Leases

3 Months Ended

Mar. 30, 2025

Leases

Nature of Leases

The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees. The Company also leases restaurant, office and transportation equipment. As of March 30, 2025, the nature of restaurants operated by the Company and its franchisees was as follows:


			March 30, 2025
Company-operated restaurants:
Owned land and building			155
Owned building and held long-term land leases			138
Leased land and building			107
Total Company-operated restaurants			400

Franchisee-operated restaurants:
Company-owned properties leased to franchisees			489
Company-leased properties subleased to franchisees			1,156
Other franchisee-operated restaurants			5,263
Total franchisee-operated restaurants			6,908
Total Company-operated and franchisee-operated restaurants			7,308

Company as Lessee

The components of lease cost are as follows:


	Three Months Ended
	March 30, 2025		March 31, 2024
Finance lease cost:
Amortization of finance lease assets	$	5,145	$	4,297
Interest on finance lease liabilities	10,877		10,658
	16,022		14,955
Operating lease cost	20,517		21,701
Variable lease cost (a)	16,213		16,488
Short-term lease cost	1,266		1,394
Total operating lease cost (b)	37,996		39,583
Total lease cost	$	54,018	$	54,538

_______________

(a)Includes expenses for executory costs of $10,394 and $10,221 for the three months ended March 30, 2025 and March 31, 2024, respectively, for which the Company is reimbursed by sublessees.

(b)Includes $30,652 and $31,718 for the three months ended March 30, 2025 and March 31, 2024, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $6,941 and $7,388 for the three months ended March 30, 2025 and March 31, 2024, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.

Leases, Company as Lessor

Company as Lessor

The components of lease income are as follows:


	Three Months Ended
	March 30, 2025		March 31, 2024
Sales-type and direct-financing leases:
Selling loss	$	(11)	$	(16)
Interest income (a)	6,915		7,719

Operating lease income	42,421		41,497
Variable lease income	16,033		16,489
Franchise rental income (b)	$	58,454	$	57,986

_______________

(a)Included in “Interest expense, net.”

(b)Includes sublease income of $42,784 and $42,783 recognized during the three months ended March 30, 2025 and March 31, 2024, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $10,197 and $10,089 for the three months ended March 30, 2025 and March 31, 2024, respectively.