Leases

12 Months Ended

Dec. 25, 2024

Leases [Abstract]

Leases

Leases

Lessee

Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years, exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years.

Lessor

We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above.

The components of lease costs were as follows:

		Fiscal Year Ended
	Classification	December 25, 2024		December 27, 2023		December 28, 2022
		(In thousands)
Lease costs
Finance lease costs:
Amortization of right-of-use assets	Depreciation and amortization	$	1,350	$	1,451	$	1,704
Interest on lease liabilities	Interest expense, net	1,990		2,139		2,350
Operating lease costs:
Operating lease costs	Occupancy	8,828		8,584		7,624
Operating lease costs	Costs of franchise and license revenue	12,702		14,022		15,541
Operating lease costs	General and administrative expenses	739		629		564
Operating lease costs	Other operating expenses	459		257		—
Operating lease costs	Restructuring charges and exit costs	125		175		201
Variable lease costs:
Variable lease costs	Occupancy	4,716		4,789		3,988
Variable lease costs	Costs of franchise and license revenue	5,979		6,232		6,596
Variable lease costs	General and administrative expenses	333		271		255
Variable lease costs	Other operating expenses	6		14		—
Variable lease costs	Restructuring charges and exit costs	65		46		34
Sublease income:
Sublease income	Franchise and license revenue	(22,817)		(24,966)		(27,445)
Sublease income	Restructuring charges and exit costs	(192)		(166)		(229)
Total lease costs		$	14,283	$	13,477	$	11,183

Lease terms and discount rates were as follows:

	December 25, 2024		December 27, 2023
Weighted-average remaining lease term (in years):
Finance leases	8.7		8.0
Operating leases	9.0		8.8
Weighted-average discount rate:
Finance leases	21.4	%	23.1	%
Operating leases	6.1	%	6.0	%

The components of lease income were as follows:

		Fiscal Year Ended
	Classification	December 25, 2024		December 27, 2023		December 28, 2022
		(In thousands)
Lease income
Operating lease income	Franchise and license revenue	$	24,269	$	26,353	$	28,473
Operating lease income	Restructuring charges and exit costs	130		119		183
Operating lease income	General and administrative expenses	71		118		140
Variable lease income	Franchise and license revenue	8,895		9,530		10,124
Variable lease income	Restructuring charges and exit costs	61		47		46
Total lease income		$	33,426	$	36,167	$	38,966

Cash and supplemental noncash amounts were as follows:

	Fiscal Year Ended
	December 25, 2024		December 27, 2023		December 28, 2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	1,990	$	2,139	$	2,350
Operating cash flows from operating leases	$	23,055	$	24,310	$	24,626
Financing cash flows from finance leases	$	1,411	$	1,786	$	2,020
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,783	$	1,071	$	537
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	$	25,283	$	7,047	$	16,040

(1)     Right-of-use assets obtained in 2022 includes $7.9 million from the acquisition of Keke’s. See Note 3.

Maturities of lease liabilities and receipts as of December 25, 2024 were as follows:

	Lease Liabilities				Lease Receipts
	Finance		Operating		Operating
	(In thousands)
2025	$	3,077	$	23,243	$	23,271
2026	2,985		23,114		22,962
2027	2,639		21,328		21,413
2028	1,953		19,479		19,691
2029	1,751		17,954		19,034
Thereafter	9,806		74,758		96,131
Total undiscounted cash flows	22,211		179,876		$	202,502
Less: interest	11,643		43,548
Present value of lease liabilities	10,568		136,328
Less: current lease liabilities	1,284		15,487
Long-term lease liabilities	$	9,284	$	120,841

Leases

Leases

Lessee

Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years, exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years.

Lessor

We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above.

The components of lease costs were as follows:

		Fiscal Year Ended
	Classification	December 25, 2024		December 27, 2023		December 28, 2022
		(In thousands)
Lease costs
Finance lease costs:
Amortization of right-of-use assets	Depreciation and amortization	$	1,350	$	1,451	$	1,704
Interest on lease liabilities	Interest expense, net	1,990		2,139		2,350
Operating lease costs:
Operating lease costs	Occupancy	8,828		8,584		7,624
Operating lease costs	Costs of franchise and license revenue	12,702		14,022		15,541
Operating lease costs	General and administrative expenses	739		629		564
Operating lease costs	Other operating expenses	459		257		—
Operating lease costs	Restructuring charges and exit costs	125		175		201
Variable lease costs:
Variable lease costs	Occupancy	4,716		4,789		3,988
Variable lease costs	Costs of franchise and license revenue	5,979		6,232		6,596
Variable lease costs	General and administrative expenses	333		271		255
Variable lease costs	Other operating expenses	6		14		—
Variable lease costs	Restructuring charges and exit costs	65		46		34
Sublease income:
Sublease income	Franchise and license revenue	(22,817)		(24,966)		(27,445)
Sublease income	Restructuring charges and exit costs	(192)		(166)		(229)
Total lease costs		$	14,283	$	13,477	$	11,183

Lease terms and discount rates were as follows:

	December 25, 2024		December 27, 2023
Weighted-average remaining lease term (in years):
Finance leases	8.7		8.0
Operating leases	9.0		8.8
Weighted-average discount rate:
Finance leases	21.4	%	23.1	%
Operating leases	6.1	%	6.0	%

