Ostrzeżenie

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the unaudited interim consolidated
financial statements and notes thereto included in Part I, Item 1 of this Form
10-Q and our audited consolidated financial statements as of and for the fiscal
year ended December 25, 2022 and notes included in our 2022 Form 10-K. As
discussed in "Cautionary Note Regarding Forward-Looking Statements," the
following discussion and analysis contains forward-looking statements that
involve risks and uncertainties. Our actual results may materially differ from
those discussed in such forward-looking statements. Factors that could cause or
contribute to these differences include, but are not limited to, those
identified below and those discussed in "Risk Factors" under Part II, Item 1A in
this Form 10-Q and in our 2022 Form 10-K, including under "Item 1A. Risk
Factors" and "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations."

Przegląd

First Watch is an award-winning Daytime Dining concept serving made-to-order
breakfast, brunch and lunch using fresh ingredients. A recipient of hundreds of
local "Best Breakfast" and "Best Brunch" accolades, First Watch's award winning
chef-driven menu includes elevated executions of classic favorites for
breakfast, brunch and lunch. In 2022, First Watch was recognized with ADP's
coveted Culture at Work Award and named a Top 100 Most Loved Workplace® by
Newsweek and the Best Practice Institute. The Company is majority owned by
Advent International Corporation, one of the world's largest private-equity
firms. On October 1, 2021, the Company's common stock began trading on Nasdaq
under the ticker symbol "FWRG."

The Company operates and franchises restaurants in 29 states under the "First
Watch" trade name and as of March 26, 2023, the Company had 370 company-owned
restaurants and 114 franchise-owned restaurants.

Ostatnie zmiany

Financial highlights for the thirteen weeks ended March 26, 2023 ("first quarter
of 2023") as compared to the thirteen weeks ended March 27, 2022 ("first quarter
of 2022") reflected the continued momentum of our strong operating performance
and include the following:

•Total revenues increased 22.1% to $211.4 million in the first quarter of 2023
from $173.1 million in the first quarter of 2022
•System-wide sales increased 23.6% to $264.7 million in the first quarter of
2023 from $214.1 million in the first quarter of 2022
•Same-restaurant sales growth of 12.9% (42.0% relative to the first quarter of
2019*)
•Same-restaurant traffic growth of 5.1% (11.7% relative to the first quarter of
2019*)
•Income from operations margin increased to 7.4% during the first quarter of
2023 from 4.5% in the first quarter of 2022
•Restaurant level operating profit margin** increased to 21.2% in the first
quarter of 2023 from 19.6% in the first quarter of 2022
•Net income increased to $9.4 million, or $0.15 per diluted share, in the first
quarter of 2023 from $4.6 million, or $0.08 per diluted share, in the first
quarter of 2022
•Adjusted EBITDA** increased to $27.4 million in the first quarter of 2023 from
$19.4 million in the first quarter of 2022
•Opened 10 system-wide restaurants in 7 states resulting in a total of 484
system-wide restaurants (370 company-owned and 114 franchise-owned) across 29
states
___________________
* Comparison to the thirteen weeks ended March 31, 2019 ("first quarter of
2019") is presented for enhanced comparability due to the economic impact of
COVID-19.
** See Non-GAAP Financial Measures Reconciliations section below.
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Spis treści

Trendy biznesowe

First quarter 2023 same-restaurant sales growth was 12.9%, which was primarily
driven by same-restaurant traffic growth of 5.1% and an in-restaurant menu price
increase of 4.1% implemented in January 2023. The average price increase over
the first quarter of 2022 was approximately 7.0%. Same-restaurant sales growth
and same-restaurant traffic growth benefited early in the first quarter from a
calendar shift as well as from favorable comparisons to the prior year period
which was impacted by the Omicron variant of Covid-19. More formidable traffic
comparisons in the last month of the first quarter of 2023 acted as a relative
headwind, though absolute average weekly traffic counts were largely consistent
throughout the entire first quarter of 2023 and remained significantly higher
than pre-pandemic levels. In-restaurant dining room traffic continued to
increase in the first quarter of 2023 while, similar to industry-wide trends,
off-premises occasions declined.

Commodity inflation continued to decelerate, furthering a trend that began in
the third and fourth quarters of 2022, and was 3.0% in the first quarter of
2023. Management estimates of near-term commodity inflation were considered in
both the January 2023 menu price increase and the annual contracts that fixed
the price for eggs and potatoes, which make up approximately 15.0% of our market
basket. Other commodities are purchased based upon negotiated price ranges
established with vendors and are subject to fixed prices or fixed formulas for
30-to-90 day periods. In 2023, we currently expect continued cost inflation for
our entire market basket in the range of 2.0% to 4.0%.

Labor cost trends as a percentage of restaurant sales improved during the first
quarter of 2023 compared to the last two quarters of 2022. During the first
quarter of 2023, our operations team improved labor scheduling protocols and
deployed analytical tools which align better with the growing traffic in our
restaurants. During the first quarter of 2023, our restaurant-level hourly wage
inflation approximated 11.0% and overall restaurant-level labor experienced
approximately 9.0% inflation. In 2023, we currently expect restaurant-level
hourly labor inflation of 9.0% to 11.0% with an overall restaurant-level labor
inflation of 8.0% to 10.0%.

Key Performance Indicators

Throughout "Management's Discussion and Analysis of Financial Condition and
Results of Operations" we commonly discuss the following key operating metrics
which we believe will drive our financial results and long-term growth model. We
believe these metrics are useful to investors because management uses these
metrics to evaluate performance and assess the growth of our business as well as
the effectiveness of our marketing and operational strategies.

Otwarcia nowych restauracji („NRO”): liczba nowych restauracji należących do firmy First Watch, które rozpoczęły działalność w danym okresie. Kierownictwo dokonuje przeglądu liczby nowych restauracji, aby ocenić wzrost nowych restauracji i sprzedaż restauracji należących do firmy.

Franchise-owned New Restaurant Openings ("Franchise-owned NROs"): the number of
new franchise-owned First Watch restaurants commencing operations during the
period.

Same-Restaurant Sales Growth: the percentage change in year-over-year restaurant
sales (excluding gift card breakage) for the comparable restaurant base, which
we define as the number of company-owned First Watch branded restaurants open
for 18 months or longer as of the beginning of the fiscal year ("Comparable
Restaurant Base"). For the thirteen weeks ended March 26, 2023 and March 27,
2022, there were 328 restaurants and 305 restaurants in our Comparable
Restaurant Base, respectively. Measuring our same-restaurant sales growth allows
management to evaluate the performance of our existing restaurant base. We
believe this measure is useful for investors to provide a consistent comparison
of restaurant sales results and trends across periods within our core,
established restaurant base, unaffected by results of store openings, closings,
and other transitional changes.

Same-Restaurant Traffic Growth: the percentage change in traffic counts as
compared to the same period in the prior year using the Comparable Restaurant
Base. Measuring our same-restaurant traffic growth allows management to evaluate
the performance of our existing restaurant base. We believe this measure is
useful for investors because an increase in same-restaurant traffic provides an
indicator as to the development of our brand and the effectiveness of our
marketing strategy.

Restauracje w całym systemie: łączna liczba restauracji, w tym wszystkie restauracje własne i franczyzowe.

Sprzedaż systemowa: obejmuje sprzedaż restauracji z naszych restauracji firmowych i restauracji franczyzowych. Nie uznajemy sprzedaży restauracji z naszych restauracji franczyzowych jako przychodów.

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Non-GAAP Financial Measures

To supplement the consolidated financial statements, which are prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP"), we use the following non-GAAP measures, which present
operating results on an adjusted basis: (i) Adjusted EBITDA, (ii) Adjusted
EBITDA margin, (iii) Restaurant level operating profit and (iv) Restaurant level
operating profit margin. Our presentation of these non-GAAP measures includes
isolating the effects of some items that are either nonrecurring in nature or
vary from period to period without any correlation to our ongoing core operating
performance. These supplemental measures of performance are not required by or
presented in accordance with GAAP. Management believes these non-GAAP measures
provide investors with additional visibility into our operations, facilitate
analysis and comparisons of our ongoing business operations because they exclude
items that may not be indicative of our ongoing operating performance, help to
identify operational trends and allow for greater transparency with respect to
key metrics used by management in our financial and operational decision making.
Our non-GAAP measures may not be comparable to similarly titled measures used by
other companies and have important limitations as analytical tools. These
non-GAAP measures should not be considered in isolation or as substitutes for
analysis of our results as reported under GAAP as they may not provide a
complete understanding of our performance. These non-GAAP measures should be
reviewed in conjunction with our consolidated financial statements prepared in
accordance with GAAP.

We use Adjusted EBITDA and Adjusted EBITDA margin (i) as factors in evaluating
management's performance when determining incentive compensation, (ii) to
evaluate our operating results and the effectiveness of our business strategies
and (iii) internally as benchmarks to compare our performance to that of our
competitors.

Korzystamy z zysku operacyjnego na poziomie restauracji i marży zysku operacyjnego na poziomie restauracji (i) do oceny wyników i rentowności każdej działającej restauracji, indywidualnie i łącznie oraz (ii) do podejmowania decyzji dotyczących przyszłych wydatków i innych decyzji operacyjnych.

Adjusted EBITDA: represents Net income before depreciation and amortization,
interest expense, income taxes, and items that we do not consider in our
evaluation of ongoing core operating performance as identified in the
reconciliation of Net income, the most directly comparable measure in accordance
with GAAP, to Adjusted EBITDA, included in the section Non-GAAP Financial
Measure Reconciliations below.

Skorygowana Marża EBITDA: reprezentuje Skorygowaną EBITDA jako procent całkowitych przychodów. Zobacz Uzgodnienia miar finansowych niezgodnych ze standardami GAAP poniżej, aby zapoznać się z uzgodnieniem z marżą dochodu netto, najbardziej bezpośrednio porównywalną miarą GAAP.

Restaurant Level Operating Profit: represents restaurant sales, less restaurant
operating expenses, which include food and beverage costs, labor and other
related expenses, other restaurant operating expenses, pre-opening expenses and
occupancy expenses. Restaurant level operating profit excludes corporate-level
expenses and other items that we do not consider in the evaluation of the
ongoing core operating performance of our restaurants as identified in the
reconciliation of Income from operations, the most directly comparable GAAP
measure, to Restaurant level operating profit, included in the section Non-GAAP
Financial Measure Reconciliations below.

Restaurant Level Operating Profit Margin: represents Restaurant level operating
profit as a percentage of restaurant sales. See Non-GAAP Financial Measure
Reconciliations below for a reconciliation to Income from operations margin, the
most directly comparable GAAP measure.

                                       20

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  Table of Contents

Selected Operating Data
                                                                         THIRTEEN WEEKS ENDED
                                                                MARCH 26, 2023          MARCH 27, 2022
System-wide sales (in thousands)                               $      264,719          $      214,121
System-wide restaurants                                                   484                     441
Company-owned                                                             370                     346
Franchise-owned                                                           114                      95
Same-restaurant sales growth                                             12.9  %                 27.2  %
Same-restaurant traffic growth                                            5.1  %                 21.9  %
Income from operations (in thousands)                          $       15,331          $        7,760
Income from operations margin                                             7.4  %                  4.5  %
Restaurant level operating profit (in thousands) (1)           $       44,102          $       33,439
Restaurant level operating profit margin (1)                             21.2  %                 19.6  %
Net income (in thousands)                                      $        9,360          $        4,640
Net income margin                                                         4.4  %                  2.7  %
Adjusted EBITDA (in thousands) (2)                             $       27,413          $       19,364
Adjusted EBITDA margin (2)                                               13.0  %                 11.2  %


________________
(1) Reconciliations from Income from operations and Income from operations
margin, the most comparable GAAP measures, to Restaurant level operating profit
and Restaurant level operating profit margin, are set forth in the schedules
within the Non-GAAP Financial Measures Reconciliations section below.
(2) Reconciliations from Net income and Net income margin, the most comparable
GAAP measures, to Adjusted EBITDA and Adjusted EBITDA margin, are set forth in
the schedules within the Non-GAAP Financial Measures Reconciliations section
below.

Wzrost sprzedaży w tej samej restauracji i wzrost ruchu w tej samej restauracji

Thirteen Weeks Ended                              Same-Restaurant Sales Growth        Same-Restaurant Traffic Growth          Comparable Restaurant Base
March 26, 2023                                                          12.9  %                               5.1  %                          328
March 27, 2022                                                          27.2  %                              21.9  %                          305
March 28, 2021                                                          14.1  %                               2.2  %                          270


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Spis treści

Wyniki operacji

Trzynaście tygodni zakończonych 26 marca 2023 r. w porównaniu z trzynastoma tygodniami zakończonymi 27 marca 2022 r.

