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Leases

12 Months Ended

Sep. 28, 2025

Leases [Abstract]

Leases

LEASES

Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance, and common area maintenance, which are excluded from the measurement of the lease liability. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”

Company as lessee — Leased assets and liabilities consisted of the following as of September 28, 2025 and September 29, 2024 (in thousands):

			September 28, 2025						September 29, 2024
Assets:
Operating lease ROU assets			$	1,371,454					$	1,410,083
Finance lease ROU assets (1)			126						416
Total ROU assets			$	1,371,580					$	1,410,499
Liabilities:
Current operating lease liabilities			$	159,267					$	162,017
Current finance lease liabilities (2)			208						602
Long-term operating lease liabilities			1,259,577						1,286,415
Long-term finance lease liabilities (2)			—						—
Total lease liabilities			$	1,419,052					$	1,449,034

________________________

(1)Included in “Property and equipment, net” on our consolidated balance sheets.

(2)Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our consolidated balance sheets.

The following table presents the components of our lease costs in fiscal 2025, 2024, and 2023 (in thousands):

			2025						2024						2023
Lease costs:
Finance lease cost:
Amortization of ROU assets (1)			$	453					$	492					$	691
Interest on lease liabilities (2)			22						68						55
Operating lease cost (3)			244,644						243,488						240,153
Short-term lease cost (3)			529						195						730
Variable lease cost (3)(4)			55,751						51,374						50,448
			$	301,399					$	295,617					$	292,077

________________________

(1)Included in “Depreciation and amortization” in our consolidated statements of earnings.

(2)Included in “Interest expense, net” in our consolidated statements of earnings.

(3)Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other,” respectively, in our consolidated statements of earnings. For our closed restaurants, these costs are included in “Other operating expense, net” and all other costs are included in “Selling, general and administrative expenses.”

(4)Includes $44.2 million, $41.0 million, and $39.9 million in 2025, 2024, and 2023, respectively, of property taxes and common area maintenance costs which are reimbursed by sub-lessees.

The following table presents supplemental information related to leases:

			September 28, 2025						September 29, 2024
Weighted-average remaining lease term (in years):
Finance leases			0.2						0.8
Operating leases			11.2						11.1
Weighted-average discount rate:
Finance leases			5.7		%				7.0		%
Operating leases			6.1		%				5.9		%

The following table presents as of September 28, 2025, the annual maturities of our lease liabilities (in thousands):

			Finance Leases						Operating Leases
Fiscal year:
2026			$	214					$	238,490
2027			—						239,965
2028			—						197,994
2029			—						160,333
2030			—						151,714
Thereafter			—						1,027,497
Total future lease payments (1)			$	214					$	2,015,993
Less: imputed interest			(6)						(597,149)
Present value of lease liabilities			$	208					$	1,418,844
Less current portion			(208)						(159,267)
Long-term lease obligations			$	—					$	1,259,577

________________________

(1)Total future lease payments include non-cancellable commitments of $0.2 million for finance leases and $1,303.7 million for operating leases.

Assets recorded under finance leases are included in property and equipment, and consisted of the following at each fiscal year-end (in thousands):

			2025						2024
Buildings			$	—					$	—
Equipment			5,549						6,003
Less accumulated amortization			(5,423)						(5,587)
			$	126					$	416

The following table includes supplemental cash flow and non-cash information related to our lessee leases (in thousands):

			2025						2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	240,732					$	218,916
Operating cash flows from financing leases			$	22					$	68
Financing cash flows from financing leases			$	583					$	617
Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets:
Right-of-use assets obtained in exchange for new operating lease obligations			$	143,795					$	191,923
Right-of-use assets obtained in exchange for new financing lease obligations			$	—					$	—

Sale and leaseback transactions — In fiscal 2025, there were no sale and leaseback transactions.

In fiscal 2024, we sold one restaurant property in a sale and leaseback transaction for net proceeds of $1.7 million, and recorded a total loss of less than $0.1 million. The lease has been accounted for as an operating lease and contains an initial term of 20 years.

In fiscal 2023, we sold one restaurant properties in sale and leaseback transactions for net proceeds of $3.7 million, and recorded total losses of $0.1 million. The leases have been accounted for as operating leases and contain initial terms of 16 years and 20 years.

