The Company determined that it is the primary beneficiary of the following material variable interest entities (“VIEs”): Soho Restaurants Limited; Ned-Soho House, LLP; Soho Works Limited; and Soho Works North America, LLC.

Soho Restaurants Limited (“Soho Restaurants”) is a casual fast-dining business that operates various restaurants throughout the UK. Prior to the August 2020 reorganization of Soho Restaurants (as further described below), the Company provided unsecured non-interest-bearing loan notes (“Soho Restaurants Loan Notes”) to Soho Restaurants from time to time and guaranteed the obligations of Soho Restaurants under certain property leases with respect to any required rental and other payments.

On August 18, 2020, Soho Restaurants underwent a series of reorganization steps, through which Quentin Partners Limited (“Quentin Partners”), an affiliate of the Company, became the sole equity holder of Soho Restaurants. As a result of the reorganization and the Company’s variable interest in Soho Restaurants (consisting primarily of the Soho Restaurants Loan Note that remained outstanding after the reorganization and certain lease guarantees), the Company determined that it is the primary beneficiary of Soho Restaurants due to its related party affiliation with Quentin Partners and its funding of the majority of Soho Restaurants’ operations. As such, the Company began consolidating Soho Restaurants on August 18, 2020 and accounted for the Soho Restaurants reorganization using the acquisition method of accounting.

On March 29, 2022, the Company acquired all of the outstanding equity interests of Soho Restaurants for nominal consideration (the “Soho Restaurants Acquisition”) from Quentin Partners. Because the Company consolidated Soho Restaurants prior to the Soho Restaurants Acquisition, the Company accounted for the Soho Restaurants Acquisition as a transaction with a noncontrolling interest holder that did not result in a change of control. The Company derecognized a noncontrolling deficit of $2 million and recorded the difference between the fair value of consideration transferred to Quentin Partners and the carrying value of the noncontrolling interest as a reduction in additional paid-in capital (i.e. a deemed distribution in the absence of retained earnings). Following the Soho Restaurants Acquisition, the Company became the sole equity owner of Soho Restaurants.

Also, on March 29, 2022, Soho Restaurants also entered into a Trademark Assignment with Chick’n Limited, pursuant to which Soho Restaurants has agreed to transfer the rights to certain intangible assets to Chick’n Limited in exchange for three separate cash payments over a one-year period, commencing on March 29, 2022, totaling £1 million ($2 million), all of which was recognized in gain on sale of property and other, net in the unaudited condensed consolidated statements of operations for the 26 weeks ended July 3, 2022.

Concurrently, on March 29, 2022, Soho Restaurants entered into a royalty-free Product License Agreement with Chick’n Limited, pursuant to which Chick’n Limited has agreed to grant the Company a non-exclusive, royalty-free license to produce and sell certain burgers at certain Soho Restaurant properties for a term of two years. Other than with respect to this limited license, Soho Restaurants has no legal right to the product.

The Ned-Soho House, LLP joint venture maintains a management agreement to operate The Ned, which is owned by unconsolidated related parties to the Company. Management fees are recognized in other revenues in the unaudited condensed consolidated statements of operations.

The Soho Works Limited (“SWL”) joint venture develops and operates Soho-branded, membership-based co-working spaces, with five sites currently in operation in the UK. Soho Works North America, LLC and its wholly owned subsidiaries (“SWNA”) was established to develop and operate Soho-branded, membership-based co-working spaces in North America.

The following table summarizes the carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the unaudited condensed consolidated balance sheets. The obligations of the consolidated VIEs other than Soho Restaurants are non-recourse to the Company, and the assets of the VIEs can be used only to settle those obligations.


	As of
(in thousands)	July 3, 2022			January 2, 2022
Cash and cash equivalents	$	6,565		$	7,187
Accounts receivable		2,548			4,137
Inventories		111			127
Prepaid expenses and other current assets		2,810			5,705
Total current assets		12,034			17,156
Property and equipment, net		79,530			89,753
Operating lease assets		228,031			238,786
Other intangible assets, net		288			160
Other non-current assets		182			205
Total assets		320,065			346,060
Accounts payable		5,567			11,258
Accrued liabilities		13,147			12,303
Indirect and employee taxes payable		360			599
Current portion of debt		—			21,092
Current portion of operating lease liabilities - sites trading more than one year		10,435			10,565
Other current liabilities		2,744			1,972
Total current liabilities		32,253			57,789
Related party loans, net of current portion and imputed interest		23,060			—
Operating lease liabilities, net of current portion - sites trading more than one year		264,962			278,171
Other non-current liabilities		383			872
Total liabilities		320,658			336,832
Net (liabilities) assets	$	(593	)	$	9,228