Subsequent Events

6 Months Ended

Jun. 29, 2025

Subsequent Events [Abstract]

Subsequent Events

12. Subsequent Events

Enactment of the “One Big Beautiful Bill Act”

On July 4, 2025, the “One Big Beautiful Bill Act,” a comprehensive tax and spending bill, was signed into U.S. law. The legislation includes changes to the U.S. corporate tax system, including, but not limited to:

•Maintaining the corporate income tax rate at 21%;

•Modifications to the deductibility of interest expense and executive compensation;

•Reinstatement and expansion of certain bonus depreciation provisions;

•Reinstatement of full expensing for domestic research and development expenditures;

•Significant changes to many credits and provisions of the Inflation Reduction Act; and

•Changes to foreign income taxation, including revisions to Global Intangible Low-Taxed Income (“GILTI”) and foreign-derived deduction eligible income (“FDDEI”) provisions.

The Company is currently evaluating the potential impact of the new legislation on its Consolidated Financial Statements. However, we currently expect that these changes may have a material impact on the Company’s current and deferred tax assets and liabilities as well as a favorable impact on the amount of cash taxes paid during 2025. We do not currently expect a material impact to our effective tax rate for 2025. Because the bill was enacted subsequent to June 29, 2025, its effects are not reflected in the accompanying financial statements as of and for the period ended June 29, 2025.

Anticipated Sale of Joint Venture

On July 18, 2025, the Company entered into an asset purchase agreement (the “Purchase Agreement”) to sell its 70% interest in a consolidated joint venture that currently operates 85 Domestic Company-owned restaurants for approximately $25 million, which is subject to change based on customary adjustments and is subject to various contingencies. Upon closing of the sale, which we expect to complete by the end of 2025, the Company expects to recognize an estimated pre-tax gain on sale of $15 million to $20 million and the restaurants will convert to franchised locations. This estimate is preliminary and subject to change, as the final gain will be determined upon completion of the relative fair value allocation necessary to finalize the disposal of goodwill associated with the divestiture as well as the final asset and liability balances as of the closing date. As such, the actual gain recognized may differ materially from our current estimate. The Company is unable to provide assurances as to whether the contingencies under the Purchase Agreement will be satisfied within the estimated timing or at all.