Revenue Recognition

9 Months Ended

Sep. 28, 2025

Revenue from Contract with Customer [Abstract]

Revenue Recognition

5. Revenue Recognition

Contract Balances

Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify within Current deferred revenue and Deferred revenue on the Condensed Consolidated Balance Sheets. During the three and nine months ended September 28, 2025, the Company recognized $8.2 million and $25.9 million in revenue, respectively, related to deferred revenue compared to $7.8 million and $24.1 million, respectively, for the three and nine months ended September 29, 2024.

The following table includes a breakout of contract liability balances:

(In thousands)	September 28, 2025		December 29, 2024		Change
Unearned franchise fees and royalties	$	19,592	$	21,860	$	(2,268)
Unredeemed gift card liabilities	6,498		7,694		(1,196)
Customer loyalty program obligations	5,069		7,252		(2,183)
Total contract liabilities	$	31,159	$	36,806	$	(5,647)

Our contract assets consist primarily of equipment incentives provided to franchisees. Equipment incentives are related to the future value of commissary revenue the Company will receive over the term of the incentive agreement. Contract assets were approximately $17.1 million and $16.6 million, respectively, at September 28, 2025, and December 29, 2024. Revenue was reduced by approximately $2.1 million and $5.5 million for the three and nine months ended September 28, 2025, and approximately $1.3 million and $4.0 million for the three and nine months ended September 29, 2024, respectively, for the amortization of contract assets over the applicable contract terms. Contract assets are included in Prepaid expenses and other current assets and Other assets on the Condensed Consolidated Balance Sheets.

Transaction Price Allocated to the Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period:

	Performance Obligations by Period
(In thousands)	Less than 1 Year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		Thereafter		Total
Unearned franchise fees and royalties	$	3,186	$	2,847	$	2,600	$	2,373	$	2,154	$	4,132	$	17,292

At September 28, 2025, approximately $2.3 million of area development fees related to unopened restaurants and International unearned franchise fees are included in Deferred revenue. Timing of revenue recognition is dependent upon the timing of restaurant openings and franchisees’ revenues. Unredeemed gift card liabilities, which are included in Deferred revenue, will be recognized in Company-owned restaurant sales when gift cards are redeemed. The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations.