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REVENUE
 3 Months Ended
Mar. 30, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
Revenue Recognition
Revenue consists of Shack sales and Licensing revenue. Generally, revenue is recognized as promised goods or services transfer to the guest or customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Revenue from Shack sales is recognized when payment is tendered at the point of sale, net of discounts as the performance obligation has been satisfied.
Sales tax collected from guests is excluded from Shack sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Revenue from gift cards is deferred and recognized over time as redemptions occur.
During fiscal 2022, we concluded we have accumulated a sufficient level of historical data from a large pool of homogeneous transactions to allow us to reasonably and objectively determine an estimated gift card breakage rate and the pattern of actual gift card redemptions. Accordingly, we will begin to recognize breakage income and reduce the related gift card liability for unredeemed gift cards in proportion to actual redemptions of gift cards. We will continue to review historical gift card redemption information at each reporting period to assess the continued appropriateness of the gift card breakage rate and pattern of redemption.
In accordance with ASC 250, Accounting Changes and Error Corrections, we concluded that this accounting change represented a change in accounting estimate. As a result, we recorded a cumulative catch-up adjustment during the thirteen weeks ended March 30, 2022 that resulted in $1,281 of gift card breakage income. Inclusive of this cumulative catch-up, we recognized $1,309 of gift card breakage income during the thirteen weeks ended March 30, 2022. Gift card breakage income is included in Shack sales in the Condensed Consolidated Statement of Income (Loss).
Licensing revenue includes initial territory fees, Shack opening fees and ongoing sales-based royalty fees from licensed Shacks. Generally, the licenses granted to develop, open and operate each Shack in a specified territory are the predominant good or service transferred to the licensee and represent distinct performance obligations. Ancillary promised services, such as training and assistance during the initial opening of a Shack, are typically combined with the license and considered one performance obligation per Shack. The Company determines the transaction price for each contract, which is comprised of the initial territory fee, and an estimate of the total Shack opening fees the Company expects to be entitled to. The calculation of total Shack opening fees included in the transaction price requires judgment, as it is based on an estimated number of Shacks the Company expects the licensee to open. The transaction price is then allocated equally to each Shack expected to open. Because the Company is transferring a license to access intellectual property throughout a contractual term, the performance obligation is satisfied over time, starting when a Shack opens, through the end of the term of the license granted to the Shack. Therefore, revenue is recognized on a straight-line basis over the license term. Generally, payment for the initial territory fee is received upon execution of the license agreement and payment for the Shack opening fees is received either in advance of or upon
opening the related Shack. These payments are initially deferred and recognized as revenue as the performance obligations are satisfied, which occurs over a long-term period.
Revenue from sales-based royalties is recognized as the related sales occur.
Revenue recognized during the thirteen weeks ended March 30, 2022 and March 31, 2021, disaggregated by type was as follows:
Thirteen Weeks Ended
March 30
2022		March 31
2021
Shack sales$196,791 $150,668 
Licensing revenue:
Sales-based royalties6,400 4,425 
Initial territory and opening fees200 189 
Total revenue$203,391 $155,282 
The aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of March 30, 2022 was $18,433. The Company expects to recognize this amount as revenue over a long-term period, as the license term for each Shack ranges from 5 to 20 years. This amount excludes any variable consideration related to sales-based royalties.
Contract Balances
Contract liabilities and receivables from contracts with customers were as follows:
March 30
2022		December 29
2021
Shack sales receivables$6,639 $6,939 
Licensing receivables, net of allowance for doubtful accounts3,262 4,005 
Gift card liability1,847 3,297 
Deferred revenue, current837 763 
Deferred revenue, long-term13,277 12,669 
Revenue recognized during the thirteen weeks ended March 30, 2022 and March 31, 2021 that was included in the respective liability balances at the beginning of the period was as follows:
Thirteen Weeks Ended
March 30
2022		March 31
2021
Gift card liability(1)
$1,506 $219 
Deferred revenue197 181 
(1)