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Leases

9 Months Ended

Oct. 03, 2023

3. LEASES

We determine if a contract contains a lease at inception. Our material operating leases consist of restaurant locations and office space. U.S. GAAP requires that our leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date, and the lease term used in the evaluation includes the non-cancellable period for which we have the right to use the underlying asset, together with renewal option periods when the exercise of the renewal

option is reasonably certain and failure to exercise such option would result in an economic penalty. All of our restaurant and office space leases are classified as operating leases. We have elected to account for lease and non-lease components as a single lease component for office and beverage gas equipment. We do not have any finance leases.

Lease costs included in “Occupancy and operating” on the Consolidated Statements of Operations consisted of the following (in thousands):


	For the Thirteen Weeks Ended				For the Thirty-Nine Weeks Ended
	October 3, 2023		September 27, 2022		October 3, 2023		September 27, 2022
Lease cost	$	15,133	$	15,043	$	44,817	$	44,705
Variable lease cost		700		751		3,107		2,496
Total lease costs	$	15,833	$	15,794	$	47,924	$	47,201