WEBVTT - First Watch’s One Shift Provides Unique Advantage 0:00:18.160 --> 0:00:21.080 Welcome to Chopping it Up. I'm your host, Mike Hallen, 0:00:21.120 --> 0:00:24.599 the senior restaurant and food service analyst at Bloomberg Intelligence. 0:00:25.280 --> 0:00:29.760 I'm excited to announce today's guest, Matt eisen Eisenacher, Senior 0:00:29.880 --> 0:00:33.000 VP of Brand Strategy and Innovation at First Watch. 0:00:33.200 --> 0:00:34.280 Thanks for doing this, Matt. 0:00:34.800 --> 0:00:37.040 Always always nice to take a step away from the 0:00:37.080 --> 0:00:39.479 business and reflect to talk about It's happy. 0:00:39.280 --> 0:00:40.480 To be here, very cool. 0:00:41.680 --> 0:00:44.519 Before I start to grill you about the business, can 0:00:44.560 --> 0:00:46.239 you just talk a little bit about your role at 0:00:46.280 --> 0:00:49.800 First Watch, how long you've been there, and maybe any 0:00:49.840 --> 0:00:52.360 interesting career stops prior. 0:00:54.040 --> 0:00:57.480 Yeah. I've been at First Watch now for about four years. 0:00:57.840 --> 0:01:01.600 We're based in Brandenton, Florida, and as you said, I'm 0:01:01.600 --> 0:01:04.319 the senior vice president of Brand Strategy and Innovation, so 0:01:05.000 --> 0:01:11.920 essentially I'm responsible for brand marketing and customer technology. Previously, 0:01:12.040 --> 0:01:15.680 I was the chief concept officer at Pata Tenans street 0:01:15.680 --> 0:01:19.280 Food based in Columbus, Ohio, and started my career in 0:01:19.319 --> 0:01:22.120 finance and then you know, migrated over to the world 0:01:22.120 --> 0:01:24.200 of brand and marketing. So kind of have a good 0:01:24.200 --> 0:01:27.480 blend of both the art and the science of marketing. 0:01:28.720 --> 0:01:29.279 Very cool. 0:01:30.520 --> 0:01:33.560 So you know, there's been a lot of noise obviously 0:01:33.640 --> 0:01:35.680 since the start of the year in terms of consumer 0:01:35.720 --> 0:01:38.880 spending and traffic and all that good stuff. Can you 0:01:38.959 --> 0:01:42.679 share any interesting tidbits about what you and the team 0:01:42.880 --> 0:01:44.640 are seeing from the consumer right now? 0:01:46.480 --> 0:01:49.880 Yeah, I'd actually take that behavior back even a little further, because, 0:01:50.080 --> 0:01:54.000 you know, I think with the rate of change we've 0:01:54.040 --> 0:01:56.840 seen with the consumer over the past three years has 0:01:56.880 --> 0:01:59.800 been incredible. I mean, you think about you know, I've 0:01:59.800 --> 0:02:02.000 been in this industry for a while, and the rate 0:02:02.040 --> 0:02:04.480 of change and change in behavior we've seen over the 0:02:04.520 --> 0:02:08.440 past three years since twenty nineteen is unreal. And I think, 0:02:08.760 --> 0:02:11.400 you know, what we've seen is that people are being 0:02:11.440 --> 0:02:14.680 more discriminate about where they spend their money. They're not 0:02:14.680 --> 0:02:15.960 going to gamble with their dollars. 0:02:16.120 --> 0:02:17.079 So you in the. 0:02:17.040 --> 0:02:19.119 Industry, you're kind of seeing a bit of a polarization, 0:02:19.200 --> 0:02:22.560 you see, you know, like QSR brands that are moving 0:02:22.560 --> 0:02:25.640 towards one extreme and learning how to take another clickout 0:02:25.760 --> 0:02:29.119 or another second out of a transaction and are being 0:02:29.120 --> 0:02:31.679 successful with that. But on the other side of the spectrum, 0:02:31.720 --> 0:02:34.960 you have consumers that are seeking an experience. I mean, 0:02:35.000 --> 0:02:37.200 you see all the stuff about travel and you know, 0:02:37.240 --> 0:02:40.560 travel hitting all time highs, and Sam goes through restaurants 0:02:40.560 --> 0:02:42.680 as well, that if you're going to go out to 0:02:42.800 --> 0:02:46.160 a full service occasion, that you're going to want something 0:02:46.160 --> 0:02:48.000 that's going to feel special, and you're going to want 0:02:48.280 --> 0:02:50.440 to go somewhere where it's going to be an experience 0:02:50.480 --> 0:02:52.120 and that you want to talk to someone about. And 0:02:52.160 --> 0:02:56.079 so you know, we kind of see people pushing across 0:02:56.880 --> 0:02:59.600 those two polar extremes, and you know, we still we 0:02:59.639 --> 0:03:02.640 feel right about where we've been because you know, we 0:03:02.720 --> 0:03:06.320 offer a very consistent experience and things like our seasonal 0:03:06.360 --> 0:03:09.000 menu are ways that we can continue to surprise and 0:03:09.080 --> 0:03:12.440 whole customers so that you know it's it's the experience 0:03:12.480 --> 0:03:13.880 worth their dollars. 0:03:15.480 --> 0:03:18.240 Very cool, and what are the demographics of the first 0:03:18.240 --> 0:03:19.120 watch customers? 0:03:20.960 --> 0:03:24.200 Well, the cool thing about breakfast is breakfast is incredibly 0:03:24.639 --> 0:03:27.160 broadly appealing. I mean, when you look at our who's 0:03:27.200 --> 0:03:32.399 in our restaurants, all backgrounds, all ethnicities, income levels. I mean, 0:03:32.800 --> 0:03:35.200 that's again the beauty of breakfast. You know, I think 0:03:35.960 --> 0:03:37.560 I like to say that you know, we've been around 0:03:37.560 --> 0:03:40.120 for forty years and if you look to say the 0:03:40.120 --> 0:03:43.440 first thirty to thirty five years, you know, we were 0:03:44.000 --> 0:03:46.640 we were a very traditional type of breakfast, you know, 0:03:46.640 --> 0:03:48.960 a little bit maybe closer to a diner type offering, 0:03:49.000 --> 0:03:51.040 and you might have heard people say, oh, that that's 0:03:51.080 --> 0:03:53.800 the place that I go to with my grandma. You know, 0:03:53.840 --> 0:03:56.640 that was you know, years ago. And as we've kind 0:03:56.640 --> 0:03:59.240 of evolved the brand over the past five to ten years, 0:03:59.760 --> 0:04:02.680 you know, we've also started to attract a different kind 0:04:02.680 --> 0:04:04.760 of customer. So we kind of think of it in 0:04:04.800 --> 0:04:07.200 two different segments. We have what we call the traditionalist. 0:04:07.800 --> 0:04:09.920 That's the person we just talked about. That's like, you know, 0:04:10.000 --> 0:04:13.440 coming on a Wednesday, you get a traditional breakfast, you know, 0:04:13.480 --> 0:04:15.360 some hot coffee, and it's kind of a ritual for 0:04:15.440 --> 0:04:17.080 you and you kind of stay in your in your 0:04:17.080 --> 0:04:21.200 crove and that's your thing. Most recently, we started to attract, 0:04:21.480 --> 0:04:23.320 you know, i'd say someone that's a little bit more 0:04:23.360 --> 0:04:26.160 of a foodie and is looking for higher quality. They 0:04:26.279 --> 0:04:28.480 like to try new things, they like to try new restaurants. 0:04:29.200 --> 0:04:31.640 We call them the trendy aspirational and the cool thing 0:04:31.680 --> 0:04:34.279 of a first watch is we we attract both of those, 0:04:34.400 --> 0:04:36.479 So you know, it's for us. It's a little bit 0:04:36.520 --> 0:04:40.479 less about demographics, and it is psychographics and and we 0:04:40.600 --> 0:04:43.279 think that we have the ability to continue to attract 0:04:43.360 --> 0:04:45.880 both of those types of customers. 0:04:46.600 --> 0:04:50.520 Okay, cool, Yeah, it's the it's it's a great it's 0:04:50.560 --> 0:04:51.960 a great concept, it's a great brand. 0:04:52.080 --> 0:04:54.840 My son and I both love it. Yeah, he's a 0:04:54.839 --> 0:04:55.240 big fan. 0:04:55.440 --> 0:04:58.960 You get when you go so oh man, I uh, well, 0:04:58.960 --> 0:05:00.760 you got to get the million dollar bacon, right, and 0:05:02.200 --> 0:05:03.560 you know I've changed it up. 0:05:03.640 --> 0:05:03.800 Man. 0:05:03.880 --> 0:05:07.640 Sometimes I'll get the chia pudding. Sometimes I'll get an omelet. 0:05:07.720 --> 0:05:10.040 But uh, you know, to be honest. 