Leases (Tables)

9 Months Ended

Sep. 28, 2025

As of September 28, 2025, the nature of restaurants operated by the Company and its franchisees was as follows:


			September 28, 2025
Company-operated restaurants:
Owned land and building			155
Owned building and held long-term land leases			141
Leased land and building			139
Total Company-operated restaurants			435

Franchisee-operated restaurants:
Company-owned properties leased to franchisees			490
Company-leased properties subleased to franchisees			1,149
Other franchisee-operated restaurants			5,289
Total franchisee-operated restaurants			6,928
Total Company-operated and franchisee-operated restaurants			7,363

Lease, Cost

The components of lease cost are as follows:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Finance lease cost:
Amortization of finance lease assets	$	5,070	$	4,779	$	15,100	$	13,448
Interest on finance lease liabilities	11,142		10,921		32,884		32,278
	16,212		15,700		47,984		45,726
Operating lease cost	19,704		21,496		61,543		64,721
Variable lease cost (a)	17,190		17,087		50,672		50,940
Short-term lease cost	1,284		1,478		3,854		4,098
Total operating lease cost (b)	38,178		40,061		116,069		119,759
Total lease cost	$	54,390	$	55,761	$	164,053	$	165,485

_______________

(a)Includes expenses for executory costs of $10,367 and $10,108 for the three months ended September 28, 2025 and September 29, 2024, respectively, and $31,339 and $30,362 for the nine months ended September 28, 2025 and September 29, 2024, respectively, for which the Company is reimbursed by sublessees.

(b)Includes $30,899 and $32,197 for the three months ended September 28, 2025 and September 29, 2024, respectively, and $94,120 and $96,270 for the nine months ended September 28, 2025 and September 29, 2024, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $6,886 and $7,299 for the three months ended September 28, 2025 and September 29, 2024, respectively, and $20,773 and $22,089 for the nine months ended September 28, 2025 and September 29, 2024, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.

Lease, Income

The components of lease income are as follows:


	Three Months Ended				Nine Months Ended
	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Sales-type and direct-financing leases:
Selling profit	$	95	$	67	$	118	$	139
Interest income (a)	6,845		7,110		20,703		22,007

Operating lease income	39,511		41,882		124,399		126,329
Variable lease income	17,828		17,432		51,805		51,609
Franchise rental income (b)	$	57,339	$	59,314	$	176,204	$	177,938

_______________

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

(b)Includes sublease income of $41,548 and $43,698 recognized during the three months ended September 28, 2025 and September 29, 2024, respectively, and $128,999 and $131,530 for the nine months ended September 28, 2025 and September 29, 2024, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $10,439 and $10,112 for the three months ended September 28, 2025 and September 29, 2024, respectively, and $31,148 and $30,356 for the nine months ended September 28, 2025 and September 29, 2024, respectively.