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FAIR VALUE
 9 Months Ended
Sep. 28, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis:
Fair Value Measurements as of September 28, 2025Fair Value Measurements as of December 29, 2024
TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
(dollar amounts in thousands)
Contingent consideration5,908 — — 5,908 14,974 — — 14,974 

The fair value of the contingent consideration was determined based on significant inputs not observable in the market.

In connection with the Company’s acquisition of Spyce on September 7, 2021, the former equity holders of Spyce may receive up to $20 million (in the form of up to 714,285 additional shares of Class A common stock, calculated based on the initial offering price of the Company’s Class A common stock of $28.00 per share sold in the Company’s initial public offering (“IPO”) (the “Reference Price”)), contingent on the achievement of certain performance milestones between the closing date of the acquisition and June 30, 2026.
Additionally, as of the date of the achievement of any of the three milestones, if the Volume-Weighted Average Price of the Company’s Class A common stock as of such milestone achievement date (“VWAP Price”) is less than the Reference Price, then the Company shall pay to each former equity holder of Spyce, in respect of each share of Class A common stock issued to such holder upon the achievement of such milestone, an amount in cash equal to the delta between the Reference Price and the VWAP Price. The contingent consideration payable upon the achievement of the three milestones, was valued using the Monte Carlo method. The analysis considered, among other items, the equity value, the contractual terms of the Spyce merger agreement, potential liquidity event scenarios (prior to the IPO), the Company’s credit-adjusted discount rate, equity volatility, risk-free rate, and the probability that milestone targets required for issuance of shares under the contingent consideration will be achieved. During the fourth quarter of fiscal 2023, the first milestone was achieved, which resulted in former equity holders of Spyce being eligible to receive $6.0 million, which was paid during the thirty-nine weeks ended September 29, 2024. Of this $6.0 million, based on a VWAP Price of $10.20, $2.1 million was issued in the form of Class A common stock, and $3.9 million was paid in cash to the former Spyce equity holders. During the second quarter of fiscal 2025, the second milestone was achieved, which resulted in the former equity holders of Spyce being eligible to receive $7.0 million and which was paid during the thirty-nine weeks ended September 28, 2025. Of this $7.0 million, based on a VWAP Price of $19.40, $4.7 million was issued in the form of Class A common stock, and $2.3 million was paid in cash to the former Spyce Equity holders.

The initial fair value of the contingent consideration at the acquisition date was $16.4 million. Since the acquisition date, the cumulative payments related to the contingent consideration were $23.4 million as of September 28, 2025, of which $6.8 million was issued in the form of Class A common stock and $16.6 million was issued in cash. Payments up to the initial fair value of the contingent consideration were included within financing activities within the condensed consolidated statements of cash flows if made in cash, or within non-cash financing activities if made in shares. The second milestone payment, as detailed above, increased the cumulative payments related to the contingent consideration liability above the initial fair value; as such, the cash component of the second milestone payment was included within operating activities within the condensed consolidated statement of cash flows during the thirty-nine weeks ended September 28, 2025. Any future cash payments would be recognized within operating activities in the condensed consolidated statements of cash flows.

The fair value of the liability as of September 28, 2025 was $5.9 million, which was included in other current liabilities within the condensed consolidated balance sheets, as we expect to make the third and final milestone payment within one year from September 28, 2025. The contingent consideration as of December 29, 2024 was $15.0 million of which $9.7 million was included in other current liabilities and $5.3 million was included in contingent consideration liability within the consolidated balance sheets.

The following table provides a roll forward of the aggregate fair values of the Company’s contingent consideration, for which fair value is determined using Level 3 inputs.
(dollar amounts in thousands)
Contingent Consideration
Balance—December 29, 2024$14,974 
Milestone payment
(7,000)
Change in fair value
(2,066)
Balance—September 28, 2025$5,908 
The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen and thirty-nine weeks ended September 28, 2025 and September 29, 2024, reflecting certain property and equipment and operating leases for which an impairment loss was recognized during the corresponding periods within impairment and closure costs within the condensed consolidated statements of operations. For the thirteen weeks ended September 28, 2025, the Company recorded a non-cash impairment charge of $4.3 million associated with four store locations, which was recorded in impairment and closure costs within the condensed consolidated statements of operations. This entire $4.3 million impairment charge was related to property and equipment. For the thirty-nine weeks ended September 28, 2025, the Company recorded non-cash impairment charges of $9.6 million associated with nine store locations, two of which were subsequently closed during July 2025, which was recorded in impairment and closure costs within
the condensed consolidated statements of operations. Of the $9.6 million total non-cash impairment, $8.0 million was related to property and equipment, and $1.6 million was related to operating lease assets. During the thirteen and thirty-nine weeks ended September 29, 2024, the Company did not record any impairment charges.

Fair Value Measurements as of Measurement DateThirteen weeks ended September 28, 2025Thirty-nine weeks ended September 28, 2025
TotalLevel 1Level 2Level 3Impairment Losses
(dollar amounts in thousands)
Property and equipment, net
— — — — 4,311 7,996 
Operating lease assets(1)
2,697 — — 2,697 — 1,594 

(1) Pertains to certain operating lease assets for which an impairment loss of $1.6 million was recognized during the thirteen weeks ended June 28, 2025. To determine the fair value, the Company estimated the market rental values through the end of each lease and discounted such cash flows using a property specific discount rate of approximately 7.5% - 9.5%.

The fair value of these assets represents a Level 3 fair value measurement. Unobservable inputs include the discount rate, projected restaurant revenues and expenses, and sublease income if the Company is closing the restaurant.