0:05:10.320 --> 0:05:13.359 You're you're you're a trendy aspirational then it sounds like 0:05:13.360 --> 0:05:14.840 you wanna you want to dabble in a little bit. 0:05:14.760 --> 0:05:15.880 Of everything to try new things. 0:05:16.080 --> 0:05:16.880 Yeah, for sure. 0:05:17.880 --> 0:05:20.719 And you know, a full disclosure here, I intermitte fast. 0:05:20.760 --> 0:05:23.440 So I don't get there as much as I probably 0:05:23.480 --> 0:05:26.400 would like. But my son is is a big fan 0:05:26.440 --> 0:05:29.039 and he gets there every chance, uh that he can. 0:05:29.160 --> 0:05:29.400 You know. 0:05:31.720 --> 0:05:34.880 So you know, one thing I've seen over the last year, 0:05:35.040 --> 0:05:38.479 especially chains that are have been able to attract high 0:05:38.560 --> 0:05:42.080 income consumers are kind of gaining some share here, and 0:05:42.120 --> 0:05:46.200 I think it might be because of the K shaped recovery. Right, 0:05:46.320 --> 0:05:49.240 higher income consumers obviously have done really well, saved a 0:05:49.240 --> 0:05:51.599 lot of money over the last few years, where lower 0:05:51.640 --> 0:05:56.080 income consumers or maybe are struggling a little bit since 0:05:56.120 --> 0:05:59.479 the end of stimulus. So are you doing anything the 0:05:59.520 --> 0:06:03.800 specific target higher income consumers and if so, how are 0:06:03.839 --> 0:06:04.320 you doing it? 0:06:06.160 --> 0:06:08.240 No, we don't specifically target them. 0:06:08.279 --> 0:06:11.760 Now. I think our offering just by the nature of 0:06:11.800 --> 0:06:15.480 our menu, we do tend to be very relevant for 0:06:15.600 --> 0:06:19.320 hire incomes as well. But frankly, we have trade areas 0:06:19.320 --> 0:06:21.280 that we've opened up that we're in, you know, moderate 0:06:21.320 --> 0:06:24.880 income areas, and we do fantastic, So we don't target them. 0:06:24.880 --> 0:06:26.679 But when you look at that customer I was talking 0:06:26.720 --> 0:06:30.000 about that newer again trendy aspirational customer, they tend to 0:06:30.040 --> 0:06:33.320 skew a little bit closer to places like Whole Foods, 0:06:34.000 --> 0:06:37.440 Trader Joe's, you know shop, you know, places like Nordstrom. 0:06:37.800 --> 0:06:40.800 So so by that nature, you know, those types of 0:06:40.800 --> 0:06:42.960 individuals do make their way into a first Watch, but 0:06:43.320 --> 0:06:46.080 it's not something we intentionally try to try to attract. 0:06:46.120 --> 0:06:49.920 But you know, again, by focusing on things like our 0:06:50.000 --> 0:06:53.599 revolving seasonal menus that changes five times a year, we're 0:06:53.600 --> 0:06:56.599 able to kind of be out in more progressive trends 0:06:56.600 --> 0:06:59.520 within the culinary universe. And so you know, those types 0:06:59.520 --> 0:07:02.640 of individual that are seeking that type of experience, you know, 0:07:02.680 --> 0:07:04.400 are really attracted to a place. 0:07:04.200 --> 0:07:08.320 Like first Watch Great and so you know, everything that 0:07:08.320 --> 0:07:11.320 that we hear is that is how much employees love 0:07:11.400 --> 0:07:15.000 that one shift, one menu model that you have. And 0:07:15.040 --> 0:07:18.160 I was very impressed with the turnover metrics in the 0:07:18.240 --> 0:07:21.280 S one when when the company went public a couple 0:07:21.320 --> 0:07:24.160 of years back. Are there any updated turnover metrics that 0:07:24.160 --> 0:07:25.080 that you'd like to share. 0:07:26.280 --> 0:07:27.360 We we've been consistent. 