Segment Information

3 Months Ended

Mar. 23, 2025

Segment Reporting [Abstract]

Segment Information

2. Segment Information

The Company has three reportable segments: (i) U.S. stores; (ii) supply chain; and (iii) international franchise.

The Company’s operations are organized by management on the combined basis of line of business and geography. The U.S. stores segment includes operations with respect to all franchised and Company-owned stores throughout the U.S. The supply chain segment primarily includes the distribution of food and, to a lesser extent, other products, from the Company’s supply chain center operations in the U.S. and Canada. The international franchise segment includes operations related to the Company’s franchising business in foreign markets. The Company’s chief operating decision maker is its Chief Executive Officer, and he evaluates the performance of the Company’s segments and allocates resources to them based on revenues and earnings before interest, taxes, depreciation, amortization and other, referred to as Segment Income. The Company uses Segment Income to determine future business objectives and targets and for long-range planning for the reportable segments, as well as to evaluate their operating performance.

The tables below summarize the financial information, including revenues, significant segment expenses, Segment Income and capital expenditures, concerning the Company’s reportable segments for the first quarters ended March 23, 2025 and March 24, 2024. Intersegment revenues are comprised of sales of food and, to a lesser extent, other products, from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based.

The Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) in the fourth quarter of 2024. The Company has included the relevant interim disclosures retrospectively for all periods presented in the condensed consolidated financial statements.

	Fiscal Quarter Ended March 23, 2025
	U.S. Stores		Supply Chain			International Franchise		Total
U.S. Company-owned stores	$	91,598	$	—		$	—	$	91,598
U.S. franchise royalties and fees		151,000		—			—		151,000
Supply chain		—		697,910			—		697,910
Supply chain - intersegment revenues		—		(27,986	)		—		(27,986	)
International franchise royalties and fees		—		—			75,559		75,559
U.S. franchise advertising		123,975		—			—		123,975
Segment revenues	$	366,573	$	669,924		$	75,559	$	1,112,056
Cost of sales - food		27,211		471,616			—		498,827
Cost of sales - labor		29,181		61,882			—		91,063
Cost of sales - other (1)		17,752		49,347			—		67,099
U.S. franchise advertising		123,975		—			—		123,975
General and administrative (2)		36,636		14,259			11,780		62,675
Segment Income	$	131,818	$	72,820		$	63,779	$	268,417
Segment capital expenditures (3)	$	976	$	5,510		$	—	$	6,486

	Fiscal Quarter Ended March 24, 2024
	U.S. Stores		Supply Chain			International Franchise		Total
U.S. Company-owned stores	$	92,649	$	—		$	—	$	92,649
U.S. franchise royalties and fees		150,518		—			—		150,518
Supply chain		—		686,642			—		686,642
Supply chain - intersegment revenues		—		(27,428	)		—		(27,428	)
International franchise royalties and fees		—		—			71,966		71,966
U.S. franchise advertising		110,300		—			—		110,300
Segment revenues	$	353,467	$	659,214		$	71,966	$	1,084,647
Cost of sales - food		26,642		469,937			—		496,579
Cost of sales - labor		29,674		62,218			—		91,892
Cost of sales - other (1)		17,186		46,016			—		63,202
U.S. franchise advertising		110,300		—			—		110,300
General and administrative (2)		33,557		16,467			12,634		62,658
Segment Income	$	136,108	$	64,576		$	59,332	$	260,016
Segment capital expenditures (3)	$	2,597	$	2,775		$	—	$	5,372

(1) Cost of sales - other, includes delivery, occupancy costs (including rent, telephone and utilities) and insurance expense. Depreciation and amortization is not included in the measurement of Segment Income.

(2) General and administrative expense consists primarily of labor cost (including variable performance-based compensation expense), computer expenses, professional fees, travel and entertainment, rent, insurance and other. Depreciation and amortization, non-cash equity-based compensation expense and gains and losses from the sale of assets are not included in the measurement of Segment Income.

(3) The Company also had $8.7 million and $14.2 million of other capital expenditures not attributable to the reportable segments primarily representing capitalized software in the first quarters of 2025 and 2024, respectively.

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

	Fiscal Quarter Ended
	March 23, 2025			March 24, 2024
Total Segment Income	$	268,417		$	260,016
General and administrative - other (1)		(27,313	)		(18,173	)
Depreciation and amortization		(20,362	)		(19,869	)
Non-cash equity-based compensation expense		(10,381	)		(11,338	)
Loss on sale/disposal of assets		(266	)		(90	)
Refranchising loss		—			(133	)
Income from operations		210,095			210,413
Other income (expense)		24,027			(18,699	)
Interest income		3,945			3,739
Interest expense		(45,585	)		(45,846	)
Income before provision for income taxes	$	192,482		$	149,607

(1) Represents corporate administrative costs that have not been allocated to a reportable segment including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

The Company’s chief operating decision maker is not regularly provided financial information related to the assets of the reportable segments, and he does not evaluate their performance or allocate resources to them based on assets. Therefore, total assets by reportable segment are not included in the Company’s segment disclosures.