At inception of a contract, the Company assesses whether a contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by the Company. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (finance lease) or not (operating lease). The Company has operating and finance leases for its corporate office, restaurant locations, office equipment and kitchen equipment. The leases have remaining lease terms of less than 1 year to up to 25 years, including options to extend many of the leases. For leases with renewal periods at the Company’s option, the Company determines the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease.

Operating leases are accounted for on the balance sheet with the lease assets and liabilities recognized in “Operating lease assets”, “Operating lease liabilities, current” and “Operating lease liabilities, net of current portion”. Finance lease liabilities are recognized on the balance sheet in “Obligations under finance leases, current” and “Obligations under finance leases, net of current portion”.

Lease assets and liabilities are recognized at the lease commencement date. All lease liabilities are measured at the present value of the lease payments not yet paid. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the maturities of the leases. We estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. Operating lease assets are initially measured based on the lease liability, adjusted for initial direct costs, prepaid or deferred rent, and lease incentives. The operating lease liabilities are subsequently measured at the carrying amount of the lease liability adjusted for initial direct costs, prepaid or accrued lease payments, and lease incentives.

The following table summarizes the operating and finance lease activities to the income statement and balance sheet for the three months ended June 30, 2024 and 2023 and the six months ended June 30, 2024 and 2023:


(in thousands)		Three months ended June 30,				Six months ended June 30,

Operating lease cost	Classification	2024		2023		2024		2023
Operating lease cost	Occupancy and related expenses, and General and administrative expenses	$	2,988	$	2,253	$	5,747	$	4,443
Variable lease cost	Occupancy and related expenses, and General and administrative expenses		1,401		1,420		2,935		2,661
Total operating lease cost		$	4,389	$	3,673	$	8,682	$	7,104


Supplemental balance sheet information related to leases:
Operating leases (in thousands)	June 30, 2024		December 31, 2023
Operating lease assets	$	122,560	$	99,255
Operating lease liabilities, current		4,516		4,535
Operating lease liabilities, net of current portion		135,071		110,501
Total operating lease liabilities	$	139,587	$	115,036


Finance lease assets, net (in thousands)	June 30, 2024			December 31, 2023
Property and equipment	$	444		$	902
Accumulated depreciation		(442	)		(861	)
Property and equipment, net	$	2		$	41


Finance lease liabilities (in thousands)	June 30, 2024		December 31, 2023
Obligations under finance leases, current	$	56	$	125
Obligations under finance leases, net of current portion		—		—
Total finance lease liabilities	$	56	$	125



	June 30, 2024
Weighted-Average Remaining Lease Term (Years)
Operating leases		15.2
Finance leases		0.4
Weighted-Average Discount Rate
Operating leases		6.71	%
Finance leases		7.45	%

Maturities of lease liabilities as of June 30, 2024:


	Operating Leases			Finance Leases
(in thousands)
2024 - remaining	$	6,050		$	57
2025		13,680			—
2026		14,121			—
2027		14,434			—
2028		14,655			—
Thereafter		172,398			—
Total undiscounted lease payments	$	235,338		$	57
Present value discount/interest		(95,751	)		(1	)
Present value		139,587			56
Lease liabilities, current		4,516			56
Lease liabilities, net of current		135,071			—
Total operating lease liability	$	139,587		$	56

As of June 30, 2024, the Company had additional operating leases related to new restaurants the Company has not yet taken possession of that will total $50.0 million in future lease payment commitments. These operating leases are expected to commence later in fiscal year 2024 and in fiscal year 2025 will have lease terms, including option periods, of 10 to 25 years.

The Company is obligated under finance leases covering certain property and equipment that expire at various dates during the next 2 years. On June 30, 2024 and June 30, 2023 the gross amounts of property and equipment and related accumulated depreciation and amortization recorded under finance leases were as follows:

Amortization of assets held under finance leases is included with depreciation expense in the condensed consolidated income statement.