LEASES

9 Months Ended

Sep. 24, 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.

The Company leases restaurants and corporate office space under various non-cancelable lease agreements that expire on various dates through 2038. 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 and thirty-nine weeks ended September 24, 2023 and September 25, 2022 were as follows:


		Thirteen weeks ended				Thirty-nine weeks ended
(dollar amounts in thousands)	Classification	September 24, 2023		September 25, 2022		September 24, 2023		September 25, 2022
Operating lease cost	Occupancy and related expense General and administrative expense Pre-opening costs	$	12,061	$	11,502	$	35,931	$	32,989
Variable lease cost	Occupancy and related expense General and administrative expense	2,904		1,680		8,237		4,982
Short term lease cost	Occupancy and related expense General and administrative expense	98		33		318		212
Sublease income	General and administrative expense	—		(186)		(356)		(597)
Total lease cost		$	15,063	$	13,029	$	44,130	$	37,586

As of September 24, 2023, future minimum lease payments for operating leases consisted of the following:


(dollar amounts in thousands)
2023	$	7,807
2024	54,059
2025	54,414
2026	53,317
2027	49,042
Thereafter	176,221
Total	$	394,860
Less: imputed interest	92,269
Total lease liabilities	$	302,591

As of September 24, 2023 and December 25, 2022 the Company had additional operating lease commitments of $21.5 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. The 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 September 24, 2023 and December 25, 2022 is as follows:


	September 24, 2023		December 25, 2022
Weighted average remaining lease term (years):
Operating Leases	7.56		7.98
Weighted average discount rate:
Operating Leases	6.48	%	6.09	%

Supplemental cash flow information related to leases for the thirty-nine weeks ended September 24, 2023 and September 25, 2022:


	September 24, 2023		September 25, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases, net of lease incentives	$	31,189	$	30,545
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	18,631	$	39,599