Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2021 | Mar. 04, 2022 | Jun. 30, 2021 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 29, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-36556 | ||
Entity Registrant Name | EL POLLO LOCO HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-3563182 | ||
Entity Address, Address Line One | 3535 Harbor Blvd. | ||
Entity Address, Address Line Two | Suite 100 | ||
Entity Address, City or Town | Costa Mesa | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92626 | ||
City Area Code | 714 | ||
Local Phone Number | 599-5000 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | LOCO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Emerging Growth Company | false | ||
Small Business Entity | false | ||
ICFR Auditor Attestation Flag | true | ||
Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 36,743,863 | ||
Entity Public Float | $ 352 | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | Costa Mesa, California | ||
Current Fiscal Year End Date | --12-29 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001606366 | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 29, 2021 | Dec. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 30,046 | $ 13,219 |
Accounts and other receivables, net | 13,407 | 9,963 |
Inventories | 2,318 | 2,100 |
Prepaid expenses and other current assets | 3,732 | 3,865 |
Income tax receivable | 0 | 2,522 |
Total current assets | 49,503 | 31,669 |
Property and equipment, net | 75,668 | 79,642 |
Property and equipment held under finance lease, net | 1,635 | 1,661 |
Property and equipment held under operating leases, net ("ROU asset") | 171,981 | 177,129 |
Goodwill | 248,674 | 248,674 |
Trademarks | 61,888 | 61,888 |
Deferred tax assets | 2,245 | 3,166 |
Other assets | 2,192 | 1,392 |
Total assets | 613,786 | 605,221 |
Current liabilities: | ||
Current portion of obligations under finance leases | 143 | 70 |
Current portion of obligations under operating leases | 19,959 | 19,907 |
Accounts payable | 10,626 | 7,472 |
Accrued salaries and vacation | 11,539 | 10,166 |
Accrued insurance | 11,193 | 10,416 |
Accrued income taxes payable | 889 | 0 |
Current portion of income tax receivable agreement payable | 437 | 1,577 |
Other accrued expenses and current liabilities | 19,796 | 16,804 |
Total current liabilities | 74,582 | 66,412 |
Revolver loan | 40,000 | 62,800 |
Obligations under finance leases, net of current portion | 1,712 | 1,692 |
Obligations under operating leases, net of current portion | 171,651 | 178,658 |
Deferred taxes | 5,464 | 5,227 |
Income tax receivable agreement payable, net of current portion | 1,101 | 1,562 |
Other noncurrent liabilities | 8,653 | 11,292 |
Total liabilities | 303,163 | 327,643 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 200,000,000 shares authorized; 36,601,648 and 36,423,505 shares issued and outstanding as December 29, 2021 and December 30, 2020, respectively | 365 | 364 |
Additional paid-in-capital | 342,941 | 339,561 |
Accumulated deficit | (32,393) | (61,514) |
Accumulated other comprehensive loss | (290) | (833) |
Total stockholders' equity | 310,623 | 277,578 |
Total liabilities and stockholders' equity | $ 613,786 | $ 605,221 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 29, 2021 | Dec. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 36,601,648 | 36,423,505 |
Common stock, shares outstanding (shares) | 36,601,648 | 36,423,505 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Revenue | |||
Total revenue | $ 454,363 | $ 426,087 | $ 442,330 |
Cost of operations | |||
Food and paper cost | 104,394 | 98,774 | 109,264 |
Labor and related expenses | 120,308 | 114,455 | 116,703 |
Occupancy and other operating expenses | 97,557 | 92,422 | 92,005 |
Gain on recovery of insurance proceeds, lost profits | 0 | (2,000) | 0 |
Company restaurant expenses | 322,259 | 303,651 | 317,972 |
General and administrative expenses | 39,852 | 35,918 | 40,389 |
Legal settlements | 0 | 2,566 | 0 |
Franchise expenses | 32,831 | 28,761 | 27,612 |
Depreciation and amortization | 15,176 | 16,878 | 17,855 |
Loss on disposal of assets | 289 | 189 | 266 |
Recovery of securities lawsuits related legal expenses and other insurance claims | 0 | (123) | (10,000) |
Loss on disposition of restaurants | 1,534 | 0 | 5,058 |
Impairment and closed-store reserves | 1,087 | 4,691 | 4,852 |
Total expenses | 413,028 | 392,531 | 404,004 |
Income from operations | 41,335 | 33,556 | 38,326 |
Interest expense, net | 1,824 | 3,292 | 3,687 |
Income tax receivable agreement expense | 58 | 139 | 57 |
Income before provision for income taxes | 39,453 | 30,125 | 34,582 |
Provision for income taxes | 10,332 | 5,651 | 9,682 |
Net income | $ 29,121 | $ 24,474 | $ 24,900 |
Net income per share | |||
Basic (usd per share) | $ 0.81 | $ 0.70 | $ 0.68 |
Diluted (usd per share) | $ 0.80 | $ 0.68 | $ 0.67 |
Weighted-average shares used in computing net income per share | |||
Basic (shares) | 35,973,892 | 35,193,325 | 36,739,209 |
Diluted (shares) | 36,446,756 | 35,796,406 | 37,441,503 |
Company-operated restaurant revenue | |||
Revenue | |||
Total revenue | $ 394,733 | $ 374,064 | $ 391,112 |
Franchise revenue | |||
Revenue | |||
Total revenue | 33,729 | 29,418 | 28,819 |
Franchise advertising fee revenue | |||
Revenue | |||
Total revenue | $ 25,901 | $ 22,605 | $ 22,399 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Statements of Other Comprehensive Income [Abstract] | |||
Net income | $ 29,121 | $ 24,474 | $ 24,900 |
Unrealized net (losses) gains arising during the period from interest rate swap | 257 | (1,762) | 430 |
Reclassifications of losses (gains) into net income | 486 | 278 | (84) |
Income tax (expense) benefit | (200) | 398 | (93) |
Other comprehensive income (loss), net of taxes | 543 | (1,086) | 253 |
Comprehensive income | $ 29,664 | $ 23,388 | $ 25,153 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance (shares) at Dec. 26, 2018 | 39,009,451 | ||||
Beginning balance at Dec. 26, 2018 | $ 390 | $ 375,734 | $ (110,888) | $ 265,236 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 2,474 | 2,474 | |||
Issuance of common stock related to restricted shares, net | $ 2 | (2) | 0 | ||
Issuance of common stock related to restricted shares, net (shares) | 309,404 | ||||
Issuance of common stock upon exercise of stock options | $ 2 | 1,448 | 1,450 | ||
Issuance of common stock upon exercise of stock options (shares) | 234,728 | ||||
Shares repurchased for employee tax withholdings | (365) | (365) | |||
Shares repurchased for employee tax withholdings (shares) | (31,397) | ||||
Repurchase of common stock | $ (43) | (48,339) | (48,382) | ||
Repurchase of common stock (shares) | (4,395,604) | ||||
Other comprehensive income, net of tax | $ 253 | 253 | |||
Net income | 24,900 | 24,900 | |||
Ending balance (shares) at Dec. 25, 2019 | 35,126,582 | ||||
Ending balance at Dec. 25, 2019 | $ 351 | 330,950 | (85,988) | 253 | 245,566 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 3,093 | 3,093 | |||
Issuance of common stock related to restricted shares, net | $ 4 | (4) | 0 | ||
Issuance of common stock related to restricted shares, net (shares) | 439,061 | ||||
Issuance of common stock upon exercise of stock options | $ 10 | 5,856 | $ 5,866 | ||
Issuance of common stock upon exercise of stock options (shares) | 970,736 | 970,736 | |||
Shares repurchased for employee tax withholdings | (335) | $ (335) | |||
Shares repurchased for employee tax withholdings (shares) | (23,407) | ||||
Forfeiture of common stock related to restricted shares | $ (1) | 1 | $ 0 | ||
Forfeiture of common stock related to restricted shares (shares) | (89,467) | (101,878) | |||
Other comprehensive income, net of tax | (1,086) | $ (1,086) | |||
Net income | 24,474 | 24,474 | |||
Ending balance (shares) at Dec. 30, 2020 | 36,423,505 | ||||
Ending balance at Dec. 30, 2020 | $ 364 | 339,561 | (61,514) | (833) | 277,578 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 3,220 | 3,220 | |||
Issuance of common stock related to restricted shares, net | $ 2 | (2) | 0 | ||
Issuance of common stock related to restricted shares, net (shares) | 246,780 | ||||
Issuance of common stock upon exercise of stock options | $ 1 | 865 | $ 866 | ||
Issuance of common stock upon exercise of stock options (shares) | 132,760 | 132,760 | |||
Shares repurchased for employee tax withholdings | (705) | $ (705) | |||
Shares repurchased for employee tax withholdings (shares) | (40,384) | ||||
Forfeiture of common stock related to restricted shares | $ (2) | 2 | $ 0 | ||
Forfeiture of common stock related to restricted shares (shares) | (161,013) | (221,110) | |||
Other comprehensive income, net of tax | 543 | $ 543 | |||
Net income | 29,121 | 29,121 | |||
Ending balance (shares) at Dec. 29, 2021 | 36,601,648 | ||||
Ending balance at Dec. 29, 2021 | $ 365 | $ 342,941 | $ (32,393) | $ (290) | $ 310,623 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 29,121 | $ 24,474 | $ 24,900 |
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||
Depreciation and amortization | 15,176 | 16,878 | 17,855 |
Bad debt expense | 0 | 190 | 0 |
Stock-based compensation expense | 3,220 | 3,093 | 2,474 |
Income tax receivable agreement expense | 58 | 139 | 57 |
Loss on disposition of restaurants | 1,534 | 0 | 5,058 |
Loss on disposal of assets | 289 | 189 | 266 |
Impairment of property and equipment | 711 | 3,498 | 3,559 |
Amortization of deferred financing costs | 251 | 252 | 251 |
Deferred income taxes, net | 957 | 4,008 | 9,578 |
Changes in operating assets and liabilities: | |||
Accounts and other receivables | (3,444) | (1,155) | 1,094 |
Inventories | (218) | (92) | 338 |
Prepaid expenses and other current assets | 133 | 1,853 | (2,727) |
Income taxes payable | 3,410 | (2,145) | (448) |
Other assets | (1,052) | (13) | (412) |
Accounts payable | 2,533 | 666 | (3,192) |
Accrued salaries and vacation | 1,373 | 1,548 | 1,044 |
Accrued insurance | 777 | 976 | 2,364 |
Payment related to tax receivable agreement | (1,658) | (5,237) | (5,764) |
Other accrued expenses and liabilities | (1,072) | (8,575) | (20,160) |
Net cash flows provided by operating activities | 52,099 | 40,547 | 36,135 |
Cash flows from investing activities: | |||
Proceeds from disposition of restaurants | 4,556 | 0 | 4,770 |
Purchase of property and equipment | (17,041) | (6,690) | (15,439) |
Net cash flows used in investing activities | (12,485) | (6,690) | (10,669) |
Cash flows from financing activities: | |||
Proceeds from borrowings on revolver and swingline loans | 0 | 59,500 | 42,000 |
Payments on revolver and swingline loan | (22,800) | (93,700) | (19,000) |
Minimum tax withholdings related to net share settlements | (705) | (335) | (365) |
Proceeds from issuance of common stock upon exercise of stock options, net of expenses | 866 | 5,866 | 1,450 |
Payment of obligations under finance leases | (148) | (39) | (68) |
Repurchases of common stock | 0 | 0 | (48,382) |
Net cash flows used in financing activities | (22,787) | (28,708) | (24,365) |
Increase in cash and cash equivalents | 16,827 | 5,149 | 1,101 |
Cash and cash equivalents, beginning of period | 13,219 | 8,070 | 6,969 |
Cash and cash equivalents, end of period | 30,046 | 13,219 | 8,070 |
Supplemental cash flow information | |||
Cash paid during the period for interest | 1,066 | 2,956 | 3,649 |
Cash paid during the period for income taxes | 5,968 | 4,225 | 558 |
Unpaid purchases of property and equipment | $ 2,454 | $ 1,925 | $ 746 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 29, 2021 | |
Accounting Policies [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware corporation headquartered in Costa Mesa, California. Holdings and its direct and indirect subsidiaries are collectively known as “we,” “us” or the “Company.” The Company’s activities are conducted principally through its indirect wholly-owned subsidiary, El Pollo Loco, Inc. (“EPL”), which develops, franchises, licenses and operates quick-service restaurants under the name El Pollo Loco ®. The restaurants, which are located principally in California but also in Arizona, Nevada, Texas, Utah and Louisiana, specialize in fire-grilling citrus-marinated chicken in a wide variety of contemporary Mexican and LA-inspired entrees, including specialty chicken burritos, chicken quesadillas, chicken tostada salads, chicken tortilla soup, variations on our Pollo Bowl®, Pollo Salads and our Pollo Fit entrees. At December 29, 2021, the Company operated 189 (141 in the greater Los Angeles area) and franchised 291 (135 in the greater Los Angeles area) El Pollo Loco restaurants. In addition, the Company currently licenses one restaurant in the Philippines. The Company’s largest stockholder is Trimaran Pollo Partners, L.L.C. (“LLC”), which is controlled by affiliates of Trimaran Capital, L.L.C. LLC acquired Chicken Acquisition Corp. (“CAC”), a predecessor of Holdings, on November 17, 2005 (the “Acquisition”) and has a 45.8% ownership interest as of December 29, 2021. LLC’s only material asset is its investment in Holdings. On April 22, 2014, CAC, the LLC’s wholly owned subsidiary, Chicken Subsidiary Corp (“CSC”) and CSC’s wholly owned subsidiary, the former El Pollo Loco Holdings, Inc. (“Old Holdings”) entered into the following reorganization transactions: (i) Old Holdings merged with and into CSC with CSC continuing as the surviving corporation; (ii) CSC merged with and into CAC with CAC continuing as the surviving corporation and (iii) CAC renamed itself El Pollo Loco Holdings, Inc. Holdings has no material assets or operations. Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc. (“Intermediate”), guarantee EPL’s 2018 Revolver (see Note 6, “Long-Term Debt”) on a full and unconditional basis and Intermediate has no subsidiaries other than EPL. EPL is a separate and distinct legal entity, and has no obligation to make funds available to Intermediate. EPL and Intermediate may pay dividends to Intermediate and to Holdings, respectively. The Company operates in one operating segment. All significant revenues relate to retail sales of food and beverages through either company or franchised restaurants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 29, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Liquidity The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodel and maintenance), interest payments on its debt, lease obligations and working capital and general corporate needs. At December 29, 2021, the Company’s total debt was $40.0 million. The Company’s ability to make payments on its indebtedness and to fund planned capital expenditures depends on available cash and its ability to generate adequate cash flows in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. Based on current operations, the Company believes that its cash flows from operations, available cash of $30.0 million at December 29, 2021, and available borrowings under the 2018 Revolver (as defined in Note 6) will be adequate to meet the Company’s liquidity needs for the next twelve months from the issuance of the consolidated financial statements. However, depending on the severity and longevity of the COVID-19 pandemic, the Company’s financial performance and liquidity could be further impacted and could impact the Company’s ability to meet certain covenants required in its 2018 Credit Agreement (as defined in Note 6), specifically the lease-adjusted coverage ratio and fixed-charge coverage ratio. Basis of Presentation The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of each calendar year. Fiscal 2021, 2020, and 2019 ended on December 29, 2021, December 30, 2020 and December 25, 2019, respectively. In a 52-week fiscal year, each quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations. Approximately every six or seven years a 53-week fiscal year occurs. Fiscal 2021 and 2019 were 52-week fiscal years. Fiscal 2020 was a 53-week fiscal year. 53-week years may cause revenues, expenses, and other results of operations to be higher due to the additional week of operations. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and revenue and expenses during the period reported. Actual results could materially differ from those estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, insurance reserves, lease accounting matters, stock-based compensation, tax receivable agreement (the “TRA”) liability, contingent liabilities and income tax valuation allowances. COVID-19 During the COVID-19 pandemic, the Company has experienced periods of significant disruption to its restaurant operations. Following the pandemic declaration in March 2020, federal, state and local governments have periodically responded to the public health crisis by requiring social distancing, issuing “stay at home” directives, and implementing restaurant restrictions - including government-mandated dining room closures - that limited business to off-premise services only (take-out, drive-thru and delivery). The COVID-19 pandemic and the measures taken to prevent its spread have adversely affected the Company’s operations and financial results, particularly during fiscal 2020 as well as periods of 2021 when COVID-19 infections increased with the spread of new strains of the virus. While all of the Company’s restaurants had dining rooms open as of December 29, 2021, the Company continues to experience staffing challenges, which resulted in reduced operating hours and service channels at some of the Company’s restaurants and resulted in higher wage inflation, overtime costs and other labor related costs. Further, the Company experienced inflationary pressures due to supply chain disruptions that resulted in increased commodity prices and impacted the Company’s business and results of operations during the year ended December 29, 2021. The Company expects these pressures to continue during fiscal 2022. During fiscal 2021, the Company incurred $3.9 million in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. During fiscal 2020, the Company incurred $4.9 million in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. During fiscal 2021 as part of the CARES Act Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate impact that the COVID-19 pandemic will have on the Company’s consolidated financial condition, liquidity, and future results of operations, and therefore any prediction as to the ultimate materiality of the adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain. Cash and Cash Equivalents The Company considers all liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents. Subsequent Events On March 8, 2022, the Company’s Board of Directors appointed Mr. Roberts as Chief Executive Officer, President and a Class III director on the Board of Directors of the Company, effective March 9, 2022. Mr. Roberts will continue to serve as the Company’s interim Chief Financial Officer and as its principal executive officer, principal accounting officer and principal financial officer. Refer to Item 9B below for additional information. Concentration of Risk Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances. The Company had one supplier for which amounts due at December 29, 2021 totaled 26.1% of the Company’s accounts payable. As of December 30, 2020, the Company had two suppliers for which amounts due totaled 24.2% and 11.4% of the Company’s accounts payable. Purchases from the Company’s largest supplier totaled 27.1% of the Company’s purchases for fiscal 2021, 26.9% for fiscal 2020 and 29.0% for fiscal 2019 with no amounts payable at December 29, 2021 or December 30, 2020. In fiscal 2021, 2020 and 2019, Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 70.9%, 71.3%, and 70.5%, respectively, of total revenue. One franchisee accounted for 10.6% of total accounts receivable as of December 29, 2021, and one franchisee accounted for 11.5% of total accounts receivable as of December 30, 2020. Management believes the loss of the significant supplier or franchisee could have a material adverse effect on the Company’s consolidated results of operations and financial condition. Accounts and Other Receivables, Net Accounts and other receivables consist primarily of royalties, advertising and sublease rent and related amounts receivable from franchisees. Such receivables are due on a monthly basis, which may differ from the Company’s fiscal month-end dates. Accounts and other receivables also include credit/debit card receivables. The need for an allowance for doubtful accounts is reviewed on a specific identification basis and takes into consideration past due balances and the financial strength of the obligor. Inventories Inventories consist principally of food, beverages and supplies and are valued at the lower of average cost or net realizable value. Property and Equipment, Net Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures for reimbursements and improvements that significantly add to the productivity capacity or extend the useful life are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements and property held under finance leases are amortized over the shorter of their estimated useful lives or the remaining lease terms. For leases with renewal periods at the Company’s option, the Company generally uses the original lease term, excluding the option periods, to determine estimated useful lives; if failure to exercise a renewal option imposes an economic penalty on the Company, such that management determines at the inception of the lease that renewal is reasonably assured, the Company may include the renewal option period in the determination of appropriate estimated useful lives. The estimated useful service lives are as follows: Buildings 20 years Land improvements 3—30 years Building improvements 3—10 years Restaurant equipment 3—10 years Other equipment 2—10 years Property/equipment held under finance leases Shorter of useful life or lease term Leasehold improvements Shorter of useful life or lease term The Company capitalizes certain directly attributable internal costs in conjunction with the acquisition, development and construction of future restaurants. The Company also capitalizes certain directly attributable costs, including interest, in conjunction with constructing new restaurants. These costs are included in property and amortized over the shorter of the life of the related buildings and leasehold improvements or the lease term. Costs related to abandoned sites and other site selection costs that cannot be identified with specific restaurants are charged to general and administrative expenses in the accompanying consolidated statements of income, and were less than $0.1 million for each of the years ended December 29, 2021, December 30, 2020 and December 25, 2019. The Company capitalized internal costs related to site selection and construction activities of $1.4 million, $1.0 million and $1.1 million for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, respectively. Impairment of Long-Lived and ROU Assets The Company reviews its long-lived and right-of-use assets (“ROU assets”) for impairment on a restaurant-by-restaurant basis whenever events or changes in circumstances indicate that the carrying value of certain long-lived and ROU assets may not be recoverable. The Company considers a triggering event, related to long-lived assets or ROU assets in a net asset position, to have occurred related to a specific restaurant if the restaurant’s AUV for the last twelve months are less than a minimum threshold or if consistent levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets. Additionally, the Company considers a triggering event related to ROU assets, to have occurred related to a specific lease if the location has been closed or subleased and future estimated sublease income is less than current lease payments. As of December 29, 2021 and December 30, 2020, ROU assets related to closed or subleased restaurant locations totaled $21.9 million and $27.7 million, respectively. If the Company concludes that the carrying value of certain long-lived and ROU assets will not be recovered based on expected undiscounted future cash flows, an impairment loss is recorded to reduce the long-lived or ROU assets to their estimated fair value. The fair value is measured on a nonrecurring basis using unobservable (Level 3) inputs. There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review analysis, which requires the use of estimates and assumptions. If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material. The Company determined that triggering events occurred for certain stores during the year ended December 29, 2021 that required an impairment review of the Company’s long-lived and ROU assets. f the ROU assets of one restaurant in Texas that closed in 2019, the carrying value of one restaurant in California that closed in 2021 and the long-lived assets of three restaurants in California. In fiscal 2020, the Company recorded non-cash impairment charges of $3.5 million primarily related to the carrying value o f the ROU assets of one restaurant in Texas and the long-lived assets of four restaurants in California Closed-Store Reserves When a restaurant is closed, the Company will evaluate the ROU asset for impairment, based on anticipated sublease recoveries. The remaining value of the ROU asset is amortized on a straight-line basis, with the expense recognized in closed-store reserve expense. Additionally, any property tax and common area maintenance (“CAM”) payments relating to closed restaurants are included within closed-store expense. During fiscal 2021, the Company recognized $0.4 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. During fiscal 2020, the Company recognized $1.2 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. Goodwill and Indefinite-Lived Intangible Assets The Company’s indefinite-lived intangible assets consist of trademarks. Goodwill represents the excess of cost over fair value of net identified assets acquired in business combinations accounted for under the purchase method. The Company does not amortize its goodwill and indefinite-lived intangible assets. Goodwill resulted from the Acquisition and from the acquisition of certain franchise locations. Upon the sale of a restaurant, the Company evaluates whether there is a decrement of goodwill. The amount of goodwill included in the cost basis of the asset sold is determined based on the relative fair value of the portion of the reporting unit disposed of compared to the fair value of the reporting unit retained. The Company determined there was no decrement of goodwill related to the disposition of restaurants in fiscal 2021, 2020 and 2019. The Company performs annual impairment tests for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of a reporting unit with its carrying amount. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs the fair value test, the Company will compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company performs annual impairment tests for indefinite-lived intangible assets during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. An impairment test consists of either a qualitative assessment or a comparison of the fair value of an intangible asset with its carrying amount. The excess of the carrying amount of an intangible asset over its fair value is its impairment loss. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company’s reporting segment and are also consistent with the projections and assumptions that are used in current operating plans. These assumptions are subject to change as a result of changing economic and competitive conditions. The Company determined that there were no indicators of potential impairment of its goodwill and indefinite-lived intangible assets during fiscal 2021. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the year ended December 29, 2021. T he ultimate severity and longevity of the COVID-19 pandemic and the extent and duration of any economic downturn is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. Deferred Financing Costs Deferred financing costs are capitalized and amortized over the period of the loan on a straight-line basis, which approximates the effective interest method. Included in other assets are deferred financing costs (net of accumulated amortization), related to the revolver, of $0.4 million and $0.6 million as of December 29, 2021 and December 30, 2020, respectively. Amortization expense for deferred financing costs was approximately $0.3 million for each of the three years ended December 29, 2021, December 30, 2020, and December 25, 2019, and is reflected as a component of interest expense in the accompanying consolidated statements of income. Insurance Reserves The Company is responsible for workers’ compensation, general and health insurance claims up to a specified aggregate stop loss amount. The Company maintains a reserve for estimated claims both reported and incurred but not reported, based on historical claims experience and other assumptions. At December 29, 2021 and December 30, 2020, the Company had accrued $11.2 million and $10.4 million, respectively, and such amounts are reflected as accrued insurance in the accompanying consolidated balance sheets. The expense for such reserves for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, totaled $9.0 million, $8.4 million, and $9.6 million, respectively. These amounts are included in labor and related expenses and general and administrative expenses on the accompanying consolidated statements of income. Restaurant Revenue Revenues from the operation of company-operated restaurants are recognized as food and beverage products are delivered to customers and payment is tendered at the time of sale. The Company presents sales net of sales-related taxes and promotional allowances. Promotional allowances amounted to approximately $7.7 million, $7.5 million and $8.0 million during the years ended December 29, 2021, December 30, 2020, and December 25, 2019, respectively. The Company offers a loyalty rewards program, which awards a customer points for dollars spent. Customers earn points for each dollar spent and, as of August 4, 2020, 50 points can be redeemed for a $5 reward to be used for a future purchase. Prior to August 4, 2020, 100 points could be redeemed for a $10 reward. If a customer does not earn or use points within a one-year period, their account is deactivated and all points expire. Additionally, if a reward is not used within six months , it expires. When a customer is part of the rewards program, the obligation to provide future discounts related to points earned is considered a separate performance obligation, to which a portion of the transaction price is allocated. The performance obligation related to loyalty points is deemed to have been satisfied, and the amount deferred in the balance sheet is recognized as revenue, when the points are transferred to a reward and redeemed, the reward or points have expired, or the likelihood of redemption is remote. A portion of the transaction price is allocated to loyalty points, if necessary, on a pro-rata basis, based on stand-alone selling price, as determined by menu pricing and loyalty points terms. The Company sells gift cards to its customers in the restaurants and through selected third parties. The gift cards sold to customers have no stated expiration dates and are subject to actual and/or potential escheatment rights in several of the jurisdictions in which the Company operates. Furthermore, due to these escheatment rights, the Company does not recognize breakage related to the sale of gift cards due to the immateriality of the amount remaining after escheatment. The Company recognizes income from gift cards when redeemed by the customer. Unredeemed gift card balances are deferred and recorded as other accrued expenses on the accompanying consolidated balance sheets. Franchise Revenue Franchise revenue consists of franchise royalties, initial franchise fees, license fees due from franchisees and IT support services. Rental income for subleases to franchisees are outside of the scope of the revenue standard and are within the scope of lease guidance. Under Topic 842, sublease income is recorded on a gross basis within the consolidated statements of income. Franchise royalties are based upon a percentage of net sales of the franchisee and are recorded as income as such sales are earned by the franchisees. For franchise and development agreement fees, the initial franchise services, or exclusivity of the development agreements, are not distinct from the continuing rights or services offered during the term of the franchise agreement and are, therefore, treated as a single performance obligation. As such, initial franchise and development fees received, and subsequent renewal fees, are recognized over the franchise or renewal term, which is typically twenty years. As of December 29, 2021, the Company had executed development agreements that represent commitments to open 67 franchised restaurants at various dates through 2031. This revenue stream is made up of the following performance obligations: ● Franchise License – inclusive of advertising services, development agreements, training, access to plans and help desk services; ● Discounted renewal option; and ● Hardware services. The Company satisfies