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Income Taxes
 12 Months Ended
Dec. 28, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The income from continuing operations before income taxes and provision (benefit) for income taxes for the years ended December 28, 2025, December 29, 2024 and December 31, 2023 was as follows:
Income from continuing operations before income tax expense (benefit)
 202520242023
(In millions)
U.S.(1)
$24.9 $88.7 $110.9 
Foreign
0.3 0.8 0.8 
Total
$25.2 $89.5 $111.7 
Income tax expense (benefit) from continuing operations
Current
202520242023
Federal
$7.2 $25.0 $25.6 
State
2.7 3.8 0.6 
Foreign(1)
1.6 2.0 2.2 
Total Current
11.5 30.8 28.4 
Deferred
Federal
(2.1)(8.1)(1.2)
State
(1.3)2.0 (12.6)
Total Deferred
(3.4)(6.1)(13.8)
Total income tax expense
Federal
5.1 16.9 24.4 
State
1.4 5.8 (12.1)
Foreign
1.6 2.0 2.2 
Provision (benefit) for income taxes
$8.1 $24.7 $14.5 
_________________________________
(1) Certain foreign-source income is included in U.S. income from continuing operations before income tax expense, while the related withholding taxes are recorded within foreign income tax expense from continuing operations.
The provision (benefit) for income taxes differs from the statutory Federal income tax for the years ended December 28, 2025, December 29, 2024 and December 31, 2023 as follows:
2025
Amount
(in millions)
Percent (%)
U.S Federal statutory tax rate$5.3 21.0 %
State and local income taxes, net of federal(1)
$2.0 7.8 %
Foreign tax effects
Mexico
Withholding taxes0.5 2.0 %
Puerto Rico
Withholding taxes0.3 1.4 %
Canada
Withholding taxes0.3 0.8 %
Other jurisdictions0.5 2.3 %
Total foreign tax effects
$1.6 6.5 %
Effect of changes in tax laws or rates enacted in the current period— — %
Effect of cross-border tax laws
Foreign tax credit(1.5)(6.1)%
Foreign-derived intangible income (FDII)(0.3)(1.0)%
Total effect of cross-border tax laws
$(1.8)(7.1)%
Tax credits
R&D tax credit(0.6)(2.4)%
FICA tip credit(0.4)(1.6)%
Total tax credits
$(1.0)(4.0)%
Changes in valuation allowances$0.4 1.6 %
Nontaxable or nondeductible items
Nondeductible stock compensation1.3 5.3 %
Nondeductible officer's compensation0.9 3.8 %
Other nontaxable or nondeductible items0.1 0.3 %
Total nontaxable or nondeductible items
$2.3 9.3 %
Changes in unrecognized tax benefits$(0.8)(3.2)%
Other adjustments$0.1 0.1 %
Income tax expense$8.1 32.0 %
_________________________________
(1) State taxes in GA, TX, NJ and MI made up the majority (greater than 50%) of the tax effect in this category.
20242023
Statutory federal income tax rate21.0 %21.0 %
Non-deductibility of goodwill0.4 — 
Non-deductibility of officer's compensation1.1 1.1 
State and other taxes, net of federal tax benefit3.9 3.8 
State income tax audit settlement— (13.5)
Excess tax deficiencies or (benefits)1.2 (0.7)
Change in unrecognized tax benefits— 1.1 
Change in valuation allowance0.8 0.7 
Changes in tax rates and state tax laws0.6 — 
General business credits(0.7)(0.7)
Other(0.8)0.2 
Effective tax rate27.5 %13.0 %
The Company or one of its subsidiaries files federal income tax returns and tax returns in various state and international jurisdictions. With few exceptions, the Company is no longer subject to federal tax examinations by tax authorities for years before 2022 and state or non-United States tax examinations by tax authorities for years before 2020.
Disclosed below is a summary of income taxes paid, net of refunds by jurisdiction for the year ended December 28, 2025:
(in millions)
United States - Federal$10.9 
United States - State and local(1)
3.3
Total U.S. Federal, State and local$14.2 
Foreign(1)
1.7
Total income taxes paid, net of refunds$15.9 
_________________________________
(1) The amount of income taxes paid during the year for state and foreign does not meet the 5% disaggregation threshold.
Net deferred tax assets (liabilities) as of December 28, 2025 and December 29, 2024 consisted of the following components:
20252024
 (In millions)
Lease liabilities$102.2 $104.3 
Employee compensation10.9 8.8 
Deferred revenue
37.8 38.9 
Tax attributes13.2 13.5 
Other13.8 8.1 
Deferred tax assets$177.9 $173.6 
Valuation allowance(5.4)(5.0)
Total deferred tax assets after valuation allowance$172.5 $168.6 
Capitalization and depreciation(1)
(124.6)(122.1)
Lease assets(94.8)(96.1)
Other(4.3)(5.0)
Deferred tax liabilities$(223.7)$(223.2)
Net deferred tax liabilities$(51.2)$(54.6)
_________________________________
(1) Primarily related to the 2007 Applebee's acquisition.
The Company considers new evidence, both positive and negative, that could impact management’s view with regards to future realization of deferred tax assets. Management believes that the future realizability of benefits arising from foreign tax credit carryforwards and certain state net operating loss carryforwards does not meet the more-likely-than-not threshold. In recognition of this risk, there is a valuation allowance of $5.4 million as of December 28, 2025.
The Company had gross operating loss carryforwards for state tax purposes of $112.4 million and $113.7 million as of December 28, 2025 and December 29, 2024, respectively. Certain net operating loss carryforwards will expire in 2029 if not utilized. The Company had income tax credit carryforwards of $7.5 million and $7.5 million as of December 28, 2025 and December 29, 2024, respectively. Certain income tax credit carryforwards will begin to expire in 2029 if not utilized.
The total gross unrecognized tax benefit as of December 28, 2025 and December 29, 2024 was $3.0 million and $2.5 million, respectively, excluding interest, penalties and related income tax benefits. If recognized, these amounts would affect the Company's effective income tax rates.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
202520242023
(In millions)
Beginning unrecognized tax benefit
$2.5 $3.5 $2.1 
Changes for tax positions of prior years(0.5)— — 
Increases for tax positions related to the current year1.1 0.4 1.9 
Decreases relating to settlements and lapsing of statutes of limitations(0.1)(1.4)(0.5)
Ending unrecognized tax benefit
$3.0 $2.5 $3.5 
As of December 28, 2025, the accrued interest was $0.2 million, excluding any related income tax benefits. As of December 29, 2024, the accrued interest and penalties were $0.8 million, excluding any related income tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of the income tax provision recognized in the Consolidated Statements of Comprehensive Income.