0:07:27.400 --> 0:07:31.000 I mean we we always you know, enjoy a benefit 0:07:31.040 --> 0:07:34.760 of being below industry turnover rates. And again, like you said, 0:07:35.440 --> 0:07:38.200 just those individuals that are willing to wake up at 0:07:38.200 --> 0:07:41.240 five thirty am and are motivated to come in when 0:07:41.240 --> 0:07:44.240 the sun sun rises. Just by by that nature, you know, 0:07:44.280 --> 0:07:47.520 you attract some really great individuals. And you know that 0:07:47.640 --> 0:07:50.600 along with you know, our our you first culture and 0:07:50.640 --> 0:07:54.040 our focus our employees. We we really feel like that's 0:07:54.080 --> 0:07:56.680 been an advantage for us through the last few years 0:07:56.680 --> 0:07:59.239 where obviously you've read all the articles, you've seen it yourself. 0:07:59.640 --> 0:08:02.240 It's been know, it's been a really wacky employment environment. 0:08:02.800 --> 0:08:04.960 But we've all we've always felt like we have a 0:08:05.080 --> 0:08:08.880 unique advantage within that within the employment. 0:08:08.520 --> 0:08:10.200 World for sure. 0:08:11.000 --> 0:08:13.840 I think a big thing is just it's easier to to, 0:08:14.360 --> 0:08:16.880 you know, have a family when you have a relationship 0:08:16.920 --> 0:08:20.600 and a family when you have normal work hours, right, yeah. 0:08:20.480 --> 0:08:21.120 I mean think about it. 0:08:21.320 --> 0:08:24.360 We have a focus there where, you know, if we 0:08:24.440 --> 0:08:27.160 find out the teams are getting out beyond four thirty 0:08:27.240 --> 0:08:30.240 and evening, like we want to know what is going wrong? 0:08:30.280 --> 0:08:32.000 What can we do to help? I mean, it's the 0:08:32.040 --> 0:08:33.360 consistency of knowing. 0:08:33.160 --> 0:08:36.400 That you can leave and you know, be home for 0:08:36.440 --> 0:08:39.640 dinner consistently and you can get your kids off a 0:08:39.640 --> 0:08:42.200 school bus or have a hobby at night is really 0:08:42.240 --> 0:08:45.079 really important. And and so I don't know if you're 0:08:45.080 --> 0:08:46.600 going to ask me this. Everyone always asks a you're 0:08:46.640 --> 0:08:50.280 going to open for dinner and it's a resounding no. 0:08:49.760 --> 0:08:54.600 I mean because like, yeah, so we always get the question. 0:08:54.679 --> 0:08:58.600 But you know, difficult things can happen in restaurants at night, 0:08:59.000 --> 0:09:03.160 and you know that that second shift really becomes difficult. 0:09:03.440 --> 0:09:05.400 And so now our managers get to meet and see 0:09:05.440 --> 0:09:08.199 every customer and they get to be in the restaurant with. 0:09:08.160 --> 0:09:10.880 Every one of their employees. So that's it's really unmatched. 0:09:10.960 --> 0:09:14.560 Yeah, it's fantastic. So what's what's driving the chain strong 0:09:14.559 --> 0:09:15.559 traffic growth right now? 0:09:17.880 --> 0:09:18.760 It's nothing sexy. 0:09:19.000 --> 0:09:21.800 You know, we say this a lot that sometimes you know, 0:09:21.840 --> 0:09:24.640 we might sound a little boring because you know, frankly, 0:09:24.840 --> 0:09:26.920 especially over the last few years, you know, I was 0:09:26.960 --> 0:09:31.840 talking about how discriminate the consumer is hot food, hot 0:09:31.920 --> 0:09:35.760 cold food, cold smiles, little things like opening the door, right, 0:09:35.800 --> 0:09:39.000 I mean, these are like we have very particular steps 0:09:39.040 --> 0:09:42.040 of service that are very ingrained in our culture. And 0:09:42.200 --> 0:09:44.960 you know, while the customer over the last few years 0:09:45.559 --> 0:09:47.720 has had a lot of question marks of where they 0:09:47.840 --> 0:09:50.320 might trust, you know, what restaurant brands they can trust, 0:09:50.559 --> 0:09:52.480 we have been very consistent. I mean, if you look 0:09:52.520 --> 0:09:56.160 at if you look at Technomic for instance, we're always 0:09:56.160 --> 0:09:58.920 in the top five of in the restaurant industry for 0:09:59.000 --> 0:10:01.560 brands that can trust. And so I guess the first 0:10:01.720 --> 0:10:04.920 first thing I would say is it's a really strong 0:10:05.000 --> 0:10:09.199 focus on our teams and operations. And you know, I'll 0:10:09.200 --> 0:10:12.680 give Chris