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Revenues
 9 Months Ended
Sep. 24, 2025
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 24, 2025September 25, 2024September 24, 2025September 25, 2024
 (In thousands)
Company restaurant sales$57,375 $52,701 $169,670 $159,391 
Franchise and license revenue:
Royalties27,745 29,101 84,673 88,421 
Advertising revenue18,604 20,172 57,167 59,098 
Initial and other fees1,772 1,639 7,450 5,903 
Occupancy revenue 7,748 8,146 23,578 24,847 
Franchise and license revenue 
55,869 59,058 172,868 178,269 
Total operating revenue$113,244 $111,759 $342,538 $337,660 

Franchise occupancy revenue consisted of the following:
 Quarter EndedThree Quarters Ended
 September 24, 2025September 25, 2024September 24, 2025September 25, 2024
 (In thousands)
Operating lease revenue$5,898 $6,063 $17,732 $18,262 
Variable lease revenue
1,850 2,083 5,846 6,585 
Total occupancy revenue
$7,748 $8,146 $23,578 $24,847 

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 25, 2024$16,968 
Fees received from franchisees854 
Revenue recognized (1)
(2,405)
Balance, September 24, 202515,417 
Less current portion included in other current liabilities1,970 
Deferred franchise revenue included in other noncurrent liabilities$13,447 
(1)    Of this amount $2.1 million was included in the deferred franchise revenue balance as of December 25, 2024.

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 25, 2024$6,706 
Franchisee deferred costs5,261 
Contract asset amortization(1,162)
Balance, September 24, 202510,805 
Less current portion included in other current assets1,213 
Contract assets included in other noncurrent assets$9,592 

The Company purchases equipment related to various programs 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 $0.1 million and $1.0 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 periods ended September 24, 2025, respectively. 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 periods ended September 25, 2024, respectively. As of September 24, 2025, we had $0.5 million in inventory and $0.2 million in receivables related to the purchased equipment. As of December 25, 2024, we had $0.2 million in inventory and $0.4 million in receivables related to the purchased equipment.

As of September 24, 2025, deferred franchise revenue, net of contract asset amortization, expected to be recognized in the future is as follows:
(In thousands)
Remainder of 2025$174 
2026773 
2027753 
2028636 
2029539 
Thereafter1,737 
Deferred franchise revenue, net$4,612 
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 24, 2025 and December 25, 2024 was $6.3 million and $8.4 million, respectively. During the year-to-date period ended September 24, 2025, we recognized revenue of $0.5 million from gift card redemptions at company restaurants.