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Segment Information (Tables) | 3 Months Ended
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Mar. 30, 2025
Segment Reporting [Abstract] |
Schedule of segment information | The tables below present our operating results by segment (in thousands). The significant expense categories and amounts presented in the tables below align with the segment-level information that is regularly provided to the CODM. A reconciliation to Company results is included in the following section.
|  | Three Months Ended March 30, 2025
|  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | Total
Revenues from external customers |  | $ | 170,795 |  | $ | 35,552 |  | $ | 212,918 |  | $ | 39,111 |  | $ | 458,376
Intersegment revenues |  | — |  | 1,259 |  | 51,458 |  | — |  | 52,717
Segment revenue |  | $ | 170,795 |  | $ | 36,811 |  | $ | 264,376 |  | $ | 39,111 |  | $ | 511,093
Less segment expenses (a): |  |  |  |  |  |  |  |  |  |
COS - Product Costs |  | $ | 52,137 |  | $ | — |  | $ | 189,469 |  | $ | 11,146 |  | $ | 252,752
COS - Salaries & Benefits |  | 57,976 |  | — |  | 29,982 |  | 1,568 |  | 89,526
COS - Other (d) |  | 44,900 |  | — |  | 16,280 |  | 7,071 |  | 68,251
General & Administrative |  | 10,750 |  | 9,563 |  | 9,292 |  | 8,844 |  | 38,449
Other Segment Expenses (c) |  | — |  | — |  | — |  | 5,101 |  | 5,101
Segment adjusted EBITDA |  | $ | 5,032 |  |  | $ | 27,248 |  |  | $ | 19,353 |  |  | $ | 5,381 |  |  | $ | 57,014 |
|  | Three Months Ended March 31, 2024
|  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | Total
Revenues from external customers |  | $ | 176,224 |  | $ | 35,697 |  | $ | 203,287 |  | $ | 46,673 |  | $ | 461,881
Intersegment revenues |  | — |  | 1,049 |  | 49,267 |  | — |  | 50,316
Segment revenue |  | $ | 176,224 |  | $ | 36,746 |  | $ | 252,554 |  | $ | 46,673 |  | $ | 512,197
Less segment expenses (a): |  |  |  |  |  |  |  |  |  |
COS - Product Costs |  | $ | 50,528 |  | $ | — |  | $ | 182,124 |  | $ | 12,494 |  | $ | 245,146
COS - Salaries & Benefits |  | 57,471 |  | — |  | 29,581 |  | 5,480 |  | 92,532
COS - Other (d) |  | 43,107 |  | — |  | 14,582 |  | 12,881 |  | 70,570
General & Administrative (b) |  | 10,180 |  | 8,238 |  | 9,091 |  | 8,739 |  | 36,248
Other Segment Expenses (c) |  | — |  | — |  | — |  | 2,886 |  | 2,886
Segment adjusted EBITDA |  | $ | 14,938 |  |  | $ | 28,508 |  |  | $ | 17,176 |  |  | $ | 4,193 |  |  | $ | 64,815 |
___________________________________ (a) Segment expenses exclude Depreciation and amortization, Stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). (b) The Company prospectively adjusted for updates in internal cost allocation methodologies in our Annual Report on Form 10-K for the year ended December 29, 2024, which increased the amount of internal general and administrative expenses allocated to the segments from Unallocated corporate expenses. These methodology updates have been reflected in the 2024 quarterly results. Refer to Note 23 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2024 for additional information. (c) Other Segment Expenses represent all operating expenses that are not included in the significant segment expense categories. The components of Other Segment Expense are advertising fund expenses and other operating expenses. (d) We have included “COS - Other” as a significant expense category beginning in the first quarter of 2025, consistent with the segment expense categories regularly provided to the CODM when evaluating segment performance and allocating resources. “COS - Other” includes delivery expenses, Company-owned restaurant advertising costs, insurance, rent, aggregator fees, and other costs of sales. For comparability purposes, we have recast quarterly 2024 segment results to include this expense category. Reconciliation of Segment Results to Company Results The following table reconciles Total Revenues from our segments to Total Revenues and Total Adjusted EBITDA from our segments to Income before income taxes (in thousands):
|  | Three Months Ended |  |
|  | March 30, 2025 |  | March 31, 2024 |  |  |  |
Total Segment Revenue |  | $ | 511,093 |  |  | $ | 512,197 |  |  |  |  |
All Other Revenue (a) |  | 74,331 |  |  | 65,207 |  |  |  |  |
