Segments

The Company has three reportable segments: (i) Franchise; (ii) Corporate-owned stores; and (iii) Equipment.

The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments.

The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, Canada, the Dominican Republic, Panama and Mexico, including revenues and expenses from the NAF beginning on January 1, 2018 (see Note 15). The Corporate-owned stores segment includes operations with respect to all Corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to franchisee-owned stores.

The accounting policies of the reportable segments are the same as those described in Note 2. The Company evaluates the performance of its segments and allocates resources to them based on revenue and earnings before interest, taxes, depreciation, and amortization, referred to as Segment EBITDA. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues.

The tables below summarize the financial information for the Company’s reportable segments for the three months ended March 31, 2019 and 2018. The “Corporate and other” category, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.



	Three months ended March 31,
	2019		2018
Revenue
Franchise segment revenue - U.S.	$	64,396	$	53,445
Franchise segment revenue - International	1,366		1,167
Franchise segment total	65,762		54,612
Corporate-owned stores - U.S.	36,949		31,573
Corporate-owned stores - International	1,095		1,135
Corporate-owned stores total	38,044		32,708
Equipment segment - U.S.	45,011		34,013
Equipment segment total	45,011		34,013
Total revenue	$	148,817	$	121,333

Franchise segment revenue includes franchise revenue, NAF revenue, and commission income.

Franchise revenue includes revenue generated from placement services of $2,765 and $2,097 for the three months ended March 31, 2019 and 2018, respectively.



	Three months ended March 31,
	2019			2018
Segment EBITDA
Franchise	$	47,360		$	36,677
Corporate-owned stores	15,569			12,170
Equipment	10,407			7,469
Corporate and other	(13,562		)	(8,741		)
Total Segment EBITDA	$	59,774		$	47,575

The following table reconciles total Segment EBITDA to income before taxes:



	Three months ended March 31,
	2019			2018
Total Segment EBITDA	$	59,774		$	47,575
Less:
Depreciation and amortization	9,907			8,465
Other income (expense)	(3,318		)	192
Income from operations	53,185			38,918
Interest income	1,798			37
Interest expense	(14,749		)	(8,771		)
Other income (expense)	(3,318		)	192
Income before income taxes	$	36,916		$	30,376

The following table summarizes the Company’s assets by reportable segment:



	March 31, 2019		December 31, 2018
Franchise	$	332,811	$	319,422
Corporate-owned stores	354,606		243,221
Equipment	201,705		210,462
Unallocated	620,470		580,311
Total consolidated assets	$	1,509,592	$	1,353,416

The table above includes $1,823 and $1,892 of long-lived assets located in the Company’s corporate-owned stores in Canada as of March 31, 2019 and December 31, 2018, respectively. All other assets are located in the U.S.

The following table summarizes the Company’s goodwill by reportable segment:



	March 31, 2019		December 31, 2018
Franchise	$	16,938	$	16,938
Corporate-owned stores	89,909		89,909
Equipment	92,666		92,666
Consolidated goodwill	$	199,513	$	199,513