the performance obligation related to the franchise license over the term of the franchise agreement, which is typically 20 years. Payment for the franchise license consists of three components, a fixed-fee related to the franchise/development agreement, a sales-based royalty fee and a sales-based advertising fee. The fixed fee, as determined by the signed development and/or franchise agreement, is due at the time the development agreement is entered into, and/or when the franchise agreement is signed, and does not include a finance component. The sales-based royalty fee and sales-based advertising fee are considered variable consideration and are recognized as revenue as such sales are earned by the franchisees. Both sales-based fees qualify under the royalty constraint exception, and do not require an estimate of future transaction price. Additionally, the Company is utilizing the practical expedient available under ASC Topic 606, “Revenue from Contracts with Customers” (“Topic 606”) regarding disclosure of the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied for sales-based royalties. In certain franchise agreements, the Company offers a discounted renewal to incentivize future renewals after the end of the initial franchise term. As this is considered a separate performance obligation, the Company allocated a portion of the initial franchise fee to this discounted renewal, on a pro-rata basis, assuming a 20 year renewal. This performance obligation is satisfied over the renewal term, which is typically 10 or 20 years, while payment is fixed and due at the time the renewal is signed. The Company purchases hardware, such as scanners, printers, cash registers and tablets, from third-party vendors, which it then sells to franchisees. As the Company is considered the principal in this relationship, payment received for the hardware is considered revenue, and is received upon transfer of the goods from the Company to the Franchisee. As of December 29, 2021, there were no performance obligations, related to hardware services that were unsatisfied or partially satisfied. Franchise Advertising Fee Revenue The Company presents advertising contributions received from franchisees as franchise advertising fee revenue and records all expenses of the advertising fund within franchise expenses. Advertising Costs Advertising expense is recorded as the obligation to contribute to the advertising fund and is accrued, generally when the associated revenue is recognized. Advertising expense, which is a component of occupancy and other operating expenses, was $16.1 million, $15.3 million and $16.1 million for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, respectively. In addition, there was $25.9 million, $22.6 million and $22.4 million for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, respectively, funded by the franchisees’ advertising fees. Franchisees pay a monthly fee to the Company that ranges from 4% to 5% of their restaurants’ net sales as reimbursement for advertising, public relations and promotional services the Company provides, which is included within franchise advertising fee revenue. Fees received in advance of provided services are included in other accrued expenses and current liabilities and were $3.6 million and $0.1 million at December 29, 2021 and December 30, 2020, respectively. Company-operated restaurants contribute to the advertising fund on the same basis as franchised restaurants. At December 29, 2021, the Company was obligated to spend $3.6 million more in future periods to comply with this requirement. Production costs of commercials, programming and other marketing activities are charged to the advertising funds when the advertising is first used for its intended purpose. Total contributions and other marketing expenses are included in general and administrative expenses in the accompanying consolidated statements of income. Preopening Costs Preopening costs incurred in connection with the opening of new restaurants are expensed as incurred. Preopening costs, which are included in general and administrative expenses on the accompanying consolidated statements of income, were $0.3 million, $0.1 million and $0.4 million for the years ended December 29, 2021, December 30, 2020, and December 25, 2019, respectively. Leases The Company’s operations utilize property, facilities, equipment and vehicles. Buildings and facilities leased from others are primarily for restaurants and support facilities. Restaurants are operated under lease arrangements that generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues more than a defined amount. Initial terms of land and restaurant building leases generally have terms of 20 years, exclusive of options to renew. ROU assets and operating and finance lease liabilities are recognized at the lease commencement date, which is the date the Company takes possession of the property. Operating and finance lease liabilities represent the present value of lease payments not yet paid. ROU assets represent the Company’s right to use an underlying asset and are based upon the operating and finance lease liabilities adjusted for prepayments or accrued lease payments, lease incentives, and impairment of ROU assets. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates corresponding to the lease term including reasonably certain renewal periods. The Company’s leases generally have escalating rents over the term of the lease, and are recorded on a straight-line basis over the expected lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the right-of-use asset related to the lease. These are amortized through the operating lease asset as reductions of expense over the lease term. Operating and finance lease liabilities that are based on an index or rate are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases of equipment primarily consist of restaurant equipment, computer systems and vehicles. The Company subleases facilities to certain franchisees and other non-related parties which are recorded on a straight-line basis. Gain on Recovery of Insurance Proceeds, Lost Profits During the year ended December 30, 2020, the Company received business interruption insurance proceeds of $2.0 million, primarily related to restaurant sales losses and expenses related to the COVID-19 pandemic and resulting dining room closures. Recovery of Securities Class Action Legal Expense and Other Insurance Claims During fiscal 2020 the Company received insurance proceeds of $0.1 million related to a property claim. During fiscal 2019, the Company received insurance proceeds of $10.0 million related to the reimbursement of certain legal expenses paid in prior years for the defense of securities lawsuits. See Note 13 “Commitments and Contingencies—Legal Matters.” Loss on Disposition of Restaurants During fiscal 2021, the Company completed the sale of eight restaurants within the Sacramento area to an existing franchisee. During fiscal 2019, the Company completed the sale of four company-operated restaurants within the San Francisco area to an existing franchisee, seven company-operated restaurants in the Phoenix area to another existing franchisee and five company-operated restaurants in Texas to a third franchisee. The Company has determined that these restaurant dispositions represent multiple element arrangements, and as a result, the cash consideration received was allocated to the separate elements based on their relative standalone selling price. Cash proceeds included upfront consideration for the sale of the restaurants and franchise fees, as well as future cash consideration for royalties. The cash consideration per restaurant related to franchise fees is consistent with the amounts stated in the related franchise agreements, which are charged for separate standalone arrangements. The Company initially defers and subsequently recognizes the franchise fees over the term of the franchise agreement. Future royalty income is also recognized in revenue as earned. The Sacramento sale resulted in cash proceeds of $4.6 million and a net loss on sale of restaurants of $1.5 million for the year ended December 29, 2021. The three sales during 2019 resulted in cash proceeds of $4.8 million and a net loss on sale of restaurants of $5.1 million for the year ended December 25, 2019. Since the date of their sale, these restaurants are now included in the total number of franchised El Pollo Loco restaurants. Derivative Financial Instruments The Company uses an interest rate swap, a derivative instrument, to hedge interest rate risk and not for trading purposes. The derivative contract is entered into with a financial institution. The Company records the derivative instrument on its consolidated balance sheets at fair value. The derivative instrument qualifies as a hedging instrument in a qualifying cash flow hedge relationship, and the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive (loss) income (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For any derivative instruments not designated as hedging instruments, the gain or loss will be recognized in earnings immediately. If a derivative previously designated as a hedge is terminated, or no longer meets the qualifications for hedge accounting, any balances in AOCI will be reclassified to earnings immediately. As a result of the use of an interest rate swap, the Company is exposed to risk that the counterparty will fail to meet their contractual obligations. To mitigate the counterparty credit risk, the Company will only enter into contracts with major financial |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 29, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. PROPERTY AND EQUIPMENT The costs and related accumulated depreciation and amortization of major classes of property are as follows (in thousands): December 29, 2021 December 30, 2020 Land $ 12,323 $ 12,323 Buildings and improvements 144,631 147,939 Other property and equipment 78,383 77,177 Construction in progress 5,333 3,567 240,670 241,006 Less: accumulated depreciation and amortization (165,002) (161,364) $ 75,668 $ 79,642 Depreciation and amortization expense was $15.2 million, $16.9 million and $17.9 million for the years ended December 29, 2021, December 30, 2020, and December 25, 2019, respectively. Based on the Company’s review of its long-lived assets for impairment, the Company recorded non-cash impairment charges of $0.3 million, $3.0 million and $0.3 million for the years ended December 29, 2021, December 30, 2020, and December 25, 2019, respectively. D epending on the severity and longevity of the COVID-19 pandemic and the extent and duration of any economic downturn , |
Trademarks, Other Intangible As
Trademarks, Other Intangible Assets and Liabilities | 12 Months Ended |
Dec. 29, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Trademarks, Other Intangible Assets and Liabilities | 4. TRADEMARKS, OTHER INTANGIBLE ASSETS AND LIABILITIES Domestic trademarks consist of the following (in thousands): December 29, December 30, 2021 2020 Cost $ 120,700 $ 120,700 Accumulated impairment charges (58,812) (58,812) Trademarks, net $ 61,888 $ 61,888 |
Leases
Leases | 12 Months Ended |
Dec. 29, 2021 | |
Leases [Abstract] | |
Leases | 5. LEASES Nature of leases The Company’s operations utilize property, facilities, equipment and vehicles leased from others. Additionally, the Company has various contracts with vendors that have been determined to contain an embedded lease in accordance with Topic 842. As of December 29, 2021, the Company had two leases that it had entered into, but had not yet commenced. The Company does not have control of the property until lease commencement. Building and facility leases The majority of the Company’s building and facilities leases are classified as operating leases; however, the Company currently has two facility and nine equipment leases that are classified as finance leases. Restaurants are operated under lease arrangements that generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues in excess of a defined amount. Additionally, a number of the Company’s leases have payments, which increase at pre-determined dates based on the change in the consumer price index. For all leases, the Company also reimburses the landlord for non-lease components, or items that are not considered components of a contract, such as common area maintenance, property tax and insurance costs. While the Company determined not to separate lease and non-lease components, these payments are based on actual costs, making them variable consideration and excluding them from the calculations of the ROU asset and lease liability. The initial terms of land and restaurant building leases are generally 20 years, exclusive of options to renew. These leases typically have four 5-year During the year ended December 29, 2021, the Company reassessed the lease terms on 22 restaurants due to certain triggering events, such as the addition of significant leasehold improvements, the decision to terminate a lease, or the decision to renew. As a result of the reassessment, an additional $17.8 million of ROU assets and lease liabilities for the year ended December 29, 2021 were recognized, and will be amortized over the new lease term. During the year ended December 30, 2020, the Company reassessed the lease terms on 12 restaurants due to certain triggering events, such as the addition of significant leasehold improvements, the decision to terminate a lease, or the decision to renew. As a result of the reassessment, an additional $3.9 million of ROU assets and lease liabilities for the year ended December 30, 2020 were recognized, and will be amortized over the new lease term. The reassessments did not have any impact on the original lease classification. Additionally, as the Company adopted all practical expedients available under Topic 842, no reallocation between lease and non-lease components was necessary. The Company also subleases facilities to certain franchisees and other non-related parties which are also considered operating leases. Sublease income also includes contingent rental income based on net revenues. The vast majority of these leases have rights to extend terms via fixed rental increases. However, none of these leases have early termination rights, the right to purchase the premises or any residual value guarantees. The Company does not have any related party leases. During fiscal 2021, the Company determined that the carrying value of ROU assets at two restaurants were not recoverable. As a result, the Company recorded a $0.4 million non-cash impairment charge for the year ended December 29, 2021 related to one restaurant closed in Texas in 2019 and one restaurant closed in California. During fiscal 2020, the Company determined that the carrying value of ROU assets at one restaurant was not recoverable. As a result, the Company recorded a $0.5 million non-cash impairment charge for the year ended December 30, 2020 related to one restaurant in Texas, which was sold to a franchisee in the prior year. During fiscal 2019, the Company determined that the carrying value of ROU assets at certain restaurants was not recoverable. As a result, we recorded a $3.2 million impairment expense for the year ended December 25, 2019. The impairment primarily related to four restaurants sold to franchisees and one restaurant closed during fiscal 2019. Equipment Leases of equipment primarily consist of restaurant equipment, copiers and vehicles. These leases are fixed payments with no variable component. Additionally, no optional renewal periods have been included in the calculation of the ROU Asset, there are no residual value guarantees and no restrictions imposed. Significant Assumptions and Judgments In applying the requirements of Topic 842, the Company made significant assumptions and judgments related to determination of whether a contract contains a lease and the discount rate used for the lease. In determining if any of the Company’s contracts contain a lease the Company made assumptions and judgments related to its ability to direct the use of any assets stated in the contract and the likelihood of renewing any short-term contracts for a period extending past twelve months. The Company also made significant assumptions and judgments in determining an appropriate discount rate for property leases. These included using a consistent discount rate for a portfolio of leases entered into at varying dates, using the full 20-year As the Company has adopted the practical expedient not to separate lease and non-lease components, no significant assumptions or judgments were necessary in allocating consideration between these components, for all classes of underlying assets. The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Property Equipment Property Equipment Property Equipment Leases Leases Total Leases Leases Total Leases Leases Total Finance lease cost: Amortization of right-of-use assets $ 78 $ 2 $ 80 $ 11 $ — $ 11 $ 9 $ — $ 9 Interest on lease liabilities 58 1 59 27 — 27 27 — 27 Operating lease cost 26,501 1,122 27,623 26,578 1,227 27,805 26,212 1,273 27,485 Short-term lease cost — 21 21 — 23 23 — 34 34 Variable lease cost 539 354 893 444 191 635 455 186 641 Sublease income (3,823) — (3,823) (3,251) — (3,251) (2,430) — (2,430) Total lease cost $ 23,353 $ 1,500 $ 24,853 $ 23,809 $ 1,441 $ 25,250 $ 24,273 $ 1,493 $ 25,766 The following table presents the Company’s total lease cost on the consolidated statement of income (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Lease cost – Occupancy and other operating expenses $ 24,020 $ 23,972 $ 24,540 Lease cost – General & administrative 414 464 463 Lease cost – Depreciation and amortization 78 11 9 Lease cost – Interest expense 58 27 27 Lease cost - Closed-store reserve 283 776 727 Total lease cost $ 24,853 $ 25,250 $ 25,766 The Company had the following cash and non-cash activities associated with its leases (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Property Equipment Property Equipment Property Equipment Leases Leases Total Leases Leases Total Leases Leases Total Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 26,414 $ 1,084 $ 27,498 $ 23,683 $ 1,230 $ 24,913 $ 25,168 $ 1,282 $ 26,450 Financing cash flows used for finance leases $ 102 $ 46 $ 148 $ 34 $ 5 $ 39 $ 68 $ — $ 68 Non-cash investing and financing activities: Operating lease ROU assets obtained in exchange for lease liabilities: Operating lease ROU assets $ 17,763 $ — $ 17,763 $ 5,850 $ 13 $ 5,863 $ 10,339 $ 256 $ 10,595 Finance lease ROU assets obtained in exchange for lease liabilities: Finance lease ROU assets $ — $ 196 $ 196 $ 1,623 $ 54 $ 1,677 $ — $ — $ — Derecognition of ROU assets due to terminations, impairment or modifications $ (4,513) $ (99) $ (4,612) $ (543) $ (26) $ (569) $ (4,574) $ (157) $ (4,731) Other Information Weighted-average remaining lease term—finance leases 18.42 4.02 18.98 4.52 2.83 — Weighted-average remaining lease term—operating leases 11.27 1.44 11.45 2.31 12.08 3.20 Weighted-average discount rate—finance leases 2.78 % 1.54 % 2.50 % 1.68 % 11.10 % — % Weighted-average discount rate—operating leases 4.45 % 3.89 % 4.29 % 3.93 % 4.38 % 3.96 % Information regarding the Company’s minimum future lease obligations at December 29, 2021 is as follows (in thousands): Finance Operating Leases Minimum Minimum Minimum Lease Lease Sublease For the Years Ending Payments Payments Income December 28, 2022 $ 190 $ 27,866 $ 3,588 December 27, 2023 145 26,115 3,571 December 25, 2024 145 24,013 3,456 December 31, 2025 141 21,773 3,106 December 30, 2026 108 19,546 2,789 Thereafter 1,582 127,306 23,165 Total $ 2,311 $ 246,619 $ 39,675 Less: imputed interest (1.54% - 4.45%) (456) (55,009) Present value of lease obligations 1,855 191,610 Less: current maturities (143) (19,959) Noncurrent portion $ 1,712 $ 171,651 Short-Term Leases The Company has multiple short-term leases, which have terms of less than 12 months, and thus were excluded from the recognition requirements of Topic 842. The Company has recognized these lease payments in its consolidated statement of income on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. In April 2020, the FASB issued guidance allowing entities to make a policy election whether to account for lease concessions related to the COVID-19 pandemic as lease modifications. The election applies to any lessor-provided lease concession related to the impact of the COVID-19 pandemic, provided the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. During the fiscal year ended December 30, 2020, the Company received non-substantial concessions from certain landlords in the form of rent deferrals and abatements. The Company elected to not account for these rent concessions as lease modifications. The rent concessions were recorded as part of other accrued expenses. The recognition of rent concessions did not have a material impact on our consolidated financial statements as of December 30, 2020. For the year ended December 29, 2021, there were no rent concessions. Lessor The Company is a lessor for certain property, facilities and equipment owned by the Company and leased to others, principally franchisees, under non-cancelable leases with initial terms ranging from 3 to 20 years. These lease agreements generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues. All leases are considered operating leases. For the leases in which the Company is the lessor, there are options to extend the lease. However, there are no terms and conditions to terminate the lease, no right to purchase premises and no residual value guarantees. Additionally, there are no related party leases. For the years ended December 29, 2021, December 30, 2020, and December 25, 2019, the Company received $0.4 million, $0.6 million and $0.5 million, respectively, of lease income from company-owned locations. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 29, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 6. LONG-TERM DEBT The Company, as a guarantor, is a party to a credit agreement (the “2018 Credit Agreement”) among EPL, as borrower, Intermediate, as a guarantor, Bank of America, N.A., as administrative agent, swingline lender, and letter of credit issuer, the lenders party thereto, and the other parties thereto, which provides for a $150.0 million five-year senior secured revolving credit facility (the “2018 Revolver”). The 2018 Revolver includes a sub limit of $15.0 million for letters of credit and a sub limit of $15.0 million for swingline loans. The obligations under the 2018 Credit Agreement and related loan documents are guaranteed by the Company and Intermediate. The obligations of the Company, EPL and Intermediate under the 2018 Credit Agreement and related loan documents are secured by a first priority lien on substantially all of their respective assets. Under the 2018 Revolver, Holdings may not make certain payments such as cash dividends, except that it may, inter alia, (i) pay up to $1.0 million per year to repurchase or redeem qualified equity interests of Holdings held by past or present officers, directors, or employees (or their estates) of the Company upon death, disability, or termination of employment, (ii) pay under its TRA, and (iii) so long as no default or event of default has occurred and is continuing, (a) make non-cash repurchases of equity interests in connection with the exercise of stock options by directors, officers and management, provided that those equity interests represent a portion of the consideration of the exercise price of those stock options, (b) pay up to $0.5 million in any 12 month consecutive period to redeem, repurchase or otherwise acquire equity interests of any subsidiary that is not a wholly-owned subsidiary from any holder of equity interest in such subsidiary, (c) pay up to $2.5 million per year pursuant to stock option plans, employment agreements, or incentive plans, (d) make up to $5.0 million in other restricted payments per year, and (e) make other restricted payments, subject to its compliance, on a pro forma basis, with (x) a lease-adjusted consolidated leverage ratio not to exceed 4.25 times and (y) the financial covenants applicable to the 2018 Revolver. Borrowings under the 2018 Revolver (other than any swingline loans) bear interest, at the borrower’s option, at rates based upon either LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a lease-adjusted consolidated leverage ratio-based pricing grid. The base rate is calculated as the highest of (a) the federal funds rate plus 0.50%, (b) the published Bank of America prime rate, or (c) LIBOR plus 1.00%. For LIBOR loans, the margin is in the range of 1.25% to 2.25%, and for base rate loans the margin is in the range of 0.25% to 1.25%. For borrowings under the 2018 Revolver during fiscal 2021, the interest rate range was 1.3% to 1.6%. For borrowings under the 2018 Revolver during fiscal 2020, the interest rate range was 1.6% to 3.3%. The interest rate under the 2018 Revolver was 1.4% at December 29, 2021 and 1.6% under the 2018 Revolver at December 30, 2020. For the year ended December 29, 2021, the Company had interest expense of $1.2 million under the 2018 Revolver. For the year ended December 30, 2020, the Company had interest expense of $2.7 million under the 2018 Revolver, and for the year ended December 25, 2019, the Company had interest expense of $3.1 million under the 2018 and 2014 Revolver. The 2018 Credit Agreement contains certain financial covenants. The Company was in compliance with all such covenants at December 29, 2021. However, depending on the severity and longevity of the COVID-19 pandemic and the extent and duration of any economic downturn , At December 29, 2021, $10.0 million of letters of credit and $40.0 million of borrowings were outstanding under the 2018 Revolver. The amount available under the 2018 Revolver was $100.0 million at December 29, 2021. At December 30, 2020, $8.4 million of letters of credit and $62.8 million of borrowings were outstanding under the 2018 Revolver. The amount available under the 2018 Revolver was $78.8 million at December 30, 2020. Maturities The 2018 Revolver and 2018 Credit Agreement will mature on July 13, 2023. During the year ended December 29, 2021, the Company elected to pay down $22.8 million on its 2018 Revolver. During the year ended December 30, 2020, the Company paid down $34.2 million, net of borrowings of $59.5 million on its 2018 Revolver. There are no required principal payments prior to maturity for the 2018 Revolver. Interest Rate Swap During the year ended December 25, 2019, the Company entered into a variable-to-fixed interest rate swap agreement with a notional amount of $40.0 million that matures in June 2023. The objective of the interest rate swap is to reduce the Company’s exposure to interest rate risk for a portion of its variable-rate interest payments on its borrowings under the 2018 Revolver. Under the terms of the swap agreement, the variable LIBOR-based component of interest payments was converted to a fixed rate of 1.31% , plus applicable margin, which was 1.5% for the year ended December 29, 2021. The interest rate swap was designated as a cash flow hedge, as the changes in the future cash flows of the swap were expected to offset changes in expected future interest payments on the related variable-rate debt, in accordance with ASC 815 “Derivatives and Hedging.” The changes in the fair value of the interest rate swap are not included in earnings, but are included in other comprehensive (loss) income (“OCI”). These changes in fair value are subsequently reclassified into net earnings as a component of interest expense as the hedged interest payments are made on the variable rate borrowings. For the year ended December 29, 2021 and December 30, 2020, the swap was a highly effective cash flow hedge. As of December 29, 2021, the estimated net gain included in AOCI related to the Company’s cash flow hedge that will be reclassified into earnings in the next 12 months is $0.6 million, based on current LIBOR interest rates. The following table shows the financial statement line item and amount of the Company’s cash flow hedge accounting on the consolidated balance sheet (in thousands): December 29, 2021 December 30, 2020 Notional Fair value Notional Fair value Other liabilities - Interest rate swap $ 40,000 $ 396 $ 40,000 $ 1,139 The following table summarizes the effect of the Company’s cash flow hedge accounting on the consolidated statements of income (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Interest expense on hedged portion of debt $ 568 $ 979 $ 461 Interest expense on interest rate swap 486 278 (84) Interest expense on debt and derivatives, net $ 1,054 $ 1,257 $ 377 The following table summarizes the effect of the Company’s cash flow hedge accounting on AOCI for the years ended December 29, 2021, December 30, 2020 and December 25, 2019 (in thousands): Gain (Loss) Reclassified from Net Gain (Loss) Recognized in OCI AOCI into Interest expense December 29, 2021 December 30, 2020 December 25, 2019 December 29, 2021 December 30, 2020 December 25, 2019 Interest rate swap $ 257 $ (1,762) $ 430 $ 486 $ 278 $ (84) See Note 2 “Summary of Significant Accounting Policies” for the fair value of the Company’s derivative asset. |
Other Accrued Expenses and Curr
Other Accrued Expenses and Current Liabilities | 12 Months Ended |
Dec. 29, 2021 | |
Payables and Accruals [Abstract] | |
Other Accrued Expenses and Current Liabilities | 7. OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES Other accrued expenses and current liabilities consist of the following (in thousands): December 29, 2021 December 30, 2020 Accrued sales and property taxes $ 4,726 $ 5,216 Gift card liability 4,622 4,008 Loyalty rewards program liability 687 900 Accrued advertising 3,635 — Accrued legal settlements and professional fees 771 321 Deferred franchise and development fees 637 503 Current portion of lease payment deferrals — 1,793 Other 4,718 4,063 Total other accrued expenses and current liabilities $ 19,796 $ 16,804 |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | 12 Months Ended |
Dec. 29, 2021 | |
Payables and Accruals [Abstract] | |
Other Noncurrent Liabilities | 8. OTHER NONCURRENT LIABILITIES Other noncurrent liabilities consist of the following (in thousands): December 29, 2021 December 30, 2020 Deferred franchise and development fees $ 5,691 $ 5,125 Derivative liability 396 1,139 Employer social security tax deferral 2,426 4,853 Other 140 175 Total other noncurrent liabilities $ 8,653 $ 11,292 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 29, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. INCOME TAXES The provision for income taxes is based on the following components (in thousands): December 29, December 30, December 25, For the Years Ended 2021 2020 2019 Current income taxes: Federal $ 7,163 $ 520 $ — State 2,158 1,123 104 Total current 9,321 1,643 104 Deferred income taxes: Federal 93 3,350 5,991 State 918 658 3,587 Total deferred 1,011 4,008 9,578 Tax provision for income taxes $ 10,332 $ 5,651 $ 9,682 The provision for income taxes differs from the amount computed by applying the federal income tax rate of 21.0% for fiscal 2021, 2020 and 2019 as follows: December 29, December 30, December 25, For the Years Ended 2021 2020 2019 Statutory federal income tax rate applied to earnings before income taxes and extraordinary items 21.0 % 21.0 % 21.0 % State income tax expense (net of federal benefit) 5.9 4.3 6.0 Change in valuation allowance 0.1 0.4 2.4 162(m) 0.8 0.2 0.3 WOTC Credit (0.5) (0.9) (0.8) Stock option exercises (1.4) (6.6) (1.0) Other 0.3 0.4 — Total 26.2 % 18.8 % 27.9 % As of December 29, 2021, the Company had no federal and less than $0.1 million state NOL carryforwards. These State NOLs expire beginning 2028. “ ” Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets. After evaluating all of the positive and negative evidence, including the Company’s continued income from operations, the Company concluded that it is more likely than not that its deferred tax assets except from certain state credits will be realized. In fiscal 2020 and 2019, the Company recorded a valuation allowance of approximately $0.1 million and $0.9 million, respectively, against its deferred tax asset resulting from certain tax credits that may not be realizable prior to the time the credits expire. In fiscal 2021, the Company recorded an additional less than $0.1 million to the valuation allowance. As of December 29, 2021, the total valuation allowance was $6.2 million. On July 30, 2014, the Company entered into the TRA. The TRA calls for the Company to pay its pre-IPO stockholders 85% of the cash savings that the Company realizes in its taxes as a result of utilizing its NOLs and other tax attributes attributable to preceding periods. The TRA charge expense (benefit) is a permanent add-back to the Company’s taxable income. TRA resulted in less than $0.1 million of expense in fiscal 2021 as a result of the amortization of interest expense related to the total expected TRA payments and changes in estimates for actual tax returns filed and future forecasted taxable income As of December 29, 2021 and December 30, 2020, the deferred tax assets related to California Enterprise Zone credits, net of valuation allowances are $1.3 million and $2.5 million, respectively. The Company’s deferred tax assets and liabilities as of December 29, 2021 and December 30, 2020 are summarized below. December 29, December 30, 2021 2020 Deferred assets: Capital leases $ 60 $ 27 Accrued vacation 503 506 Accrued workers’ compensation 2,616 1,894 Enterprise zone and other credits 7,524 8,579 Net operating losses 5 5 Fixed assets 4,393 4,643 ROU assets 51,864 53,875 Other 5,694 6,349 Total deferred tax assets 72,659 75,878 Valuation allowance (6,181) (6,127) Net deferred tax assets 66,478 69,751 Deferred liabilities: Goodwill (6,349) (6,218) Trademark (16,727) (16,773) Prepaid expense (498) (720) ROU liabilities (46,484) (48,005) Other 361 (96) Deferred tax liabilities (69,697) (71,812) Net deferred tax liability $ (3,219) $ (2,061) The net deferred tax asset amounts above as of December 29, 2021 and December 30, 2020 have been classified in the accompanying consolidated balance sheets as noncurrent assets and are as follows (in thousands): December 29, December 30, 2021 2020 Noncurrent: Assets - state $ 2,245 $ 3,166 Liabilities - federal (5,464) (5,227) Net deferred tax liability $ (3,219) $ (2,061) As of December 29, 2021 and December 30, 2020, the Company had no accrual for unrecognized tax benefits. Consequently, no interest or penalties have been accrued by the Company. The Company believes that no significant changes to the amount of unrecognized tax benefits will occur within the next twelve months. The Company is subject to taxation in the United States and in various state jurisdictions. The Company is no longer subject to U.S. examination for years before 2018 by the federal taxing authority, and for years before 2017 by state taxing authorities. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 29, 2021 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | 10. EMPLOYEE BENEFIT PLANS The Company sponsors a defined contribution employee benefit plan that permits its employees, subject to certain eligibility requirements, to contribute up to 25% of their qualified compensation to the plan. The Company matches 100% of the employees’ contributions of the first 3% of the employees’ annual qualified compensation, and 50% of the employees’ contributions of the next 2% of the employees’ annual qualified compensation. The Company’s matching contribution immediately fully vests. The Company’s contributions to the plan were $0.8 million for the years ended December 29, 2021, December 30, 2020 and December 25, 2019. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 29, 2021 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 11. STOCK-BASED COMPENSATION Pursuant to the 2018 Omnibus Equity Incentive Plan the Company grants stock options (“options”), restricted stock units, performance-based stock units and restricted stock. The Company has authorized 5,652,240 shares of common stock for issuance in connection with stock awards. On June 8, 2021, our stockholders approved amending the Equity Incentive Plan, formerly the 2018 Omnibus Equity Incentive Plan, under which the new aggregate share limit was increased to be 2,000,000 shares. As of December 29, 2021, 721,924 shares were available for grant. During the years ended December 29, 2021, December 30, 2020 and December 25, 2019, the Company recognized stock-based compensation expense of $3.2 million, $3.1 million and $2.5 million, respectively. These expenses were included in general and administrative expenses consistent with the salary expense for the related optionees in the accompanying consolidated statements of income. Stock Options At December 29, 2021, options to purchase 978,078 shares of common stock of the Company were outstanding, including 699,170 vested and 278,908 unvested. Unvested options vest over time, or upon our achieving annual financial goals. However, the compensation committee of the board of directors, as administrator of the Company’s 2018 Omnibus Equity Incentive Plan, has the power to accelerate the vesting schedule of stock-based compensation, and, generally, in the event of an employee termination in connection with a change in control of the Company, any unvested portion of an award under the plan shall become fully vested. At December 29, 2021, 212,196 premium options, options granted above the stock price at date of grant, remained outstanding. In fiscal 2021, the Company granted 256,172 options, with an exercise price equal to the fair market value of the common stock on the date of grant. The options granted in fiscal 2021 had a four year vesting period. Stock options generally expire 10 years from the date of grant. In fiscal 2020, the Company did not grant any options. Changes in options for the years ended December 29, 2021 and December 30, 2020, are as follows: Weighted-Average Aggregate Weighted-Average Contractual Life Intrinsic Value Shares Exercise Price Life (Years) (in thousands) Outstanding - December 25, 2019 2,077,570 $ 8.14 Exercised (970,736) 6.04 Forfeited, cancelled or expired (75,968) 12.14 Outstanding - December 30, 2020 1,030,866 $ 9.82 Grants 256,172 17.55 Exercised (132,760) 6.52 Forfeited, cancelled or expired (176,200) $ 14.48 Outstanding - December 29, 2021 978,078 $ 11.45 4.59 $ 3,165 Vested and expected to vest at December 29, 2021 974,133 $ 11.43 4.57 $ 3,162 Exercisable at December 29, 2021 699,170 $ 10.01 3.05 $ 2,869 The intrinsic value of options exercised, calculated as the difference between the market value on the date of exercise and the exercise price, was $1.6 million, $9.9 million and $2.1 million for fiscal years 2021, 2020 and 2019, respectively. The Company measures and recognizes compensation expense for the estimated fair value of stock options for employees and non-employee directors and similar awards based on the grant-date fair value of the award. For options that are based on a service requirement, the cost is recognized on a straight-line basis over the requisite service period, usually the vesting period. For options that were based on performance requirements, costs were recognized over periods to which the performance criteria related. In order to calculate our stock options’ fair values and the associated compensation costs for share-based awards, the Company utilizes the Black–Scholes option pricing model and has developed estimates of various inputs including forfeiture rate, expected term, expected volatility, and risk-free interest rate. The forfeiture rate is based on historical rates and reduces the compensation expense recognized. The expected term for options granted is derived using the “simplified” method, in accordance with SEC guidance. The Company calculates the risk-free interest rate using the implied yield for a U.S. Treasury security with constant maturity and a remaining term equal to the expected term of the Company’s employee stock options. The Company does not anticipate paying any cash dividends for the foreseeable future and therefore uses an expected dividend yield of zero for option valuation purposes. Expected volatility is based on the Company’s historical data. Volatility is calculated by taking the historical daily closing equity prices of the Company, prior to the grant date, over a period equal to the expected term. In fiscal 2020, the Company did not grant any employee stock options. The weighted-average estimated fair value of employee stock options granted in fiscal 2021 was $8.10 per share using the Black–Scholes model with the following weighted-average assumptions used to value the option grants: December 29, 2021 Expected volatility 46.9 % Risk-free interest rate 1.1 % Expected term (years) 6.25 Expected dividends — As of December 29, 2021, the Company had total unrecognized compensation expense of $1.4 million related to unvested stock options, which the Company expects to recognize over a weighted average period of 2.9 years. The above assumptions generally require significant judgment. If in the future the Company determines that another method is more reasonable, or if another method for calculating these input assumptions is prescribed by authoritative guidance, and, therefore, should be used to estimate volatility or expected term, the fair value calculated for our stock options could change significantly. Higher volatility and longer expected lives result in an increase to stock-based compensation expense determined at the date of grant. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and will continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior, and other factors. Changes in the estimated forfeiture rate can have a significant effect on reported stock-based compensation expense, as the cumulative effect of adjusting the rate for all expense amortization is recognized in the period the forfeiture estimate is changed. If a revised forfeiture rate is higher than the previously-estimated forfeiture rate, an adjustment is made that will result in a decrease to the stock-based compensation expense recognized in the financial statements. If a revised forfeiture rate is lower than the previously-estimated forfeiture rate, an adjustment is made that will result in an increase to the stock-based compensation expense recognized in the financial statements. The effect of forfeiture adjustments was insignificant in fiscal 2021, 2020 and 2019. The Company will continue to use significant judgment in evaluating the expected term, volatility, and forfeiture rate related to its stock-based compensation. Restricted Shares In fiscal 2021 and 2020, 222,741 and 415,022 restricted share awards were granted, respectively, at the fair market value on the date of grant. These grants vest based on continued service over three years for directors and four years for employees. Changes in restricted shares for the years ended December 29, 2021 and December 30, 2020, are as follows: Weighted-Average Shares Fair Value Unvested shares at December 25, 2019 588,008 $ 11.23 Granted 415,022 $ 12.50 Released (158,748) $ 11.73 Forfeited, cancelled, or expired (101,878) $ 12.32 Unvested shares at December 30, 2020 742,404 $ 11.68 Granted 222,741 $ 17.13 Released (248,255) $ 11.99 Forfeited, cancelled, or expired (221,110) $ 11.80 Unvested shares at December 29, 2021 495,780 $ 13.92 As of December 29, 2021, there was total unrecognized compensation expense of $5.3 million related to unvested restricted share awards, which the Company expects to recognize over a weighted-average period of 2.49 years. As of December 29, 2021, all remaining performance stock units and restricted units were forfeited, cancelled, expired, or released. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 29, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 12. EARNINGS PER SHARE Basic EPS is calculated using the weighted-average number of shares of common stock outstanding during the years ended December 29, 2021, December 30, 2020, and December 25, 2019. Diluted EPS is calculated using the weighted-average number of shares of common stock outstanding and potentially dilutive during the period, using the treasury stock method. On August 2, 2018, the Company announced that the Board of Directors had authorized a stock repurchase program. The Company entered into a stock repurchase plan on August 28, 2018 (the “2018 Stock Repurchase Plan”), which allowed for the repurchase of up to $20.0 million of the Company’s common stock. The 2018 Stock Repurchase Plan commenced on November 6, 2018 and terminated on June 26, 2019. On April 30, 2019, as part of the Company’s focus on stockholder returns, the Board of Directors approved a new stock repurchase program. The Company entered into a stock repurchase plan on May 17, 2019 (the “2019 Stock Repurchase Plan”), which allowed for the repurchase of up to $30.0 million of the Company’s common stock. The 2019 Stock Repurchase Plan commenced on June 27, 2019, and was exhausted on September 26, 2019. Under the 2018 Stock Repurchase Plan and the 2019 Stock Repurchase Plan, the Company was permitted to repurchase its common stock from time to time, in amounts and at prices that the Company deemed appropriate, subject to market conditions and other considerations. The Company’s repurchases were executed using open market purchases, including pursuant to Rule 10b5-1 trading plans, and/or through privately negotiated transactions. For the year ended December 25, 2019, the Company repurchased 1,558,836 and 2,836,768 shares of common stock under the 2018 Stock Repurchase Plan and the 2019 Stock Repurchase Plan, respectively, executed using open market purchases, for total consideration of approximately $18.4 million and $30.0 million, respectively. The common stock repurchased under both the 2018 Stock Repurchase Plan and the 2019 Stock Repurchase Plan was retired upon repurchase. Below are basic and diluted EPS data for the periods indicated, which are in thousands except for per share data. For the Years Ended December 29, December 30, December 25, 2021 2020 2019 Numerator: Net income $ 29,121 $ 24,474 $ 24,900 Denominator: Weighted-average shares outstanding—basic 35,973,892 35,193,325 36,739,209 Weighted-average shares outstanding—diluted 36,446,756 35,796,406 37,441,503 Net income per share—basic $ 0.81 $ 0.70 $ 0.68 Net income per share—diluted $ 0.80 $ 0.68 $ 0.67 Anti-dilutive securities not considered in diluted EPS calculation 136,397 81,041 526,295 Below is a reconciliation of basic and diluted share counts. For the Years Ended December 29, December 30, December 25, 2021 2020 2019 Weighted-average shares outstanding—basic 35,973,892 35,193,325 36,739,209 Dilutive effect of stock options and restricted shares 472,864 603,081 702,294 Weighted-average shares outstanding—diluted 36,446,756 35,796,406 37,441,503 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 29, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. COMMITMENTS AND CONTINGENCIES Legal Matters On or about February 24, 2014, a former employee filed a class action in the Superior Court of the State of California, County of Orange, under the caption Elliott Olvera, et al v. El Pollo Loco, Inc., et al (Case No. 30-2014-00707367-CU-OE-CXC) on behalf of all putative class members (all hourly employees from 2010 to the present) alleging certain violations of California labor laws, including failure to pay overtime compensation, failure to provide meal periods and rest breaks, and failure to provide itemized wage statements. The parties reached a settlement in principle on January 24, 2019 of all claims brought on behalf of the 32,000+ putative class members in Olvera, as well as all claims for failure to pay overtime compensation, failure to provide meal periods and rest breaks, and failure to provide itemized wage statements brought in the class actions captioned Martha Perez v. El Pollo Loco, Inc. (Los Angeles Superior Court Case No. BC624001), Maria Vega, et al. v. El Pollo Loco, Inc. (Los Angeles Superior Court Case No. BC649719), and Gonzalez v. El Pollo Loco, Inc. (Los Angeles Superior Court Case No. BC712867). The settlement reached in principle in the Olvera, Perez, Vega, and Gonzalez actions resolves all potential claims from April 12, 2010 through April 1, 2019 that El Pollo Loco restaurant employees may have against El Pollo Loco for failure to pay for all compensation owed, failure to pay overtime compensation, failure to provide meal periods and rest breaks and failure to provide itemized wage statements, among other wage and hour related claims. A $16.3 million accrual of an expected settlement amount related to this matter was recorded as of December 26, 2018, and the court formally approved the settlement on January 31, 2020. The settlement payment was made on February 28, 2020. Purported class actions alleging wage and hour violations are commonly filed against California employers. The Company fully expects to have to defend against similar lawsuits in the future. On or about November 5, 2015, a purported Holdings shareholder filed a derivative complaint on behalf of Holdings in the Court of Chancery of the State of Delaware against certain Holdings officers, directors and Trimaran Pollo Partners, L.L.C., under the caption Armen Galustyan v. Sather, et al. (Case No. 11676-VCL). The derivative complaint alleges that these defendants breached their fiduciary duties to Holdings and were unjustly enriched when they sold shares of Holdings at artificially inflated prices due to alleged misrepresentations and omissions regarding EPL’s comparable store sales in the second quarter of 2015. The