Poniższa tabela podsumowuje nasze wyniki operacyjne i procentowe wartości niektórych pozycji w stosunku do przychodów ogółem lub, tam gdzie wskazano, sprzedaży restauracji za trzynaście tygodni zakończonych 26 marca 2023 r. i 27 marca 2022 r.:

                                                                                     THIRTEEN WEEKS ENDED
(in thousands)                                                      MARCH 26, 2023                           MARCH 27, 2022
Revenues
Restaurant sales                                          $      207,968             98.4  %       $      170,669             98.6  %
Franchise revenues                                                 3,438              1.6  %                2,443              1.4  %
Total revenues                                            $      211,406            100.0  %       $      173,112            100.0  %
Operating costs and expenses
Restaurant operating expenses (1) (exclusive of
depreciation and amortization shown below):
Food and beverage costs                                           46,627             22.4  %               39,403             23.1  %
Labor and other related expenses                                  68,573             33.0  %               55,142             32.3  %
Other restaurant operating expenses                               31,696             15.2  %               27,317             16.0  %
Occupancy expenses                                                15,934              7.7  %               14,383              8.4  %
Pre-opening expenses                                               1,036              0.5  %                  985              0.6  %
General and administrative expenses                               22,705             10.7  %               19,563             11.3  %
Depreciation and amortization                                      9,117              4.3  %                8,223              4.8  %
Impairments and loss on disposal of assets                           134              0.1  %                   79                -  %
Transaction expenses, net                                            253              0.1  %                  257              0.1  %
Total operating costs and expenses                               196,075             92.7  %              165,352             95.5  %
Income from operations (1)                                        15,331              7.4  %                7,760              4.5  %
Interest expense                                                  (1,907)            (0.9) %               (1,006)            (0.6) %
Other income, net                                                    494              0.2  %                  163              0.1  %
Income before income taxes                                        13,918              6.6  %                6,917              4.0  %
Income tax expense                                                (4,558)            (2.2) %               (2,277)            (1.3) %
Net income and total comprehensive income                 $        9,360              4.4  %       $        4,640              2.7  %

____________

(1) Jako odsetek sprzedaży restauracji.

Sprzedaż Restauracji

Restaurant sales represent the aggregate sales of food and beverages, net of
discounts, at company-owned restaurants. Restaurant sales in any period are
directly influenced by the number of operating weeks in the period, the number
of open restaurants, customer traffic and average check. Average check growth is
driven by our menu price increases and changes to our menu mix.

                                              THIRTEEN WEEKS ENDED
(in thousands)                  MARCH 26, 2023       MARCH 27, 2022       Change
Restaurant sales:
In-restaurant dining sales     $       169,229      $       132,892       27.3  %
Third-party delivery sales              22,314               21,026        6.1  %
Take-out sales                          16,425               16,751       (1.9) %
Total Restaurant sales         $       207,968      $       170,669       21.9  %



The increase in total restaurant sales during the thirteen weeks ended March 26,
2023 as compared to the same period in the prior year was primarily due to (i)
same-restaurant sales growth of 12.9%, driven by same-restaurant traffic growth
of 5.1% and the increase in average check per person, mainly due to the increase
in menu prices, in addition to (ii) $24.0 million from restaurants not in the
Comparable Restaurant Base, which included $14.9 million from our 27 NROs
between March 27, 2022 and March 26, 2023.

                                       22

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Spis treści

Przychody franczyzy

Franchise revenues are comprised of sales-based royalty fees, system fund
contributions and the amortization of upfront initial franchise fees, which are
recognized as revenue on a straight-line basis over the term of the franchise
agreement. Franchise revenues in any period are directly influenced by the
number of open franchise-owned restaurants.

