FWRG Stock Gains on a Deal to Acquire 16 Franchise Restaurants

First Watch Restaurant Group, Inc. FWRG has entered into an agreement to acquire 15 franchise-owned locations and one restaurant under construction in North and South Carolina for a total of $49 million.The transaction is expected to close by mid-April 2025, subject to customary closing conditions, and will be funded with a combination of cash and borrowings from the company’s credit facility.The company views strategic acquisitions of franchise-operated restaurants as a key component of its long-term growth and value-creation strategy. The addition of these 16 restaurants and its development rights will strengthen First Watch Restaurant’s corporate presence in the East Coast.This acquisition is part of First Watch Restaurant’s ongoing expansion strategy. Since May 2023, the company has acquired 45 franchised restaurants through six transactions, significantly increasing its presence across key markets. The company’s continued expansion highlights its strong growth in the daytime dining sector.This move will also open up new territories for organic growth in the future. First Watch Restaurant expects these restaurants to perform at levels similar to its company-owned locations, generating strong unit volumes and restaurant-level operating profit margins.Shares of FWRG moved up 1.7% and 1.2% during yesterday’s trading session and after-hours, respectively.FWRG Expands Presence With Franchise AcquisitionInvestors looking for opportunities in the restaurant sector should pay attention to FWRG's strategic acquisitions, as these position the company for long-term growth and value generation in a competitive market.On April 15, 2024, the company completed the acquisition of 21 franchise-owned restaurants in North Carolina for $75 million. This transaction supports First Watch Restaurant’s strategy to strengthen its market presence and drive continued growth.In the third quarter of 2024, the company opened nine new system-wide restaurants across eight states. This brings the total number of system-wide restaurants to 547, including 466 company-owned and 81 franchise-owned locations, as of Sept. 29, 2024, across 29 states.Image Source: Zacks Investment ResearchShares of the company have gained 24.7% in the past year compared with the Zacks Retail – Restaurants industry’s growth of 13.4%. The company is benefiting from new restaurant openings and increased focus on strategic franchise acquisitions.In the fourth quarter, the company expects to open 23 new restaurants. First Watch Restaurant aims to grow the size of its system by 10% or more annually. The company is currently managing more than 120 projects in its development pipeline. Many of these projects are planned for opening in 2025 and 2026.FWRG’s Zacks Rank & Key PicksFWRG currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the Zacks Retail-Wholesale sector have been discussed below.Abercrombie & Fitch Co. ANF currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.It has a trailing four-quarter earnings surprise of 28%, on average. The stock has risen 111.3% in the past year. The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and earnings per share (EPS) implies growth of 13% and 63.9%, respectively, from the year-ago levels.Brinker International, Inc. EAT currently flaunts a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 12.1%, on average. The stock has risen 245.7% in the past year.The Zacks Consensus Estimate for EAT’s fiscal 2025 sales and EPS indicates a rise of 8% and 32.4%, respectively, from the year-ago numbers.El Pollo Loco Holdings, Inc. LOCO currently sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 26.1%, on average. Shares of LOCO have gained 57.9% in the past year.The Zacks Consensus Estimate for LOCO’s 2024 sales and EPS indicates a rise of 0.7% and 16.9%, respectively, from the year-ago numbers.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Abercrombie & Fitch Company (ANF): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis Report El Pollo Loco Holdings, Inc. (LOCO): Free Stock Analysis Report First Watch Restaurant Group, Inc. (FWRG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks