national · macro

First Watch is spending more on marketing and food to grow sales

Original headline: “Inside First Watch’s ‘spend more to earn more’ strategy”

Why this matters

First Watch is deliberately increasing costs across marketing, food, and new locations, betting that higher spend now drives enough customer growth to justify the hit to margins. The chain is reporting sales and revenue gains so far, suggesting the bet is working at scale. For an indie operator, this is the playbook a well-capitalized chain can run that you cannot: absorb margin compression for quarters at a time to buy market share. When chains in your segment ramp marketing and development, they pull customers from the pool you are fishing in, often without you seeing it coming until covers drop.

What to do

Check your traffic trends against last quarter and identify which dayparts or days are softening before a competitor's spend shows up in your numbers.

Reveal Newsroom · Auto-published from restaurant-dive →

Published Mon, 10 Aug 2026 14:08:17 GMT