                                                       THIRTEEN WEEKS ENDED
(in thousands)                            MARCH 26, 2023       MARCH 27, 2022      Change
Franchise revenues:
Royalty and system fund contributions    $    3,361           $        2,379       41.3  %
Initial fees                                     77                       64       20.3  %
Total Franchise revenues                 $    3,438           $        2,443       40.7  %


The increase in franchise revenues during the thirteen weeks ended March 26,
2023 as compared to the same period in the prior year was primarily driven by
(i) the increase in sales from franchise-owned restaurants and (ii) $0.4 million
from the 19 Franchise-owned NROs between March 27, 2022 and March 26, 2023.

Koszty żywności i napojów

Składniki kosztów żywności i napojów w restauracjach należących do spółki są z natury zmienne, zmieniają się wraz z wielkością sprzedaży, mają na nie wpływ asortyment produktów i podlegają wzrostom lub spadkom kosztów towarów.

                                                     THIRTEEN WEEKS ENDED
(in thousands)                          MARCH 26, 2023      MARCH 27, 2022      Change
Food and beverage costs                $      46,627       $      39,403        18.3  %
As a percentage of restaurant sales             22.4  %             23.1  % 

(0,7) %

Food and beverage costs as a percent of restaurant sales decreased during the
thirteen weeks ended March 26, 2023 as compared to the same period in the prior
year primarily due to (i) the decrease in price for pork and avocados and (ii)
the increase in menu prices.
Food and beverage costs increased during the thirteen weeks ended March 26, 2023
as compared to the same period in the prior year primarily as a result of (i)
the increase in restaurant sales and (ii) 27 NROs between March 27, 2022 and
March 26, 2023. This was partially offset by the decrease in price for pork and
avocados.

Wydatki na robociznę i inne powiązane wydatki

Labor and other related expenses are variable by nature and include hourly and
management wages, bonuses, payroll taxes, workers' compensation expense and
employee benefits. Factors that influence labor costs include minimum wage and
payroll tax legislation, health care costs, the number and performance of our
company-owned restaurants and increased competition for qualified staff.

                                                    THIRTEEN WEEKS ENDED
(in thousands)                         MARCH 26, 2023      MARCH 27, 2022   

Zmiana

Wydatki na robociznę i inne powiązane 68 573 USD 55 142 USD

    24.4  %
As a percentage of restaurant sales            33.0  %             32.3  %  

0,7%

Labor and other related expenses as a percentage of restaurant sales increased
during the thirteen weeks ended March 26, 2023 as compared to the same period in
the prior year primarily as a result of investments in labor, including
increases in wages and staffing levels. This was partially offset by sales
leverage driven by the increase in restaurant sales.

The increase in labor and other related expenses during the thirteen weeks ended
March 26, 2023 as compared to the same period in the prior year was primarily
due to (i) investments in labor, including increases in wages and staffing
levels, as well as (ii) 27 NROs between March 27, 2022 and March 26, 2023.


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Other Restaurant Operating Expenses

Other restaurant operating expenses consist of marketing and advertising
expenses, utilities, insurance and other operating variable expenses incidental
to operating company-owned restaurants, such as operating supplies (including
paper products, menus and to-go supplies), credit card fees, repairs and
maintenance, and third-party delivery services fees.

                                                     THIRTEEN WEEKS ENDED
(in thousands)                          MARCH 26, 2023      MARCH 27, 2022  

Zmiana

Pozostałe koszty operacyjne restauracji 31.696 $ 27.317

     16.0  %
As a percentage of restaurant sales             15.2  %             16.0  % 

(0,8) %

Other restaurant operating expenses as a percentage of restaurant sales during
the thirteen weeks ended March 26, 2023 was lower than the same period in the
prior year primarily due to (i) leveraging the increase in restaurant sales and
(ii) the increase in menu prices.

The increase in other restaurant operating expenses during the thirteen weeks
ended March 26, 2023 as compared to the same period in the prior year was mainly
due to (i) the increase in restaurant sales and (ii) 27 NROs between March 27,
2022 and March 26, 2023.

Occupancy Expenses

Koszty najmu składają się głównie z kosztów czynszu, ubezpieczenia nieruchomości, wydatków na części wspólne i podatków od nieruchomości.

                                                     THIRTEEN WEEKS ENDED
(in thousands)                          MARCH 26, 2023      MARCH 27, 2022      Change
Occupancy expenses                     $      15,934       $      14,383        10.8  %
As a percentage of restaurant sales              7.7  %              8.4  % 

(0,7) %

As a percentage of restaurant sales, the decrease in occupancy expenses for the
thirteen weeks ended March 26, 2023 as compared to the same period in the prior
year was primarily due to leveraging the increase in restaurant sales.