Elimination of intersegment revenue |  | (67,115) |  |  | (63,488) |  |  |  |  |
Total Revenue |  | $ | 518,309 |  |  | $ | 513,916 |  |  |  |  |
|  | Three Months Ended |  |
|  | March 30, 2025 |  | March 31, 2024 |  |  |  |
Total Segment adjusted EBITDA |  | $ | 57,014 |  |  | $ | 64,815 |  |  |  |  |
All Other adjusted EBITDA (a) |  | 10,164 |  |  | 6,898 |  |  |  |  |
Unallocated corporate expenses, adjusted (b) |  | (17,554) |  |  | (11,148) |  |  |  |  |
Elimination of Intersegment profit (loss) |  | — |  |  | — |  |  |  |  |
Other income/(expense) adjustments to reconcile to income before income before income taxes (c) |  | (25,659) |  |  | (26,847) |  |  |  |  |
Net interest expense |  | (10,079) |  |  | (11,063) |  |  |  |  |
Income before income taxes |  | $ | 13,886 |  |  | $ | 22,655 |  |  |  |  |
___________________________________ (a) As noted in the commentary above, All Other revenue and adjusted EBITDA is derived from business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, including: franchise contributions to marketing funds and information systems and related services used in restaurant operations. (b) Unallocated corporate expenses represent administrative fees incurred by the restaurant support centers, including: information systems and related services, corporate salaries and bonuses, and other corporate costs. These expenses are adjusted for depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). (c) Other income/(expense) adjustments represent Depreciation and amortization, Stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. As such, management excludes these items from the evaluation of adjusted EBITDA. For the periods above, the adjustments include:
|  | Three Months Ended |  |
(in thousands) |  | March 30, 2025 |  | March 31, 2024 |  |  |  |
Depreciation and amortization |  | $ | 18,343 |  |  | $ | 17,674 |  |  |  |  |
International restructuring costs (see Note 9) |  | 2,180 |  |  | 9,543 |  |  |  |  |
Net expenses due to natural disasters |  | 892 |  |  | — |  |  |  |  |
Strategic initiative costs |  | 575 |  |  | — |  |  |  |  |
Stock-based compensation expense |  | 3,669 |  |  | (370) |  |  |  |  |
Other (income)/expense adjustments |  | $ | 25,659 |  |  | $ | 26,847 |  |  |  |  |
Schedule of revenue disaggregated by major product line | 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):
|  | Three Months Ended March 30, 2025
|  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All Other |  | Elimination of Intersegment Revenue |  | Total
Company-owned restaurant sales |  | $ | 170,795 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,086 |  |  | $ | — |  |  | $ | — |  |  | $ | 173,881 |
Franchise royalties and fees |  | — |  |  | 36,811 |  |  | — |  |  | 12,504 |  |  | — |  |  | (1,259) |  |  | 48,056 |
Commissary sales |  | — |  |  | — |  |  | 264,376 |  |  | 16,022 |  |  | — |  |  | (51,457) |  |  | 228,941 |
Other revenues |  | — |  |  | — |  |  | — |  |  | 3,284 |  |  | 25,078 |  |  | (4,605) |  |  | 23,757 |
Advertising funds revenue |  | — |  |  | — |  |  | — |  |  | 4,215 |  |  | 49,253 |  |  | (9,794) |  |  | 43,674 |
Total revenues |  | $ | 170,795 |  |  | $ | 36,811 |  |  | $ | 264,376 |  |  | $ | 39,111 |  |  | $ | 74,331 |  |  | $ | (67,115) |  |  | $ | 518,309 |
|  | Three Months Ended March 31, 2024
|  | Domestic Company-owned restaurants |  | North America franchising |  | North America commissaries |  | International |  | All Other |  | Elimination of Intersegment Revenue |  | Total
Company-owned restaurant sales |  | $ | 176,224 |  |  | $ | — |  |  | $ | — |  |  | $ | 15,027 |  |  | $ | — |  |  | $ | — |  |  | $ | 191,251 |
Franchise royalties and fees |  | — |  |  | 36,746 |  |  | — |  |  | 11,456 |  |  | — |  |  | (1,049) |  |  | 47,153 |
Commissary sales |  | — |  |  | — |  |  | 252,554 |  |  | 14,225 |  |  | — |  |  | (49,267) |  |  | 217,512 |
Other revenues |  | — |  |  | — |  |  | — |  |  | 3,064 |  |  | 21,524 |  |  | (3,653) |  |  | 20,935 |
Advertising funds revenue |  | — |  |  | — |  |  | — |  |  | 2,901 |  |  | 43,683 |  |  | (9,519) |  |  | 37,065 |
Total revenues |  | $ | 176,224 |  |  | $ | 36,746 |  |  | $ | 252,554 |  |  | $ | 46,673 |  |  | $ | 65,207 |  |  | $ | (63,488) |  |  | $ | 513,916 |

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