
Notes Payable, Other Payables
Debt Instrument [Line Items]
Debt instrument, face amount								$ 1,900,000
Interest rate								6.04%
Term Facility \| New Facilities \| Minimum
Debt Instrument [Line Items]
Line of credit facility, unused capacity, commitment fee percentage						0.25%
Term Facility \| New Facilities \| Maximum
Debt Instrument [Line Items]
Line of credit facility, unused capacity, commitment fee percentage						0.50%
Term Facility \| New Facilities \| Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity						$ 100,000,000.0
Debt instrument, amortization cost, percentage of principal amount						5.00%	2.50%
Term Facility \| New Facilities \| Line of Credit \| Subsequent Event
Debt Instrument [Line Items]
Debt instrument, amortization cost, percentage of principal amount			10.00%	7.50%	5.00%
Revolving Credit Facility \| New Facilities \| Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity						$ 75,000,000.0

Transaction Expenses (Income), Net - Schedule of Transaction (Income) Expenses, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 25, 2022	Dec. 26, 2021
Business Combination and Asset Acquisition [Abstract]
Acquisition-related costs	$ 2,062	$ 0	$ 0
Secondary offering costs	1,031	1,957	0
Gain on lease modifications	0	0	(1,961)
Credit Agreement modification	127	0	0
Contingent consideration liability revaluation	0	165	801
Conversion costs	0	0	2
(Gain) Loss, net on restaurant closures/relocations	(73)	391	2
Total transaction expenses (income), net	$ 3,147	$ 2,513	$ (1,156)