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Segment Information | 12 Months Ended
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Dec. 29, 2024
Segment Reporting [Abstract] |
Segment Information | (11) Segment Information The Company has three reportable segments: (i) U.S. stores; (ii) supply chain; and (iii) international franchise. The Company’s operations are organized by management on the combined basis of line of business and geography. The U.S. stores segment includes operations with respect to all franchised and Company-owned stores throughout the U.S. The supply chain segment primarily includes the distribution of food, and to a lesser extent, other products, from the Company’s supply chain center operations in the U.S. and Canada. Over 90% of the Company’s supply chain revenues are attributable to the U.S. The international franchise segment includes operations related to the Company’s franchising business in foreign markets. The accounting policies of the reportable segments are the same as those described in Note 1. The Company’s chief operating decision maker is its Chief Executive Officer, and he evaluates the performance of the Company’s segments and allocates resources to them based on revenues and earnings before interest, taxes, depreciation, amortization and other, referred to as Segment Income. The Company uses Segment Income to determine future business objectives and targets and for long-range planning for the reportable segments, as well as to evaluate their operating performance. The tables below summarize the financial information, including revenues, significant segment expenses, Segment Income and capital expenditures, concerning the Company’s reportable segments for fiscal years 2024, 2023 and 2022. Intersegment revenues are comprised of sales of food, and to a lesser extent, other products, from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based.
|  | Fiscal year ended December 29, 2024 |
|  | U.S. Stores |  |  | Supply Chain |  |  | International Franchise |  |  | Total |
U.S. Company-owned stores |  | $ | 393,898 |  |  | $ | — |  |  | $ | — |  |  | $ | 393,898 |
U.S. franchise royalties and fees |  |  | 638,193 |  |  |  | — |  |  |  | — |  |  |  | 638,193 |
Supply chain |  |  | — |  |  |  | 2,966,953 |  |  |  | — |  |  |  | 2,966,953 |
Supply chain - intersegment revenues |  |  | — |  |  |  | (121,172 | ) |  |  | — |  |  |  | (121,172 | )
International franchise royalties and fees |  |  | — |  |  |  | — |  |  |  | 318,691 |  |  |  | 318,691 |
U.S. franchise advertising |  |  | 509,853 |  |  |  | — |  |  |  | — |  |  |  | 509,853 |
Segment revenues |  | $ | 1,541,944 |  |  | $ | 2,845,781 |  |  | $ | 318,691 |  |  | $ | 4,706,416 |
Cost of sales - food |  |  | 114,220 |  |  |  | 2,027,816 |  |  |  | — |  |  |  | 2,142,036 |
Cost of sales - labor |  |  | 123,251 |  |  |  | 262,312 |  |  |  | — |  |  |  | 385,563 |
Cost of sales - other (1) |  |  | 78,197 |  |  |  | 202,694 |  |  |  | — |  |  |  | 280,891 |
U.S. franchise advertising |  |  | 509,853 |  |  |  | — |  |  |  | — |  |  |  | 509,853 |
General and administrative (2) |  |  | 151,030 |  |  |  | 72,348 |  |  |  | 58,029 |  |  |  | 281,407 |
Segment Income |  | $ | 565,393 |  |  | $ | 280,611 |  |  | $ | 260,662 |  |  | $ | 1,106,666 |
Segment capital expenditures (3) |  | $ | 10,959 |  |  | $ | 44,653 |  |  | $ | 33 |  |  | $ | 55,645 |
|  | Fiscal year ended December 31, 2023 |
|  | U.S. Stores |  |  | Supply Chain |  |  | International Franchise |  |  | Total |
U.S. Company-owned stores |  | $ | 376,180 |  |  | $ | — |  |  | $ | — |  |  | $ | 376,180 |
U.S. franchise royalties and fees |  |  | 604,897 |  |  |  | — |  |  |  | — |  |  |  | 604,897 |
Supply chain |  |  | — |  |  |  | 2,829,224 |  |  |  | — |  |  |  | 2,829,224 |
Supply chain - intersegment revenues |  |  | — |  |  |  | (114,215 | ) |  |  | — |  |  |  | (114,215 | )
International franchise royalties and fees |  |  | — |  |  |  | — |  |  |  | 310,077 |  |  |  | 310,077 |
U.S. franchise advertising |  |  | 473,195 |  |  |  | — |  |  |  | — |  |  |  | 473,195 |
Segment revenues |  | $ | 1,454,272 |  |  | $ | 2,715,009 |  |  | $ | 310,077 |  |  | $ | 4,479,358 |
Cost of sales - food |  |  | 109,554 |  |  |  | 1,964,500 |  |  |  | — |  |  |  | 2,074,054 |
Cost of sales - labor |  |  | 118,798 |  |  |  | 247,048 |  |  |  | — |  |  |  | 365,846 |
Cost of sales - other (1) |  |  | 75,457 |  |  |  | 192,794 |  |  |  | — |  |  |  | 268,251 |
U.S. franchise advertising |  |  | 473,195 |  |  |  | — |  |  |  | — |  |  |  | 473,195 |
General and administrative (2) |  |  | 156,291 |  |  |  | 65,237 |  |  |  | 50,469 |  |  |  | 271,997 |
Segment Income |  | $ | 520,977 |  |  | $ | 245,430 |  |  | $ | 259,608 |  |  | $ | 1,026,015 |
Segment capital expenditures (3) |  | $ | 11,942 |  |  | $ | 34,044 |  |  | $ | 93 |  |  | $ | 46,079 |
|  | Fiscal year ended January 1, 2023 |
|  | U.S. Stores |  |  | Supply Chain |  |  | International Franchise |  |  | Total |
U.S. Company-owned stores |  | $ | 445,810 |  |  | $ | — |  |  | $ | — |  |  | $ | 445,810 |
U.S. franchise royalties and fees |  |  | 556,269 |  |  |  | — |  |  |  | — |  |  |  | 556,269 |
Supply chain |  |  | — |  |  |  | 2,898,069 |  |  |  | — |  |  |  | 2,898,069 |
Supply chain - intersegment revenues |  |  | — |  |  |  | (143,327 | ) |  |  | — |  |  |  | (143,327 | )
International franchise royalties and fees |  |  | — |  |  |  | — |  |  |  | 295,007 |  |  |  | 295,007 |
U.S. franchise advertising |  |  | 485,330 |  |  |  | — |  |  |  | — |  |  |  | 485,330 |
Segment revenues |  | $ | 1,487,409 |  |  | $ | 2,754,742 |  |  | $ | 295,007 |  |  | $ | 4,537,158 |
Cost of sales - food |  |  | 139,887 |  |  |  | 2,046,049 |  |  |  | — |  |  |  | 2,185,936 |
Cost of sales - labor |  |  | 135,993 |  |  |  | 240,950 |  |  |  | — |  |  |  | 376,943 |
Cost of sales - other (1) |  |  | 88,764 |  |  |  | 194,919 |  |  |  | — |  |  |  | 283,683 |
U.S. franchise advertising |  |  | 485,330 |  |  |  | — |  |  |  | — |  |  |  | 485,330 |
General and administrative (2) |  |  | 198,831 |  |  |  | 64,025 |  |  |  | 58,863 |  |  |  | 321,719 |
Segment Income |  | $ | 438,604 |  |  | $ | 208,799 |  |  | $ | 236,144 |  |  | $ | 883,547 |
Segment capital expenditures (3) |  | $ | 9,830 |  |  | $ | 34,625 |  |  | $ | — |  |  | $ | 44,455 |
(1) Cost of sales - other, includes delivery, occupancy costs (including rent, telephone and utilities) and insurance expense. Depreciation and amortization is not included in the measurement of Segment Income. (2) General and administrative expense consists primarily of labor cost (including variable performance-based compensation expense), computer expenses, professional fees, travel and entertainment, rent, insurance and other. Depreciation and amortization, non-cash equity-based compensation expense and gains and losses from the sale of assets are not included in the measurement of Segment Income. (3) The Company also had $53.7 million, $59.2 million and $44.4 million of other capital expenditures not attributable to the reportable segments primarily representing capitalized software in 2024, 2023 and 2022, respectively. The following table reconciles total Segment Income to income before provision for income taxes:
|  | 2024 |  |  | 2023 |  |  | 2022 |
Total Segment Income |  | $ | 1,106,666 |  |  | $ | 1,026,015 |  |  | $ | 883,547 |
