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Segment Information | 9 Months Ended
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Sep. 25, 2022
Segment Reporting [Abstract] |
Segment Information | Segment Information We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and international operations. The domestic Company-owned restaurant segment consists of the operations of all domestic (“domestic” is defined as contiguous United States) Company-owned restaurants and derives its revenues principally from retail sales of pizza, Papadias, which are flatbread-style sandwiches, and side items, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages. The North America commissary segment consists of the operations of our regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to domestic Company-owned and franchised restaurants in the United States and Canada. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and collection of royalties from our franchisees located in the United States and Canada. The international segment principally consists of distribution sales to franchised Papa John’s restaurants located in the United Kingdom and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our international franchisees. International franchisees are defined as all franchise operations outside of the United States and Canada. All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as “all other,” which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Generally, we evaluate performance and allocate resources based on operating income and intercompany eliminations. Certain administrative and capital costs are allocated to segments based upon predetermined rates or estimated resource usage. We account for intercompany sales and transfers as if the sales or transfers were to third parties and eliminate the activity in consolidation. Our reportable segments are business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. No single external customer accounted for 10% or more of our consolidated revenues. Our segment information is as follows:
| Three Months Ended |  | Nine Months Ended
(In thousands) | September 25, 2022 |  | September 26, 2021 |  | September 25, 2022 |  | September 26, 2021
Revenues: |  |  |  |  |  |  |
Domestic Company-owned restaurants | $ | 166,050 |  | $ | 191,584 |  | $ | 536,226 |  | $ | 584,942
North America franchising | 33,712 |  | 31,933 |  | 102,897 |  | 97,123
North America commissaries | 216,115 |  | 189,224 |  | 645,177 |  | 560,743
International | 37,707 |  | 46,880 |  | 119,696 |  | 135,761
All others | 56,928 |  | 53,161 |  | 171,873 |  | 160,967
Total revenues | $ | 510,512 |  | $ | 512,782 |  | $ | 1,575,869 |  | $ | 1,539,536
Intersegment revenues: |  |  |  |  |  |  |
North America franchising | $ | 996 |  | $ | 1,037 |  | $ | 3,097 |  | $ | 3,138
North America commissaries | 51,330 |  | 53,454 |  | 162,591 |  | 158,952
All others | 15,562 |  | 18,522 |  | 50,830 |  | 56,613
Total intersegment revenues | $ | 67,888 |  | $ | 73,013 |  | $ | 216,518 |  | $ | 218,703
Operating income: |  |  |  |  |  |  |
Domestic Company-owned restaurants(a) | $ | 3,667 |  | $ | 9,480 |  | $ | 11,579 |  | $ | 40,165
North America franchising | 31,464 |  | 29,830 |  | 96,225 |  | 90,791
North America commissaries | 8,425 |  | 9,598 |  | 28,717 |  | 29,089
International(b) | 1,136 |  | 9,618 |  | 12,897 |  | 26,665
All others | 2,037 |  | 3,848 |  | 7,943 |  | 14,860
Unallocated corporate expenses(c) | (27,684) |  |  | (23,158) |  |  | (84,138) |  |  | (70,937) |
Elimination of intersegment (profits) losses | 416 |  |  | (639) |  | (423) |  |  | (557)
Total operating income | $ | 19,461 |  | $ | 38,577 |  | $ | 72,800 |  | $ | 130,076
Property and equipment, net: |  |  |  |  |  |  |
Domestic Company-owned restaurants | $ | 229,480 |  |  |  |  |  |
North America commissaries | 153,604 |  |  |  |  |  |
International | 14,601 |  |  |  |  |  |
All others | 122,927 |  |  |  |  |  |
Unallocated corporate assets | 246,006 |  |  |  |  |  |
Accumulated depreciation and amortization | (535,724) |  |  |  |  |  |  |
Total property and equipment, net | $ | 230,894 |  |  |  |  |  |
(a) | Includes a one-time, non-cash charge of $8.4 million associated with the refranchising of the Company’s ownership interest in a 90-restaurant joint venture, recorded as Refranchising and impairment loss for the nine months ended September 25, 2022. See Note 10 for additional information.
(b) | The three months ended September 25, 2022 includes a charge of $4.1 million related to the reserve of certain accounts and notes receivable and operating lease right-of-use assets impairment associated with the termination of a significant franchisee in the United Kingdom. The nine months ended September 25, 2022 also includes $3.5 million of one-time, non-cash reserves for certain accounts receivable and impairments of reacquired franchise rights. See Notes 2 and 10 for additional information.
(c) | Unallocated corporate expenses includes $10.0 million for certain legal settlements for the three months ended September 25, 2022. For the nine months ended September 25, 2022, Unallocated corporate expenses includes $13.9 million of one-time, non-cash reserves of certain notes receivable, $15.0 million for certain legal settlements (see Note 9 for more information), and $1.5 million of advisory fees and severance costs associated with the transition of certain executives. Unallocated corporate expense includes $2.2 million and $9.4 million of reorganization costs for the three and nine months ended September 26, 2021. See Notes 2 and 9 for additional information.
