First Watch Restaurant Group (FWRG) risk factors, FY2025 10-K

First Watch Restaurant Group's FY2025 10-K, filed Feb 24, 2026, lists 49 risk factors in 8 groups. Against the prior year's 56: 5 new, 12 dropped, 15 substantially reworded.

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Risk factors listed
498 groups
New this year
5vs 56 last year
Dropped
12since the prior 10-K
Substantially reworded
15of those kept
Section length
16k wordsItem 1A

What the changes say

  • First Watch Restaurant Group highlights food safety risks from fresh produce, labor law compliance challenges, and recent internal control weaknesses.

What changed since the prior 10-K

New

  • NewRisks Related to Our Business and Industry

    due to the geographic concentration of many of our restaurants. This risk exists even if it were later determined that the illness was wrongly attributed to one of our restaurants

    Using fresh, unprocessed produce and traditional cooking methods may increase our risk of food-borne illnesses compared to competitors using frozen or automated processes.

  • NewLegal and Regulatory Risks

    Matters relating to employment and labor law could have a material adverse effect on our business, financial condition and results of operations

    Changes in federal and state labor laws, minimum wages, and mandated benefits could harm our financial condition and operations.

  • NewLegal and Regulatory Risks

    Restaurant companies have been the target of class action lawsuits and other proceedings alleging violations of workplace and employment laws. Proceedings of this nature are costly, divert management attention and, if successful, could result in our payment of substantial damages or settlement costs

    We face potential costs and legal exposure from workplace and employment class action lawsuits brought by employees or franchisee workers.

  • NewLegal and Regulatory Risks

    Changes in tax laws, and unanticipated tax liabilities and realization of deferred tax assets could adversely affect our results of operations

    Changes in tax laws, audit determinations, or valuation allowances for deferred tax assets could adversely affect our results of operations.

  • NewRisks Related to Accounting and Financial Reporting Matters

    If we fail to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which, in turn, could adversely impact the market value of our common stock

    We identified material weaknesses in our internal control over financial reporting as of December 29, 2024, which could impact our ability to report accurately.

Dropped

  • DroppedRisks Related to Our Business and Industry

    Our financial condition and results of operations are subject to, and may be adversely affected by, a number of other factors, many of which are also largely outside of our control

  • DroppedRisks Related to Information Technology and Intellectual Property

    privacy or consumer protection or any inadvertent or unauthorized use or disclosure of data that we store or handle as part of operating our business

    General macroeconomic factors outside of our control.

  • DroppedLegal and Regulatory Risks

    As a public company, we incur significant costs to comply with the laws and regulations affecting public companies, which could harm our business and results of operations

  • DroppedLegal and Regulatory Risks

    Fluctuations in our tax obligations and effective tax rate and realization of our deferred tax assets may result in volatility of our results of operations

  • DroppedLegal and Regulatory Risks

    failure to comply with these regulations and obtain or retain licenses could have a material adverse effect on our business, financial condition and results of operations

  • DroppedRisks Related to Accounting and Financial Reporting Matters

    Changes to estimates related to our long-lived assets and definite-lived intangible assets or operating results that are lower than our current estimates at certain restaurant locations may cause us to incur impairment losses on certain long-lived assets, which may adversely affect our results of operations

  • DroppedRisks Related to Our Company and Organizational Structure

    The interests of Advent may conflict with our interests or the interests of the holders of our common stock in the future

  • DroppedRisks Related to Our Company and Organizational Structure

    For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies

  • DroppedRisks Related to Ownership of Our Common Stock

    longer a “controlled company” within the meaning of the rules of the Nasdaq, Advent continues to exert substantial influence over us

  • DroppedRisks Related to Ownership of Our Common Stock

    The market price of our common stock could be adversely affected by sales of substantial amounts of our common stock in the public markets

  • DroppedRisks Related to Ownership of Our Common Stock

    The market price of our common stock may decline significantly in connection with any sales by Advent of its common stock. A decline in the price of our common stock might impede our ability to raise capital through the issuance of additional common stock or other equity securities

  • DroppedRisks Related to Ownership of Our Common Stock

    Our insurance may not provide adequate levels of coverage against claims

Reworded

  • 68% rewrittenRisks Related to Ownership of Our Common Stock

    Our quarterly results of operations may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price

    Appended text regarding the 2021 Equity Plan to the stock price volatility risk.

  • 64% rewrittenLegal and Regulatory Risks

    Our business is subject to risks related to our sale of alcoholic beverages

    Added specific consequence language regarding the failure to comply with alcoholic beverage regulations.

  • 48% rewrittenRisks Related to Our Business and Industry

    Our same-restaurant sales growth and same-restaurant traffic growth may be lower than we expect in future periods

    Added marketing initiatives and same-restaurant traffic growth as key factors affecting sales growth.