our CEO a lot of credit. You know, 0:10:12.720 --> 0:10:15.400 when we were going through say twenty twenty and twenty 0:10:15.480 --> 0:10:18.559 twenty one, a lot of brands were doing things like 0:10:19.080 --> 0:10:21.120 you know, they slim down their menu or you know, 0:10:21.120 --> 0:10:25.320 they're blocking off tables and and and you know, we 0:10:25.320 --> 0:10:27.679 we went the other way, and we wanted to if 0:10:27.720 --> 0:10:30.040 you wanted to get out during those times. We wanted 0:10:30.040 --> 0:10:31.760 to be a place that you just you could trust 0:10:31.760 --> 0:10:32.839 and you knew what you were going to get. So 0:10:32.840 --> 0:10:35.240 we didn't change our menu one bit. We leaned into 0:10:35.240 --> 0:10:38.680 our seasonal menu. Actually we held off on pricing. So 0:10:39.040 --> 0:10:43.160 those types of things don't seem that sexy, but really 0:10:43.200 --> 0:10:46.240 allowed us to bring more people into First Watch that 0:10:46.320 --> 0:10:48.679 maybe had not come into First Watch before. 0:10:49.320 --> 0:10:51.479 So so, you know, we really. 0:10:51.240 --> 0:10:53.760 Believed that our focus there has really allowed us to 0:10:54.000 --> 0:10:57.240 produce some of the best performance in the restaurant industry 0:10:57.240 --> 0:10:58.199 over the last few years. 0:10:59.160 --> 0:11:01.480 Yeah, I've run a great restaurants. You know, may not 0:11:01.520 --> 0:11:07.320 sound sexy, but it works, that's for sure. What's your 0:11:07.360 --> 0:11:10.000 biggest growth opportunity in the current store base. Is it 0:11:10.040 --> 0:11:14.400 improved through put on the weekends or boosting weekday breakfast 0:11:14.440 --> 0:11:15.160 in lunch sales. 0:11:17.040 --> 0:11:18.080 Yes, it's both. 0:11:18.160 --> 0:11:21.000 But the way we think about it is we talk 0:11:21.040 --> 0:11:25.080 about serving more demand and creating more demand. And you know, 0:11:25.080 --> 0:11:27.520 I think if you if you follow us, I'm sure 0:11:27.559 --> 0:11:30.319 you do. You know, at the end of twenty twenty two, 0:11:30.400 --> 0:11:33.800 we had said there are Number one focus wasn't serving 0:11:33.840 --> 0:11:36.640 more demand. I mean we have we have restaurants that 0:11:36.880 --> 0:11:38.880 you know, can have waits up to ninety minutes two 0:11:38.920 --> 0:11:41.599 hours on the weekend. We have like demand that is 0:11:41.600 --> 0:11:43.200 sitting there at our front door, people that want to 0:11:43.200 --> 0:11:45.240 come in, and you know, we don't have to go 0:11:45.360 --> 0:11:48.320 find and so we started to realize that if we 0:11:48.440 --> 0:11:52.480 can really put a focus against, you know, be more efficient. 0:11:52.920 --> 0:11:55.920 I mean, in the last fifteen years, Mike a first 0:11:56.000 --> 0:11:59.000 Watch kitchen, it really hadn't changed. If you looked in 0:11:59.000 --> 0:12:02.680 twenty nineteen, came into a First Watch, a server would 0:12:02.679 --> 0:12:06.840 write down your order, would hand it across to the kitchen, 0:12:07.040 --> 0:12:09.440 who would then verbally call it out. And if you 0:12:09.480 --> 0:12:11.960 think of a cook who's on the egg grill and 0:12:12.000 --> 0:12:14.120 you've got a full egg grow on a Sunday, like 0:12:14.200 --> 0:12:16.680 the amount of modifications and things you have to remember 0:12:16.760 --> 0:12:19.360 and just think about the efficiency there. So, you know, 0:12:19.400 --> 0:12:22.120 we started to realize that when our business started to 0:12:22.120 --> 0:12:26.160 transform into the last few years, that we really looked 0:12:26.320 --> 0:12:28.920 from end to end everything that was going on in 0:12:28.960 --> 0:12:32.120 our kitchens and we've we've really been focusing on all 0:12:32.160 --> 0:12:36.720 process and procedures roles, things like double dishwashers. Again you 0:12:36.760 --> 0:12:39.360 talk about things that aren't sexy, but allows