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Leases

12 Months Ended

Dec. 27, 2023

Leases [Abstract]

Leases

Leases

Lessee

Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years, exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years.

Lessor

We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above.

The components of lease costs were as follows:

									Fiscal Year Ended
			Classification						December 27, 2023						December 28, 2022
									(In thousands)
Lease costs
Finance lease costs:
Amortization of right-of-use assets			Depreciation and amortization						$	1,451					$	1,704
Interest on lease liabilities			Interest expense, net						2,139						2,350
Operating lease costs:
Operating lease costs - company			Occupancy						8,841						7,624
Operating lease costs - franchise			Costs of franchise and license revenue						14,022						15,541
Operating lease costs - general and administrative			General and administrative expenses						629						564
Operating lease costs - closed stores			Restructuring charges and exit costs						175						201
Variable lease costs:
Variable lease costs - company			Occupancy						4,803						3,988
Variable lease costs - franchise			Costs of franchise and license revenue						6,232						6,596
Variable lease costs - general and administrative			General and administrative expenses						271						255
Variable lease costs - closed stores			Restructuring charges and exit costs						46						34
Sublease income:
Sublease income - franchise			Franchise and license revenue						(24,966)						(27,445)
Sublease income - closed stores			Restructuring charges and exit costs						(166)						(229)
Total lease costs									$	13,477					$	11,183

Lease terms and discount rates were as follows:

			December 27, 2023						December 28, 2022
Weighted-average remaining lease term (in years):
Finance leases			8.0						8.4
Operating leases			8.8						9.4
Weighted-average discount rate:
Finance leases			23.1		%				23.5		%
Operating leases			6.0		%				5.8		%

The components of lease income were as follows:

									Fiscal Year Ended
			Classification						December 27, 2023						December 28, 2022
									(In thousands)
Lease income
Operating lease income - franchise			Franchise and license revenue						$	26,353					$	28,473
Operating lease income - closed stores			Restructuring charges and exit costs						119						183
Operating lease income - general and administrative			General and administrative expenses						118						140
Variable lease income - franchise			Franchise and license revenue						9,530						10,124
Variable lease income - closed stores			Restructuring charges and exit costs						47						46
Total lease income									$	36,167					$	38,966

Cash and supplemental noncash amounts were as follows:

						Fiscal Year Ended
						December 27, 2023						December 28, 2022
						(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases						$	2,139					$	2,350
Operating cash flows from operating leases						$	24,310					$	24,626
Financing cash flows from finance leases						$	1,786					$	2,020
Right-of-use assets obtained in exchange for new finance lease liabilities						$	1,071					$	537
Right-of-use assets obtained in exchange for new operating lease liabilities (1)						$	7,047					$	16,040

    

(1)    Right-of-use assets obtained in 2022 includes $7.9 million from the acquisition of Keke’s. See Note 3.

Maturities of lease liabilities and receipts as of December 27, 2023 were as follows:

			Lease Liabilities												Lease Receipts
			Finance						Operating						Operating
			(In thousands)
2024			$	3,312					$	21,977					$	23,950
2025			3,171						21,022						23,943
2026			2,820						20,402						23,567
2027			2,408						18,539						22,133
2028			1,728						16,558						20,317
Thereafter			9,929						69,289						117,351
Total undiscounted cash flows			23,368						167,787						$	231,261
Less: interest			12,835						38,557
Present value of lease liabilities			10,533						129,230
Less: current lease liabilities			1,383						14,779
Long-term lease liabilities			$	9,150					$	114,451

Leases

Leases

Lessee

Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years, exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years.

Lessor

We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above.

The components of lease costs were as follows:

									Fiscal Year Ended
			Classification						December 27, 2023						December 28, 2022
									(In thousands)
Lease costs
Finance lease costs:
Amortization of right-of-use assets			Depreciation and amortization						$	1,451					$	1,704
Interest on lease liabilities			Interest expense, net						2,139						2,350
Operating lease costs:
Operating lease costs - company			Occupancy						8,841						7,624
Operating lease costs - franchise			Costs of franchise and license revenue						14,022						15,541
Operating lease costs - general and administrative			General and administrative expenses						629						564
Operating lease costs - closed stores			Restructuring charges and exit costs						175						201
Variable lease costs:
Variable lease costs - company			Occupancy						4,803						3,988
Variable lease costs - franchise			Costs of franchise and license revenue						6,232						6,596
Variable lease costs - general and administrative			General and administrative expenses						271						255
Variable lease costs - closed stores			Restructuring charges and exit costs						46						34
Sublease income:
Sublease income - franchise			Franchise and license revenue						(24,966)						(27,445)
Sublease income - closed stores			Restructuring charges and exit costs						(166)						(229)
Total lease costs									$	13,477					$	11,183

Lease terms and discount rates were as follows:

			December 27, 2023						December 28, 2022
Weighted-average remaining lease term (in years):
Finance leases			8.0						8.4
Operating leases			8.8						9.4
Weighted-average discount rate:
Finance leases			23.1		%				23.5		%
Operating leases			6.0		%				5.8		%

The components of lease income were as follows:

									Fiscal Year Ended
			Classification						December 27, 2023						December 28, 2022
									(In thousands)
Lease income
Operating lease income - franchise			Franchise and license revenue						$	26,353					$	28,473
Operating lease income - closed stores			Restructuring charges and exit costs						119						183
Operating lease income - general and administrative			General and administrative expenses						118						140
Variable lease income - franchise			Franchise and license revenue						9,530						10,124
Variable lease income - closed stores			Restructuring charges and exit costs						47						46
Total lease income									$	36,167					$	38,966

Cash and supplemental noncash amounts were as follows:

						Fiscal Year Ended
						December 27, 2023						December 28, 2022
						(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases						$	2,139					$	2,350
Operating cash flows from operating leases						$	24,310					$	24,626
Financing cash flows from finance leases						$	1,786					$	2,020
Right-of-use assets obtained in exchange for new finance lease liabilities						$	1,071					$	537
Right-of-use assets obtained in exchange for new operating lease liabilities (1)						$	7,047					$	16,040

    

(1)    Right-of-use assets obtained in 2022 includes $7.9 million from the acquisition of Keke’s. See Note 3.

