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Revenues
 6 Months Ended
Jun. 28, 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 EndedTwo Quarters Ended
 June 28, 2023June 29, 2022June 28, 2023June 29, 2022
 (In thousands)
Company restaurant sales$54,881 $49,167 $108,333 $93,143 
Franchise and license revenue:
Royalties30,376 28,759 60,403 55,284 
Advertising revenue19,853 19,486 39,521 37,692 
Initial and other fees2,616 7,779 7,606 12,286 
Occupancy revenue 9,189 9,826 18,523 19,719 
Franchise and license revenue 
62,034 65,850 126,053 124,981 
Total operating revenue$116,915 $115,017 $234,386 $218,124 
Franchise occupancy revenue consisted of the following:
 Quarter EndedTwo Quarters Ended
 June 28, 2023June 29, 2022June 28, 2023June 29, 2022
 (In thousands)
Operating lease revenue$6,683 $7,253 $13,554 $14,671 
Variable lease revenue
2,506 2,573 4,969 5,048 
Total occupancy revenue
$9,189 $9,826 $18,523 $19,719 

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 franchisees990 
Revenue recognized (1)
(1,608)
Balance, June 28, 202320,133 
Less current portion included in other current liabilities2,204 
Deferred franchise revenue included in other noncurrent liabilities$17,929 
(1)    Of this amount $1.4 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 costs1,103 
Contract asset amortization(740)
Balance, June 28, 20235,724 
Less current portion included in other current assets915 
Contract assets included in other noncurrent assets$4,809 

The Company purchases equipment related to various programs for franchise restaurants, including kitchen and point-of-sale system equipment. 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 $0.5 million and $2.9 million of revenue, recorded as a component of initial and other fees, related to the sale of equipment to franchisees during the quarter and year-to-date period ended June 28, 2023, and for the quarter and year-to-date period ended June 29, 2022, we recognized $5.7 million and $7.9 million of revenue, respectively. As of June 28, 2023, we had $1.0 million in inventory and $1.5 million in receivables related to the purchased equipment. 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 June 28, 2023 and December 28, 2022 was $6.2 million and $7.7 million, respectively. During the year-to-date period ended June 28, 2023, we recognized revenue of $0.3 million from gift card redemptions at company restaurants.