you to 0:12:39.400 --> 0:12:42.400 get through some of these bottlenecks, you know, bigger egg grills, 0:12:42.840 --> 0:12:45.679 bigger griddles, and so a lot of those things, as 0:12:45.720 --> 0:12:49.240 well as technology like kitchen display screens, have allowed us 0:12:49.280 --> 0:12:52.560 to actually you know, really start to increase peak hours 0:12:52.600 --> 0:12:55.040 on the weekend. So to answer question that is that 0:12:55.120 --> 0:12:58.000 is the first priority. But you know, my team also 0:12:58.840 --> 0:13:03.240 we've been into testing a lot of different ways of 0:13:03.320 --> 0:13:06.160 using digital marketing and social media to get really targeted 0:13:06.200 --> 0:13:10.000 and and creating more demand as well. And so you 0:13:10.040 --> 0:13:11.839 know that's that's the type of thing that once we 0:13:11.960 --> 0:13:14.800 start serving higher peak hours on the weekends, which we're 0:13:14.800 --> 0:13:19.480 doing now, you will also focus on increasing during the 0:13:19.480 --> 0:13:20.000 week as well. 0:13:21.080 --> 0:13:23.240 O great, great, Uh can you give us an update 0:13:23.240 --> 0:13:26.240 on where the alcohol program stands stands right now? 0:13:26.320 --> 0:13:29.040 What percentage and what percentage of sales are you targeting? 0:13:30.520 --> 0:13:32.000 Yeah, when when you go in with your son, do 0:13:32.040 --> 0:13:33.120 you did you get a cocktail? 0:13:33.760 --> 0:13:35.840 I'm in New Jersey, man, so that that was not 0:13:35.960 --> 0:13:36.440 an option. 0:13:36.800 --> 0:13:42.319 You know, these alcohol the the alcohol licenses are extremely expensive, 0:13:42.360 --> 0:13:45.800 so I'm sure it's prohibitive for you here, but so 0:13:45.920 --> 0:13:46.960 the answers, there. 0:13:46.840 --> 0:13:50.240 Are some yeah, there are some pockets in the country, 0:13:50.800 --> 0:13:53.800 but really we're everywhere where we can have the program now. 0:13:53.800 --> 0:13:57.440 And it was incredible. We rolled almost our whole system 0:13:57.480 --> 0:13:59.360 in about a year and a half, and it was 0:13:59.360 --> 0:14:03.920 an incredible initiative because you know, we really felt again 0:14:04.120 --> 0:14:06.720 if you think about that occasion of first Watch being 0:14:06.760 --> 0:14:09.040 about a place where people can come connect with others. 0:14:09.480 --> 0:14:11.800 You know, we knew alcohol was a part of that, 0:14:11.880 --> 0:14:14.600 and so you know, it's mixing it at about six percent, 0:14:15.240 --> 0:14:17.600 and you know, we're we're a little different. So I 0:14:17.640 --> 0:14:20.480 think as you look at other maybe breakfast or brunch 0:14:20.600 --> 0:14:23.440 places that really lean into you know, a full bar 0:14:23.680 --> 0:14:26.640 and they're free pouring. You know, for us, we don't 0:14:26.640 --> 0:14:29.560 want to be defined by alcohol as the occasion because 0:14:29.800 --> 0:14:32.040 First Watch is a place you can come Monday through 0:14:32.080 --> 0:14:35.200 Sunday every day, and we always want to make sure 0:14:35.280 --> 0:14:38.840 that that's it's not only about Sunday brunch, right, and 0:14:38.920 --> 0:14:41.280 so you know, for us, it's it was about or 0:14:41.440 --> 0:14:44.240 is about taking away the VITA vote that if if 0:14:44.240 --> 0:14:45.960 you have a group of friends or you know, family 0:14:46.000 --> 0:14:48.320 and someone wants a bloody Mary. You know, we didn't 0:14:48.360 --> 0:14:50.520 want to exclude people from that. So you know, that's 0:14:50.600 --> 0:14:52.520 that's the role that serves for us is it's it's 0:14:52.520 --> 0:14:57.440 another option for customers to enjoy relaxing and connecting with others. 0:14:57.840 --> 0:15:01.760 And so, you know, we've continued to innovate with new offerings. 