The increase in occupancy expenses during the thirteen weeks ended March 26,
2023 as compared to the same period in the prior year was primarily due to the
increase in the number of company-owned restaurants.

Wydatki przed otwarciem

Pre-opening expenses are costs incurred to open new company-owned restaurants.
Pre-opening expenses include pre-opening rent expense, which is recognized
during the period between the date of possession of the restaurant facility and
the restaurant opening date. In addition, pre-opening expenses include manager
salaries, recruiting expenses, employee payroll and training costs, which are
recognized in the period in which the expense was incurred. Pre-opening expenses
can fluctuate from period to period, based on the number and timing of new
company-owned restaurant openings.

                                         THIRTEEN WEEKS ENDED
(in thousands)             MARCH 27, 2022         MARCH 28, 2021       Change
Pre-opening expenses    $      1,036             $           985        5.2  %


The increase in pre-opening expenses during the thirteen weeks ended March 26,
2023 as compared to the same period in the prior year was primarily due to the
increase in wages and pre-opening rent expense.
                                       24

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Spis treści

Koszty ogólnoadministracyjne

General and administrative expenses primarily consist of costs associated with
our corporate and administrative functions that support restaurant development
and operations including marketing and advertising costs incurred as well as
legal fees, professional fees, stock-based compensation and expenses associated
with being a public company, including costs associated with our compliance with
the Sarbanes-Oxley Act. General and administrative expenses are impacted by
changes in our employee headcount and costs related to strategic and growth
initiatives.

                                                      THIRTEEN WEEKS ENDED
(in thousands)                          MARCH 26, 2023       MARCH 27, 2022       Change

Koszty ogólne i administracyjne 22 705 USD 19 563 USD

16,1%

The increase in general and administrative expenses during the thirteen weeks
ended March 26, 2023 as compared to the same period in the prior year was mainly
due to (i) $2.8 million in compensation expense from wage increases and
additional employee headcount to support growth, (ii) $0.5 million of fees
associated with investments in technology initiatives and (iii) $0.4 million of
professional service costs incurred in connection with the Delaware Voluntary
Disclosure Agreement Program related to unclaimed or abandoned property. This
was partially offset by the decrease in stock-based compensation of $0.8 million
mainly due to the accelerated recognition method for certain stock option
grants, net of the stock-based compensation expense recognized for stock-based
awards issued during the thirteen weeks ended March 27, 2022 and March 26, 2023.

Amortyzacja i amortyzacja

Depreciation and amortization consists of the depreciation of fixed assets,
including leasehold improvements, fixtures and equipment and the amortization of
definite-lived intangible assets, which are primarily comprised of franchise
rights. Franchise rights includes rights which arose from the purchase price
allocation in connection with the merger agreement through which the Company was
acquired by funds affiliated with or managed by Advent International Corporation
in August 2017, as well as reacquired rights from our acquisitions of
franchise-owned restaurants.

                                               THIRTEEN WEEKS ENDED
(in thousands)                    MARCH 26, 2023       MARCH 27, 2022      Change
Depreciation and amortization    $    9,117           $        8,223       10.9  %


The increase in depreciation and amortization during the thirteen weeks ended
March 26, 2023 as compared to the same period in the prior year was primarily
due to incremental depreciation of capital expenditures associated with NROs.
                                       25

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Spis treści

Koszty transakcyjne netto

Transaction expenses, net include (i) revaluations of contingent consideration
payable to previous stockholders for tax savings generated through the use of
federal and state loss carryforwards and general business credits that had been
accumulated from operations prior to August 2017, (ii) gains or losses
associated with lease or contract terminations, (iii) costs incurred in
connection with the acquisition of franchise-owned restaurants, (iv) costs
related to restaurant closures and (v) costs related to certain equity
offerings.

                                                THIRTEEN WEEKS ENDED
(in thousands)                    MARCH 26, 2023         MARCH 27, 2022       Change
Transaction expenses, net     $      253                $           257        n/m (1)


____________
(1) Not meaningful.

During the thirteen weeks ended March 26, 2023, Transaction expenses, net
primarily included costs incurred in connection with the acquisition of certain
franchise-owned restaurants, which was partially offset by the gain recognized
from the lease modification of one company-owned restaurant.