Company as lessor — The following table presents rental income (in thousands):

			2025																		2024
			Owned Properties						Leased Properties						Total						Owned Properties						Leased Properties						Total
Operating lease income - franchise			$	16,859					$	245,062					$	261,921					$	18,301					$	242,111					$	260,412
Variable lease income - franchise			12,467						92,888						105,355						12,522						100,903						113,425
Amortization of sublease assets and liabilities, net			—						1,367						1,367						—						1,591						1,591
Franchise rental revenues			$	29,326					$	339,317					$	368,643					$	30,823					$	344,605					$	375,428
Operating lease income - closed restaurants and other (1)			$	223					$	8,147					$	8,370					$	31					$	7,662					$	7,693

________________________

(1)Primarily relates to closed restaurant properties included in “Other operating expense, net” in our consolidated statements of earnings.

The following table presents as of September 28, 2025, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

			September 28, 2025
Fiscal year:
2026			$	260,867
2027			261,171
2028			216,010
2029			171,837
2030			165,455
Thereafter			1,128,479
Total minimum rental receipts			$	2,203,819

Assets held for lease and included in property and equipment consisted of the following at each fiscal year-end (in thousands):

			September 28, 2025						September 29, 2024
Land			$	66,796					$	71,130
Buildings			789,797						763,697
Equipment			1,727						716
			858,320						835,543
Less accumulated depreciation			(704,564)						(669,459)
			$	153,756					$	166,084

Leases

LEASES

Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance, and common area maintenance, which are excluded from the measurement of the lease liability. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”

Company as lessee — Leased assets and liabilities consisted of the following as of September 28, 2025 and September 29, 2024 (in thousands):

			September 28, 2025						September 29, 2024
Assets:
Operating lease ROU assets			$	1,371,454					$	1,410,083
Finance lease ROU assets (1)			126						416
Total ROU assets			$	1,371,580					$	1,410,499
Liabilities:
Current operating lease liabilities			$	159,267					$	162,017
Current finance lease liabilities (2)			208						602
Long-term operating lease liabilities			1,259,577						1,286,415
Long-term finance lease liabilities (2)			—						—
Total lease liabilities			$	1,419,052					$	1,449,034

________________________

(1)Included in “Property and equipment, net” on our consolidated balance sheets.

(2)Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our consolidated balance sheets.

The following table presents the components of our lease costs in fiscal 2025, 2024, and 2023 (in thousands):

			2025						2024						2023
Lease costs:
Finance lease cost:
Amortization of ROU assets (1)			$	453					$	492					$	691
Interest on lease liabilities (2)			22						68						55
Operating lease cost (3)			244,644						243,488						240,153
Short-term lease cost (3)			529						195						730
Variable lease cost (3)(4)			55,751						51,374						50,448
			$	301,399					$	295,617					$	292,077

________________________

(1)Included in “Depreciation and amortization” in our consolidated statements of earnings.

(2)Included in “Interest expense, net” in our consolidated statements of earnings.

(3)Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other,” respectively, in our consolidated statements of earnings. For our closed restaurants, these costs are included in “Other operating expense, net” and all other costs are included in “Selling, general and administrative expenses.”

(4)Includes $44.2 million, $41.0 million, and $39.9 million in 2025, 2024, and 2023, respectively, of property taxes and common area maintenance costs which are reimbursed by sub-lessees.

The following table presents supplemental information related to leases:

			September 28, 2025						September 29, 2024
Weighted-average remaining lease term (in years):
Finance leases			0.2						0.8
Operating leases			11.2						11.1
Weighted-average discount rate:
Finance leases			5.7		%				7.0		%
Operating leases			6.1		%				5.9		%

The following table presents as of September 28, 2025, the annual maturities of our lease liabilities (in thousands):

			Finance Leases						Operating Leases
Fiscal year:
2026			$	214					$	238,490
2027			—						239,965
2028			—						197,994
2029			—						160,333
2030			—						151,714
Thereafter			—						1,027,497
Total future lease payments (1)			$	214					$	2,015,993
Less: imputed interest			(6)						(597,149)
Present value of lease liabilities			$	208					$	1,418,844
Less current portion			(208)						(159,267)
Long-term lease obligations			$	—					$	1,259,577

________________________

(1)Total future lease payments include non-cancellable commitments of $0.2 million for finance leases and $1,303.7 million for operating leases.

