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. Our 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 year ended December 31, 2024 and 2023:


(in thousands)		Year ended December 31,
Operating lease cost	Classification	2024		2023
Operating lease cost	Occupancy and related expenses, and General and administrative expenses	$	11,937	$	9,463
Variable lease cost	Occupancy and related expenses, and General and administrative expenses		5,913		5,495
Total operating lease cost		$	17,850	$	14,958


Supplemental balance sheet information related to leases:
Operating leases (in thousands)	December 31, 2024		December 31, 2023
Operating lease assets	$	131,542	$	99,255
Operating lease liabilities, current		5,221		4,535
Operating lease liabilities, net of current portion		147,898		110,501
Total operating lease liabilities	$	153,119	$	115,036


Finance lease assets, net (in thousands)	December 31, 2024			December 31, 2023
Property and equipment	$	447		$	902
Accumulated depreciation		(446	)		(861	)
Property and equipment, net	$	1		$	41


Finance lease liabilities (in thousands)	December 31, 2024		December 31, 2023
Obligations under finance leases, current	$	26	$	125
Obligations under finance leases, net of current portion		—		—
Total finance lease liabilities	$	26	$	125



	December 31, 2024
Weighted-Average Remaining Lease Term (Years)		-
Operating leases		15.6
Finance leases		-
Weighted-Average Discount Rate
Operating leases		6.98	%
Finance leases		-

Maturities of lease liabilities as of December 31, 2024:


(in thousands)	Operating Leases			Finance Leases
2025	$	14,776		$	26
2026		15,431			—
2027		15,752			—
2027		15,982			—
2028		16,253			—
Thereafter		183,658			—
Total undiscounted lease payments	$	261,852		$	26
Present value discount/interest		(108,733	)		—
Present value		153,119			26
Lease liabilities, current		5,221			26
Lease liabilities, net of current		147,898			—
Total operating lease liability	$	153,119		$	26

As of December 31, 2024, the Company had additional operating leases related to new restaurants, which the Company has not yet taken possession. These additional leases will total $62.2 million in future lease payment commitments. These operating leases are expected to commence in fiscal year 2025 and have lease terms, including option periods, of 20 to 25 years.

The Company is obligated under finance leases covering certain property and equipment that expire at various dates during the next year. On December 31, 2024 and December 31, 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 consolidated income statement.