The components of lease income were as follows:

		Fiscal Year Ended
	Classification	December 25, 2024		December 27, 2023		December 28, 2022
		(In thousands)
Lease income
Operating lease income	Franchise and license revenue	$	24,269	$	26,353	$	28,473
Operating lease income	Restructuring charges and exit costs	130		119		183
Operating lease income	General and administrative expenses	71		118		140
Variable lease income	Franchise and license revenue	8,895		9,530		10,124
Variable lease income	Restructuring charges and exit costs	61		47		46
Total lease income		$	33,426	$	36,167	$	38,966

Cash and supplemental noncash amounts were as follows:

	Fiscal Year Ended
	December 25, 2024		December 27, 2023		December 28, 2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	1,990	$	2,139	$	2,350
Operating cash flows from operating leases	$	23,055	$	24,310	$	24,626
Financing cash flows from finance leases	$	1,411	$	1,786	$	2,020
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,783	$	1,071	$	537
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	$	25,283	$	7,047	$	16,040

(1)     Right-of-use assets obtained in 2022 includes $7.9 million from the acquisition of Keke’s. See Note 3.

Maturities of lease liabilities and receipts as of December 25, 2024 were as follows:

	Lease Liabilities				Lease Receipts
	Finance		Operating		Operating
	(In thousands)
2025	$	3,077	$	23,243	$	23,271
2026	2,985		23,114		22,962
2027	2,639		21,328		21,413
2028	1,953		19,479		19,691
2029	1,751		17,954		19,034
Thereafter	9,806		74,758		96,131
Total undiscounted cash flows	22,211		179,876		$	202,502
Less: interest	11,643		43,548
Present value of lease liabilities	10,568		136,328
Less: current lease liabilities	1,284		15,487
Long-term lease liabilities	$	9,284	$	120,841

Leases

Leases

Lessee

Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years, exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years.

Lessor

We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above.

The components of lease costs were as follows:

		Fiscal Year Ended
	Classification	December 25, 2024		December 27, 2023		December 28, 2022
		(In thousands)
Lease costs
Finance lease costs:
Amortization of right-of-use assets	Depreciation and amortization	$	1,350	$	1,451	$	1,704
Interest on lease liabilities	Interest expense, net	1,990		2,139		2,350
Operating lease costs:
Operating lease costs	Occupancy	8,828		8,584		7,624
Operating lease costs	Costs of franchise and license revenue	12,702		14,022		15,541
Operating lease costs	General and administrative expenses	739		629		564
Operating lease costs	Other operating expenses	459		257		—
Operating lease costs	Restructuring charges and exit costs	125		175		201
Variable lease costs:
Variable lease costs	Occupancy	4,716		4,789		3,988
Variable lease costs	Costs of franchise and license revenue	5,979		6,232		6,596
Variable lease costs	General and administrative expenses	333		271		255
Variable lease costs	Other operating expenses	6		14		—
Variable lease costs	Restructuring charges and exit costs	65		46		34
Sublease income:
Sublease income	Franchise and license revenue	(22,817)		(24,966)		(27,445)
Sublease income	Restructuring charges and exit costs	(192)		(166)		(229)
Total lease costs		$	14,283	$	13,477	$	11,183

Lease terms and discount rates were as follows:

	December 25, 2024		December 27, 2023
Weighted-average remaining lease term (in years):
Finance leases	8.7		8.0
Operating leases	9.0		8.8
Weighted-average discount rate:
Finance leases	21.4	%	23.1	%
Operating leases	6.1	%	6.0	%

The components of lease income were as follows:

		Fiscal Year Ended
	Classification	December 25, 2024		December 27, 2023		December 28, 2022
		(In thousands)
Lease income
Operating lease income	Franchise and license revenue	$	24,269	$	26,353	$	28,473
Operating lease income	Restructuring charges and exit costs	130		119		183
Operating lease income	General and administrative expenses	71		118		140
Variable lease income	Franchise and license revenue	8,895		9,530		10,124
Variable lease income	Restructuring charges and exit costs	61		47		46
Total lease income		$	33,426	$	36,167	$	38,966

Cash and supplemental noncash amounts were as follows:

	Fiscal Year Ended
	December 25, 2024		December 27, 2023		December 28, 2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	1,990	$	2,139	$	2,350
Operating cash flows from operating leases	$	23,055	$	24,310	$	24,626
Financing cash flows from finance leases	$	1,411	$	1,786	$	2,020
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,783	$	1,071	$	537
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	$	25,283	$	7,047	$	16,040

(1)     Right-of-use assets obtained in 2022 includes $7.9 million from the acquisition of Keke’s. See Note 3.

Maturities of lease liabilities and receipts as of December 25, 2024 were as follows:

	Lease Liabilities				Lease Receipts
	Finance		Operating		Operating
	(In thousands)
2025	$	3,077	$	23,243	$	23,271
2026	2,985		23,114		22,962
2027	2,639		21,328		21,413
2028	1,953		19,479		19,691
2029	1,751		17,954		19,034
Thereafter	9,806		74,758		96,131
Total undiscounted cash flows	22,211		179,876		$	202,502
Less: interest	11,643		43,548
Present value of lease liabilities	10,568		136,328
Less: current lease liabilities	1,284		15,487
Long-term lease liabilities	$	9,284	$	120,841