Assets recorded under finance leases are included in property and equipment, and consisted of the following at each fiscal year-end (in thousands):

			2025						2024
Buildings			$	—					$	—
Equipment			5,549						6,003
Less accumulated amortization			(5,423)						(5,587)
			$	126					$	416

The following table includes supplemental cash flow and non-cash information related to our lessee leases (in thousands):

			2025						2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	240,732					$	218,916
Operating cash flows from financing leases			$	22					$	68
Financing cash flows from financing leases			$	583					$	617
Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets:
Right-of-use assets obtained in exchange for new operating lease obligations			$	143,795					$	191,923
Right-of-use assets obtained in exchange for new financing lease obligations			$	—					$	—

Sale and leaseback transactions — In fiscal 2025, there were no sale and leaseback transactions.

In fiscal 2024, we sold one restaurant property in a sale and leaseback transaction for net proceeds of $1.7 million, and recorded a total loss of less than $0.1 million. The lease has been accounted for as an operating lease and contains an initial term of 20 years.

In fiscal 2023, we sold one restaurant properties in sale and leaseback transactions for net proceeds of $3.7 million, and recorded total losses of $0.1 million. The leases have been accounted for as operating leases and contain initial terms of 16 years and 20 years.

Company as lessor — The following table presents rental income (in thousands):

			2025																		2024
			Owned Properties						Leased Properties						Total						Owned Properties						Leased Properties						Total
Operating lease income - franchise			$	16,859					$	245,062					$	261,921					$	18,301					$	242,111					$	260,412
Variable lease income - franchise			12,467						92,888						105,355						12,522						100,903						113,425
Amortization of sublease assets and liabilities, net			—						1,367						1,367						—						1,591						1,591
Franchise rental revenues			$	29,326					$	339,317					$	368,643					$	30,823					$	344,605					$	375,428
Operating lease income - closed restaurants and other (1)			$	223					$	8,147					$	8,370					$	31					$	7,662					$	7,693

________________________

(1)Primarily relates to closed restaurant properties included in “Other operating expense, net” in our consolidated statements of earnings.

The following table presents as of September 28, 2025, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

			September 28, 2025
Fiscal year:
2026			$	260,867
2027			261,171
2028			216,010
2029			171,837
2030			165,455
Thereafter			1,128,479
Total minimum rental receipts			$	2,203,819

Assets held for lease and included in property and equipment consisted of the following at each fiscal year-end (in thousands):

			September 28, 2025						September 29, 2024
Land			$	66,796					$	71,130
Buildings			789,797						763,697
Equipment			1,727						716
			858,320						835,543
Less accumulated depreciation			(704,564)						(669,459)
			$	153,756					$	166,084

Leases

LEASES

Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance, and common area maintenance, which are excluded from the measurement of the lease liability. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”

Company as lessee — Leased assets and liabilities consisted of the following as of September 28, 2025 and September 29, 2024 (in thousands):

			September 28, 2025						September 29, 2024
Assets:
Operating lease ROU assets			$	1,371,454					$	1,410,083
Finance lease ROU assets (1)			126						416
Total ROU assets			$	1,371,580					$	1,410,499
Liabilities:
Current operating lease liabilities			$	159,267					$	162,017
Current finance lease liabilities (2)			208						602
Long-term operating lease liabilities			1,259,577						1,286,415
Long-term finance lease liabilities (2)			—						—
Total lease liabilities			$	1,419,052					$	1,449,034

________________________

(1)Included in “Property and equipment, net” on our consolidated balance sheets.

(2)Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our consolidated balance sheets.

The following table presents the components of our lease costs in fiscal 2025, 2024, and 2023 (in thousands):

			2025						2024						2023
Lease costs:
Finance lease cost:
Amortization of ROU assets (1)			$	453					$	492					$	691
Interest on lease liabilities (2)			22						68						55
Operating lease cost (3)			244,644						243,488						240,153
Short-term lease cost (3)			529						195						730
Variable lease cost (3)(4)			55,751						51,374						50,448
			$	301,399					$	295,617					$	292,077

________________________

(1)Included in “Depreciation and amortization” in our consolidated statements of earnings.

