Income Taxes (Tables)

12 Months Ended

Jan. 01, 2023

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Income before income taxes is set forth below:

	Year Ended
	2022		2021		2020
Domestic	$	231,862	$	228,756	$	149,046
Foreign (a)	11,643		11,822		3,749
	$	243,505	$	240,578	$	152,795

_______________

(a)Excludes foreign income of domestic subsidiaries.

Schedule of Components of Income Tax (Expense) Benefit

The (provision for) benefit from income taxes is set forth below:

	Year Ended
	2022		2021		2020
Current:
U.S. federal	$	(43,141)	$	(38,416)	$	(16,176)
State	(9,152)		(7,039)		(3,723)
Foreign	(9,537)		(8,512)		(4,798)
Current tax provision	(61,830)		(53,967)		(24,697)
Deferred:
U.S. federal	(3,868)		(52)		(6,707)
State	(2,629)		15,993		(3,185)
Foreign	2,192		(2,160)		(374)
Deferred tax (provision) benefit	(4,305)		13,781		(10,266)
Income tax provision	$	(66,135)	$	(40,186)	$	(34,963)

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets (liabilities) are set forth below:

	Year End
	January 1, 2023		January 2, 2022
Deferred tax assets:
Operating and finance lease liabilities	$	355,653	$	368,932
Net operating loss and credit carryforwards	58,030		60,620
Deferred revenue	23,617		23,636
Unfavorable leases	19,085		19,060
Accrued compensation and related benefits	14,577		18,487
Accrued expenses and reserves	7,012		6,763
Other	8,275		7,586
Valuation allowances	(35,680)		(38,277)
Total deferred tax assets	450,569		466,807
Deferred tax liabilities:
Operating and finance lease assets	(326,646)		(341,681)
Intangible assets	(285,688)		(290,088)
Fixed assets	(66,830)		(63,936)
Other	(41,826)		(38,812)
Total deferred tax liabilities	(720,990)		(734,517)
	$	(270,421)	$	(267,710)

Summary of Net Operating Loss and Tax Credit Carryforwards

The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows:

	Amount		Expiration
Tax credit carryforwards:
U.S. federal foreign tax credits	$	14,350	2027-2032
State tax credits	423		2023-2024
Foreign tax credits of non-U.S. subsidiaries	3,881		Indefinite
Total	$	18,654
Net operating loss carryforwards (pre-tax):
State and local net operating loss carryforwards	$	1,059,037	2023-Indefinite
Foreign net operating loss carryforwards	13,880		Indefinite
Total	$	1,072,917

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to reported income tax is set forth below:

	Year Ended
	2022		2021		2020
Income tax provision at the U.S. federal statutory rate	$	(51,136)	$	(50,521)	$	(32,087)
State income tax provision, net of U.S. federal income tax effect	(11,616)		(6,256)		(4,664)
Prior years’ tax matters	2,290		1,820		1,761
Excess federal tax benefits from share-based compensation	402		7,160		5,338
Foreign and U.S. tax effects of foreign operations	(3,744)		(5)		(397)
Valuation allowances (a)	2,127		11,807		(4,593)
Non-deductible goodwill (b)	—		(947)		—
Tax credits	1,385		1,028		1,901
Non-deductible executive compensation	(3,154)		(3,810)		(1,973)
Unrepatriated earnings	(294)		(282)		(283)
Non-deductible expenses and other	(2,395)		(180)		34
	$	(66,135)	$	(40,186)	$	(34,963)

_______________

(a)2021 primarily relates to a $12,606 benefit resulting from a change in state tax law.

(b)Related to the sale of the New York Company-operated restaurants (including Manhattan). See Note 4 for further information.

Schedule of Unrecognized Tax Benefits Roll Forward

As of January 1, 2023, the Company had unrecognized tax benefits of $17,404, which, if resolved favorably, would reduce income tax expense by $13,749. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:

	Year Ended
	2022		2021		2020
Beginning balance	$	18,849	$	20,973	$	22,323
Additions:
Tax positions of current year	178		157		322
Reductions:
Tax positions of prior years	(662)		(2,015)		(1,183)
Settlements	(8)		(46)		(119)
Lapse of statute of limitations	(953)		(220)		(370)
Ending balance	$	17,404	$	18,849	$	20,973