Leases

8 Months Ended

Jan. 07, 2024

Note 7 – Leases

The Company leases various assets, including real estate, retail buildings, restaurant equipment, and office equipment. The Company has non-cancelable operating leases expiring at various times through 2036.

In June 2023, the Company entered into a lease amendment for one location that resulted in a lease modification in accordance with Accounting Standards Codification 842, Leases (ASC 842), under which the Company received an abatement of $4,673 and deferral of previously unpaid rent of $4,500. The modification of the lease increased the lease liability by $2,678, decreased accrued occupancy costs by $9,173, and decreased the lease asset, which resulted in a gain of $3,281 that is included as a reduction in the Company’s store occupancy costs, excluding depreciation, line of the unaudited condensed consolidated statements of operations for the thirty-six weeks ended January 7, 2024.

As of January 7, 2024, the Company entered into additional operating leases with $64,769 in aggregate future fixed lease payments related to new locations, which have not yet commenced. As of January 7, 2024, the Company did not have control of the underlying properties.

The components of lease expense are as follows:


	Twelve Weeks Ended				Thirty-Six Weeks Ended
	January 7, 2024		January 1, 2023		January 7, 2024		January 1, 2023
Operating lease cost	$	3,701	$	3,321	$	7,579	$	9,120
Variable lease cost	$	1,654	$	1,611	$	4,525	$	4,744
Total lease cost	$	5,355	$	4,932	$	12,104	$	13,864

The operating lease costs, except pre-opening costs of $303 and $1,306 for the twelve and thirty-six weeks ended January 7, 2024, respectively, and $495 and $939 for the twelve and thirty-six weeks ended January 1, 2023, are included within store occupancy costs on the unaudited condensed consolidated statements of operations.