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Segment Information | 9 Months Ended
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Sep. 29, 2024
Segment Reporting [Abstract] |
Segment Information | 12. 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 Company-owned restaurants and derives its revenues principally from retail sales of pizza, Papadias, and side items, including breadsticks, Papa Bites, cheesesticks, boneless chicken wings and bone-in chicken wings, dessert items and canned or bottled beverages. 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 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 International segment consists of the operations of all Company-owned restaurants located in the UK, as well as distribution sales to franchised Papa Johns restaurants located in the UK 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. 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 information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms, as well as franchise contributions to marketing funds. Generally, we evaluate performance and allocate resources based on operating income. 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. The following tables present our segment information.
|  | Three Months Ended |  | Nine Months Ended
(In thousands) |  | September 29, 2024 |  | September 24, 2023 |  | September 29, 2024 |  | September 24, 2023
Revenues: |  |  |  |  |  |  |  |
Domestic Company-owned restaurants |  | $ | 168,672 |  | $ | 177,195 |  | $ | 518,103 |  | $ | 532,841
North America franchising |  | 33,831 |  | 35,041 |  | 103,937 |  | 105,824
North America commissaries |  | 210,389 |  | 204,887 |  | 611,873 |  | 624,433
International |  | 39,098 |  | 48,481 |  | 132,318 |  | 128,539
All others |  | 54,817 |  | 57,208 |  | 162,386 |  | 172,754
Total revenues |  | $ | 506,807 |  | $ | 522,812 |  | $ | 1,528,617 |  | $ | 1,564,391
Intersegment revenues: |  |  |  |  |  |  |  |
North America franchising |  | $ | 1,011 |  | $ | 1,040 |  | $ | 3,101 |  | $ | 3,117
North America commissaries |  | 52,063 |  | 51,237 |  | 151,633 |  | 154,640
All others |  | 13,472 |  | 16,180 |  | 40,422 |  | 49,363
Total intersegment revenues |  | $ | 66,546 |  | $ | 68,457 |  | $ | 195,156 |  | $ | 207,120
Operating income: |  |  |  |  |  |  |  |
Domestic Company-owned restaurants (a) |  | $ | (1,748) |  | $ | 6,147 |  | $ | 13,388 |  | $ | 19,438
North America franchising |  | 31,865 |  | 32,234 |  | 97,985 |  | 97,745
North America commissaries (b) |  | 53,599 |  | 10,691 |  | 77,337 |  | 31,818
International (c) |  | 42 |  | 2,270 |  | (8,612) |  | 13,265
All others |  | 2,834 |  | 2,379 |  | 8,202 |  | 6,879
Unallocated corporate expenses (d) |  | (21,106) |  |  | (20,792) |  |  | (60,346) |  |  | (63,859) |
Elimination of intersegment (profits) losses |  | (257) |  |  | (1,061) |  | (781) |  |  | (710)
Total operating income |  | $ | 65,229 |  | $ | 31,868 |  | $ | 127,173 |  | $ | 104,576
Property and equipment, net: |  |  |  |  |  |  |  |
Domestic Company-owned restaurants |  | $ | 265,002 |  |  |  |  |  |
North America commissaries |  | 150,527 |  |  |  |  |  |
International |  | 26,902 |  |  |  |  |  |
All others |  | 140,900 |  |  |  |  |  |
Unallocated corporate assets |  | 248,855 |  |  |  |  |  |
Accumulated depreciation and amortization |  | (565,678) |  |  |  |  |  |  |
Total property and equipment, net |  | $ | 266,508 |  |  |  |  |  |
___________________________________ (a) The three and nine months ended September 29, 2024 includes $1.5 million and $5.5 million, respectively, of non-cash impairment and remeasurement charges related primarily to fixed and intangible assets from the refranchising of 15 Domestic restaurants. See “Note 11. Divestitures”. (b) The three and nine months ended September 29, 2024 includes $41.3 million pre-tax gain on sale of Texas and Florida QC Center properties, net of transaction costs. See “Note 11. Divestitures”. (c) The three and nine months ended September 29, 2024 includes $3.9 million and $19.5 million, respectively, of costs related to the International Transformation Plan. See “Note 9. Restructuring” for additional information. The three and nine months ended September 24, 2023 includes $1.2 million and $2.5 million of costs associated with repositioning the UK portfolio as well as transaction costs related to the acquisition of restaurants from franchisees. (d) The nine months ended September 24, 2023 includes $2.0 million of severance and related costs associated with the transition of certain executives. The three and nine months ended September 24, 2023 includes $0.6 million for certain legal settlements. 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 29, 2024
Major Products/Services Lines |  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales |  | $ | 168,672 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,425 |  |  | $ | — |  |  | $ | 171,097 |
