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Income Taxes
 12 Months Ended
Dec. 28, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes is set forth below:
Year Ended
202520242023
Domestic$210,514 $254,309 $264,423 
Foreign (a)16,732 18,104 14,995 
$227,246 $272,413 $279,418 
_______________

(a)Excludes foreign income of domestic subsidiaries.
The (provision for) benefit from income taxes is set forth below:
Year Ended
202520242023
Current:
U.S. federal$(16,541)$(55,875)$(50,435)
U.S. state(7,263)(12,888)(13,730)
Foreign(14,906)(14,822)(11,620)
Current tax provision(38,710)(83,585)(75,785)
Deferred:
U.S. federal(19,543)10,786 2,163 
U.S. state(4,489)(5,409)564 
Foreign571 152 (1,920)
Deferred tax (provision) benefit(23,461)5,529 807 
Income tax provision$(62,171)$(78,056)$(74,978)

Deferred tax assets (liabilities) are set forth below:
Year End
December 28, 2025December 29, 2024
Deferred tax assets:
Operating and finance lease liabilities$341,414 $333,033 
Net operating loss and credit carryforwards52,753 51,667 
Deferred revenue22,953 23,085 
Other46,509 51,626 
Valuation allowances(44,737)(38,536)
Total deferred tax assets418,892 420,875 
Deferred tax liabilities:
Operating and finance lease assets(307,378)(300,498)
Intangible assets(291,333)(282,186)
Fixed assets(66,902)(61,160)
Other(41,032)(40,451)
Total deferred tax liabilities(706,645)(684,295)
$(287,753)$(263,420)
The amounts and expiration dates of tax credit and net operating loss carryforwards are as follows:
AmountExpiration
Tax credit carryforwards:
U.S. federal foreign tax credits$25,704 2027-2034
Foreign tax credits of non-U.S. subsidiaries856 Indefinite
Total$26,560 
Net operating loss carryforwards (pre-tax):
State and local net operating loss carryforwards$687,277 2026-2035
State and local net operating loss carryforwards212,125 Indefinite
Foreign net operating loss carryforwards1,692 Indefinite
Total$901,094 

The Company’s valuation allowances of $44,737 and $38,536 as of December 28, 2025 and December 29, 2024, respectively, relate primarily to foreign tax credit and foreign and state net operating loss carryforwards. The relative presence of Company-operated restaurants in various states impacts expected future state taxable income available to utilize state net operating loss carryforwards.

The current portion of refundable income taxes was $17,055 and $3,587 as of December 28, 2025 and December 29, 2024, respectively, and is included in “Accounts and notes receivable, net.” There were no long-term refundable income taxes as of December 28, 2025 and December 29, 2024.

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
202520242023
U.S. federal statutory tax rate (21%)$47,722 21.0 %$57,207 21.0 %$58,678 21.0 %
State and local income taxes, net of federal income tax effect9,284 4.1 %14,455 5.3 %10,401 3.7 %
Foreign tax effects1,137 0.5 %2,106 0.8 %2,687 1.0 %
Effects of cross-border tax laws(335)(0.1)%(1,669)(0.6)%(2,403)(0.9)%
Tax credits(931)(0.4)%(899)(0.3)%(1,050)(0.4)%
Changes in valuation allowance:
Foreign tax credits4,320 1.9 %4,274 1.5 %2,761 1.0 %
Other359 0.2 %— 0.0 %1,739 0.6 %
Nontaxable or nondeductible items987 0.4 %2,626 1.0 %1,581 0.6 %
Other adjustments(372)(0.2)%(44)0.0 %584 0.2 %
$62,171 27.4 %$78,056 28.7 %$74,978 26.8 %

In 2025, state and local income taxes in Michigan, Florida, Georgia and California comprised the majority (greater than 50%) of the tax effect in the state and local income taxes, net of federal income tax effect category. In 2024, state and local income taxes in Louisiana, Florida and Illinois comprised the majority of the tax effect in the state and local income taxes, net of federal income tax category. In 2023, state and local income taxes in Florida, Illinois and Massachusetts comprised the majority of the tax effect in the state and local income taxes, net of federal income tax effect category.
The income taxes paid (net of refunds) by jurisdiction are set forth below:
Year Ended
202520242023
U.S. federal$29,859 $52,774 $53,057 
U.S. state10,558 12,476 15,716 
Foreign8,697 8,350 6,417 
Total$49,114 $73,600 $75,190 

Income taxes paid (net of refunds) exceeded 5% of total income taxes paid (net of refunds) in the following jurisdictions:
Year Ended
202520242023
U.S. state:
Florida$3,210 $3,777 $4,300 
Illinois$2,497 **
Foreign:
Canada$8,562 $8,192 $6,300 
_______________

* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

The Company participates in the Internal Revenue Service (the “IRS”) Compliance Assurance Process (“CAP”). As part of CAP, tax years are examined on a contemporaneous basis so that all or most issues are resolved prior to the filing of the tax return. As such, our tax returns for fiscal years through 2023 have been settled. The Company or one of its subsidiaries also files tax returns in various state, local and foreign jurisdictions. The statute of limitations in these jurisdictions vary but generally income tax returns from its 2020 fiscal year and forward remain subject to examination. We believe that adequate provisions have been made for any liabilities, including interest and penalties that may result from the completion of these examinations.

Unrecognized Tax Benefits

As of December 28, 2025, the Company had unrecognized tax benefits of $19,048, which, if resolved favorably, would reduce income tax expense by $15,048. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
Year Ended
202520242023
Beginning balance$14,805 $16,719 $17,404 
Additions:
Tax positions of current year119 375 836 
Tax positions of prior years (a)5,832 — — 
Reductions:
Tax positions of prior years (b)(583)(2,069)(690)
Settlements— — (249)
Lapse of statute of limitations(1,125)(220)(582)
Ending balance$19,048 $14,805 $16,719 
_______________

(a)Increase in uncertain tax benefits related to tax positions of prior years during 2025 was primarily driven by adjustments to state income tax positions.
(b)Reduction in uncertain tax benefits related to tax positions of prior years during 2024 was primarily driven by a non-recurring state rate law change.

During 2025, 2024 and 2023, the Company recognized (income) expense for interest of $(214), $376 and $134, respectively. The Company has $1,141 and $1,355 accrued for interest related to uncertain tax positions as of December 28, 2025 and December 29, 2024, respectively.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Key provisions include the permanent extension of several business tax incentives originally established under the 2017 Tax Cuts and Jobs Act, as well as changes to provisions related to bonus depreciation, and research and development. The OBBBA resulted in an impact to the Company’s current and deferred tax assets and liabilities as of December 28, 2025, as well as a favorable impact on the amount of cash taxes paid during 2025.