(2)Included in “Interest expense, net” in our consolidated statements of earnings.

(3)Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other,” respectively, in our consolidated statements of earnings. For our closed restaurants, these costs are included in “Other operating expense, net” and all other costs are included in “Selling, general and administrative expenses.”

(4)Includes $44.2 million, $41.0 million, and $39.9 million in 2025, 2024, and 2023, respectively, of property taxes and common area maintenance costs which are reimbursed by sub-lessees.

The following table presents supplemental information related to leases:

			September 28, 2025						September 29, 2024
Weighted-average remaining lease term (in years):
Finance leases			0.2						0.8
Operating leases			11.2						11.1
Weighted-average discount rate:
Finance leases			5.7		%				7.0		%
Operating leases			6.1		%				5.9		%

The following table presents as of September 28, 2025, the annual maturities of our lease liabilities (in thousands):

			Finance Leases						Operating Leases
Fiscal year:
2026			$	214					$	238,490
2027			—						239,965
2028			—						197,994
2029			—						160,333
2030			—						151,714
Thereafter			—						1,027,497
Total future lease payments (1)			$	214					$	2,015,993
Less: imputed interest			(6)						(597,149)
Present value of lease liabilities			$	208					$	1,418,844
Less current portion			(208)						(159,267)
Long-term lease obligations			$	—					$	1,259,577

________________________

(1)Total future lease payments include non-cancellable commitments of $0.2 million for finance leases and $1,303.7 million for operating leases.

Assets recorded under finance leases are included in property and equipment, and consisted of the following at each fiscal year-end (in thousands):

			2025						2024
Buildings			$	—					$	—
Equipment			5,549						6,003
Less accumulated amortization			(5,423)						(5,587)
			$	126					$	416

The following table includes supplemental cash flow and non-cash information related to our lessee leases (in thousands):

			2025						2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	240,732					$	218,916
Operating cash flows from financing leases			$	22					$	68
Financing cash flows from financing leases			$	583					$	617
Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets:
Right-of-use assets obtained in exchange for new operating lease obligations			$	143,795					$	191,923
Right-of-use assets obtained in exchange for new financing lease obligations			$	—					$	—

Sale and leaseback transactions — In fiscal 2025, there were no sale and leaseback transactions.

In fiscal 2024, we sold one restaurant property in a sale and leaseback transaction for net proceeds of $1.7 million, and recorded a total loss of less than $0.1 million. The lease has been accounted for as an operating lease and contains an initial term of 20 years.

In fiscal 2023, we sold one restaurant properties in sale and leaseback transactions for net proceeds of $3.7 million, and recorded total losses of $0.1 million. The leases have been accounted for as operating leases and contain initial terms of 16 years and 20 years.

Company as lessor — The following table presents rental income (in thousands):

			2025																		2024
			Owned Properties						Leased Properties						Total						Owned Properties						Leased Properties						Total
Operating lease income - franchise			$	16,859					$	245,062					$	261,921					$	18,301					$	242,111					$	260,412
Variable lease income - franchise			12,467						92,888						105,355						12,522						100,903						113,425
Amortization of sublease assets and liabilities, net			—						1,367						1,367						—						1,591						1,591
Franchise rental revenues			$	29,326					$	339,317					$	368,643					$	30,823					$	344,605					$	375,428
Operating lease income - closed restaurants and other (1)			$	223					$	8,147					$	8,370					$	31					$	7,662					$	7,693

________________________

(1)Primarily relates to closed restaurant properties included in “Other operating expense, net” in our consolidated statements of earnings.

The following table presents as of September 28, 2025, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

			September 28, 2025
Fiscal year:
2026			$	260,867
2027			261,171
2028			216,010
2029			171,837
2030			165,455
Thereafter			1,128,479
Total minimum rental receipts			$	2,203,819

Assets held for lease and included in property and equipment consisted of the following at each fiscal year-end (in thousands):

			September 28, 2025						September 29, 2024
Land			$	66,796					$	71,130
Buildings			789,797						763,697
Equipment			1,727						716
			858,320						835,543
Less accumulated depreciation			(704,564)						(669,459)
			$	153,756					$	166,084

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The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

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-Topic 842
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The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

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