Long-Term Debt

12 Months Ended

Dec. 28, 2025

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

The Company's long-term debt consists of the following:

	December 28, 2025		December 29, 2024
	(In millions)
Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II	—		594.0
Series 2022-1 Variable Funding Senior Notes, Class A-1(a)	—		100.0
Series 2023-1 7.824% Fixed Rate Senior Secured Notes, Class A-2	500.0		500.0
Series 2025-1 6.720% Fixed Rate Senior Secured Notes, Class A-2	600.0		—
Series 2025-1 Variable Funding Senior Notes, Class A-1(b)	100.0		—
Unamortized debt issuance costs	(11.8)		(7.4)
Long-term debt, net of debt issuance costs	1,188.2		1,186.6
Current portion of long-term debt	—		(100.0)
Long-term debt	$	1,188.2	$	1,086.6

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(a)Variable interest rate of 7.14% at December 29, 2024.

(b)Variable interest rate of 6.56% at December 28, 2025.

Long-Term Debt

On April 17, 2023, Applebee’s Funding LLC and IHOP Funding LLC (the “Co-Issuers”) completed a refinancing transaction and issued $500 million of Series 2023-1 7.824% Fixed Rate Senior Secured Notes, Class A-2 (the “2023 Class A-2 Notes”). The 2023 Class A-2 Notes were issued pursuant to an offering exempt from registration under the Securities Act of 1933, as amended.

On June 17, 2025, the Co-Issuers completed a refinancing transaction and issued $600 million of Series 2025-1 6.720% Fixed Rate Senior Secured Notes, Class A-2 (the “2025 Class A-2 Notes”). The Company used the net proceeds of the 2025 Class A-2 Notes to repay the entire outstanding balance of approximately $594.0 million of the Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II (the "2019 Class A-2-II Notes") and to pay fees and expenses incurred in connection

with the issuance of the 2025 Class A-2 Notes. The 2023 Class A-2 Notes and the 2025 Class A-2 Notes are referred to collectively herein as the "A-2 Notes".

Also on June 17, 2025, the Co-Issuers established a new revolving financing facility, the Series 2025-1 Variable Funding Senior Notes, Class A-1 (the “Credit Facility”), that allows for drawings up to $325 million of variable funding notes on a revolving basis and the issuance of letters of credit. In connection with this transaction, the Co-Issuers terminated their existing $325 million revolving financing facility, the Series 2022-1 Variable Funding Senior Notes, Class A-1 (the "2022 Credit Facility"). The 2023 Class A-2 Notes, the Credit Facility and the 2025 Class A-2 Notes (collectively referred to herein as the "Notes") were issued in securitization transactions pursuant to which substantially all the domestic revenue-generating assets and domestic intellectual property held by the Co-Issuers and certain other special-purpose, wholly-owned indirect subsidiaries of the Company (the “Guarantors”) were pledged as collateral.

The Notes were issued under a Base Indenture, dated as of September 30, 2014, amended and restated as of June 5, 2019 and April 17, 2023 (the “Base Indenture”). The 2023 Class A-2 Notes were issued under the related Series 2023-1 Supplement to the Base Indenture, dated April 17, 2023 (the “Series 2023-1 Supplement”) and the 2025 Class A-2 Notes and the Credit Facility were issued under the related Series 2025-1 Supplement to the Base Indenture, dated June 17, 2025 (the "Series 2025-1 Supplement", collectively, the “Indenture”).

The A-2 Notes

The legal final maturity of the 2023 Class A-2 Notes is in March 2053 and the 2025 Class A-2 Notes is in June 2055. However, it is anticipated that, unless repaid earlier to the extent permitted under the Indenture, the 2023 Class A-2 Notes will be repaid in June 2029 and the 2025 Class A-2 Notes in June 2030 (the “A-2 Anticipated Repayment Dates”). If the Co-Issuers have not repaid or refinanced the A-2 Notes by those respective dates, additional interest will accrue at the greater of: (A) 5.0% and (B) the amount, if any, by which the sum of the following exceeds the 2023 Class A-2 Notes' or the 2025 Class A-2 Notes', as applicable, stated interest rates: (x) the yield to maturity as of the A-2 Anticipated Repayment Dates of the United States Treasury Security having a term closest to 10 years plus (y) 9.24% with respect to the 2023 Class A-2 Notes or 7.85% with respect to the 2025 Class A-2 Notes.

