Allowance For Credit Losses

12 Months Ended

Dec. 29, 2024

Credit Loss [Abstract]

Allowance for Credit Losses

10. Allowance for Credit Losses

Estimates of expected credit losses, even if remote, are based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics, and macroeconomic factors. Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer. Account and note balances are charged off against the allowance after recovery efforts have ceased.

The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable:

(In thousands)	Accounts Receivable		Notes Receivable
Balance at December 25, 2022	$	6,718	$	14,499
Current period provision for expected credit losses, net (a)	3,609		1,784
Write-offs charged against the allowance	(1,974)		(191)
Balance at December 31, 2023	$	8,353	$	16,092
Current period provision for expected credit losses, net (b)	1,613		1,124
Write-offs charged against the allowance	(1,498)		(1,978)
Balance at December 29, 2024	$	8,468	$	15,238

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(a)    During the year ended December 31, 2023, the Company recorded $1.7 million of reserves for certain accounts receivable and notes receivable associated with the termination of a specific franchisee in the United Kingdom and $0.9 million of reserves for certain accounts receivable related to the conflict in the Middle East.

(b)    During the year ended December 29, 2024, the Company recorded $1.7 million of reserves for certain notes receivable associated with the termination of specific franchisees in the United Kingdom as part of our International Transformation Plan. See “Note 16. Restructuring” for further information.