Disaggregation of Revenue In the following tables, revenues are disaggregated by major product/service line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands):
| Reportable Segments
| Three Months Ended September 25, 2022
Major Products/Services Lines | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales | $ | 166,050 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 166,050 |
Franchise royalties and fees | — |  |  | 34,708 |  |  | — |  |  | 11,619 |  |  | — |  |  | 46,327 |
Commissary sales | — |  |  | — |  |  | 267,445 |  |  | 19,116 |  |  | — |  |  | 286,561 |
Other revenues | — |  |  | — |  |  | — |  |  | 6,972 |  |  | 72,490 |  |  | 79,462 |
Eliminations | — |  |  | (996) |  |  | (51,330) |  |  | — |  |  | (15,562) |  |  | (67,888) |
Total segment revenues | $ | 166,050 |  |  | $ | 33,712 |  |  | $ | 216,115 |  |  | $ | 37,707 |  |  | $ | 56,928 |  |  | $ | 510,512 |
International other revenues(a) | — |  |  | — |  |  | — |  |  | (6,972) |  |  | 6,972 |  |  | — |
Total revenues | $ | 166,050 |  |  | $ | 33,712 |  |  | $ | 216,115 |  |  | $ | 30,735 |  |  | $ | 63,900 |  |  | $ | 510,512 |
| Reportable Segments
| Three Months Ended September 26, 2021
Major Products/Services Lines | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales | $ | 191,584 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 191,584 |
Franchise royalties and fees | — |  |  | 32,970 |  |  | — |  |  | 14,031 |  |  | — |  |  | 47,001 |
Commissary sales | — |  |  | — |  |  | 242,678 |  |  | 24,377 |  |  | — |  |  | 267,055 |
Other revenues | — |  |  | — |  |  | — |  |  | 8,472 |  |  | 71,683 |  |  | 80,155 |
Eliminations | — |  |  | (1,037) |  |  | (53,454) |  |  | — |  |  | (18,522) |  |  | (73,013) |
Total segment revenues | $ | 191,584 |  |  | $ | 31,933 |  |  | $ | 189,224 |  |  | $ | 46,880 |  |  | $ | 53,161 |  |  | $ | 512,782 |
International other revenues(a) | — |  |  | — |  |  | — |  |  | (8,472) |  |  | 8,472 |  |  | — |
Total revenues | $ | 191,584 |  |  | $ | 31,933 |  |  | $ | 189,224 |  |  | $ | 38,408 |  |  | $ | 61,633 |  |  | $ | 512,782 |
| Reportable Segments
| Nine Months Ended September 25, 2022
Major Products/Services Lines | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales | $ | 536,226 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 536,226 |
Franchise royalties and fees | — |  |  | 105,994 |  |  | — |  |  | 37,097 |  |  | — |  |  | 143,091 |
Commissary sales | — |  |  | — |  |  | 807,768 |  |  | 60,213 |  |  | — |  |  | 867,981 |
Other revenues | — |  |  | — |  |  | — |  |  | 22,386 |  |  | 222,703 |  |  | 245,089 |
Eliminations | — |  |  | (3,097) |  |  | (162,591) |  |  | — |  |  | (50,830) |  |  | (216,518) |
Total segment revenues | $ | 536,226 |  |  | $ | 102,897 |  |  | $ | 645,177 |  |  | $ | 119,696 |  |  | $ | 171,873 |  |  | $ | 1,575,869 |
International other revenues(a) | — |  |  | — |  |  | — |  |  | (22,386) |  |  | 22,386 |  |  | — |
Total revenues | $ | 536,226 |  |  | $ | 102,897 |  |  | $ | 645,177 |  |  | $ | 97,310 |  |  | $ | 194,259 |  |  | $ | 1,575,869 |
| Reportable Segments
| Nine Months Ended September 26, 2021
Major Products/Services Lines | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales | $ | 584,942 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 584,942 |
Franchise royalties and fees | — |  |  | 100,261 |  |  | — |  |  | 39,396 |  |  | — |  |  | 139,657 |
Commissary sales | — |  |  | — |  |  | 719,695 |  |  | 71,233 |  |  | — |  |  | 790,928 |
Other revenues | — |  |  | — |  |  | — |  |  | 25,132 |  |  | 217,580 |  |  | 242,712 |
Eliminations | — |  |  | (3,138) |  |  | (158,952) |  |  | — |  |  | (56,613) |  |  | (218,703) |
Total segment revenues | $ | 584,942 |  |  | $ | 97,123 |  |  | $ | 560,743 |  |  | $ | 135,761 |  |  | $ | 160,967 |  |  | $ | 1,539,536 |
International other revenues(a) | — |  |  | — |  |  | — |  |  | (25,132) |  |  | 25,132 |  |  | — |
Total revenues | $ | 584,942 |  |  | $ | 97,123 |  |  | $ | 560,743 |  |  | $ | 110,629 |  |  | $ | 186,099 |  |  | $ | 1,539,536 |
(a) | Other revenues as reported in the Condensed Consolidated Statements of Operations include $7.0 million and $22.4 million of revenue for the three and nine months ended September 25, 2022, respectively, and $8.5 million and $25.1 million for the three and nine months ended September 26, 2021, respectively, that are part of the international reporting segment. These amounts include marketing fund contributions and sublease rental income from international franchisees in the United Kingdom that provide no significant contribution to operating income but must be reported on a gross basis under accounting requirements. The related expenses for these Other revenues are reported in Other expenses in the Condensed Consolidated Statements of Operations.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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