The Company leases certain retail store and supply chain center locations, vehicles, equipment and its corporate headquarters with expiration dates through 2045.

The components of operating and finance lease cost for 2025, 2024 and 2023 were as follows:


	2025		2024		2023
Operating lease cost	$	52,160	$	50,058	$	47,579

Finance lease cost:
Amortization of right-of-use assets		5,385		5,644		5,545
Interest on lease liabilities		3,673		4,090		4,340
Total finance lease cost	$	9,058	$	9,734	$	9,885

Rent expense totaled $95.9 million, $91.2 million and $85.6 million in 2025, 2024 and 2023, respectively. Rent expense includes operating lease cost, as well as expense for non-lease components including common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Rent expense also includes the variable rate per mile driven and fixed maintenance charges for the Company’s supply chain center tractors and trailers and expense for short-term rentals. Rent expense for certain short-term supply chain center tractor and trailer rentals was $6.5 million, $7.5 million and $5.4 million in 2025, 2024 and 2023, respectively. Variable rent expense and rent expense for other short-term leases were immaterial for 2025, 2024 and 2023.

Supplemental balance sheet information related to the Company’s finance leases as of December 28, 2025 and December 29, 2024 was as follows:


	December 28, 2025			December 29, 2024
Land and buildings	$	80,457		$	79,966
Equipment		4,225			4,640
Finance lease assets		84,682			84,606
Accumulated depreciation and amortization		(32,908	)		(28,148	)
Finance lease assets, net	$	51,774		$	56,458

Current portion of long-term debt	$	6,017		$	4,895
Long-term debt, less current portion		55,991			61,163
Total principal payable on finance leases	$	62,008		$	66,058

As of December 28, 2025 and December 29, 2024, the weighted average remaining lease term and weighted average discount rate for the Company’s operating and finance leases were as follows:


	2025						2024
	Operating			Finance			Operating			Finance
	Leases			Leases			Leases			Leases
Weighted average remaining lease term	6 years			11 years			7 years			12 years
Weighted average discount rate		4.8	%		6.1	%		4.6	%		6.1	%

Supplemental cash flow information related to leases for 2025, 2024 and 2023 was as follows:


	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	51,552	$	50,636	$	46,936
Operating cash flows from finance leases		3,673		4,090		4,340
Financing cash flows from finance leases		4,744		4,683		4,184
Cash paid for amounts included in the measurement of financing obligation from sale leaseback:
Operating cash flows from sale leaseback		1,186		1,293		201
Financing cash flows from sale leaseback		96		89		21
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases		55,511		53,076		34,313
Finance leases		842		1,442		3,842

Maturities of lease liabilities as of December 28, 2025 were as follows:


	Operating			Finance
	Leases			Leases
2026	$	57,778		$	9,402
2027		49,212			8,350
2028		41,316			7,277
2029		37,230			7,352
2030		26,756			7,399
Thereafter		59,108			43,416
Total future minimum rental commitments		271,400			83,196
Less, amounts representing interest		(39,930	)		(21,188	)
Total lease liabilities	$	231,470		$	62,008

In the fourth quarter of 2023, a subsidiary of the Company entered into a purchase and sale agreement with a developer to sell one of the Company’s owned supply chain center buildings and the associated land for $14.9 million. Concurrently, a separate subsidiary of the Company entered into a lease agreement with the developer to construct a new supply chain center which includes both the existing building as well as an adjoined new construction on the adjacent properties owned by the developer.

The leaseback of the Company’s building on a standalone basis for the construction period plus the 20-year term using the discount rate implicit in the lease resulted in a finance lease classification, and therefore, the transaction was accounted for as a failed sale leaseback. The Company retained the existing land and buildings on its consolidated balance sheet which are included in property, plant and equipment and the Company continues to depreciate the building as if it owned it. The $14.9 million cash proceeds from the transaction was recorded as a financing obligation and is being amortized over the term of the financing agreement. As of December 28, 2025, $0.1 million is classified as current portion of long-term debt and $14.6 million is classified as long-term debt in the Company’s consolidated balance sheet. As of December 29, 2024, $0.1 million is classified as current portion of long-term debt and $14.7 million is classified as long-term debt in the Company’s consolidated balance sheet. The $119.5 million of future minimum rent payments associated with the new construction on a standalone basis is included in the disclosure for material leases not yet commenced, below.

As of December 28, 2025, in addition to the lease for the new supply chain construction on a standalone basis discussed above, the Company also had additional leases for certain supply chain real estate and certain supply chain vehicles that had not yet commenced. The total estimated future minimum rental commitments for all of these arrangements is $161.6 million. These leases are expected to commence in 2026 with lease terms of up to 20 years. These undiscounted amounts are not included in the table above.

The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees was $12.6 million and $12.8 million as of December 28, 2025 and December 29, 2024, respectively. The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues or expenses, capital expenditures or liquidity.