Holdings shareholder’s requested remedies include an award of compensatory damages to Holdings, as well as a court order to improve corporate governance by putting forward for stockholder vote certain resolutions for amendments to Holdings’ Bylaws or Certificate of Incorporation. The Holdings shareholder voluntarily dismissed the action on October 7, 2020. A second purported Holdings shareholder filed a derivative complaint on or about September 23, 2016, under the caption Diep v. Sather, CA 12760-VCL in the Delaware Court of Chancery. The Diep action is also purportedly brought on behalf of Holdings, names the same defendants and asserts substantially the same claims on substantially the same alleged facts as does Galustyan. Defendants moved to stay or dismiss the Diep action. On March 17, 2017, the Delaware court granted in part, and denied in part, the motion to stay the Diep action. The court denied defendants’ motion to dismiss the complaint for failure to state a claim. On January 17, 2018, the court entered an order granting the parties’ stipulation staying all proceedings in the Diep action for five months or until the completion of an investigation of the allegations in the action by a special litigation committee of the Holdings board of directors (the “SLC”). On September 25, 2020, after concluding its investigation, the SLC filed a motion to dismiss the Diep action and filed its investigative report under seal as an exhibit to the motion to dismiss. On May 21, 2021, while the SLC’s motion to dismiss the Diep action was pending, the Company filed a notice of proposed partial settlement of the Diep action with respect to defendants Kay Bogeajis, Laurance Roberts, Stephen J. Sather, Edward J. Valle, Douglas K. Ammerman, and Samuel N. Borgese (collectively, the “Settling Defendants”). Defendant Trimaran Pollo Partners, LLC (“Trimaran”) was not a party to the settlement. The court approved the settlement of $625,000 , less Plaintiffs’ fees of $156,250 , on September 10, 2021, and dismissed all claims brought, or that could have been brought, against Settling Defendants. In connection with this settlement, the Company received $469,000 in insurance proceeds, which was recorded within general and administrative expenses in the Company’s statement of income for the year ended December 29, 2021. On July 30, 2021, the court granted the SLC’s motion to dismiss with respect to the claims asserted against remaining defendant Trimaran. On October 4, 2021, Plaintiffs filed a notice of appeal of the court’s granting of the motion to dismiss against defendant Trimaran. Plaintiff filed its opening brief on December 6, 2021. SLC filed its answering brief on December 20, 2021 and the public version of the brief was filed on January 7, 2022. Plaintiffs filed the reply brief on January 4, 2022. The hearing on the appeal is scheduled for March 30, 2022. Janice P. Handlers-Bryman and Michael D. Bryman v. El Pollo Loco, Inc., Los Angeles Superior Court (Case No. MC026045) (the “Lancaster Lawsuit”) was filed on February 9, 2016. Existing El Pollo Loco franchisees, Janice P. Handlers-Bryman and Michael D. Bryman, as individuals and in their capacities as trustees of the Handlers Bryman Trust (collectively, “Plaintiffs”), filed suit against us alleging, among other things, that we “imposed unreasonable time limitations” on their development of additional restaurant locations in Lancaster, California, and that we thereafter developed company-operated El Pollo Loco restaurants in the “market area” of Plaintiffs’ existing El Pollo Loco restaurant in Lancaster. During fiscal 2020, the Company reached an agreement with the Plaintiffs to resolve the lawsuit for a payment by the Company of $2.5 million, which was recorded within operating expenses in the Company’s statement of income for the fiscal year ended December 30, 2020. Additionally, during fiscal 2020, the matter was formally resolved. On September 2, 2020, the California Court of Appeals entered an order, following a motion for stipulated reversal of the trial court’s judgment jointly filed by the parties, reversing the trial court’s judgment in the case and instructing the trial court to dismiss the matter with prejudice. On September 10, 2020, the trial court entered an order reversing its judgment and dismissing the case with prejudice. The settlement payment of $2.5 million has been made in the third quarter of 2020. The Company is also involved in various other claims such as wage and hour and other legal actions that arise in the ordinary course of business. The outcomes of these actions are not predictable but the Company does not believe that the ultimate resolution of these other actions will have a material adverse effect on its financial position, results of operations, liquidity, or capital resources. A significant increase in the number of claims, or an increase in amounts owing under successful claims, could materially and adversely affect its business, consolidated financial condition, results of operations, and cash flows. Purchase Commitments The Company has long-term beverage supply agreements with certain major beverage vendors. Pursuant to the terms of these arrangements, marketing rebates are provided to the Company and its franchisees from the beverage vendors based upon the dollar volume of purchases for system-wide restaurants which will vary according to their demand for beverage syrup and fluctuations in the market rates for beverage syrup. These contracts have terms extending through the end of 2024. At December 29, 2021, the Company’s total estimated commitment to purchase chicken was $38.7 million. Contingent Lease Obligations As a result of assigning the Company’s interest in obligations under real estate leases in connection with the sale of company-operated restaurants to some of the Company’s franchisees, the Company is contingently liable on four lease agreements. These leases have various terms, the latest of which expires in 2036. As of December 29, 2021, the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessee was $2.6 million. The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at December 29, 2021 was $2.4 million. The Company’s franchisees are primarily liable on the leases. The Company has cross-default provisions with these franchisees that would put them in default of their franchise agreements in the event of non-payment under the leases. The Company believes that these cross-default provisions reduce the risk that payments will be required to be made under these leases. During fiscal 2020, due to the current uncertainty related to the COVID-19 pandemic and the impact it has had on the ability of the Company’s franchisees to make their lease payments, the Company recorded a $0.1 million liability in the Company’s consolidated financial statements related to these contingent liabilities. During fiscal 2021, the Company reversed the initially recorded liability of $0.1 million due to the Company’s franchisees continuing to make their lease payments without any delays. Employment Agreements As of December 29, 2021, the Company had employment agreements with three of the officers of the Company. These agreements provide for minimum salary levels, possible annual adjustments for cost-of-living changes, and incentive bonuses that are payable under certain business conditions. Indemnification Agreements The Company has entered into indemnification agreements with each of its current directors and officers. These agreements require the Company to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the Company and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. The Company also intends to enter into indemnification agreements with future directors and officers. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 29, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. RELATED PARTY TRANSACTIONS LLC owns approximately 45.8% of the Company’s outstanding common stock as of December 29, 2021. This large position means that LLC and its majority owners—predecessors and affiliates of, and certain funds managed by, Trimaran Capital Partners and Freeman Spogli & Co. (collectively, “Trimaran” and “Freeman Spogli,” respectively)—possess significant influence when stockholders vote on matters such as election of directors, mergers, consolidations and acquisitions, the sale of all or substantially all of the Company’s assets, decisions affecting the Company’s capital structure, amendments to the Company’s certificate of incorporation or by-laws, and the Company’s winding up and dissolution. So long as LLC maintains at least 40% ownership, (i) any member of the board of directors may be removed at any time without cause by affirmative vote of a majority of the Company’s common stock, and (ii) stockholders representing 40% or greater ownership may cause special stockholder meetings to be called. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 29, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 15. REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition Nature of products and services The Company has two revenue streams, company-operated restaurant revenue and franchise related revenue. See Note 2 “Summary of Significant Accounting Policies” for a description of the revenue recognition policies. Franchise and franchise advertising revenue Franchise revenue consists of franchise royalties, initial franchise fees, license fees due from franchisees, IT support services, and rental income for subleases to franchisees. Franchise advertising revenue consists of advertising contributions received from franchisees. Disaggregated revenue The following table presents the Company’s revenues for the years ended December 29, 2021, December 30, 2020 and December 25, 2019 disaggregated by revenue source and market (in thousands): December 29, December 30, December 25, 2021 2020 2019 Core Market (1) : Company-operated restaurant revenue $ 371,067 $ 346,662 $ 351,624 Franchise revenue 16,062 14,216 14,918 Franchise advertising fee revenue 12,017 10,632 11,049 Total core market $ 399,146 $ 371,510 $ 377,591 Non-Core Market (2) : Company-operated restaurant revenue $ 23,666 $ 27,402 $ 39,488 Franchise revenue 17,667 15,202 13,901 Franchise advertising fee revenue 13,884 11,973 11,350 Total non-core market $ 55,217 $ 54,577 $ 64,739 Total revenue $ 454,363 $ 426,087 $ 442,330 (1) Core Market includes markets with existing company-operated restaurants at the time of the Company’s Initial Public Offering ("IPO") on July 28, 2014. (2) Non-Core Market includes markets entered into by the Company subsequent to the IPO date. The following table presents the Company’s revenues disaggregated by geographic market for the years ended December 29, 2021, December 30, 2020 and December 25, 2019: December 29, 2021 December 30, 2020 December 25, 2019 Greater Los Angeles area market 70.9 % 71.3 % 70.5 % Other markets 29.1 % 28.7 % 29.5 % Total 100 % 100 % 100 % Contract balances The following table provides information about the change in the franchise contract liability balances during the year ended December 29, 2021 and December 30, 2020 (in thousands): December 25, 2019 $ 6,317 Revenue recognized - beginning balance (1,082) Additional contract liability 398 Revenue recognized - additional contract liability (5) December 30, 2020 $ 5,628 Revenue recognized - beginning balance (680) Additional contract liability 1,380 December 29, 2021 $ 6,328 The Company’s franchise contract liability includes development fees, initial franchise and license fees, franchise renewal fees, lease subsidies and royalty discounts and is included within other accrued expenses and current liabilities and other noncurrent liabilities within the accompanying consolidated balance sheets. The Company receives area development fees from franchisees when they execute multi-unit area development agreements. Initial franchise and license fees, or franchise renewal fees, are received from franchisees upon the execution of, or renewal of, a franchise agreement. Revenue is recognized from these agreements as the underlying performance obligation is satisfied, which is over the term of the agreement. For the year ended December 29, 2021, there was an increase to the contract liability balance due to the Company’s completion of the sale of eight company-operated restaurants within the Sacramento area to an existing franchisee. This resulted in an additional contract liability of $0.7 million, relating to allocation of the transaction price to various performance obligations under the applicable contracts of the sale. The following table illustrates the estimated revenue to be recognized in the future related to performance obligations that are unsatisfied as of December 29, 2021: Franchise revenues: 2022 $ 641 2023 569 2024 477 2025 433 2026 410 Thereafter 3,798 Total $ 6,328 Changes in the loyalty rewards program liability included in other within other accrued expenses and current liabilities on the consolidated balance sheets were as follows (in thousands): December 29, December 30, December 25, 2021 2020 2019 Loyalty rewards liability, beginning balance $ 900 $ 1,084 $ 1,048 Revenue deferred 2,677 2,463 2,395 Revenue recognized (2,890) (2,647) (2,359) Loyalty rewards liability, ending balance $ 687 $ 900 $ 1,084 The Company expects all loyalty points revenue related to performance obligations unsatisfied as of December 29, 2021 to be recognized within one year . Gift Cards The gift card liability included in other accrued expenses and current liabilities on the consolidated balance sheets was as follows (in thousands): December 29, December 30, 2021 2020 Gift card liability $ 4,622 $ 4,008 Revenue recognized from the redemption of gift cards that was included in other accrued expenses and current liabilities at the beginning of the year was as follows (in thousands): December 29, December 30, December 25, 2021 2020 2019 Revenue recognized from gift card liability balance at the beginning of the year $ 1,218 $ 1,028 $ 871 Contract Costs The Company does not currently incur costs to obtain or fulfill a contract that would be considered contract assets under Topic 606. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 29, 2021 | |
Accounting Policies [Abstract] | |
Liquidity | Liquidity The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodel and maintenance), interest payments on its debt, lease obligations and working capital and general corporate needs. At December 29, 2021, the Company’s total debt was $40.0 million. The Company’s ability to make payments on its indebtedness and to fund planned capital expenditures depends on available cash and its ability to generate adequate cash flows in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. Based on current operations, the Company believes that its cash flows from operations, available cash of $30.0 million at December 29, 2021, and available borrowings under the 2018 Revolver (as defined in Note 6) will be adequate to meet the Company’s liquidity needs for the next twelve months from the issuance of the consolidated financial statements. However, depending on the severity and longevity of the COVID-19 pandemic, the Company’s financial performance and liquidity could be further impacted and could impact the Company’s ability to meet certain covenants required in its 2018 Credit Agreement (as defined in Note 6), specifically the lease-adjusted coverage ratio and fixed-charge coverage ratio. |
Basis of Presentation | Basis of Presentation The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of each calendar year. Fiscal 2021, 2020, and 2019 ended on December 29, 2021, December 30, 2020 and December 25, 2019, respectively. In a 52-week fiscal year, each quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations. Approximately every six or seven years a 53-week fiscal year occurs. Fiscal 2021 and 2019 were 52-week fiscal years. Fiscal 2020 was a 53-week fiscal year. 53-week years may cause revenues, expenses, and other results of operations to be higher due to the additional week of operations. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and revenue and expenses during the period reported. Actual results could materially differ from those estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, insurance reserves, lease accounting matters, stock-based compensation, tax receivable agreement (the “TRA”) liability, contingent liabilities and income tax valuation allowances. |
