LEASES

3 Months Ended

Mar. 26, 2023

As a result of the Company losing its emerging growth company status on December 25, 2022, the Company was required to adopt ASC 842, effective beginning on December 27, 2021. As a result, the amounts included in the Company’s condensed consolidated statement of operations represent the updated balances to the respective line items within previously filed quarterly statements’ condensed consolidated statement of operations. For the reasons described herein, the fiscal year 2022 quarterly information presented herein does not mirror the financial information included in our Quarterly Reports on Form 10-Q filed during fiscal year 2022. For the reasons described herein, the fiscal year-end 2022 as presented on the filed 2022 10-K conform to ASC 842.

The Company leases restaurants and corporate office space under various non-cancelable lease agreements that expire on various dates through 2033. Lease terms for restaurants generally include a base term of 10 years, with options to extend these leases for additional periods of 5 to 15 years.

The components of lease cost for the thirteen weeks ended March 26, 2023 and March 27, 2022 were as follows:


(dollar amounts in thousands)	Classification	March 26, 2023		March 27, 2022
Operating lease cost	Occupancy and related expense General and administrative expense Pre-opening costs	11,829		9,640
Variable lease cost	Occupancy and related expense General and administrative expense	2,612		2,023
Short term lease cost	Occupancy and related expense General and administrative expense	145		145
Sublease income	General and administrative expense	(178)		(178)
Total lease cost		$	14,408	$	11,630

As of March 26, 2023, future minimum lease payments for operating leases consisted of the following:


(dollar amounts in thousands)
2023			32,748
2024			52,260
2025			52,457
2026			51,329
2027			47,018
Thereafter			163,890
Total			399,702
Less: imputed interest			96,281
Total lease liabilities			303,421

As of March 26, 2023 and December 25, 2022 the Company had additional operating lease commitments of $22.5 million and $18.0 million, respectively, for non-cancelable leases without a possession date, which the Company anticipates will commence in fiscal year 2023 or early 2024. These nature of such lease commitments is consistent with the nature of the leases that the Company has executed thus far.

A summary of lease terms and discount rates for operating leases as of March 26, 2023 and December 25, 2022 is as follows:


	March 26, 2023		December 25, 2022
Weighted average remaining lease term (years):
Operating Leases	7.91		7.98
Weighted average discount rate:
Operating Leases	6.35	%	6.09	%

Supplemental cash flow information related to leases for the thirteen weeks ended March 26, 2023 and March 27, 2022:


	March 26, 2023		March 27, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases, net of lease incentives	$	12,789	$	8,930
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	10,532	$	8,697