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Revenues
 3 Months Ended
Mar. 29, 2023
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
The following table disaggregates our revenue by sales channel and type of good or service:
 Quarter Ended
 March 29, 2023March 30, 2022
 (In thousands)
Company restaurant sales$53,452 $43,976 
Franchise and license revenue:
Royalties30,027 26,525 
Advertising revenue19,668 18,206 
Initial and other fees4,990 4,507 
Occupancy revenue 9,334 9,893 
Franchise and license revenue 
64,019 59,131 
Total operating revenue$117,471 $103,107 

Franchise occupancy revenue consisted of the following:
 Quarter Ended
 March 29, 2023March 30, 2022
 (In thousands)
Operating lease revenue$6,871 $7,418 
Variable lease revenue
2,463 2,475 
Total occupancy revenue
$9,334 $9,893 

Balances related to contracts with customers consists of receivables, contract assets, 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 28, 2022$20,751 
Fees received from franchisees455 
Revenue recognized (1)
(745)
Balance, March 29, 202320,461 
Less current portion included in other current liabilities2,210 
Deferred franchise revenue included in other noncurrent liabilities$18,251 
(1)    Of this amount $0.7 million was included in the deferred franchise revenue balance as of December 28, 2022.

We record contract assets related to incentives and subsidies provided to franchisees related to new unit openings and/or equipment upgrades. These amounts will be recognized as a component of franchise and license revenue over the remaining term of the related franchise agreements.

The components of the change in contract assets are as follows:
 (In thousands)
Balance, December 28, 2022$5,361 
Franchisee deferred costs942 
Contract asset amortization(291)
Balance, March 29, 20236,012 
Less current portion included in other current assets839 
Contract assets included in other noncurrent assets$5,173 

During 2021, 2022 and 2023, the Company purchased equipment related to a kitchen modernization program for franchise restaurants. We bill our franchisees and recognize revenue when the related equipment is installed, less amounts contributed from the Company, which have been deferred as contract assets in the table above. We recognized $2.2 million of revenue related to the sale of kitchen equipment to franchisees during the quarters ended March 29, 2023 and March 30, 2022, respectively. As of March 29, 2023, we had $1.3 million in inventory and $4.7 million in receivables related to the kitchen equipment rollout. As of December 28, 2022, we had $3.6 million in inventory and $6.6 million in receivables related to the kitchen equipment rollout.

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 March 29, 2023 and December 28, 2022 was $6.3 million and $7.7 million, respectively. During the quarter ended March 29, 2023, we recognized revenue of $0.2 million from gift card redemptions at company restaurants.