During the thirteen weeks ended March 27, 2022, Transaction expenses, net
included a termination fee in connection with the closure of one company-owned
restaurant.

Income from Operations

                                                     THIRTEEN WEEKS ENDED
(in thousands)                          MARCH 26, 2023       MARCH 27, 2022      Change
Income from operations                 $       15,331       $       7,760        97.6  %
As a percentage of restaurant sales               7.4  %              4.5  

% 2,9 %

Income from operations margin increased during the thirteen weeks ended March
26, 2023 as compared to the same period in the prior year primarily due to (i)
leveraging restaurant sales and (ii) menu price increases. This increase was
partially offset by (i) the increase in restaurant-level wages and staffing and
(ii) the increase in general and administrative expenses mainly due to wage
increases and additional employee headcount to support growth.

Koszt odsetek

Na koszty odsetek składają się przede wszystkim odsetki i opłaty od naszego niespłaconego zadłużenia oraz koszt amortyzacji dyskonta długu i odroczonych kosztów emisji.

                                 THIRTEEN WEEKS ENDED
(in thousands)      MARCH 26, 2023       MARCH 27, 2022      Change
Interest expense   $    1,907           $        1,006       89.6  %



The increase in interest expense during the thirteen weeks ended March 26, 2023
as compared to the same period in the prior year was primarily due to higher
interest rates.
                                       26

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Spis treści

Inne dochody netto

Other income, net includes items deemed to be non-operating based on
management's assessment of the nature of the item in relation to our core
operations.

                                      THIRTEEN WEEKS ENDED
(in thousands)          MARCH 26, 2023         MARCH 27, 2022       Change
Other income, net   $      494                $           163        n/m (1)


____________
(1) Not meaningful.

The increase in Other income, net during the thirteen weeks ended March 26, 2023
as compared to the same period in the prior year was primarily due to (i)
insurance recoveries, net of costs incurred, in connection with Hurricane Ian
and (ii) the increase in interest income.

Koszt podatku dochodowego

Podatek dochodowy składa się głównie z różnych podatków federalnych i stanowych.

                                    THIRTEEN WEEKS ENDED

(w tysiącach) 26.03.2023 27.03.2022 Zmiana Podatek dochodowy $ (4 558) $ (2 277) 100,2 %

___________
(1) Not meaningful.

The effective income tax rate for the thirteen weeks ended March 26, 2023 was
32.7% as compared to 32.9% for the thirteen weeks ended March 27, 2022. The
change in the effective income tax rates was primarily due to (i) the change in
the valuation allowance for federal and state deferred tax assets and (ii) the
benefit of tax credits for FICA taxes on certain employees' tips.

Net Income
                                                   THIRTEEN WEEKS ENDED
(in thousands)                       MARCH 26, 2023       MARCH 27, 2022      Change
Net income                          $        9,360       $       4,640        101.7  %
As a percentage of total revenues              4.4  %              2.7  %       1.7  %


___________
(1) Not meaningful.

Net income and Net income margin during the thirteen weeks ended March 26, 2023
increased as compared to the same period in the prior year primarily due to the
increase in income from operations. This was partially offset by the increase in
interest expense and income tax expense.

Restaurant Level Operating Profit and Restaurant level Operating Profit Margin

                                                           THIRTEEN WEEKS ENDED
(in thousands)                                MARCH 26, 2023      MARCH 27, 2022      Change
Restaurant level operating profit            $      44,102       $      33,439        31.9  %
Restaurant level operating profit margin              21.2  %             

19,6% 1,6%

Restaurant level operating profit margin during the thirteen weeks ended March
26, 2023 increased as compared to the same period in the prior year primarily
due to (i) leveraging restaurant sales, (ii) menu price increases and (iii)
lower prices for pork and avocados. This was partially offset by the increase in
wages and staffing levels.