    Was: Our same-restaurant sales growth may be lower than we expect in future periods

  • 43% rewrittenRisks Related to Employees and the Workforce

    Our inability to identify qualified individuals for our workforce could slow our growth and adversely impact our ability to operate our restaurants

    Added industry-wide context regarding aggressive talent competition, wage inflation, and workplace pressure.

  • 43% rewrittenRisks Related to Accounting and Financial Reporting Matters

    An impairment in the carrying value of our goodwill or indefinite-lived intangible assets or changes to estimates related to our long-lived and definite-lived assets could have a material adverse effect on our financial condition and results of operations

    Updated goodwill and intangible asset figures to $420.2 million and $140.1 million as of December 28, 2025, and updated the qualitative assessment year to 2025.

    Was: An impairment in the carrying value of our goodwill or indefinite-lived intangible assets could have a material adverse effect on our financial condition and results of operations

  • 42% rewrittenRisks Related to Our Business and Industry

    Our system-wide restaurant base is geographically concentrated in the southeast portion of the United States, and we could be adversely affected by conditions specific to that region

    Updated Florida's restaurant concentration share from 23% to 22% as of December 28, 2025.

  • 38% rewrittenRisks Related to Our Business and Industry

    We are vulnerable to changes in economic conditions and consumer preferences that could have a material adverse effect on our business, financial condition and results of operations

    Updated verb tense regarding how traffic patterns and weather have adversely affected performance.

  • 37% rewrittenRisks Related to Ownership of Our Common Stock

    We do not anticipate paying any dividends on our common stock in the foreseeable future

    Changed 'grow our business' to 'invest cash generated by operations in the growth of our business' and capitalized Credit Agreement.

  • 36% rewrittenRisks Related to Information Technology and Intellectual Property

    We face potential liability with our gift cards under the property laws of some states

  • 34% rewrittenRisks Related to Our Business and Industry

    Food safety and food-borne illness concerns may have an adverse effect on our business by decreasing sales and increasing costs

  • 34% rewrittenRisks Related to Our Company and Organizational Structure

    First Watch Restaurant Group, Inc. is a holding company with no operations and relies on its operating subsidiaries to provide it with funds necessary to meet its financial obligations

    Was: First Watch Restaurant Group, Inc. is a holding company with no operations and relies on its operating subsidiaries to provide it with funds necessary to meet its financial obligations and to pay dividends

  • 25% rewrittenRisks Related to Our Business and Industry

    We have limited control with respect to the operations of our franchisees, which could have a material adverse effect on our business, financial condition and results of operations

  • 22% rewrittenRisks Related to Our Business and Industry

    Opening new restaurants in existing markets may adversely impact sales at our and our franchisees’ existing restaurants

  • 20% rewrittenRisks Related to Our Business and Industry

    We have a limited number of suppliers and distributors for several of our frequently used ingredients. If our suppliers or distributors are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs

  • 20% rewrittenRisks Related to Information Technology and Intellectual Property

    Information technology system failures or breaches of our network security could interrupt our operations and have a material adverse effect on our business, financial condition and results of operations

All 49 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Industry

  1. 01We are vulnerable to changes in economic conditions and consumer preferences that could have a material adverse effect on our business, financial condition and results of operations38% rewritten
  2. 02If we are unable to open new restaurants, or if planned restaurant openings are significantly delayed, it could have a material adverse effect on our business, financial condition and results of operations
  3. 03Our failure to manage our growth effectively could harm our business and results of operations
  4. 04Opening new restaurants in existing markets may adversely impact sales at our and our franchisees’ existing restaurants22% rewritten
  5. 05A decline in visitors to any of the retail centers, lifestyle centers, or entertainment centers where our restaurants are located could adversely affect our restaurant sales
  6. 06Our same-restaurant sales growth and same-restaurant traffic growth may be lower than we expect in future periods48% rewritten
  7. 07Our marketing programs and our limited-time menu offerings may not be successful and could fail to meet expectations, and our new menu items, advertising campaigns and restaurant designs and remodels may not generate increased sales or profits
  8. 08Changes in the cost of food could have a material adverse effect on our business, financial condition and results of operations
  9. 09New restaurants may not be profitable or may close, and the performance of our restaurants that we have experienced in the past may not be indicative of future results
  10. 10We face significant competition for customers, and our inability to compete effectively may affect our traffic, our sales and our operating profit margins, which could have a material adverse effect on our business, financial condition and results of operations
  11. 11Food safety and food-borne illness concerns may have an adverse effect on our business by decreasing sales and increasing costs34% rewritten
  12. 12due to the geographic concentration of many of our restaurants. This risk exists even if it were later determined that the illness was wrongly attributed to one of our restaurantsNew
  13. 13The financial performance of our franchisees can have a material adverse effect on our business, financial condition and results of operations
  14. 14We have limited control with respect to the operations of our franchisees, which could have a material adverse effect on our business, financial condition and results of operations25% rewritten
  15. 15If we are unable to maintain good relationships with our franchisees due to conflicts of interest or otherwise, revenues could decrease and we may be unable to expand our presence in certain markets
  16. 16We have a limited number of suppliers and distributors for several of our frequently used ingredients. If our suppliers or distributors are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs20% rewritten
  17. 17Our system-wide restaurant base is geographically concentrated in the southeast portion of the United States, and we could be adversely affected by conditions specific to that region42% rewritten
  18. 18Damage to our reputation and negative publicity could have a material adverse effect on our business, financial condition and results of operations
  19. 19Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media or artificial intelligence could have a material adverse effect on our business, financial condition and results of operations

