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Revenues
 9 Months Ended
Sep. 25, 2024
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
The following table disaggregates our revenue by sales channel and type of good or service:
 Quarter EndedThree Quarters Ended
 September 25, 2024September 27, 2023September 25, 2024September 27, 2023
 (In thousands)
Company restaurant sales$52,701 $53,153 $159,391 $161,486 
Franchise and license revenue:
Royalties29,101 29,703 88,421 90,106 
Advertising revenue20,172 19,297 59,098 58,818 
Initial and other fees1,639 3,388 5,903 10,994 
Occupancy revenue 8,146 8,642 24,847 27,165 
Franchise and license revenue 
59,058 61,030 178,269 187,083 
Total operating revenue$111,759 $114,183 $337,660 $348,569 
Franchise occupancy revenue consisted of the following:
 Quarter EndedThree Quarters Ended
 September 25, 2024September 27, 2023September 25, 2024September 27, 2023
 (In thousands)
Operating lease revenue$6,063 $6,461 $18,262 $20,015 
Variable lease revenue
2,083 2,181 6,585 7,150 
Total occupancy revenue
$8,146 $8,642 $24,847 $27,165 

Balances related to contracts with customers consist 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 27, 2023$19,150 
Fees received from franchisees522 
Revenue recognized (1)
(2,345)
Balance, September 25, 202417,327 
Less current portion included in other current liabilities1,946 
Deferred franchise revenue included in other noncurrent liabilities$15,381 
(1)    Of this amount $2.1 million was included in the deferred franchise revenue balance as of December 27, 2023.

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 27, 2023$6,608 
Franchisee deferred costs293 
Contract asset amortization(980)
Balance, September 25, 20245,921 
Less current portion included in other current assets941 
Contract assets included in other noncurrent assets$4,980 

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 $0.1 million and $0.6 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 September 25, 2024, respectively. We recognized $1.7 million and $4.6 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 September 27, 2023, respectively. As of September 25, 2024, we had $0.3 million in inventory and $0.2 million in receivables related to the purchased equipment. As of December 27, 2023, we had $0.6 million in inventory and $0.3 million in receivables related to the purchased equipment.
As of September 25, 2024, deferred franchise revenue, net of contract asset amortization, expected to be recognized in the future is as follows:
(In thousands)
Remainder of 2024$306 
20251,123 
20261,121 
20271,091 
2028966 
Thereafter6,799 
Deferred franchise revenue, net$11,406 
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 September 25, 2024 and December 27, 2023 was $5.9 million and $7.8 million, respectively. During the year-to-date period ended September 25, 2024, we recognized revenue of $0.4 million from gift card redemptions at company restaurants.