UPDATE: Sept. 22, 2021: First Watch Restaurant Group has begun a roadshow for its initial public offering of over 9 million shares of common stock, according to a press release. The company expects its price per share to be between $17 to $20, which would raise between roughly $160 million and over $189 million. The restaurant company also plans to grant underwriters a 30-day option to purchase another 1.4 million shares, which would raise a maximum of $28 million. First Watch expects to use the proceeds from its IPO to repay debt under its credit facilities. 

Dive Brief:

• First Watch Restaurant Group on Tuesday filed paperwork for an initial public offering with the U.S. Securities and Exchange Commission.
• The number of shares and price range for the proposed offering have not yet been determined, per a company release. The company, which trades on NASDAQ as "FWRG," plans to use proceeds from the offering to repay borrowings outstanding under the company's credit facilities.
• First Watch is the first full-service restaurant company to go public this year. The chain joins a growing list of brands to file IPOs within the last eight months, including Dutch Bros Coffee, Sweetgreen, Krispy Kreme and Portillo's.

Dive Insight:

First Watch, which only operates the breakfast and lunch dayparts, survived pandemic disruption by rapidly accelerating the rollout of its off-premise channel and relaunching its app for online ordering. First Watch CEO Chris Tomasso previously told Restaurant Dive that the chain managed to execute innovation plans that would typically take three months in just three weeks. The breakfast joint also added alcoholic beverages to its menu to boost sales. 

Its pandemic plan paid off. When First Watch's company-owned restaurants reopened during the pandemic, the chain was able to meet customer demand for off-premise while also serving dine-in customers, the company said in the S-1 filing. Pre-pandemic, average weekly off-premise sales made up less than $2,000 per unit, but that grew to $8,082 during the fiscal quarter ending Dec. 27, 2020. When dine-in traffic began to steadily increase in 2021, average off-premise weekly sales remained relatively consistent at $8,079 per restaurant as of the second fiscal quarter of 2021, the company said. 

"We believe that off-premises sales will remain an incremental channel for us that serves an additional use occasion for our customers and that it will be an important part of growing average unit volumes to higher than pre-pandemic levels," the company said.

This performance may given First Watch majority owner Advent International, a private equity firm, confidence in its chances of growth as a public company. The market is also ripe for IPOs — strong consumer demand and low interest rates are driving up valuations, and many private equity firms are hoping to cash out by making brands public, according to Quartz.

First Watch's same-store sales also began exceeding pre-COVID-19 levels in March, reaching 17% same-restaurant sales in August compared to 2019. Traffic has also grown during the summer months, up 5% in July and 2% in August compared to 2019. 

The company didn't pull back from restaurant development during the pandemic either, reaching 423 system-wide restaurants as of June 27. This included the opening of 42 restaurants in 2020 and 18 during the 26 weeks ending June 27, 2021. The company believes it has a significant opportunity to grow density in its new and existing markets. It also conducted an in-depth analysis with a third-party real estate firm that resulted in the potential for over 2,200 locations across the U.S. 

Future initiatives include boosting the weekday lunch daypart, which made up only about 6% of its weekday customer purchases in fiscal 2019, according to the filing. The company expects increased opportunities to boost this daypart with the help of its optimized core menu, off-premise channels and the ability to apply targeted marketing to suburban markets — where many urban dwellers have moved during the pandemic and where "a meaningful portion" of its restaurants exist. 

With the rollout of additional technology from digital off-premise and in-store tech, such as remote waitlists, the company has gathered 2.9 million unique customer profiles to better understand trial, frequency and customer lifetime value, according to the filing. First Watch plans to use this data to create a more advanced customer relationship management system to grow customer frequency. 

To combat high demand and extended wait times during peak hours, especially on the weekend, First Watch also plans to use technology to improve throughput and capacity, such as the installation of kitchen display screens to automate order routing.