While the A-2 Notes are outstanding, payment of principal and interest is required to be made on a quarterly basis. The quarterly principal payment of $1.25 million on the 2023 Class A-2 Notes and $1.5 million on the 2023 Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x.

As of December 28, 2025, the Company's leverage ratio was approximately 4.84x. As a result, quarterly principal payments on the A-2 Notes are not required.

The Company may voluntarily repay the A-2 Notes at any time; however, if they are repaid prior to certain dates, the Company would be required to pay make-whole premiums. As of December 28, 2025, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $17.4 million and $37.1 million on the 2025 Class A-2 Notes. The Company is also subject to a make-whole premium in the event of a mandatory prepayment required following a Rapid Amortization Event or certain asset dispositions. The make-whole premiums are considered derivatives embedded in the A-2 Notes that must be bifurcated for separate accounting. The Company estimated the fair value of these derivatives to be immaterial as of December 28, 2025.

The Credit Facility

The applicable interest rate under the Credit Facility depends on the type of borrowing by the Co-Issuers. The applicable interest rate for advances is generally calculated at a per annum rate equal to the commercial paper funding rate or one-, two-, three- or six-month Term SOFR Rate, in either case, plus 2.50%. The applicable interest rate for swingline advances and unreimbursed draws on outstanding letters of credit is a per annum base rate equal to the sum of (a) the greatest of (A) the Prime Rate in effect from time to time, (B) the Federal Funds Rate in effect from time to time plus 0.50% and (C) Term SOFR for a one-month tenor in effect at such time plus 0.50% plus (b) 2.00%.

The legal final maturity of the Credit Facility is June 2055, but rapid amortization will apply if there are outstanding amounts under the Credit Facility after June 2030. The June 2030 date may be extended at the Co-Issuers’ election for up to two successive one-year periods if certain conditions are met. If the Co-Issuers have not repaid or refinanced the Credit Facility by June 2030 (after giving effect to any extensions), then interest will accrue on the Credit Facility at a rate equal to 5.00% in addition to the regular interest rate applicable to the Credit Facility at that time.

As of December 28, 2025, the outstanding balance of the Credit Facility was $100 million. The amount of $0.6 million was pledged against the Credit Facility for outstanding letters of credit, leaving $224.4 million of the Credit Facility available for

borrowing at December 28, 2025. It is anticipated that the principal and interest on the Credit Facility will be repaid in full on or prior to the quarterly payment date in June 2030, subject to the two extensions. The weighted average interest rate for the period outstanding during the twelve months ended December 28, 2025 was 6.78%.

Management Agreement

Under the terms of the Management Agreement, dated September 30, 2014, as amended and restated, among the Co-Issuers and the Guarantors (collectively, the “Securitization Entities”), the Company, Applebee’s Services, Inc., International House of Pancakes, LLC and the Trustee, the Company will act as the manager with respect to substantially all of the assets of the Securitization Entities (the “Securitized Assets”). The primary responsibilities of the manager will be to perform certain franchising, distribution, intellectual property and operational functions on behalf of the Securitization Entities with respect to the Securitized Assets pursuant to the Management Agreement. The manager will be entitled to the payment of the weekly management fee, as set forth in the Management Agreement and will be subject to the liabilities set forth in the Management Agreement.

Covenants and Restrictions

The Notes are subject to a series of covenants and restrictions customary for transactions of this type, including: (i) that the Co-Issuers maintain specified reserve accounts to be used to make required payments in respect of the Notes, (ii) provisions relating to optional and mandatory prepayments, and the related payment of specified amounts, including specified call redemption premiums in the case of the A-2 Notes; (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Notes are subject to customary rapid amortization events provided for in the Indenture, including events tied to failure of the Securitization Entities (as defined in the Indenture) to maintain the stated debt service coverage ratio (“DSCR”), the sum of domestic retail sales for all restaurants being below certain levels on certain measurement dates, certain manager termination events, certain events of default and the failure to repay or refinance the A-2 Notes on the anticipated repayment dates. The Notes are also subject to certain events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure of the Securitization Entities to maintain the stated DSCR, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties and certain judgments.