Covid 19 | COVID-19 During the COVID-19 pandemic, the Company has experienced periods of significant disruption to its restaurant operations. Following the pandemic declaration in March 2020, federal, state and local governments have periodically responded to the public health crisis by requiring social distancing, issuing “stay at home” directives, and implementing restaurant restrictions - including government-mandated dining room closures - that limited business to off-premise services only (take-out, drive-thru and delivery). The COVID-19 pandemic and the measures taken to prevent its spread have adversely affected the Company’s operations and financial results, particularly during fiscal 2020 as well as periods of 2021 when COVID-19 infections increased with the spread of new strains of the virus. While all of the Company’s restaurants had dining rooms open as of December 29, 2021, the Company continues to experience staffing challenges, which resulted in reduced operating hours and service channels at some of the Company’s restaurants and resulted in higher wage inflation, overtime costs and other labor related costs. Further, the Company experienced inflationary pressures due to supply chain disruptions that resulted in increased commodity prices and impacted the Company’s business and results of operations during the year ended December 29, 2021. The Company expects these pressures to continue during fiscal 2022. During fiscal 2021, the Company incurred $3.9 million in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. During fiscal 2020, the Company incurred $4.9 million in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. During fiscal 2021 as part of the CARES Act Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate impact that the COVID-19 pandemic will have on the Company’s consolidated financial condition, liquidity, and future results of operations, and therefore any prediction as to the ultimate materiality of the adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents. |
Subsequent Events | Subsequent Events On March 8, 2022, the Company’s Board of Directors appointed Mr. Roberts as Chief Executive Officer, President and a Class III director on the Board of Directors of the Company, effective March 9, 2022. Mr. Roberts will continue to serve as the Company’s interim Chief Financial Officer and as its principal executive officer, principal accounting officer and principal financial officer. Refer to Item 9B below for additional information. |
Concentration of Risk | Concentration of Risk Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances. The Company had one supplier for which amounts due at December 29, 2021 totaled 26.1% of the Company’s accounts payable. As of December 30, 2020, the Company had two suppliers for which amounts due totaled 24.2% and 11.4% of the Company’s accounts payable. Purchases from the Company’s largest supplier totaled 27.1% of the Company’s purchases for fiscal 2021, 26.9% for fiscal 2020 and 29.0% for fiscal 2019 with no amounts payable at December 29, 2021 or December 30, 2020. In fiscal 2021, 2020 and 2019, Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 70.9%, 71.3%, and 70.5%, respectively, of total revenue. One franchisee accounted for 10.6% of total accounts receivable as of December 29, 2021, and one franchisee accounted for 11.5% of total accounts receivable as of December 30, 2020. Management believes the loss of the significant supplier or franchisee could have a material adverse effect on the Company’s consolidated results of operations and financial condition. |
Accounts and Other Receivables, Net | Accounts and Other Receivables, Net Accounts and other receivables consist primarily of royalties, advertising and sublease rent and related amounts receivable from franchisees. Such receivables are due on a monthly basis, which may differ from the Company’s fiscal month-end dates. Accounts and other receivables also include credit/debit card receivables. The need for an allowance for doubtful accounts is reviewed on a specific identification basis and takes into consideration past due balances and the financial strength of the obligor. |
Inventories | Inventories Inventories consist principally of food, beverages and supplies and are valued at the lower of average cost or net realizable value. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures for reimbursements and improvements that significantly add to the productivity capacity or extend the useful life are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements and property held under finance leases are amortized over the shorter of their estimated useful lives or the remaining lease terms. For leases with renewal periods at the Company’s option, the Company generally uses the original lease term, excluding the option periods, to determine estimated useful lives; if failure to exercise a renewal option imposes an economic penalty on the Company, such that management determines at the inception of the lease that renewal is reasonably assured, the Company may include the renewal option period in the determination of appropriate estimated useful lives. The estimated useful service lives are as follows: Buildings 20 years Land improvements 3—30 years Building improvements 3—10 years Restaurant equipment 3—10 years Other equipment 2—10 years Property/equipment held under finance leases Shorter of useful life or lease term Leasehold improvements Shorter of useful life or lease term The Company capitalizes certain directly attributable internal costs in conjunction with the acquisition, development and construction of future restaurants. The Company also capitalizes certain directly attributable costs, including interest, in conjunction with constructing new restaurants. These costs are included in property and amortized over the shorter of the life of the related buildings and leasehold improvements or the lease term. Costs related to abandoned sites and other site selection costs that cannot be identified with specific restaurants are charged to general and administrative expenses in the accompanying consolidated statements of income, and were less than $0.1 million for each of the years ended December 29, 2021, December 30, 2020 and December 25, 2019. The Company capitalized internal costs related to site selection and construction activities of $1.4 million, $1.0 million and $1.1 million for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, respectively. |
Impairment of Long-Lived and ROU Assets | Impairment of Long-Lived and ROU Assets The Company reviews its long-lived and right-of-use assets (“ROU assets”) for impairment on a restaurant-by-restaurant basis whenever events or changes in circumstances indicate that the carrying value of certain long-lived and ROU assets may not be recoverable. The Company considers a triggering event, related to long-lived assets or ROU assets in a net asset position, to have occurred related to a specific restaurant if the restaurant’s AUV for the last twelve months are less than a minimum threshold or if consistent levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets. Additionally, the Company considers a triggering event related to ROU assets, to have occurred related to a specific lease if the location has been closed or subleased and future estimated sublease income is less than current lease payments. As of December 29, 2021 and December 30, 2020, ROU assets related to closed or subleased restaurant locations totaled $21.9 million and $27.7 million, respectively. If the Company concludes that the carrying value of certain long-lived and ROU assets will not be recovered based on expected undiscounted future cash flows, an impairment loss is recorded to reduce the long-lived or ROU assets to their estimated fair value. The fair value is measured on a nonrecurring basis using unobservable (Level 3) inputs. There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review analysis, which requires the use of estimates and assumptions. If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material. The Company determined that triggering events occurred for certain stores during the year ended December 29, 2021 that required an impairment review of the Company’s long-lived and ROU assets. f the ROU assets of one restaurant in Texas that closed in 2019, the carrying value of one restaurant in California that closed in 2021 and the long-lived assets of three restaurants in California. In fiscal 2020, the Company recorded non-cash impairment charges of $3.5 million primarily related to the carrying value o f the ROU assets of one restaurant in Texas and the long-lived assets of four restaurants in California |
Closed-Store Reserves | Closed-Store Reserves When a restaurant is closed, the Company will evaluate the ROU asset for impairment, based on anticipated sublease recoveries. The remaining value of the ROU asset is amortized on a straight-line basis, with the expense recognized in closed-store reserve expense. Additionally, any property tax and common area maintenance (“CAM”) payments relating to closed restaurants are included within closed-store expense. During fiscal 2021, the Company recognized $0.4 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. During fiscal 2020, the Company recognized $1.2 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets The Company’s indefinite-lived intangible assets consist of trademarks. Goodwill represents the excess of cost over fair value of net identified assets acquired in business combinations accounted for under the purchase method. The Company does not amortize its goodwill and indefinite-lived intangible assets. Goodwill resulted from the Acquisition and from the acquisition of certain franchise locations. Upon the sale of a restaurant, the Company evaluates whether there is a decrement of goodwill. The amount of goodwill included in the cost basis of the asset sold is determined based on the relative fair value of the portion of the reporting unit disposed of compared to the fair value of the reporting unit retained. The Company determined there was no decrement of goodwill related to the disposition of restaurants in fiscal 2021, 2020 and 2019. The Company performs annual impairment tests for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of a reporting unit with its carrying amount. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs the fair value test, the Company will compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company performs annual impairment tests for indefinite-lived intangible assets during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. An impairment test consists of either a qualitative assessment or a comparison of the fair value of an intangible asset with its carrying amount. The excess of the carrying amount of an intangible asset over its fair value is its impairment loss. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company’s reporting segment and are also consistent with the projections and assumptions that are used in current operating plans. These assumptions are subject to change as a result of changing economic and competitive conditions. The Company determined that there were no indicators of potential impairment of its goodwill and indefinite-lived intangible assets during fiscal 2021. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the year ended December 29, 2021. T he ultimate severity and longevity of the COVID-19 pandemic and the extent and duration of any economic downturn is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are capitalized and amortized over the period of the loan on a straight-line basis, which approximates the effective interest method. Included in other assets are deferred financing costs (net of accumulated amortization), related to the revolver, of $0.4 million and $0.6 million as of December 29, 2021 and December 30, 2020, respectively. Amortization expense for deferred financing costs was approximately $0.3 million for each of the three years ended December 29, 2021, December 30, 2020, and December 25, 2019, and is reflected as a component of interest expense in the accompanying consolidated statements of income. |
Insurance Reserves | Insurance Reserves The Company is responsible for workers’ compensation, general and health insurance claims up to a specified aggregate stop loss amount. The Company maintains a reserve for estimated claims both reported and incurred but not reported, based on historical claims experience and other assumptions. At December 29, 2021 and December 30, 2020, the Company had accrued $11.2 million and $10.4 million, respectively, and such amounts are reflected as accrued insurance in the accompanying consolidated balance sheets. The expense for such reserves for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, totaled $9.0 million, $8.4 million, and $9.6 million, respectively. These amounts are included in labor and related expenses and general and administrative expenses on the accompanying consolidated statements of income. |
Restaurant and Franchise Revenue | Restaurant Revenue Revenues from the operation of company-operated restaurants are recognized as food and beverage products are delivered to customers and payment is tendered at the time of sale. The Company presents sales net of sales-related taxes and promotional allowances. Promotional allowances amounted to approximately $7.7 million, $7.5 million and $8.0 million during the years ended December 29, 2021, December 30, 2020, and December 25, 2019, respectively. The Company offers a loyalty rewards program, which awards a customer points for dollars spent. Customers earn points for each dollar spent and, as of August 4, 2020, 50 points can be redeemed for a $5 reward to be used for a future purchase. Prior to August 4, 2020, 100 points could be redeemed for a $10 reward. If a customer does not earn or use points within a one-year period, their account is deactivated and all points expire. Additionally, if a reward is not used within six months , it expires. When a customer is part of the rewards program, the obligation to provide future discounts related to points earned is considered a separate performance obligation, to which a portion of the transaction price is allocated. The performance obligation related to loyalty points is deemed to have been satisfied, and the amount deferred in the balance sheet is recognized as revenue, when the points are transferred to a reward and redeemed, the reward or points have expired, or the likelihood of redemption is remote. A portion of the transaction price is allocated to loyalty points, if necessary, on a pro-rata basis, based on stand-alone selling price, as determined by menu pricing and loyalty points terms. The Company sells gift cards to its customers in the restaurants and through selected third parties. The gift cards sold to customers have no stated expiration dates and are subject to actual and/or potential escheatment rights in several of the jurisdictions in which the Company operates. Furthermore, due to these escheatment rights, the Company does not recognize breakage related to the sale of gift cards due to the immateriality of the amount remaining after escheatment. The Company recognizes income from gift cards when redeemed by the customer. Unredeemed gift card balances are deferred and recorded as other accrued expenses on the accompanying consolidated balance sheets. Franchise Revenue Franchise revenue consists of franchise royalties, initial franchise fees, license fees due from franchisees and IT support services. Rental income for subleases to franchisees are outside of the scope of the revenue standard and are within the scope of lease guidance. Under Topic 842, sublease income is recorded on a gross basis within the consolidated statements of income. Franchise royalties are based upon a percentage of net sales of the franchisee and are recorded as income as such sales are earned by the franchisees. For franchise and development agreement fees, the initial franchise services, or exclusivity of the development agreements, are not distinct from the continuing rights or services offered during the term of the franchise agreement and are, therefore, treated as a single performance obligation. As such, initial franchise and development fees received, and subsequent renewal fees, are recognized over the franchise or renewal term, which is typically twenty years. As of December 29, 2021, the Company had executed development agreements that represent commitments to open 67 franchised restaurants at various dates through 2031. This revenue stream is made up of the following performance obligations: ● Franchise License – inclusive of advertising services, development agreements, training, access to plans and help desk services; ● Discounted renewal option; and ● Hardware services. The Company satisfies the performance obligation related to the franchise license over the term of the franchise agreement, which is typically 20 years. Payment for the franchise license consists of three components, a fixed-fee related to the franchise/development agreement, a sales-based royalty fee and a sales-based advertising fee. The fixed fee, as determined by the signed development and/or franchise agreement, is due at the time the development agreement is entered into, and/or when the franchise agreement is signed, and does not include a finance component. The sales-based royalty fee and sales-based advertising fee are considered variable consideration and are recognized as revenue as such sales are earned by the franchisees. Both sales-based fees qualify under the royalty constraint exception, and do not require an estimate of future transaction price. Additionally, the Company is utilizing the practical expedient available under ASC Topic 606, “Revenue from Contracts with Customers” (“Topic 606”) regarding disclosure of the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied for sales-based royalties. In certain franchise agreements, the Company offers a discounted renewal to incentivize future renewals after the end of the initial franchise term. As this is considered a separate performance obligation, the Company allocated a portion of the initial franchise fee to this discounted renewal, on a pro-rata basis, assuming a 20 year renewal. This performance obligation is satisfied over the renewal term, which is typically 10 or 20 years, while payment is fixed and due at the time the renewal is signed. The Company purchases hardware, such as scanners, printers, cash registers and tablets, from third-party vendors, which it then sells to franchisees. As the Company is considered the principal in this relationship, payment received for the hardware is considered revenue, and is received upon transfer of the goods from the Company to the Franchisee. As of December 29, 2021, there were no performance obligations, related to hardware services that were unsatisfied or partially satisfied. Franchise Advertising Fee Revenue The Company presents advertising contributions received from franchisees as franchise advertising fee revenue and records all expenses of the advertising fund within franchise expenses. |
