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LEASES
 12 Months Ended
Oct. 03, 2025
Leases [Abstract]  
LEASES LEASES:
The Company has lease arrangements primarily related to real estate, vehicles and equipment, which generally have terms of one to 20 years. Finance leases primarily relate to vehicles. The Company assesses whether an arrangement is a lease, or contains a lease, upon inception of the related contract. A right-of-use asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (“short-term leases”).
The Company recognizes operating lease liabilities and operating lease right-of-use assets on its Consolidated Balance Sheets. Operating lease right-of-use assets represent the Company’s right to use the underlying assets for the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and operating lease right-of-use assets are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. Deferred rent, tenant improvement allowances and prepaid rent are included in the operating lease right-of-use asset balances. Lease expense is recognized on a straight-line basis over the expected lease term. The Company has lease agreements with lease and non-lease components. Non-lease components are combined with the related lease components and accounted for as lease components for all classes of underlying assets.
Variable lease payments, which primarily consist of real estate taxes, common area maintenance charges, insurance costs and other operating expenses, are not included in the operating lease right-of-use asset or operating lease liability balances and are recognized in the period in which the expenses are incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain they will be exercised or not, respectively. Options to extend lease terms that are reasonably certain of exercise are recognized as part of the operating lease right-of-use asset and operating lease liability balances.
The Company is required to discount its future minimum lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. As the Company’s leases typically do not provide an implicit rate, the present value of our lease liability is determined using an incremental borrowing rate based on the information available as of the lease commencement date.
The following table summarizes the location of the operating and finance leases in the Company’s Consolidated Balance Sheets (in thousands), as well as the weighted average remaining lease term and weighted average discount rate:
LeasesBalance Sheet LocationOctober 3, 2025September 27, 2024
Assets:
OperatingOperating Lease Right-of-use Assets$85,108 $73,530 
FinanceProperty and Equipment, net144,288 131,041 
Total lease assets$229,396 $204,571 
Liabilities:
Current
OperatingCurrent operating lease liabilities$20,189 $19,886 
FinanceCurrent maturities of financing lease obligations35,234 31,347 
Noncurrent
OperatingNoncurrent Operating Lease Liabilities77,032 66,111 
FinanceNoncurrent Financing Lease Obligations131,071 115,325 
Total lease liabilities$263,526 $232,669 
Weighted average remaining lease term (in years)
Operating leases5.86.1
Finance leases5.85.7
Weighted average discount rate
Operating leases6.9 %6.1 %
Finance leases4.7 %4.6 %
The following table summarizes the location of lease related costs in the Consolidated and Combined Statements of Income (in thousands):
Fiscal Year Ended
Lease CostIncome Statement LocationOctober 3, 2025September 27, 2024September 29, 2023
Operating lease cost:
Fixed lease costsCost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses$24,847 $23,359 $23,119 
Variable lease costsCost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses12,974 10,447 9,888 
Short-term lease costsCost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses7,171 8,698 8,175 
Finance lease cost(1):
Amortization of right-of-use-assetsDepreciation and amortization33,747 31,647 30,360 
Interest on lease liabilitiesInterest Expense, net7,107 5,784 4,174 
Net lease cost$85,846 $79,935 $75,716 
__________________
(1)Excludes variable lease costs, which are immaterial.
Supplemental cash flow information related to leases for the periods reported is as follows (in thousands):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases(1)
$25,224 $19,871 $24,208 
Operating cash flows from finance leases7,107 5,784 4,174 
Financing cash flows from finance leases34,496 30,608 27,601 
Lease assets obtained in exchange for lease obligations:
Operating leases30,441 35,997 12,640 
Finance leases55,625 44,916 42,581 
__________________
(1)For fiscal 2025, excludes cash paid for variable and short-term lease costs of $13.0 million and $7.2 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2024, excludes cash paid for variable and short-term lease costs of $10.4 million and $8.7 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2023, excludes cash paid for variable and short-term lease costs of $9.9 million and $8.2 million, respectively, that are not included within the measurement of lease liabilities. Additionally, for fiscal 2025 and 2024, includes $0.1 million and $4.5 million, respectively, of cash received for reimbursements of tenant improvement allowances.
Future minimum lease payments under non-cancelable leases as of October 3, 2025 are as follows (in thousands):
Operating leasesFinance leasesTotal
2026$27,921 $42,293 $70,214 
202724,505 38,710 63,215 
202820,733 33,196 53,929 
202916,118 27,875 43,993 
203011,266 43,643 54,909 
Thereafter25,719 6,159 31,878 
Total future minimum lease payments$126,262 $191,876 $318,138 
Less: Interest(29,041)(25,571)(54,612)
Present value of lease liabilities$97,221 $166,305 $263,526 
LEASES LEASES:
The Company has lease arrangements primarily related to real estate, vehicles and equipment, which generally have terms of one to 20 years. Finance leases primarily relate to vehicles. The Company assesses whether an arrangement is a lease, or contains a lease, upon inception of the related contract. A right-of-use asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (“short-term leases”).