Risks Related to Information Technology and Intellectual Property

  1. 20Information technology system failures or breaches of our network security could interrupt our operations and have a material adverse effect on our business, financial condition and results of operations20% rewritten
  2. 21We face potential liability with our gift cards under the property laws of some states36% rewritten
  3. 22The failure to enforce and maintain our trademarks and protect our other intellectual property could have a material adverse effect on our business, including our ability to establish and maintain brand awareness
  4. 23Litigation with respect to intellectual property assets, if decided against us, may result in competing uses or require adoption of new, non-infringing intellectual property, which may in turn adversely affect sales and revenues

Risks Related to Employees and the Workforce

  1. 24Our inability to identify qualified individuals for our workforce could slow our growth and adversely impact our ability to operate our restaurants43% rewritten
  2. 25Failure to maintain our corporate culture as we grow could have a material adverse effect on our business, financial condition and results of operations
  3. 26Unionization activities may disrupt our operations and increase our costs
  4. 27Our sustainability activities, including environmental, social and governance matters, could result in reputational risks, increased costs and other risks

Legal and Regulatory Risks

  1. 28Matters relating to employment and labor law could have a material adverse effect on our business, financial condition and results of operationsNew
  2. 29Restaurant companies have been the target of class action lawsuits and other proceedings alleging violations of workplace and employment laws. Proceedings of this nature are costly, divert management attention and, if successful, could result in our payment of substantial damages or settlement costsNew
  3. 30We could be party to litigation that could distract management, increase our expenses or subject us to material monetary damages or other remedies
  4. 31If we and our franchisees face labor shortages or increased labor costs or health care costs, it could have a material adverse effect on our business, financial condition and results of operations
  5. 32We are exposed to risks associated with leasing property subject to long-term and non-cancelable leases and may be unable to renew leases at the end of their terms
  6. 33Changes in tax laws, and unanticipated tax liabilities and realization of deferred tax assets could adversely affect our results of operationsNew
  7. 34Our business is subject to risks related to our sale of alcoholic beverages64% rewritten
  8. 35We are subject to many federal, state and local laws with which compliance is both costly and complex

Risks Related to Accounting and Financial Reporting Matters

  1. 36An impairment in the carrying value of our goodwill or indefinite-lived intangible assets or changes to estimates related to our long-lived and definite-lived assets could have a material adverse effect on our financial condition and results of operations43% rewritten
  2. 37If we fail to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which, in turn, could adversely impact the market value of our common stockNew
  3. 38Changes in accounting principles applicable to us could have a material adverse effect on our financial condition and results of operations

Risks Related to Our Indebtedness

  1. 39Our level of indebtedness could have a material adverse effect on our business, financial condition and results of operations
  2. 40The failure to comply with the covenants under our Credit Agreement or volatility in the credit and capital markets could have a material adverse effect on our financial condition

Risks Related to Our Company and Organizational Structure

  1. 41First Watch Restaurant Group, Inc. is a holding company with no operations and relies on its operating subsidiaries to provide it with funds necessary to meet its financial obligations34% rewritten
  2. 42Delaware law and our organizational documents, as well as our existing and future debt agreements, may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares
  3. 43The foregoing factors could impede a merger, takeover, or other business combination, or discourage a potential investor from making a tender offer for our common stock, which, under certain circumstances, could reduce the market value of our common stock

Risks Related to Ownership of Our Common Stock

  1. 44Future offerings of debt or equity securities by us may have a material adverse effect on the market price of our common stock
  2. 45In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our common stock or by offering debt or other equity securities, including senior or subordinated notes and debt securities convertible into equity or shares of preferred stock
  3. 46We do not anticipate paying any dividends on our common stock in the foreseeable future37% rewritten
  4. 47Our quarterly results of operations may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price68% rewritten
  5. 48We depend on our executive officers and certain other key employees, the loss of whom could have a material adverse effect on our business, financial condition and results of operations
  6. 49We might require additional capital to support business growth and this capital might not be available

Other First Watch Restaurant Group 10-Ks

  • FY2024 10-K risk factors
    56 risks

    First Watch operates breakfast and brunch restaurants facing concentrated regional risk in the southeast United States and Florida. Profitability depends heavily on commodity costs like pork, eggs, and avocados, plus labor wages. The company relies on a single broad-line distributor and faces extensive regulatory oversight.

    Filed Mar 11, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.