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Restaurant Impairments, Closure Costs and Asset Disposals
 12 Months Ended
Dec. 30, 2025
Restructuring and Related Activities [Abstract]  
Restaurant Impairments, Closure Costs and Asset Disposals Restaurant Impairments, Closure Costs and Asset Disposals
The following table presents restaurant impairments, closure costs and asset disposals for fiscal years 2025, 2024 and 2023 (in thousands):
202520242023
Restaurant impairments(1)
$22,040 $13,441 $2,987 
Closure costs including gains and losses on lease remeasurement(1)
(69)2,337 1,198 
Loss on disposal of assets and other4,291 4,490 4,215 
Total restaurant impairments, closure costs and asset disposals$26,262 $20,268 $8,400 
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(1)Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed.
Restaurant Impairments
Impairment is based on management’s current assessment of the expected future cash flows of its company-owned restaurants based on recent results and other specific market factors. Impairment expense is a Level 3 fair value measure and is determined by comparing the carrying value of restaurant assets to the estimated fair market value of the restaurant assets at resale value.
The Company has identified a group of restaurants that the Company will seek to close on or before their next lease renewal dates, and are unlikely to recover the net book value of their assets. During 2025, the Company recorded fixed asset impairment on 25 restaurants and wrote down lease related assets on 16 restaurants. In 2024, the Company recognized an impairment charge related to the fixed assets on 16 restaurants and a write-down of its lease related assets on seven restaurants. In 2023, the Company impaired the fixed assets on two restaurants and the lease related assets on four restaurants. Additionally, the Company wrote-off its lease related assets on 12 previously closed restaurants in 2025 and two previously closed restaurants in both of 2024 and 2023. All periods include ongoing equipment costs for restaurants previously impaired.
Closure Costs and Lease Remeasurements
Closure costs during 2025, 2024 and 2023 pertain to ongoing costs of restaurants that closed in previous years, as well as costs related to the closure of 33, 13, and six restaurants, respectively. These closure costs were offset by gains of $0.6 million in 2025, $0.6 million in 2024 and $0.2 million in 2023 resulting from lease asset remeasurements and the adjustments to liabilities as lease terminations occur. Closure costs can also include fees from real estate advisors and brokers related to terminations of the leases and charges resulting from final adjustments to liabilities as lease terminations occur.
Losses on Disposal of Assets and Other
All periods include asset disposals in the normal course of business and lease related costs and expenses that the Company is still obligated for. In 2024, the Company recognized a gain of $0.5 million from the sale of six company-owned restaurants to a franchisee (“DND Sale”). Losses on disposal of assets and other in 2023 were partially offset by $0.2 million gain on insurance proceeds from property damage.
Sublease Expense
The Company records sublease expense related to leases for which the Company remains obligated. In previous years, the Company has entered into transactions to sell company-owned restaurants to franchisees. The lease agreements for those restaurants were assigned to the franchisee, but in some instances, the Company was not relieved of its primary obligations under the lease, therefore these leases are treated as subleases. The lease income for these restaurants has been recorded in franchising royalties and fees, and other and the offsetting lease expense has been recorded in restaurant impairments, closure costs and asset disposals in the Consolidated Statement of Operations.