Leases

6 Months Ended

Jun. 27, 2024

Leases [Abstract]

Leases

Leases

The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to Accounting Standards Codification No. 842, Leases. The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease.

The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Total lease cost consists of the following:

		13 Weeks Ended				26 Weeks Ended
Lease Cost	Classification	June 27, 2024		June 29, 2023		June 27, 2024		June 29, 2023
Finance lease costs:
Amortization of finance lease assets	Depreciation and amortization	$	554	$	688	$	1,169	$	1,379
Interest on lease liabilities	Interest expense	160		192		335		390
		$	714	$	880	$	1,504	$	1,769
Operating lease costs:
Operating lease costs	Rent expense	$	6,133	$	6,033	$	12,118	$	12,077
Variable lease cost	Rent expense	290		527		602		943
Short-term lease cost	Rent expense	73		34		123		67
		$	6,496	$	6,594	$	12,843	$	13,087

Additional information related to leases is as follows:

	13 Weeks Ended				26 Weeks Ended
Other Information	June 27, 2024		June 29, 2023		June 27, 2024		June 29, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	613	$	645	$	1,214	$	1,201
Operating cash flows from finance leases	160		192		335		390
Operating cash flows from operating leases	6,527		6,429		12,809		12,859
Right of use assets obtained in exchange for new lease obligations:
Finance lease liabilities	115		136		115		136
Operating lease liabilities	2,112		—		2,112		—

	June 27, 2024		December 28, 2023
Finance leases:
Property and equipment – gross	$	30,037	$	30,106
Accumulated depreciation and amortization	(19,065)		(17,956)
Property and equipment - net	$	10,972	$	12,150

Remaining lease terms and discount rates are as follows:

Lease Term and Discount Rate	June 27, 2024		December 28, 2023
Weighted-average remaining lease terms:
Finance leases	6 years		7 years
Operating leases	11 years		12 years
Weighted-average discount rates:
Finance leases	4.67	%	4.62	%
Operating leases	4.73	%	4.52	%

Deferred rent payments of approximately $619 for the Company’s operating leases have been included in the total operating lease obligations as of June 27, 2024, of which approximately $169 is included in long-term operating lease obligations.

Leases

Leases

The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to Accounting Standards Codification No. 842, Leases. The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease.

The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Total lease cost consists of the following:

		13 Weeks Ended				26 Weeks Ended
Lease Cost	Classification	June 27, 2024		June 29, 2023		June 27, 2024		June 29, 2023
Finance lease costs:
Amortization of finance lease assets	Depreciation and amortization	$	554	$	688	$	1,169	$	1,379
Interest on lease liabilities	Interest expense	160		192		335		390
		$	714	$	880	$	1,504	$	1,769
Operating lease costs:
Operating lease costs	Rent expense	$	6,133	$	6,033	$	12,118	$	12,077
Variable lease cost	Rent expense	290		527		602		943
Short-term lease cost	Rent expense	73		34		123		67
		$	6,496	$	6,594	$	12,843	$	13,087

Additional information related to leases is as follows:

	13 Weeks Ended				26 Weeks Ended
Other Information	June 27, 2024		June 29, 2023		June 27, 2024		June 29, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	613	$	645	$	1,214	$	1,201
Operating cash flows from finance leases	160		192		335		390
Operating cash flows from operating leases	6,527		6,429		12,809		12,859
Right of use assets obtained in exchange for new lease obligations:
Finance lease liabilities	115		136		115		136
Operating lease liabilities	2,112		—		2,112		—

	June 27, 2024		December 28, 2023
Finance leases:
Property and equipment – gross	$	30,037	$	30,106
Accumulated depreciation and amortization	(19,065)		(17,956)
Property and equipment - net	$	10,972	$	12,150

Remaining lease terms and discount rates are as follows:

Lease Term and Discount Rate	June 27, 2024		December 28, 2023
Weighted-average remaining lease terms:
Finance leases	6 years		7 years
Operating leases	11 years		12 years
Weighted-average discount rates:
Finance leases	4.67	%	4.62	%
Operating leases	4.73	%	4.52	%

Deferred rent payments of approximately $619 for the Company’s operating leases have been included in the total operating lease obligations as of June 27, 2024, of which approximately $169 is included in long-term operating lease obligations.