XML 32 R18.htm IDEA: XBRL DOCUMENT v3.20.4
Revenues
 12 Months Ended
Dec. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenues RevenuesOur revenues are derived primarily from two sales channels, which we operate as one segment: company restaurants and franchised and licensed restaurants. The following table disaggregates our revenue by sales channel and type of good or service:
 Fiscal Year Ended
 December 30, 2020December 25, 2019December 26, 2018
 (In thousands)
Company restaurant sales$118,160 $306,377 $411,932 
Franchise and license revenue:
Royalties67,501 108,813 101,557 
Advertising revenue53,745 81,144 78,308 
Initial and other fees7,332 6,541 6,422 
Occupancy revenue 41,867 38,514 31,960 
Franchise and license revenue 
170,445 235,012 218,247 
Total operating revenue$288,605 $541,389 $630,179 

Company restaurant sales decreased from $411.9 million in 2018 to $118.2 million in 2020, primarily as a result of impact of the sale of company restaurants to franchisees and, during 2020, the impact of the COVID-19 pandemic. Franchise and license revenue increased from $218.2 million in 2018 to $235.0 million in 2019 primarily as a result of the impact of the sale of company restaurants to franchisees. The decrease in franchise and licenses revenue to $170.4 million in 2020 is primarily the result of the impact of the COVID-19 pandemic. Many of our company and franchised and licensed restaurants were temporarily closed and most of the restaurants that remained open had limited operations during 2020 resulting in significant declines in revenues.

Balances related to contracts with customers consists of receivables, deferred franchise revenue and deferred gift card revenue. See Note 3 for details on our receivables.

Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that will begin amortizing into revenue when the related restaurants are opened. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising. The components of the change in deferred franchise revenue are as follows:
 (In thousands)
Balance, December 25, 2019$23,256 
Fees received from franchisees868 
Revenue recognized (1)
(3,318)
Balance, December 30, 202020,806 
Less current portion included in other current liabilities1,997 
Deferred franchise revenue included in other noncurrent liabilities$18,809 

    (1) Of this amount $3.2 million was included in the deferred franchise revenue balance as of December 25, 2019.

As of December 30, 2020, the deferred franchise revenue expected to be recognized in the future is as follows:
 (In thousands)
2021$1,997 
20221,893 
20231,812 
20241,760 
20251,690 
Thereafter11,654 
Deferred franchise revenue$20,806 

Deferred gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of deferred gift card liabilities represents our remaining performance obligations to our customers. The
balance of deferred gift card liabilities as of December 30, 2020 and December 25, 2019 was $6.1 million and $6.5 million, respectively. During the year ended December 30, 2020, we recognized revenue of $0.4 million from gift card redemptions at company restaurants.

Financial Statement Impact of Adoption
Upon adoption of Topic 606, we recorded a cumulative effect adjustment related to previously recognized initial franchise fees resulting in a $21.0 million increase to deferred franchise revenue, a $15.6 million increase to opening deficit and a $5.4 million increase to deferred tax assets. The deferred franchise revenue resulting from the cumulative effect adjustment will be amortized over the remaining lives of the individual franchise agreements. Also upon adoption, we recorded a cumulative effect adjustment to recognize breakage in proportion to redemptions that occurred prior to December 28, 2017 resulting in a decrease of $0.6 million to gift card liability (a component of other current liabilities), a $0.5 million increase to accrued advertising (a component of other current liabilities) and a $0.1 million decrease to opening deficit.