Revenues

12 Months Ended

Dec. 25, 2024

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

The following table disaggregates our revenue by sales channel and type of good or service:

	Fiscal Year Ended
	December 25, 2024		December 27, 2023		December 28, 2022
	(In thousands)
Company restaurant sales	$	211,781	$	215,532	$	199,753
Franchise and license revenue:
Royalties	118,705		120,131		113,891
Advertising revenue	79,973		78,494		75,926
Initial and other fees	8,711		13,882		28,262
Occupancy revenue	33,164		35,883		38,597
Franchise and license revenue	240,553		248,390		256,676
Total operating revenue	$	452,334	$	463,922	$	456,429

Balances related to contracts with customers consist of receivables, contract assets, deferred franchise revenue and deferred gift card revenue. See Note 4 for details on our receivables.

Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that will begin amortizing into revenue when the related restaurants are opened. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising.

The components of the change in deferred franchise revenue are as follows:

	(In thousands)
Balance, December 27, 2023	$	19,150
Fees received from franchisees	1,080
Revenue recognized, net (1)	(3,262)
Balance, December 25, 2024	16,968
Less current portion included in other current liabilities	2,073
Deferred franchise revenue included in other noncurrent liabilities	$	14,895

(1) Of this amount $2.8 million was included in the deferred franchise revenue balance as of December 27, 2023.

We record contract assets related to incentives and subsidies provided to franchisees related to new unit openings and/or equipment upgrades. These amounts will be recognized as a component of franchise and license revenue over the remaining term of the related franchise agreements.

The components of the change in contract assets are as follows:

	(In thousands)
Balance, December 27, 2023	$	6,608
Franchisee deferred costs	1,417
Contract asset amortization	(1,319)
Balance, December 25, 2024	6,706
Less current portion included in other current assets	976
Contract assets included in other noncurrent assets	$	5,730

The Company purchases equipment related to various programs for franchise restaurants, including kitchen and point-of-sale system equipment. We bill our franchisees and recognize revenue when the related equipment is installed, less amounts contributed from the Company, which have been deferred as contract assets in the table above. We recognized $0.7 million, $4.8 million and $19.3 million of revenue related to the sale of equipment to franchisees during the years ended December 25, 2024, December 27, 2023 and December 28, 2022, respectively. As of December 25, 2024, we had $0.2 million in inventory and $0.4 million in receivables related to the purchased equipment. As of December 27, 2023, we had $0.6 million in inventory and $0.3 million in receivables related to the purchased equipment.

As of December 25, 2024, deferred franchise revenue, net of contract asset amortization, expected to be recognized in the future is as follows:

	(In thousands)
2025	$	1,097
2026	1,072
2027	1,041
2028	917
2029	813
Thereafter	5,322
Deferred franchise revenue, net	$	10,262

Deferred gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of deferred gift card liabilities represents our remaining performance obligations to customers. The balance of deferred gift card liabilities as of December 25, 2024 and December 27, 2023 was $8.4 million and $7.8 million, respectively. During the year ended December 25, 2024, we recognized revenue of $0.6 million from gift card redemptions at company restaurants.