In general, the DSCR ratio is Net Cash Flow (as defined in the Indenture) for the four quarters preceding the calculation date divided by the total debt service payments (as defined in the Indenture) of the preceding four quarters. The complete definitions of the DSCR and all calculation elements are contained in the Indenture. Failure to maintain a prescribed DSCR can trigger a Cash Trapping Event, A Rapid Amortization Event, a Manager Termination Event or a Default Event (each as defined in the Indenture) as described below. In a Cash Trapping Event, the Trustee is required to retain respective Cash Trapping Percentage (as defined in the Indenture) of excess cash flow in a restricted account. In a Rapid Amortization Event, all excess cash flow is retained and used to retire principal amounts of debt. In a Manager Termination Event, the Company may be replaced as manager of the assets securitized under the Indenture. In a Default Event, the outstanding principal amount and any accrued but unpaid interest can be called to become immediately due and payable. Key DSCRs are as follows:

•DSCR less than 1.75x - Cash Flow Sweeping Event

•DSCR less than 1.20x - Rapid Amortization Event

•Interest-only DSCR less than 1.20x - Manager Termination Event

•Interest-only DSCR less than 1.10x - Default Event

The Company's DSCR for the reporting period ended December 28, 2025 was approximately 3.0x.

Repurchase Program

On February 16, 2023, the Company's Board of Directors authorized a debt repurchase program of up to $100 million. Repurchases of the Company's debt, if any, are expected to reduce future interest payments, as well as future amounts due at maturity or upon redemption. Under the authorization, the Company may make repurchases of the Company's debt from time to time in the open market or in privately negotiated transactions upon such terms and at such prices as management may determine.

Debt Issuance Costs

Credit Facility

In June 2025, the Company incurred costs of approximately $4.1 million in connection with the issuance of the Credit Facility. These debt issuance costs are deferred along with the unamortized costs of the terminated 2022 Credit Facility and are being amortized over the terms of the new arrangement. Amortization costs of $1.2 million, $1.2 million and $1.2 million were included in interest expense for the years ended December 28, 2025, December 29, 2024 and December 31, 2023. As of December 28, 2025, total unamortized debt issuance costs of $6.3 million related to the Credit Facility are classified as other non-current assets in the Consolidated Balance Sheets.

2025 Class A-2 Notes

The Company incurred costs of approximately $7.6 million in connection with the issuance of the 2025 Class A-2 Notes. These debt issuance costs are being amortized using the effective interest method over estimated life of the 2025 Class A-2 Notes. Amortization costs of $0.7 million were included in interest expense for the year ended December 28, 2025. As of December 28, 2025, unamortized debt issuance costs of $6.8 million are reported as a direct reduction of the 2025 Class A-2 Notes in the Consolidated Balance Sheets.

2023 Class A-2 Notes

The Company incurred costs of approximately $8.0 million in connection with the issuance of the 2023 Class A-2 Notes. These debt issuance costs are being amortized using the effective interest method over the estimated life of the 2023 Class A-2 Notes. Amortization costs of $1.2 million, $1.1 million, and $0.7 million were included in interest expense for the years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively. As of December 28, 2025, unamortized debt issuance costs of $5.0 million are reported as a direct reduction of the 2023 Class A-2 Notes in the Condensed Consolidated Balance Sheets.

2019 Class A-2-II Notes

Debt issuance costs incurred in connection with the issuance of the 2019 Class A-2-II Notes were amortized using the effective interest method over the estimated life of the 2019 Class A-2-II Notes. The 2019 Class A-2-II Notes amortization costs of $0.4 million, $1.0 million, and $1.6 million were included in interest expense for the years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively. In connection with the repayment of the 2019 Class A-2-II Notes discussed above, the Company recognized a loss on extinguishment of debt of $0.9 million, representing the remaining unamortized debt issuance costs.