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Discontinued Operations | 3 Months Ended
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Mar. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations On December 30, 2024 (the “Closing Date”), an indirect wholly owned subsidiary of the Company (the “Seller”) completed the sale of 67% of the ownership interest in its business in Brazil (the “Disposal Group”) to a fund managed by an affiliate of Vinci Partners Investments Ltd. (the “Buyer”) (the “Brazil Sale Transaction”). Following the closing, the Brazil restaurants began operating as unconsolidated franchisees. The aggregate consideration paid to the Seller consists of 67% of the enterprise valuation of the Disposal Group in the amount of R$2.06 billion Brazilian Reais, which equals R$1.4 billion Brazilian Reais (approximately $225.3 million in U.S. Dollars based on the exchange rate on the Closing Date), subject to customary adjustments, and withholding for Brazilian taxes (the “Purchase Price”). On December 30, 2024 the Company received cash proceeds, net of withheld income taxes, of $103.9 million, in U.S. dollars based on the exchange rate on the Closing Date, representing 52% of the Purchase Price. The proceeds were applied to the Company’s revolving credit facility during the thirteen weeks ended March 30, 2025. The second installment payment, representing 48% of the Purchase Price, is due on the first anniversary of the Closing Date (based on the exchange rate on the date of payment) and will generate interest income based on the interbank deposit rate in Brazil until paid. During the thirteen weeks ended March 30, 2025 the Company recorded a pretax gain on the sale of the Disposal Group of $2.9 million within Net (loss) income from discontinued operations, net of tax in its Consolidated Statements of Operations and Comprehensive Income (Loss). The sale represents a strategic shift to a primarily franchised model for the Company’s international operations. The assets and liabilities of the Disposal Group were classified as held for sale on the Company’s Consolidated Balance Sheet as of December 29, 2024. For the thirteen weeks ended March 30, 2025 and March 31, 2024, all sales, direct costs and expenses and income taxes attributable to restaurants classified as discontinued operations have been aggregated to a single caption titled (Loss) income from discontinued operations, net of tax in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for all periods presented. As of the Closing Date, the fair value of the Company’s retained interest was $59.9 million based on the proportional enterprise valuation of the Disposal Group, adjusted for debt used by the Buyer to fund a portion of the Purchase Price and to be pushed down to the operating entity subsequent to the second installment payment. See Note 3 - Equity Method Investment for additional details regarding the Company’s retained interest in its Brazil operations. , in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) includes the following for the periods indicated:
| THIRTEEN WEEKS ENDED |  |  |  |
(dollars in thousands) | MARCH 30, 2025 |  | MARCH 31, 2024 |  |  |  |
Revenues | $ | — |  |  | $ | 132,810 |  |  |  |  |
Operating costs and expenses | — |  |  | 126,574 |  |  |  |  |
Gain on sale of Brazil business (1) | 2,903 |  |  | — |  |  |  |  |
Income from operations | 2,903 |  |  | 6,236 |  |  |  |  |
Provision for income taxes | 3,157 |  |  | 3,328 |  |  |  |  |
(Loss) income from discontinued operations, net of tax | $ | (254) |  |  | $ | 2,908 |  |  |  |  |
____________________ (1)Includes $1.6 million of foreign currency translation gains on contingent consideration assets and indemnification liabilities, as discussed below. Contingent Consideration Assets and Indemnification Liabilities - During the thirteen weeks ended March 30, 2025, the Company recognized contingent consideration assets of $29.3 million and indemnification liabilities of $6.9 million within Other assets, net and Other long-term liabilities, net, respectively, on the Company’s Consolidated Balance Sheet in connection with the Brazil Sale Transaction. As of March 30, 2025, the Company’s balance of contingent consideration assets and indemnification liabilities, which are denominated in Brazilian Reais, increased to $31.5 million and $7.5 million, respectively, as a result of fluctuations in foreign exchange rates. All future activity related to contingent consideration assets and indemnification liabilities, including foreign exchange gains and losses, will also be reflected in discontinued operations. Discontinued Operations

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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