Restaurant level operating profit for the thirteen weeks ended March 26, 2023
increased as compared to the same period in the prior year primarily due to (i)
same-restaurant sales growth of 12.9%, driven by same-restaurant traffic growth
of 5.1% and the increase in average check per person, mainly due to the increase
in menu prices, as well as (ii) 27 NROs between March 27, 2022 and March 26,
2023. This was partially offset by the increase in wages and staffing levels.
                                       27

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Spis treści

Skorygowana EBITDA i Skorygowana Marża EBITDA

                                         THIRTEEN WEEKS ENDED
(in thousands)              MARCH 26, 2023      MARCH 27, 2022      Change
Adjusted EBITDA            $      27,413       $      19,364        41.6  %
Adjusted EBITDA margin              13.0  %             11.2  %      1.8  %


Adjusted EBITDA and Adjusted EBITDA margin increased during the thirteen weeks
ended March 26, 2023 as compared to the same period in the prior year primarily
due to the increase in restaurant level operating profit. This was partially
offset by the increase in general and administrative expenses mainly due to wage
increases and additional employee headcount to support our growth.


                                       28

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Spis treści

Uzgodnienia miar finansowych niezgodnych ze standardami GAAP

Skorygowana EBITDA i Skorygowana marża EBITDA — Poniższa tabela zawiera zestawienie zysku netto i marży zysku netto, najbardziej bezpośrednio porównywalnych miar GAAP z Skorygowaną EBITDA i Skorygowaną marżą EBITDA we wskazanych okresach:

.
                                                                       THIRTEEN WEEKS ENDED
(in thousands)                                                MARCH 26, 2023          MARCH 27, 2022
Net income                                                   $        9,360          $        4,640
Depreciation and amortization                                         9,117                   8,223
Interest expense                                                      1,907                   1,006
Income taxes                                                          4,558                   2,277
EBITDA                                                               24,942                  16,146
Strategic costs (1)                                                     305                     450
Stock-based compensation (2)                                          1,497                   2,294
Delaware Voluntary Disclosure Agreement Program (3)                     367                       -
Transaction expenses, net (4)                                           253                     257

Wpływy z ubezpieczenia w związku z klęskami żywiołowymi, netto (5)

                                                                    (141)                      -
Impairments and loss on disposal of assets (6)                          134                      79
Recruiting and relocation costs (7)                                      30                      76
Severance costs (8)                                                      26                      62
Adjusted EBITDA                                              $       27,413          $       19,364

Total revenues                                               $      211,406          $      173,112
Net income margin                                                       4.4  %                  2.7  %
Adjusted EBITDA margin                                                 13.0  %                 11.2  %

Additional information
Deferred rent expense (9)                                    $          584          $          580


_____________________________
(1) Represents costs related to process improvements and strategic initiatives.
These costs are recorded within General and administrative expenses on the
Consolidated Statements of Operations and Comprehensive Income.
(2) Represents non-cash, stock-based compensation expense which is recorded
within General and administrative expenses on the Consolidated Statements of
Operations and Comprehensive Income.
(3) Represents professional service costs incurred in connection with the
Delaware Voluntary Disclosure Agreement Program related to unclaimed or
abandoned property. These costs are recorded in General and administrative
expenses on the Consolidated Statements of Operations and Comprehensive Income.
(4) Represents costs incurred in connection with the acquisition of
franchise-owned restaurants. In 2022, represents a termination fee in connection
with the closure of one company-owned restaurant.
(5) Represents insurance recoveries, net of costs incurred, in connection with
Hurricane Ian, which were recorded in Other income, net on the Consolidated
Statements of Operations and Comprehensive Income.
(6) Represents costs related to the disposal of assets due to retirements,
replacements or certain restaurant closures. There were no impairments
recognized during the periods presented.
(7) Represents costs incurred for hiring qualified individuals. These costs are
recorded within General and administrative expenses on the Consolidated
Statements of Operations and Comprehensive Income.
(8) Severance costs are recorded in General and administrative expenses on the
Consolidated Statements of Operations and Comprehensive Income.
(9) Represents the non-cash portion of straight-line rent expense recorded
within both Occupancy expenses and General and administrative expenses on the
Consolidated Statements of Operations and Comprehensive Income.


                                       29

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Spis treści

Restaurant level operating profit and Restaurant level operating profit margin -
The following table reconciles Income from operations and Income from operations
margin, the most comparable GAAP measures to Restaurant level operating profit
and Restaurant level operating profit margin for the periods indicated:

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