0:15:02.520 --> 0:15:05.440 One of our best selling juices is purple Haze. I 0:15:05.440 --> 0:15:08.040 don't know if you've had purple Haze, but you know 0:15:08.080 --> 0:15:10.760 we've turned that into a spiked lavender lemonade as well, 0:15:11.200 --> 0:15:14.080 and we've rolled a samegree option as well. We have 0:15:14.120 --> 0:15:17.400 a couple other innovations that will be coming to our 0:15:17.400 --> 0:15:20.560 alcohol platform. But for us, it's about balancing that with 0:15:20.720 --> 0:15:22.600 all the other parts of our menu and our. 0:15:22.480 --> 0:15:24.680 Seasonal menu awesome. 0:15:26.800 --> 0:15:29.400 You know. When the company iPod I was also impressed 0:15:29.440 --> 0:15:34.400 by the unit economics very strong, especially being a single 0:15:34.640 --> 0:15:38.600 shift restaurant. Can you give an update to those numbers. 0:15:39.680 --> 0:15:42.520 Yeah, we're pretty proud of them because people forget, you know, 0:15:42.520 --> 0:15:44.360 when you look at our AEVs, they're done in seven 0:15:44.400 --> 0:15:47.000 and a half hours, and you look at it compared 0:15:47.000 --> 0:15:49.400 to you know, other places that are open for twelve hours, 0:15:49.400 --> 0:15:52.280 like Pound for pound hour for hour, we serve a 0:15:52.280 --> 0:15:55.400 lot of customers. And to your point, if you think 0:15:55.480 --> 0:15:59.560 back to twenty nineteen, our AEVs were around one point 0:15:59.600 --> 0:16:02.240 four in and now you look at the end of 0:16:02.280 --> 0:16:04.880 twenty twenty two, we're around two million for the entire 0:16:05.240 --> 0:16:09.240 entire com group, but our new restaurants are averaging closer 0:16:09.240 --> 0:16:11.960 to two point two and you take that to the 0:16:12.000 --> 0:16:14.680 bottom line and we're producing, you know, eighteen to twenty 0:16:14.800 --> 0:16:18.440 percent margins. In Q one, we even eclipsed Eclipse that So, 0:16:18.840 --> 0:16:21.400 you know, the thing that we're really proud of is 0:16:21.400 --> 0:16:26.120 that we generate through those solid unit economics, really strong 0:16:26.200 --> 0:16:30.360 cash on cash returns, and we have evolved the First 0:16:30.400 --> 0:16:34.800 Watch box significantly over the past few years. We're adding 0:16:34.800 --> 0:16:39.920 square footage, we're adding indoor outdoor bars, large expansive patios, 0:16:39.920 --> 0:16:42.760 we're adding more space in the back of house, dedicated 0:16:42.800 --> 0:16:45.000 make lines, extended make lines in the back. And so 0:16:45.440 --> 0:16:49.960 even with all that innovation, and we've increased some of 0:16:50.000 --> 0:16:52.720 our buildout costs, but our cash on cash returns have 0:16:52.800 --> 0:16:56.840 remained really steady, over thirty five percent. So I think 0:16:56.840 --> 0:16:59.640 it just goes to show the amount of demand that 0:16:59.680 --> 0:17:02.880 we have for First Watch in daytime eateery. 0:17:03.600 --> 0:17:06.879 Great. Yeah, three back, three year paid backs very attractive. 0:17:07.600 --> 0:17:09.639 Is this team still aiming for one hundred and thirty 0:17:09.680 --> 0:17:13.360 company stores between twenty twenty two and twenty twenty four. 0:17:14.720 --> 0:17:17.600 Yeah, so this this year will open forty five to 0:17:17.680 --> 0:17:20.879 fifty one and about ten of those will be franchised, 0:17:20.880 --> 0:17:23.520 all the rest will be corporate. And while we don't 0:17:23.520 --> 0:17:25.640 give the numbers explicitly for out years, you can look 0:17:25.640 --> 0:17:29.160 at our long term guidance and we will We'll still 0:17:29.200 --> 0:17:31.399 continue to grow at about ten percent per year. So 0:17:31.720 --> 0:17:34.280 you do that math, and the number of units, you know, 0:17:34.359 --> 0:17:38.399 consistently grows, And I'll tell you our real estate and 0:17:38.440 --> 0:17:40.840 development team is the best in the industry. I mean 0:17:40.840 --> 0:17:42.920 it is a well oiled machine. I mean you see 0:17:42.960 --> 0:17:46.119 how many think about that for you