Maturities of lease liabilities and receipts as of December 27, 2023 were as follows:

			Lease Liabilities												Lease Receipts
			Finance						Operating						Operating
			(In thousands)
2024			$	3,312					$	21,977					$	23,950
2025			3,171						21,022						23,943
2026			2,820						20,402						23,567
2027			2,408						18,539						22,133
2028			1,728						16,558						20,317
Thereafter			9,929						69,289						117,351
Total undiscounted cash flows			23,368						167,787						$	231,261
Less: interest			12,835						38,557
Present value of lease liabilities			10,533						129,230
Less: current lease liabilities			1,383						14,779
Long-term lease liabilities			$	9,150					$	114,451

Leases

Leases

Lessee

Our operations utilize property, facilities and equipment leased from others. Buildings and facilities are primarily used for restaurants and support facilities. Many of our restaurants are operated under lease arrangements which generally provide for a fixed base rent, and, in many instances, contingent rent based on a percentage of gross revenues. Initial terms of land and restaurant building leases generally range from 10 to 20 years, exclusive of options to renew, which are typically for five year periods. Leases of equipment consist primarily of restaurant equipment, computer equipment and vehicles. Initial terms of equipment leases generally range from three to five years.

Lessor

We lease or sublease certain restaurant properties to our franchisees and occasionally to third parties. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above.

The components of lease costs were as follows:

									Fiscal Year Ended
			Classification						December 27, 2023						December 28, 2022
									(In thousands)
Lease costs
Finance lease costs:
Amortization of right-of-use assets			Depreciation and amortization						$	1,451					$	1,704
Interest on lease liabilities			Interest expense, net						2,139						2,350
Operating lease costs:
Operating lease costs - company			Occupancy						8,841						7,624
Operating lease costs - franchise			Costs of franchise and license revenue						14,022						15,541
Operating lease costs - general and administrative			General and administrative expenses						629						564
Operating lease costs - closed stores			Restructuring charges and exit costs						175						201
Variable lease costs:
Variable lease costs - company			Occupancy						4,803						3,988
Variable lease costs - franchise			Costs of franchise and license revenue						6,232						6,596
Variable lease costs - general and administrative			General and administrative expenses						271						255
Variable lease costs - closed stores			Restructuring charges and exit costs						46						34
Sublease income:
Sublease income - franchise			Franchise and license revenue						(24,966)						(27,445)
Sublease income - closed stores			Restructuring charges and exit costs						(166)						(229)
Total lease costs									$	13,477					$	11,183

Lease terms and discount rates were as follows:

			December 27, 2023						December 28, 2022
Weighted-average remaining lease term (in years):
Finance leases			8.0						8.4
Operating leases			8.8						9.4
Weighted-average discount rate:
Finance leases			23.1		%				23.5		%
Operating leases			6.0		%				5.8		%

The components of lease income were as follows:

									Fiscal Year Ended
			Classification						December 27, 2023						December 28, 2022
									(In thousands)
Lease income
Operating lease income - franchise			Franchise and license revenue						$	26,353					$	28,473
Operating lease income - closed stores			Restructuring charges and exit costs						119						183
Operating lease income - general and administrative			General and administrative expenses						118						140
Variable lease income - franchise			Franchise and license revenue						9,530						10,124
Variable lease income - closed stores			Restructuring charges and exit costs						47						46
Total lease income									$	36,167					$	38,966

Cash and supplemental noncash amounts were as follows:

						Fiscal Year Ended
						December 27, 2023						December 28, 2022
						(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases						$	2,139					$	2,350
Operating cash flows from operating leases						$	24,310					$	24,626
Financing cash flows from finance leases						$	1,786					$	2,020
Right-of-use assets obtained in exchange for new finance lease liabilities						$	1,071					$	537
Right-of-use assets obtained in exchange for new operating lease liabilities (1)						$	7,047					$	16,040

    

(1)    Right-of-use assets obtained in 2022 includes $7.9 million from the acquisition of Keke’s. See Note 3.

Maturities of lease liabilities and receipts as of December 27, 2023 were as follows:

			Lease Liabilities												Lease Receipts
			Finance						Operating						Operating
			(In thousands)
2024			$	3,312					$	21,977					$	23,950
2025			3,171						21,022						23,943
2026			2,820						20,402						23,567
2027			2,408						18,539						22,133
2028			1,728						16,558						20,317
Thereafter			9,929						69,289						117,351
Total undiscounted cash flows			23,368						167,787						$	231,261
Less: interest			12,835						38,557
Present value of lease liabilities			10,533						129,230
Less: current lease liabilities			1,383						14,779
Long-term lease liabilities			$	9,150					$	114,451

X

- References

No definition available.

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- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//842-20/tableOfContent

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- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//842-20/tableOfContent

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- Definition

The entire disclosure for lessor's operating leases.

+ References

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-Topic 842
-SubTopic 30
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//842-30/tableOfContent

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