SEGMENT REPORTING

9 Months Ended

Sep. 24, 2025

SEGMENT REPORTING

SEGMENT REPORTING

14. SEGMENT REPORTING

Operating segments are defined as components of a company that engage in business activities from which it may earn revenue and incur expenses, and for which separate financial information is available and is regularly reviewed by the chief operating decision maker ("CODM") to assess the performance of the individual segments and make decisions about company resources such as personnel and working capital to be allocated to the segments.

The Company derives revenue from three primary sources: (1) company-operated restaurant revenue, (2) franchise revenue, which is comprised primarily of franchise royalties and, to a lesser extent, franchise fees and sublease rental income, and (3) franchise advertising fee revenue. All significant revenues relate to retail sales of food and beverages through either company-operated or franchised restaurants.

The Company determined that it has one operating segment and one reportable segment which is reflected in the Company’s current organizational and management structure. The accounting policies of the segment are the same as those described in Note 1 “Basis of Presentation and Summary of Accounting Policies”.

The Company’s CODM is the Chief Executive Officer who manages the Company’s operations on a reportable segment basis. The Company’s CODM reviews its operations and financial performance at a consolidated level by comparing actual results to budgeted figures and prior year results. This approach allows the CODM to assess whether the Company’s operating segment is meeting its financial goals, identify trends and make more informed decisions about resource allocation and performance targets.

When evaluating the Company’s financial performance, the CODM regularly reviews total revenues, segment expenses and consolidated net income as reported on the Consolidated Statements of Operations as well as non-GAAP measures such as restaurant contribution margin and Adjusted EBITDA to allocate Company resources and assess the performance of the Company. Segment asset information is not used by the CODM to assess performance and allocate resources.

The table below is a summary of the segment net income, including significant segment expenses for the thirteen and twenty-six weeks ended September 24, 2025 and September 25, 2024 (in thousands):

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 24, 2025		September 25, 2024		September 24, 2025		September 25, 2024
Total revenue	$	121,520	$	120,395	$	366,531	$	358,724

Less:
Food and paper costs		24,879		25,401		75,114		76,751
Labor and related expenses		30,648		32,744		94,982		96,192
General and administrative expenses		12,343		11,418		37,138		35,130
Franchise expenses		11,407		10,488		36,476		31,961
Occupancy expenses		7,973		7,703		24,016		23,071
Other operating expenses(1)		18,757		18,385		55,128		51,538
Depreciation and amortization		3,973		4,034		11,789		11,755
Other segment expenses(2)		82		85		153		192
Total operating expenses		110,062		110,258		334,796		326,590
Income from operations		11,458		10,137		31,735		32,134
Interest expenses, net		1,122		1,536		3,505		4,627
Provision for income taxes		2,978		2,415		8,284		7,776
Total segment net income	$	7,358	$	6,186	$	19,946	$	19,731

(1) Other operating expenses are comprised of utilities, repairs and maintenance, advertising, credit card processing fees, delivery service provider fees, restaurant supplies and other restaurant operating costs.

(2) Other segment expenses include loss on disposal of assets, gain on recovery of insurance proceeds, net, loss on disposition of restaurants, and impairment and closed-store reserves.