know, working right now, 0:17:46.119 --> 0:17:48.880 we're working even out until twenty twenty five finding site. 0:17:48.880 --> 0:17:51.159 So you think about how many units we have in 0:17:51.200 --> 0:17:53.800 our pipeline, and we've been doing it for so long 0:17:53.960 --> 0:17:56.480 that it's a well oiled machine. I mean, we don't 0:17:56.840 --> 0:17:59.040 even with that number of units, even in the full 0:17:59.080 --> 0:18:02.080 service world, you don't feel it. You don't feel it 0:18:02.080 --> 0:18:04.560 at first watch because you know, I think we've really 0:18:04.920 --> 0:18:10.080 understood how to staff and handle that growing number of units. 0:18:10.119 --> 0:18:12.320 I mean, you think back to some acquisitions we've had 0:18:12.320 --> 0:18:15.440 in the past, and we've converted those units. We've had 0:18:15.440 --> 0:18:18.880 some years of some pretty significant unit opening. So we're 0:18:18.920 --> 0:18:19.600 really proud of that. 0:18:20.320 --> 0:18:20.600 Great. 0:18:20.640 --> 0:18:23.160 And is the long term restaurant target still about twenty 0:18:23.160 --> 0:18:24.560 two hundred here in the United States? 0:18:25.880 --> 0:18:28.040 Yeah, twenty two hundred. We have several models that have 0:18:28.080 --> 0:18:32.360 shown us that twenty two one hundred units is feasible domestically, 0:18:32.840 --> 0:18:36.000 and so you know, people people look past that that's 0:18:36.000 --> 0:18:37.480 a lot, that's a lot of units, but if you 0:18:37.520 --> 0:18:40.800 look at it, you know, we have I don't remember 0:18:40.800 --> 0:18:42.600 the exact number, but somewhere around one hundred and ten 0:18:42.680 --> 0:18:45.000 in Florida, And you know a lot of times you 0:18:45.040 --> 0:18:47.200 look and we have some of those units a mile 0:18:47.280 --> 0:18:50.760 two miles away from one another. And and so you know, 0:18:50.800 --> 0:18:54.800 we're we feel really strongly that the demand for breakfast 0:18:54.960 --> 0:18:57.880 is going to continue to grow and it's a it's 0:18:57.880 --> 0:19:00.320 an underdeveloped day part that we see a whole lot 0:19:00.320 --> 0:19:01.480 of white space and opportunity. 0:19:02.760 --> 0:19:06.879 Great, And what's the split between new units that you're 0:19:06.920 --> 0:19:12.200 building in new markets, emerging markets, and mature markets. 0:19:13.760 --> 0:19:16.840 Yeah, we're we're pretty uh we're pretty strongly a third 0:19:16.920 --> 0:19:17.440 or third third. 0:19:17.680 --> 0:19:19.720 So we have a third in core markets, so those 0:19:19.760 --> 0:19:22.560 are more mature, established markets. We have a third in 0:19:22.600 --> 0:19:25.800 emerging markets where you know, they might have a few 0:19:25.880 --> 0:19:27.920 number of units, but we're adding quickly to it. So 0:19:27.960 --> 0:19:31.639 a great example of that is Chicago. We were just 0:19:31.640 --> 0:19:33.560 in a meeting the other day, you know, talking about 0:19:34.320 --> 0:19:37.160 unit growth and I looked up and saw how many 0:19:37.200 --> 0:19:39.320 we have coming in Chicago, and you know, it's just 0:19:39.400 --> 0:19:42.720 it's one of our more recent new markets. And then 0:19:42.760 --> 0:19:45.440 the third would be uh, you know, brand new, brand 0:19:45.440 --> 0:19:48.000 new markets that we're entering and really close on being 0:19:48.040 --> 0:19:50.880 able to announce some of those. So we usually try 0:19:50.880 --> 0:19:53.080 to get to one a year. Sometimes it works out, 0:19:53.119 --> 0:19:54.560 you know, a few months off of that, but that's 0:19:54.600 --> 0:19:55.159 usually our. 0:19:55.000 --> 0:19:58.560 Goal and nice and a good good excuse to visit 0:19:58.640 --> 0:19:59.800 Chicago in the summertime. 0:20:01.440 --> 0:20:04.280 Chicago is really cool in the summer. So yeah, we 0:20:04.280 --> 0:20:07.480 we we opened our first in oak Brook, second and 0:20:07.560 --> 0:20:09.760