Leases

12 Months Ended

Oct. 03, 2025

LEASES:

The Company has lease arrangements primarily related to real estate, vehicles and equipment, which generally have terms of one year to 25 years. In addition, there can be leases identified in the Company's revenue contracts with customers, which generally include fixed or variable lease payments. The Company assesses whether an arrangement is a lease, or contains a lease, upon inception of the related contract. A right-of-use asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less ("short-term leases"). Certain of the Company's lease arrangements, primarily vehicle leases, with terms of one to 8 years, contain provisions related to residual value guarantees. The maximum potential liability to the Company under such arrangements was approximately $34.6 million at October 3, 2025 if the terminal fair value of vehicles coming off lease was zero. Consistent with past experience, management does not expect any significant payments will be required pursuant to these arrangements. No amounts have been accrued for guarantee arrangements at October 3, 2025.

The Company recognizes operating lease liabilities and operating lease right-of-use assets on its Consolidated Balance Sheets. Operating lease right-of-use assets represent the Company’s right to use the underlying assets for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and operating lease right-of-use assets are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. Deferred rent, tenant improvement allowances and prepaid rent are included in the operating lease right-of-use asset balances. Lease expense is recognized on a straight-line basis over the expected lease term. The Company has lease agreements with lease and non-lease components. Non-lease components are combined with the related lease components and accounted for as lease components for all classes of underlying assets.

Variable lease payments, which primarily consist of leases associated with the Company's revenue contracts with customers, real estate taxes, common area maintenance charges, insurance costs and other operating expenses, are not included in the operating lease right-of-use asset or operating lease liability balances and are recognized in the period in which the expenses are incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain they will be exercised or not, respectively. Options to extend lease terms that are reasonably certain of exercise are recognized as part of the operating lease right-of-use asset and operating lease liability balances.

The Company is required to discount its future minimum lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. The Company primarily uses its incremental borrowing rate as the discount rate. The Company uses a portfolio approach to determine the incremental borrowing rate based on the geographic location of the lease and the remaining lease term. The incremental borrowing rate is calculated using a base line rate plus an applicable margin.

The following table summarizes the location of the operating leases in the Company’s Consolidated Balance Sheets (in thousands), as well as the weighted average remaining lease term and weighted average discount rate:


	October 3, 2025			September 27, 2024
Assets:
Operating Lease Right-of-use Assets(1)	$	701,839		$	638,659



Liabilities:
Current operating lease liabilities	$	60,744		$	54,163

Noncurrent Operating Lease Liabilities	255,305			241,012

Total operating lease liabilities	$	316,049		$	295,175

Weighted average remaining lease term (in years)	6.3			6.9

Weighted average discount rate	4.8		%	4.6		%


(1)			Includes $420.9 million and $384.1 million of long-term prepaid rent as of October 3, 2025 and September 27, 2024, respectively.

The following table summarizes the location of operating lease related costs on the Consolidated Statements of Income (in thousands):


		Fiscal Year Ended
Lease Cost	Income Statement Location	October 3, 2025		September 27, 2024		September 29, 2023
Operating lease cost(1):
Fixed lease costs	Cost of services provided (exclusive of depreciation and amortization)	$	127,953	$	117,584	$	110,393
Variable lease costs(2)	Cost of services provided (exclusive of depreciation and amortization)	1,080,782		1,052,310		922,334
Short-term lease costs	Cost of services provided (exclusive of depreciation and amortization)	82,245		80,816		79,788
Net operating lease cost		$	1,290,980	$	1,250,710	$	1,112,515


(1)			Excludes sublease income, which is immaterial.
(2)			Includes $1,054.4 million, $1,027.9 million and $903.4 million of costs related to leases associated with revenue contracts with customers for fiscal 2025, fiscal 2024 and fiscal 2023, respectively. These costs represent the rent the Company pays its clients to operate at their locations, typically based on a percentage of sales.

Supplemental cash flow information related to operating leases for the periods reported is as follows (in thousands):


	Fiscal Year Ended
	October 3, 2025		September 27, 2024		September 29, 2023
Cash paid for amounts included in the measurement of operating lease liabilities(1)	$	168,490	$	192,391	$	170,457
Lease assets obtained in exchange for operating lease obligations	88,657		59,780		52,215


(1)			For fiscal 2025, excludes cash paid for variable and short-term lease costs of $1,070.7 million and $82.2 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2024, excludes cash paid for variable and short-term lease costs of $1,039.0 million and $80.8 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2023, excludes cash paid for variable and short-term lease costs of $909.1 million and $79.8 million, respectively, that are not included within the measurement of lease liabilities.

Future minimum lease payments under non-cancelable leases as of October 3, 2025 are as follows (in thousands):


	Operating leases
2026	$	74,298
2027	65,622
2028	55,855
2029	45,931
2030	36,454
Thereafter	86,807
Total future minimum lease payments	364,967
Less: Interest	(48,918)
Present value of lease liabilities	$	316,049