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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Lease Guarantees - The Company assigned its interest, and is contingently liable, under certain real estate leases. These leases have varying terms, the latest of which expires in 2032. As of December 31, 2023, the undiscounted payments the Company could be required to make in the event of non-payment by the primary lessees was approximately $19.7 million. The present value of these potential payments discounted at the Company’s incremental borrowing rate as of December 31, 2023 was approximately $15.0 million. In the event of default, the indemnity clauses in the Company’s purchase and sale agreements govern its ability to pursue and recover damages incurred. As of December 31, 2023 and December 25, 2022, the Company’s recorded contingent lease liability was $5.3 million and $6.2 million, respectively. Purchase Obligations - Purchase obligations were $196.8 million and $226.6 million as of December 31, 2023 and December 25, 2022, respectively. These purchase obligations are primarily due within three years, however commitments with various vendors extend through December 2030. Outstanding commitments consist primarily of inventory, fixtures and equipment and technology. In 2023, the Company purchased: (i) more than 95% of its U.S. beef raw materials from four beef suppliers that represent a significant portion of the total beef marketplace in the U.S and (ii) more than 80% of its Brazil pork raw materials from four pork suppliers that represent more than 45% of the total pork marketplace in Brazil. Litigation and Other Matters - The Company is subject to legal proceedings, claims and liabilities, such as liquor liability, slip and fall cases, wage and hour and other employment-related litigation, which arise in the ordinary course of business. A reserve is recorded when it is both: (i) probable that a loss has occurred and (ii) the amount of loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the reserve that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable. The Company’s legal proceedings range from cases brought by a single plaintiff to threatened class actions with many putative class members. While some matters pending against the Company specify the damages claimed by the plaintiff or class, many seek unspecified amounts or are at very early stages of the legal process. Even when the amount of damages claimed against the Company are stated, the claimed amount may be exaggerated, unsupported or unrelated to possible outcomes, and as such, are not meaningful indicators of the Company’s potential liability or financial exposure. As a result, some matters have not yet progressed sufficiently through discovery or development of important factual information and legal issues to enable the Company to estimate an amount of loss or a range of possible loss. The Company intends to defend itself in legal matters. Some of these matters may be covered, at least in part, by insurance if they exceed specified retention or deductible amounts. However, it is possible that claims may be denied by the Company’s insurance carriers, the Company may be required by its insurance carriers to contribute to the payment of claims, or the Company’s insurance coverage may not continue to be available on acceptable terms or in sufficient amounts. The Company records receivables from third party insurers when recovery has been determined to be probable. The Company believes that the ultimate determination of liability in connection with legal claims pending against the Company, if any, in excess of amounts already provided for such matters in the consolidated financial statements, will not have a material adverse effect on its business, annual results of operations, liquidity or financial position. However, it is possible that the Company’s business, results of operations, liquidity or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period. In recent years, certain subsidiaries of the Company were named in collective actions alleging violations of the Fair Labor Standards Act and state wage and hour laws. For these and other matters, the Company recorded reserves of $13.3 million and $15.1 million for certain of its outstanding legal proceedings as of December 31, 2023 and December 25, 2022, respectively, within Accrued and other current liabilities on its Consolidated Balance Sheets. While the Company believes that additional losses beyond these accruals are reasonably possible, it cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals. During 2023, 2022 and 2021, the Company recognized ($0.2) million, $9.4 million and $5.4 million, respectively, in Other restaurant operating expense in the Company’s Consolidated Statements of Operations and Comprehensive Income for certain legal reserves and settlements. Royalty Termination - On August 2, 2021, wholly-owned subsidiaries of the Company entered into the Purchase and Sale of Royalty Payment Stream and Termination of Royalty Agreement (the “Royalty Termination Agreement”) with the Carrabba’s Italian Grill founders (the “Carrabba’s Founders”), pursuant to which the Company’s obligation to pay future royalties on U.S. Carrabba’s Italian Grill restaurant sales and lump sum royalty fees on Carrabba’s Italian Grill (and Abbraccio) restaurants opened outside the U.S. was terminated. Upon execution of the Royalty Termination Agreement, the Company made a cash payment of $61.9 million to the Carrabba’s Founders, which was recorded in Other restaurant operating expense in its Consolidated Statements of Operations and Comprehensive Income during 2021. Insurance - As of December 31, 2023, the future undiscounted payments the Company expects for workers’ compensation, general liability and health insurance claims are as follows:
(dollars in thousands) |
2024 | $ | 19,689 |
2025 | 11,105 |
2026 | 7,546 |
2027 | 4,154 |
2028 | 2,285 |
Thereafter | 7,715 |
| $ | 52,494 |
The following is a reconciliation of the expected aggregate undiscounted reserves to the discounted reserves for insurance claims recognized on the Company’s Consolidated Balance Sheets as of the periods indicated:
(dollars in thousands) | DECEMBER 31, 2023 |  | DECEMBER 25, 2022
Undiscounted reserves | $ | 52,494 |  |  | $ | 55,364 |
Discount (1) | (6,568) |  |  | (6,299) |
Discounted reserves | $ | 45,926 |  |  | $ | 49,065 |
Discounted reserves recognized on the Company’s Consolidated Balance Sheets: |  |  |
Accrued and other current liabilities | $ | 19,310 |  |  | $ | 20,932 |
Other long-term liabilities, net | 26,616 |  |  | 28,133 |
| $ | 45,926 |  |  | $ | 49,065 |
____________________ (1) Discount rates of 5.13% and 4.47% were used for December 31, 2023 and December 25, 2022, respectively.

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