Stock-Based Compensation

12 Months Ended

Dec. 30, 2025

Share-Based Payment Arrangement [Abstract]

In May of 2023, the Company’s Board of Directors adopted the 2023 Stock Incentive Plan, which was approved at the annual meeting of stockholders on May 16, 2023 (the “2023 Plan”). The 2023 Plan authorizes the grant of non-qualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and incentive bonuses to employees, officers, non-employee directors and other service providers, as applicable. The Company’s 2013 Stock Incentive Plan, as amended and restated in May of 2013 was terminated. The 2023 Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”) or another committee designated by the Board, or in the absence of any such committee, the Board itself (the “administrator”). Stock options are granted at a price determined by the administrator at an exercise price that is not less than the fair market value of the underlying stock on the date of grant. The administrator may also grant SARs, RSUs and PSUs with terms determined by the administrator in

accordance with the 2023 Plan. All share-based awards (except for RSUs and PSUs) granted under the 2023 Plan have a life of ten years. Most awards vest ratably over four years; however, some have been granted with different vesting schedules. Of the awards outstanding, none have been granted to non-employees (except those granted to non-employee members of the Board of Directors of the Company) under the 2023 Plan. In 2022, the Company launched the General Manager (“GM”) Equity program which granted RSUs to top performing general managers with a three year cliff vesting. The final grant under the GM Equity program was in the first quarter of 2024. At December 30, 2025, approximately 0.4 million (3.3 million prior to the Reverse Stock Split) share-based awards were available to be granted under the 2023 Plan. The number of shares have been restated to reflect the 1-for-8 Reverse Stock Split effectuated on February 18, 2026. All historical share and per share amounts reflected in this Report have been adjusted to reflect the Reverse Stock Split. Refer to Note 18: Subsequent Event for further discussion.

In July of 2024, the Company’s Board of Directors adopted the 2024 Inducement Plan (the “Inducement Plan”). The Inducement Plan provides for the potential grant of options, SARs, restricted stock and RSUs, any of which may be performance-based, and for incentive bonuses, which may be paid in cash or stock or a combination thereof, for certain newly hired employees. As of December 30, 2025, approximately 37,982 (303,851 prior to the Reverse Stock Split) share-based awards were available to be granted under the Inducement Plan.

Stock-based compensation expense is generally recognized on a straight-line basis over the service period of the awards. In 2025, 2024 and 2023, non-cash stock-based compensation expense of $3.0 million, $3.7 million and $4.3 million, respectively, was included in general and administrative expense. As of December 30, 2025, there was $3.0 million of unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the 2023 Plan, which is expected to be recognized over 2.1 years.

The Company has estimated forfeiture rates that average 32% based upon the class of employees receiving stock-based compensation in its calculation of stock-based compensation expense for the year ended December 30, 2025. These estimates are based on historical forfeiture behavior exhibited by employees of the Company.

Stock Options

The estimated fair value of each option granted is calculated using the Black-Scholes option-pricing model. Expected volatilities are based on the Company’s historical data and implied volatility. The Company uses historical data to estimate expected employee forfeitures of stock options. The expected life of options granted is management’s best estimate using recent and expected transactions. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. In 2024, the Company granted 31,250 performance-based stock options to its chief executive officer, which were to vest and become exercisable on the third anniversary of the grant date subject to the achievement of stock price target conditions at the end of the three-year performance period; however these options expired upon the resignation of such chief executive officer in August 2025. The fair value of each option share was $8.40 at grant date and calculated using a Monte Carlo valuation model. The Company did not grant any options in 2025 or 2023.

A summary of aggregate option award activity under the 2023 Plan as of December 30, 2025, and changes during the fiscal year then ended is presented below:


	Awards	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value (1) (in thousands)
Outstanding—December 31, 2024	56,342	$	53.16
Granted	—	—
Forfeited or expired	(52,373)	75.63
Exercised	—	—
Outstanding—December 30, 2025	3,969	$	63.92	2.43	$	—
Vested	3,969	$	63.92	2.43	$	—
Exercisable as of December 30, 2025	3,969	$	63.92	2.43	$	—

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(1)Aggregate intrinsic value represents the amount by which fair value of the Company’s stock exceeds the exercise price of the option as of December 30, 2025.

No option shares vested in 2025 or 2024. The Company had 4,365 options that vested in 2023. These awards had a total estimated fair value of $0.1 million at the date of vesting during the fiscal year ended January 2, 2024.

Restricted Stock Units (RSUs) and Performance Stock Units (PSUs)

The Company grants RSUs and PSUs to its executive officers under the 2023 Plan, and such awards may be granted under the Inducement Plan. The RSU awards vest over a four-year period subject to continued employment as of the applicable vesting date. The PSU awards are earned over a three-year performance period subject to the achievement of certain target performance conditions. The number of shares eligible to vest ranges from 0% to 200%, however no share shall vest if the defined minimum targets are not met. During fiscal years 2021 and 2022, PSUs were granted based on target performance measures over the Company’s comparable sales growth and Adjusted EBITDA (“Financial PSU”). For fiscal year 2021 to 2023, the Company also awarded PSUs based on a total shareholder return based metric (“TSR”), which compares the stock price of the Company’s shares to a group of peer companies. In fiscal year 2024, the Company awarded PSUs based on a volume-weighted average stock price for the Company’s shares. In fiscal year 2025, the Company awarded PSUs based on an absolute stock price of the Company’s shares on the measurement date.

Each share of the Financial PSUs has a fair value equal to the Company’s stock price at the date of grant while the fair value of each share of TSRs and the 2024-2025 PSUs is determined using a Monte Carlo valuation model. The Financial PSU stock-based compensation expense is recognized during the three-year period and is adjusted for the number of shares that are expected to vest based on the probability of achieving the targeted performance measures. Stock-based compensation expense for TSR and PSU awards is recognized straight-line over the term of the award. PSUs remain unvested until the end of the performance period and through the post-performance holding period of three to six months (“vest date”) if applicable. For TSR awards, there is a mandatory post-vest holding period of one year. PSUs are forfeited in the event of termination prior to the vest date.

The stock-based compensation expense recognized from the PSUs amounted to $(0.1) million, $0.2 million and $(0.6) million during 2025, 2024 and 2023, respectively. In 2025 the Company recorded a reversal of previously recognized compensation costs due to forfeitures of $0.4 million related to executive officer departures. In 2023, the Company recorded a reversal of previously recognized compensation costs due to forfeitures of $0.3 million related to executive officer departures and $0.5 million reversal due to target performance measures not being met.

A summary of the status of the Company’s aggregate non-vested RSUs and PSUs as of December 30, 2025 and changes during the year then ended is presented below:


	Awards	Weighted-Average Grant Date Fair Value
Outstanding—December 31, 2024	426,430	$	26.61
Granted	325,872	5.54
Vested	(158,453)	28.03
Forfeited	(232,811)	14.13
Non-vested at December 30, 2025	361,038	$	15.03

The Company had 158,453, 95,718 and 90,624 award units that vested in 2025, 2024 and 2023, respectively. This included 2,919 and 20,953 PSUs that vested in 2024 and 2023, respectively. No PSUs vested in 2025. These units had a total estimated fair value of $1.0 million, $1.5 million and $3.4 million at the date of vesting during the fiscal years ended December 30, 2025, December 31, 2024 and January 2, 2024, respectively.