The Company recognizes operating lease liabilities and operating lease right-of-use assets on its Consolidated Balance Sheets. Operating lease right-of-use assets represent the Company’s right to use the underlying assets for the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and operating lease right-of-use assets are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. Deferred rent, tenant improvement allowances and prepaid rent are included in the operating lease right-of-use asset balances. Lease expense is recognized on a straight-line basis over the expected lease term. The Company has lease agreements with lease and non-lease components. Non-lease components are combined with the related lease components and accounted for as lease components for all classes of underlying assets.
Variable lease payments, which primarily consist of real estate taxes, common area maintenance charges, insurance costs and other operating expenses, are not included in the operating lease right-of-use asset or operating lease liability balances and are recognized in the period in which the expenses are incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain they will be exercised or not, respectively. Options to extend lease terms that are reasonably certain of exercise are recognized as part of the operating lease right-of-use asset and operating lease liability balances.
The Company is required to discount its future minimum lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. As the Company’s leases typically do not provide an implicit rate, the present value of our lease liability is determined using an incremental borrowing rate based on the information available as of the lease commencement date.
The following table summarizes the location of the operating and finance leases in the Company’s Consolidated Balance Sheets (in thousands), as well as the weighted average remaining lease term and weighted average discount rate:
LeasesBalance Sheet LocationOctober 3, 2025September 27, 2024
Assets:
OperatingOperating Lease Right-of-use Assets$85,108 $73,530 
FinanceProperty and Equipment, net144,288 131,041 
Total lease assets$229,396 $204,571 
Liabilities:
Current
OperatingCurrent operating lease liabilities$20,189 $19,886 
FinanceCurrent maturities of financing lease obligations35,234 31,347 
Noncurrent
OperatingNoncurrent Operating Lease Liabilities77,032 66,111 
FinanceNoncurrent Financing Lease Obligations131,071 115,325 
Total lease liabilities$263,526 $232,669 
Weighted average remaining lease term (in years)
Operating leases5.86.1
Finance leases5.85.7
Weighted average discount rate
Operating leases6.9 %6.1 %
Finance leases4.7 %4.6 %
The following table summarizes the location of lease related costs in the Consolidated and Combined Statements of Income (in thousands):
Fiscal Year Ended
Lease CostIncome Statement LocationOctober 3, 2025September 27, 2024September 29, 2023
Operating lease cost:
Fixed lease costsCost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses$24,847 $23,359 $23,119 
Variable lease costsCost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses12,974 10,447 9,888 
Short-term lease costsCost of services provided (exclusive of depreciation and amortization) / Selling, general and administrative expenses7,171 8,698 8,175 
Finance lease cost(1):
Amortization of right-of-use-assetsDepreciation and amortization33,747 31,647 30,360 
Interest on lease liabilitiesInterest Expense, net7,107 5,784 4,174 
Net lease cost$85,846 $79,935 $75,716 
__________________
(1)Excludes variable lease costs, which are immaterial.
Supplemental cash flow information related to leases for the periods reported is as follows (in thousands):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases(1)
$25,224 $19,871 $24,208 
Operating cash flows from finance leases7,107 5,784 4,174 
Financing cash flows from finance leases34,496 30,608 27,601 
Lease assets obtained in exchange for lease obligations:
Operating leases30,441 35,997 12,640 
Finance leases55,625 44,916 42,581 
__________________
(1)For fiscal 2025, excludes cash paid for variable and short-term lease costs of $13.0 million and $7.2 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2024, excludes cash paid for variable and short-term lease costs of $10.4 million and $8.7 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2023, excludes cash paid for variable and short-term lease costs of $9.9 million and $8.2 million, respectively, that are not included within the measurement of lease liabilities. Additionally, for fiscal 2025 and 2024, includes $0.1 million and $4.5 million, respectively, of cash received for reimbursements of tenant improvement allowances.
Future minimum lease payments under non-cancelable leases as of October 3, 2025 are as follows (in thousands):
Operating leasesFinance leasesTotal
2026$27,921 $42,293 $70,214 
202724,505 38,710 63,215 
202820,733 33,196 53,929 
202916,118 27,875 43,993 
203011,266 43,643 54,909 
Thereafter25,719 6,159 31,878 
Total future minimum lease payments$126,262 $191,876 $318,138 
Less: Interest(29,041)(25,571)(54,612)
Present value of lease liabilities$97,221 $166,305 $263,526