First Watch Restaurant Group, Inc.FWRG
First Watch Restaurant Group, Inc. Debt Disclosure
Debt
Long-term debt, net consisted of the following:
| DECEMBER 28, 2025 | DECEMBER 29, 2024 | ||||||||||||||||||||||
| (in thousands) | Balance | Interest Rate | Balance | Interest Rate | |||||||||||||||||||
| Term Facilities | $ | 211,625 | 6.54% | $ | 193,797 | 6.93% | |||||||||||||||||
| Revolving Credit Facility | 56,000 | 7.17% | — | ||||||||||||||||||||
| Finance lease liabilities | 12,906 | 2,766 | |||||||||||||||||||||
| Financing obligation | 3,050 | 3,050 | |||||||||||||||||||||
| Less: Unamortized debt discount and deferred issuance costs | (1,201) | (1,342) | |||||||||||||||||||||
| Total Debt, net | 282,380 | 198,271 | |||||||||||||||||||||
| Less: Current portion of long-term debt | (13,309) | (9,228) | |||||||||||||||||||||
| Long-term debt, net | $ | 269,071 | $ | 189,043 | |||||||||||||||||||
Credit Facilities
FWR Holding Corporation (“FWR”), a subsidiary of the Company, is the borrower under the credit agreement dated October 6, 2021, the terms of which were amended on February 24, 2023 and January 5, 2024, which provides for (i) a $225.0 million term loan A facility and delayed draw facility (the “Term Facilities”) and (ii) a $125.0 million revolving credit facility (the “Revolving Credit Facility” and collectively with the Term Facilities the “Credit Facility”). The Credit Facility matures on January 5, 2029.
During Fiscal 2024, the Company drew $97.5 million of the $125.0 million delayed draw facility. The proceeds were used to repay $22.5 million of borrowings under the Revolving Credit Facility and fund the business acquisition that was completed on April 15, 2024 for approximately $75.1 million. During Fiscal 2025, the Company drew the remaining $27.5 million on the delayed draw facility and $32.5 million on the Revolving Credit Facility, primarily to fund the business acquisitions referenced in Note 3, “Business Acquisitions”. As of December 28, 2025, the delayed draw facility was fully drawn with the same servicing and repayment terms as the term loan A facility. The Company drew an additional $23.5 million on the Revolving Credit Facility during Fiscal 2025 primarily to fund capital expenditures.
As of December 28, 2025, borrowings under the Credit Facility bear interest at the option of FWR at either (i) the alternate base rate plus a margin of between 150 and 225 basis points depending on the total rent adjusted net leverage ratio of FWR and its restricted subsidiaries on a consolidated basis (the “Total Rent Adjusted Net Leverage Ratio”) or (ii) the secured overnight financing rate (“SOFR”), plus a credit spread adjustment of 10 basis points plus a margin of between 250 and 325 basis points depending on the Total Rent Adjusted Net Leverage Ratio. Additionally, an unused commitment fee of between 37.5 and 50 basis points is paid on the undrawn commitments under the New Revolving Credit Facility, also depending on the Total Rent Adjusted Net Leverage Ratio. Refer to Note 11, Interest Rate Swaps, for information about the Company’s variable-to-fixed interest rate swap agreements.
The Term Facilities are subject to amortization of principal, payable in quarterly installments equal to (i) 1.9% of the original principal amount of the term loans in Fiscal 2024, (ii) 4.4% of the original principal amount of the term loans in the fiscal year ending December 28, 2025, (iii) 5.0% of the original principal amount of the term loans in the fiscal year ending December 27, 2026, (iv) 6.9% of the original principal amount of the term loans in the fiscal year ending December 26, 2027 and (v) 9.4% of the original principal amount of the term loans in the fiscal year ending December 31, 2028. The remaining principal amount outstanding is payable at maturity.
Principal payments due on the outstanding debt, excluding finance lease liabilities and financing obligations, as of December 28, 2025 are as follows:
| FISCAL YEAR | (in thousands) | ||||
| 2026 | $ | 11,250 | |||
| 2027 | 15,469 | ||||
| 2028 | 21,094 | ||||
| 2029 | 219,812 | ||||
| $ | 267,625 | ||||
Interest Expense
The following table summarizes our interest expense:
| FISCAL YEAR | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Interest expense | $ | (18,664) | $ | (14,257) | $ | (8,063) | |||||||||||
| Capitalized interest | 1,965 | 1,617 | — | ||||||||||||||
| Total interest expense, net | $ | (16,699) | $ | (12,640) | $ | (8,063) | |||||||||||
Fair Value of Debt
The estimated fair value of the outstanding debt, excluding finance lease obligations and financing obligations, is classified as Level 3 in the fair value hierarchy and was estimated using discounted cash flow models, market yield and yield volatility. The following table includes the carrying value and fair value of the Company’s debt as of the dates indicated:
| DECEMBER 28, 2025 | DECEMBER 29, 2024 | ||||||||||||||||||||||
| (in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||
| Term Facilities | $ | 211,625 | $ | 210,860 | $ | 193,797 | $ | 193,417 | |||||||||||||||
| Revolving Credit Facility | $ | 56,000 | $ | 55,761 | $ | — | $ | — | |||||||||||||||
Letter of Credit
The Company utilizes standby letters of credit to satisfy workers’ compensation and general liability insurance requirements. The contract amount of the letters of credit approximates fair value. As of December 28, 2025 and December 29, 2024, the open letters of credit totaled approximately $2.1 million and $1.7 million, respectively, and there were no draws against the letters of credit. The Company pays participation fees for the letters of credit based on a varying percentage of the amount not drawn.
Debt Covenants
The Credit Facilities are guaranteed by all of FWR’s wholly-owned domestic restricted subsidiaries, subject to customary exceptions, and by AI Fresh Parent, Inc., a Delaware corporation and the direct parent company of FWR (“Holdings”), and are secured by associated collateral agreements that pledge a lien on substantially all of FWR’s and each guarantor’s assets, including fixed assets and intangibles, in each case, subject to customary exceptions.
Under the Credit Agreement, FWR (and in certain circumstances, Holdings) and its restricted subsidiaries are subject to customary affirmative, negative and financial covenants, maintenance of certain ratios, restrictions on additional indebtedness and events of default for facilities of this type (with customary grace periods, as applicable, and lender remedies). FWR was in compliance with covenants under the Credit Agreement as of December 28, 2025 and December 29, 2024.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2022 | Mar 7, 2023 | |
| 2021 | Mar 23, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.