General and administrative - other (1) |  |  | (94,995 | ) |  |  | (86,894 | ) |  |  | (26,022 | )
Depreciation and amortization |  |  | (87,732 | ) |  |  | (80,640 | ) |  |  | (80,251 | )
Non-cash equity-based compensation expense |  |  | (43,255 | ) |  |  | (37,514 | ) |  |  | (28,709 | )
Loss on sale/disposal of assets |  |  | (1,527 | ) |  |  | (1,299 | ) |  |  | (1,813 | )
Refranchising (loss) gain |  |  | (158 | ) |  |  | (149 | ) |  |  | 21,173 |
Income from operations |  |  | 878,999 |  |  |  | 819,519 |  |  |  | 767,925 |
Other income |  |  | 22,064 |  |  |  | 17,713 |  |  |  | — |
Interest income |  |  | 17,022 |  |  |  | 11,683 |  |  |  | 3,162 |
Interest expense |  |  | (195,870 | ) |  |  | (196,475 | ) |  |  | (198,254 | )
Income before provision for income taxes |  | $ | 722,215 |  |  | $ | 652,440 |  |  | $ | 572,833 |
(1) Represents corporate administrative costs that have not been allocated to a reportable segment including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs. In 2023, the Company changed its allocation methodology for certain costs which support certain internally developed software used across the Company’s franchise system. This allocation methodology change was implemented in order to reflect the way the chief operating decision maker allocates resources to the Company’s reportable segments and evaluates segment profitability, including the costs of internally developed software. The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $65.7 million and an estimated increase in international franchise Segment Income of $8.9 million. These estimated increases in U.S. stores and international franchise Segment Income were offset by a corresponding $74.6 million decrease in unallocated general and administrative - other expenses. The change in allocation methodology of certain software development costs in 2023 had no impact on revenues, income from operations or supply chain Segment Income. The change in allocation methodology for certain software development costs was a prospective change and the comparative information for fiscal 2022 has not been restated. The following table summarizes the Company’s identifiable asset information by reportable segment as of December 29, 2024 and December 31, 2023:
|  | December 29, 2024 |  |  | December 31, 2023 |
U.S. stores |  | $ | 240,408 |  |  | $ | 232,336 |
Supply chain |  |  | 641,523 |  |  |  | 631,908 |
International franchise |  |  | 38,306 |  |  |  | 37,981 |
Reportable segment assets |  |  | 920,237 |  |  |  | 902,225 |
Unallocated |  |  | 816,776 |  |  |  | 772,674 |
Total assets |  | $ | 1,737,013 |  |  | $ | 1,674,899 |
Unallocated assets primarily include cash and cash equivalents, restricted cash and cash equivalents, certain accounts receivable and prepaid expenses, investments and marketable securities, certain long-lived assets including certain property, plant and equipment, capitalized software and the operating lease right-of-use asset for the Company’s corporate headquarters and deferred income taxes. Over 95% of the Company’s long-lived assets including property, plant and equipment, capitalized software and operating lease right-of-use assets are located in the U.S. The following table summarizes the Company’s goodwill balance by reportable segment as of December 29, 2024 and December 31, 2023:
|  | December 29, 2024 |  |  | December 31, 2023 |
U.S. stores |  | $ | 10,511 |  |  | $ | 10,621 |
Supply chain |  |  | 1,067 |  |  |  | 1,067 |
Consolidated goodwill |  | $ | 11,578 |  |  | $ | 11,688 |

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- Definition The entire disclosure for reporting segments including data and tables. 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