News

First Watch plans fast casual growth

The new man in Florida, Rick Akam's plans new growth for First Watch.

March 1, 2005

Then, during his year and half run as chief operating officer for Raving Brands Inc. in Atlanta, Akam was part of a tremendous growth time for Moes going from 60 to 185 locations.

Now Akam plans on doubling First Watch by the end of 2006 the number of breakfast-and-lunch establishments operated by Bradenton-based First Watch Restaurants Inc. The company announced last week Akam's appointment to chief operating officer as part of an aggressive expansion and franchising plan into the now crowded fast casual segment.

Fast Casual segment now has over 80 chains that have been identified as a fast casual segment by the leading web site fastcasual.com the industry expert on the topic of fast casual growth and trend development.

With Akrams stellar performance at Hooters and Moe's, First Watch is expecting some great things from the restaurateur.

Akam said he saw a golden opportunity to grow a company in the breakfast and lunch market, which he thinks is untapped in fast casual.

"Akam is right" stated Paul Barron of BMG Consulting. "This segment is short on options vs. the Mexican, Pan-Asian, and Coffee House leaders like Chipotle, Pei Wei and Starbucks".

But since First Watch's inception in the early 1980s, rapid growth hasn't been much of a goal. First Watch previously told other news sources in December 2003 of the company's conservative expansion plans - four to eight restaurant openings per year.

That changed last fall, however, when the company received a significant capital investment of $35 million from Connecticut-based Catterton Partners.

Catterton, who is now a majority shareholder in First Watch Restaurants Inc., also has investment arrangements with Odwalla Inc. and PF Chang's China Bistro, among others, according to the company's Web site.

Now First Watch plans on opening an additional 48 restaurants by the end of 2006, with five or six to be completed this year.

"This is an aggressive growth model for a company that has not been on this track before", stated industry expert John Perry. After 2006 First Watch expects about 24 openings per year.

The company operates restaurants in Arizona, California, Kansas, Florida, Ohio, Kentucky, Oklahoma, Missouri, and West Virginia.

New locations will open in Florida, Ohio, Atlanta, Washington, D.C., and Philadelphia.

First Watch is expecting to make an entry to first or second in the fast casual breakfast / lunch category in these cities. Quality and service will be a key factor in their success, but more importantly they will need to improve the service model to avoid the Panera Bread and Starbuck line stacks of people.

With the fast casual segment growing service is becoming a big issue in consumers minds. Which is why you will see the fast casual chains to begin using drive-thru's in the future.

The First Watch plans to offer franchising opportunities to qualified groups or individuals on a multi-unit basis to develop a territory. In five years, they expect franchisees to own between 30 and 40 percent of First Watch restaurants.

It costs between $400,000 and $450,000 to open a First Watch location, with Individual stores sales at about $1.1 million.

Akam's appointment is part of a growing management team that will also include directors of personnel and training, real estate and construction, and franchising.

Paul Barron, of BMG Consulting believes Akam was a big part of why Moe's Southwest Grill has been the segment leader in fast casual.

"They "Raving Brands" have done some very creative things with franchising. What is important to understand is that they focus on franchising vs. trying to run a restaurant. This opens up some opportunities to train, market, and research better when you are a smaller player in the market" stated Barron.

Now with close to 1,000 units sold, it is clear the the Akam and Martin Sprock - founder of Raving Brands were clearly onto to something.

The industry will be watching Akam to see if he can spin his magic in the morning at First Watch.