Segment Information

6 Months Ended

Jun. 18, 2023

Segment Reporting [Abstract]

Segment Information

2. Segment Information

The following tables summarize revenues and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which the Company refers to as Segment Income, for each of its reportable segments. Intersegment revenues are comprised of sales of food, equipment and supplies from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

	Fiscal Quarters Ended June 18, 2023 and June 19, 2022
	U.S.		Supply		International		Intersegment
	Stores		Chain		Franchise		Revenues			Other			Total
Revenues
2023	$	338,421	$	641,481	$	70,495	$	(25,770	)	$	—		$	1,024,627
2022		351,681		683,298		66,915		(36,712	)		—			1,065,182
Segment Income
2023	$	123,592	$	60,026	$	58,865	N/A			$	(18,865	)	$	223,618
2022		104,055		53,633		52,890	N/A				(5,621	)		204,957

	Two Fiscal Quarters Ended June 18, 2023 and June 19, 2022
	U.S.		Supply		International		Intersegment
	Stores		Chain		Franchise		Revenues			Other			Total
Revenues
2023	$	668,922	$	1,291,605	$	140,166	$	(51,668	)	$	—		$	2,049,025
2022		684,450		1,325,260		135,748		(69,127	)		—			2,076,331
Segment Income
2023	$	236,275	$	108,541	$	117,004	N/A			$	(34,587	)	$	427,233
2022		201,347		99,982		107,936	N/A				(13,331	)		395,934

In the first quarter of 2023, the Company changed its allocation methodology for certain costs which support certain internally developed software used across the Company’s franchise system. This allocation methodology change was implemented in order to reflect the way the chief operating decision maker allocates resources to the Company’s reportable segments and evaluates segment profitability, including the costs of internally developed software.

The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $15.8 million, an estimated increase in international franchise Segment Income of $1.9 million and an estimated decrease in other Segment Income of $17.7 million in the second quarter of 2023. The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $25.9 million, an estimated increase in international franchise Segment Income of $3.8 million and an estimated decrease in other Segment Income of $29.7 million in the two fiscal quarters of 2023. The change in allocation methodology of certain software development costs had no impact on revenues, supply chain Segment Income or total Segment Income. The change in allocation methodology for certain software development costs is a prospective change and the comparative information has not been restated.

The following table reconciles total Segment Income to consolidated income before provision for income taxes.

	Fiscal Quarter Ended						Two Fiscal Quarters Ended
	June 18,			June 19,			June 18,			June 19,
	2023			2022			2023			2022
Total Segment Income	$	223,618		$	204,957		$	427,233		$	395,934
Depreciation and amortization		(18,561	)		(18,117	)		(36,731	)		(37,093	)
Refranchising loss		—			—			(149	)		—
Loss on sale/disposal of assets		(127	)		(253	)		(402	)		(448	)
Non-cash equity-based compensation expense		(9,527	)		(8,473	)		(17,065	)		(15,738	)
Income from operations		195,403			178,114			372,886			342,655
Other expense		(14,964	)		—			(14,964	)		—
Interest income		2,537			219			4,928			268
Interest expense		(44,932	)		(44,851	)		(91,479	)		(91,723	)
Income before provision for income taxes	$	138,044		$	133,482		$	271,371		$	251,200