Franchise royalties and fees |  | — |  |  | 34,842 |  |  | — |  |  | 11,999 |  |  | — |  |  | 46,841 |
Commissary sales |  | — |  |  | — |  |  | 262,452 |  |  | 18,600 |  |  | — |  |  | 281,052 |
Other revenues |  | — |  |  | — |  |  | — |  |  | 6,074 |  |  | 68,289 |  |  | 74,363 |
Eliminations |  | — |  |  | (1,011) |  |  | (52,063) |  |  | — |  |  | (13,472) |  |  | (66,546) |
Total segment revenues |  | 168,672 |  |  | 33,831 |  |  | 210,389 |  |  | 39,098 |  |  | 54,817 |  |  | 506,807 |
International other revenues (a) |  | — |  |  | — |  |  | — |  |  | (6,074) |  |  | 6,074 |  |  | — |
Total revenues |  | $ | 168,672 |  |  | $ | 33,831 |  |  | $ | 210,389 |  |  | $ | 33,024 |  |  | $ | 60,891 |  |  | $ | 506,807 |
|  | Reportable Segments
|  | Three Months Ended September 24, 2023
Major Products/Services Lines |  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales |  | $ | 177,195 |  |  | $ | — |  |  | $ | — |  |  | $ | 14,013 |  |  | $ | — |  |  | $ | 191,208 |
Franchise royalties and fees |  | — |  |  | 36,081 |  |  | — |  |  | 12,219 |  |  | — |  |  | 48,300 |
Commissary sales |  | — |  |  | — |  |  | 256,124 |  |  | 16,695 |  |  | — |  |  | 272,819 |
Other revenues |  | — |  |  | — |  |  | — |  |  | 5,554 |  |  | 73,388 |  |  | 78,942 |
Eliminations |  | — |  |  | (1,040) |  |  | (51,237) |  |  | — |  |  | (16,180) |  |  | (68,457) |
Total segment revenues |  | 177,195 |  |  | 35,041 |  |  | 204,887 |  |  | 48,481 |  |  | 57,208 |  |  | 522,812 |
International other revenues (a) |  | — |  |  | — |  |  | — |  |  | (5,554) |  |  | 5,554 |  |  | — |
Total revenues |  | $ | 177,195 |  |  | $ | 35,041 |  |  | $ | 204,887 |  |  | $ | 42,927 |  |  | $ | 62,762 |  |  | $ | 522,812 |
|  | Reportable Segments
|  | Nine Months Ended September 29, 2024
Major Products/Services Lines |  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales |  | $ | 518,103 |  |  | $ | — |  |  | $ | — |  |  | $ | 28,885 |  |  | $ | — |  |  | $ | 546,988 |
Franchise royalties and fees |  | — |  |  | 107,038 |  |  | — |  |  | 35,598 |  |  | — |  |  | 142,636 |
Commissary sales |  | — |  |  | — |  |  | 763,506 |  |  | 48,950 |  |  | — |  |  | 812,456 |
Other revenues |  | — |  |  | — |  |  | — |  |  | 18,885 |  |  | 202,808 |  |  | 221,693 |
Eliminations |  | — |  |  | (3,101) |  |  | (151,633) |  |  | — |  |  | (40,422) |  |  | (195,156) |
Total segment revenues |  | 518,103 |  |  | 103,937 |  |  | 611,873 |  |  | 132,318 |  |  | 162,386 |  |  | 1,528,617 |
International other revenues (a) |  | — |  |  | — |  |  | — |  |  | (18,885) |  |  | 18,885 |  |  | — |
Total revenues |  | $ | 518,103 |  |  | $ | 103,937 |  |  | $ | 611,873 |  |  | $ | 113,433 |  |  | $ | 181,271 |  |  | $ | 1,528,617 |
|  | Reportable Segments
|  | Nine Months Ended September 24, 2023
Major Products/Services Lines |  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All others |  | Total
Company-owned restaurant sales |  | $ | 532,841 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,031 |  |  | $ | — |  |  | $ | 549,872 |
Franchise royalties and fees |  | — |  |  | 108,941 |  |  | — |  |  | 36,906 |  |  | — |  |  | 145,847 |
Commissary sales |  | — |  |  | — |  |  | 779,073 |  |  | 55,061 |  |  | — |  |  | 834,134 |
Other revenues |  | — |  |  | — |  |  | — |  |  | 19,541 |  |  | 222,117 |  |  | 241,658 |
Eliminations |  | — |  |  | (3,117) |  |  | (154,640) |  |  | — |  |  | (49,363) |  |  | (207,120) |
Total segment revenues |  | 532,841 |  |  | 105,824 |  |  | 624,433 |  |  | 128,539 |  |  | 172,754 |  |  | 1,564,391 |
International other revenues (a) |  | — |  |  | — |  |  | — |  |  | (19,541) |  |  | 19,541 |  |  | — |
Total revenues |  | $ | 532,841 |  |  | $ | 105,824 |  |  | $ | 624,433 |  |  | $ | 108,998 |  |  | $ | 192,295 |  |  | $ | 1,564,391 |
___________________________________ (a) Other revenues as reported in the Condensed Consolidated Statements of Operations include $6.1 million and $18.9 million of revenues for the three and nine months ended September 29, 2024, respectively, and $5.6 million and $19.5 million of revenues for the three and nine months ended September 24, 2023, 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 income before income taxes 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. 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