Leases

9 Months Ended

Sep. 30, 2025

10. Leases

Balance sheet information related to leases consisted of the following for the periods presented:


		As of
	Classification	September 30, 2025		December 31, 2024
Assets
Operating	Operating right of use assets, net	$	901,631	$	924,896
Finance	Property and equipment, net		11,566		12,344
Total lease assets		$	913,197	$	937,240

Liabilities
Current
Operating	Current maturities of operating lease liability	$	52,330	$	48,986
Finance	Current maturities of finance lease liability		857		804
Long-term
Operating	Operating lease liability		871,296		890,613
Finance	Financing lease liability		12,575		13,262
Total lease liabilities		$	937,058	$	953,665

Components of total lease cost, net, consisted of the following for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Operating lease expense(a)	$	30,886	$	28,126	$	92,373	$	82,997
Finance lease expense
Amortization of lease assets		242		254		729		756
Interest on lease liabilities		242		258		737		782
Short-term lease expense		22		52		61		155
Variable lease expense(b)		2,999		3,548		13,908		13,568
Total lease expense	$	34,391	$	32,238	$	107,808	$	98,258

Operating lease expense includes an immaterial amount of sublease income and is included in other store operating expenses and general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income.

Variable lease costs consist of property taxes, property insurance, and common area or other maintenance costs for our leases of land and buildings and is included in other store operating expenses in the accompanying consolidated statements of operations and comprehensive income.

The following includes supplemental information for the periods presented:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Operating cash flows from operating leases	$	29,901		$	27,091		$	89,330		$	80,451
Operating cash flows from finance leases	$	242		$	258		$	737		$	782
Financing cash flows from finance leases	$	198		$	190		$	585		$	552

Operating lease ROU assets obtained in exchange for lease liabilities	$	10,364		$	25,821		$	17,959		$	60,768
Finance lease ROU assets obtained in exchange for lease liabilities	$	—		$	57		$	—		$	57

Weighted-average remaining operating lease term		13.40			13.63			13.40			13.63
Weighted-average remaining finance lease term		14.28			14.96			14.28			14.96

Weighted-average operating lease discount rate		8.15	%		8.09	%		8.15	%		8.09	%
Weighted-average finance lease discount rate		7.34	%		7.33	%		7.34	%		7.33	%

As of September 30, 2025, lease obligation maturities were as follows:


Fiscal Year Ending:	Operating Leases			Finance Leases
2025 (remaining three months)	$	30,294		$	446
2026		121,778			1,792
2027		118,479			1,819
2028		112,277			1,846
2029		111,540			1,575
Thereafter		1,074,049			16,852
Total future minimum obligations	$	1,568,417		$	24,330
Present value discount		(644,791	)		(10,898	)
Present value of net future minimum lease obligations	$	923,626		$	13,432
Current portion		(52,330	)		(857	)
Long-term obligations	$	871,296		$	12,575

Forward-Starting Leases

As of September 30, 2025, we entered into 11 leases that had not yet commenced related to build-to-suit arrangements for car wash locations. These leases will commence in years 2025 through 2028 with initial lease terms of 15 to 20 years.

As of December 31, 2024, we entered into 10 leases that had not yet commenced related to build-to-suit arrangements for car wash locations. These leases will commence in years 2025 through 2027 with initial lease terms of 15 to 20 years.

Sale-Leaseback Transactions

During the three months ended September 30, 2025 and 2024, we completed one and four sale-leaseback transactions related to car wash locations, respectively, with aggregate consideration of $5,000 and $18,636, respectively, resulting in a net loss and net gain of $1,377 and $2,514, respectively, which are included in (gain) loss on sale of assets in the accompanying consolidated statements of operations and comprehensive income. Contemporaneously with the closing of the sales, we entered into lease agreements for the properties for initial 20-year terms. For the sale-leaseback transactions consummated in the three months ended September 30, 2025 and 2024, the cumulative initial annual rent for the properties was approximately $307 and $1,239, respectively, subject to annual escalations. These leases are accounted for as operating leases.

During the nine months ended September 30, 2025 and 2024, we completed one and eight sale-leaseback transactions related to car wash locations, respectively, with aggregate consideration of $5,000 and $37,381, respectively, resulting in a net loss and net gain of $1,377 and $1,553, respectively, which are included in (gain) loss on sale of assets in the accompanying consolidated statements of operations and comprehensive income. Contemporaneously with the closing of the sales, we entered into lease agreements for the properties for initial 20-year terms. For the sale-leaseback transactions consummated in nine months ended September 30, 2025 and

2024, the cumulative initial annual rent for the property was approximately $307 and $2,426, respectively, subject to annual escalations. These leases are accounted for as operating leases.