Advertising Costs | Advertising Costs Advertising expense is recorded as the obligation to contribute to the advertising fund and is accrued, generally when the associated revenue is recognized. Advertising expense, which is a component of occupancy and other operating expenses, was $16.1 million, $15.3 million and $16.1 million for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, respectively. In addition, there was $25.9 million, $22.6 million and $22.4 million for the years ended December 29, 2021, December 30, 2020 and December 25, 2019, respectively, funded by the franchisees’ advertising fees. Franchisees pay a monthly fee to the Company that ranges from 4% to 5% of their restaurants’ net sales as reimbursement for advertising, public relations and promotional services the Company provides, which is included within franchise advertising fee revenue. Fees received in advance of provided services are included in other accrued expenses and current liabilities and were $3.6 million and $0.1 million at December 29, 2021 and December 30, 2020, respectively. Company-operated restaurants contribute to the advertising fund on the same basis as franchised restaurants. At December 29, 2021, the Company was obligated to spend $3.6 million more in future periods to comply with this requirement. Production costs of commercials, programming and other marketing activities are charged to the advertising funds when the advertising is first used for its intended purpose. Total contributions and other marketing expenses are included in general and administrative expenses in the accompanying consolidated statements of income. |
Preopening Costs | Preopening Costs Preopening costs incurred in connection with the opening of new restaurants are expensed as incurred. Preopening costs, which are included in general and administrative expenses on the accompanying consolidated statements of income, were $0.3 million, $0.1 million and $0.4 million for the years ended December 29, 2021, December 30, 2020, and December 25, 2019, respectively. |
Leases | Leases The Company’s operations utilize property, facilities, equipment and vehicles. Buildings and facilities leased from others are primarily for restaurants and support facilities. Restaurants are operated under lease arrangements that generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues more than a defined amount. Initial terms of land and restaurant building leases generally have terms of 20 years, exclusive of options to renew. ROU assets and operating and finance lease liabilities are recognized at the lease commencement date, which is the date the Company takes possession of the property. Operating and finance lease liabilities represent the present value of lease payments not yet paid. ROU assets represent the Company’s right to use an underlying asset and are based upon the operating and finance lease liabilities adjusted for prepayments or accrued lease payments, lease incentives, and impairment of ROU assets. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates corresponding to the lease term including reasonably certain renewal periods. The Company’s leases generally have escalating rents over the term of the lease, and are recorded on a straight-line basis over the expected lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the right-of-use asset related to the lease. These are amortized through the operating lease asset as reductions of expense over the lease term. Operating and finance lease liabilities that are based on an index or rate are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases of equipment primarily consist of restaurant equipment, computer systems and vehicles. The Company subleases facilities to certain franchisees and other non-related parties which are recorded on a straight-line basis. |
Gain on Recovery of Insurance Proceeds, Lost Profits | Gain on Recovery of Insurance Proceeds, Lost Profits During the year ended December 30, 2020, the Company received business interruption insurance proceeds of $2.0 million, primarily related to restaurant sales losses and expenses related to the COVID-19 pandemic and resulting dining room closures. |
Recovery of Securities Class Action Legal Expense and Other Insurance Claims | Recovery of Securities Class Action Legal Expense and Other Insurance Claims During fiscal 2020 the Company received insurance proceeds of $0.1 million related to a property claim. During fiscal 2019, the Company received insurance proceeds of $10.0 million related to the reimbursement of certain legal expenses paid in prior years for the defense of securities lawsuits. See Note 13 “Commitments and Contingencies—Legal Matters.” |
Loss on Disposition of Restaurants | Loss on Disposition of Restaurants During fiscal 2021, the Company completed the sale of eight restaurants within the Sacramento area to an existing franchisee. During fiscal 2019, the Company completed the sale of four company-operated restaurants within the San Francisco area to an existing franchisee, seven company-operated restaurants in the Phoenix area to another existing franchisee and five company-operated restaurants in Texas to a third franchisee. The Company has determined that these restaurant dispositions represent multiple element arrangements, and as a result, the cash consideration received was allocated to the separate elements based on their relative standalone selling price. Cash proceeds included upfront consideration for the sale of the restaurants and franchise fees, as well as future cash consideration for royalties. The cash consideration per restaurant related to franchise fees is consistent with the amounts stated in the related franchise agreements, which are charged for separate standalone arrangements. The Company initially defers and subsequently recognizes the franchise fees over the term of the franchise agreement. Future royalty income is also recognized in revenue as earned. The Sacramento sale resulted in cash proceeds of $4.6 million and a net loss on sale of restaurants of $1.5 million for the year ended December 29, 2021. The three sales during 2019 resulted in cash proceeds of $4.8 million and a net loss on sale of restaurants of $5.1 million for the year ended December 25, 2019. Since the date of their sale, these restaurants are now included in the total number of franchised El Pollo Loco restaurants. |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses an interest rate swap, a derivative instrument, to hedge interest rate risk and not for trading purposes. The derivative contract is entered into with a financial institution. The Company records the derivative instrument on its consolidated balance sheets at fair value. The derivative instrument qualifies as a hedging instrument in a qualifying cash flow hedge relationship, and the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive (loss) income (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For any derivative instruments not designated as hedging instruments, the gain or loss will be recognized in earnings immediately. If a derivative previously designated as a hedge is terminated, or no longer meets the qualifications for hedge accounting, any balances in AOCI will be reclassified to earnings immediately. As a result of the use of an interest rate swap, the Company is exposed to risk that the counterparty will fail to meet their contractual obligations. To mitigate the counterparty credit risk, the Company will only enter into contracts with major financial institutions, based upon their credit ratings and other factors, and will continue to assess the creditworthiness of the counterparty. As of December 29, 2021, the counterparty to the Company’s interest rate swap has performed in accordance with their contractual obligation. |
Income Taxes | Income Taxes The provision for income taxes, income taxes payable and deferred income taxes is determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If, after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by charging to tax expense a reserve for the portion of deferred tax assets which are not expected to be realized. The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where it is required to file. When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position the Company takes has to have at least a “more likely than not” chance of being sustained (based on the position’s technical merits) upon challenge by the respective authorities. The term “more likely than not” means a likelihood of more than 50%. Otherwise, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the “more likely than not” criterion as the largest amount of tax benefit that is greater than 50% likely of being realized upon its effective resolution. Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial position and cash flows. The Company’s policy is to recognize interest or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at December 29, 2021 or December 30, 2020. During fiscal 2020, the Company recognized interest of $0.1 million related to the Notice of Proposed Adjustment (“NOPA”), discussed below. The Company did not recognize any interest or penalties during fiscal 2021 and 2019. During fiscal 2021, fiscal 2020 and fiscal 2019, there were no material unrecognized tax benefits. Management believes no significant change to the amount of unrecognized tax benefits will occur within the next twelve months. On July 30, 2014, the Company entered into a TRA, which calls for the Company to pay to its pre-IPO stockholders 85% of the savings in cash that the Company realizes in its income taxes as a result of utilizing its net operating losses (“NOLs”) and other tax attributes attributable to preceding periods. As of December 29, 2021 and December 30, 2020, the Company had accrued $1.5 million and $3.1 million, respectively relating to expected TRA payments. In fiscal 2021, 2020 and 2019, the Company paid $1.7 million, $5.2 million and $5.8 million, respectively, to its pre-IPO stockholders under the TRA. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law as a stimulus package, and contained several tax provisions, including a correction of a previous drafting error related to quality improvement property (“QIP”) and immediate refundability of all remaining alternative minimum tax (“AMT”) credits. The new provisions did not have a material impact on the Company’s consolidated financial statements. During fiscal 2020, the Company received a NOPA for the years ended December 27, 2017 and December 28, 2016, related to the Company’s methodology regarding its ordering of utilization of AMT NOLs. Resolution of this NOPA resulted in a payment of $0.4 million, and the audit is closed. As a result of the CARES Act, this amount was immediately refundable upon filing of a Form 1139. The Company filed the Form 1139 during the year ended December 30, 2020 and received a refund totaling $0.5 million. The CARES Act also provides for the deferral of employer Social Security taxes that are otherwise owed for wage payment and the creation of refundable employee retention credits. The total amount deferred as of December 30, 2020 is $4.9 million, of which 50% is due by December 31, 2021 and another 50% is due by December 31, 2022. As of December 29, 2021, deferred payroll tax payments of $2.4 million were included in other non-current liabilities on the Company’s consolidated balance sheet. Additionally, the Company assessed its eligibility for the business relief provision under the CARES Act known as the Employee Retention Credit (“ERC”), a refundable payroll tax credit for 50% of qualified wages paid during 2020. The American Rescue Plan passed into law on March 11, 2021 extended the ERC through September 30, 2021, and the credit was increased to 70% of qualified wages paid from January 1, 2021 through September 30, 2021. During fiscal 2021, the Company recognized the ERC credit in the amount of $3.4 million as income as it is probable that it will comply with the ERC eligibility requirements. The Company has elected an accounting policy to present government assistance as a reduction of the related expense. The ERC credit is recorded as a receivable as part of the accounts and other receivable on the consolidated balance sheet for the year ended December 29, 2021 and |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: ● Level 1: Quoted prices for identical instruments in active markets. ● Level 2: Observable prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. ● Level 3: Unobservable inputs used when little or no market data is available. During the year ended December 25, 2019, the Company entered into an interest rate swap, which is required to be measured at fair value on a recurring basis. The fair value was determined based on Level 2 inputs, which include valuation models, as reported by the Company’s counterparty. These valuation models use a discounted cash flow analysis on the cash flows of the derivative based on the terms of the contract and the forward yield curves adjusted for our credit risk. The key inputs for the valuation models are observable market prices, discount rates, and forward yield curves. See Note 6 “Long-Term Debt” for further discussion regarding the Company’s interest rate swaps. The following table presents fair value for the interest rate swap at December 29, 2021 (in thousands): Fair Value Measurements Using Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ — $ 396 $ — The following table presents fair value for the interest rate swap at December 30, 2020 (in thousands): Fair Value Measurements Using Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ — $ 1,139 $ — Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 29, 2021 reflecting certain property and equipment and ROU assets, for which an impairment loss was recognized during the corresponding periods, as discussed above under Impairment of Long-Lived and ROU Assets Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 304 Certain ROU assets, net $ 411 $ — $ — $ 411 $ 407 The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 30, 2020 reflecting certain property and equipment and ROU assets for which an impairment loss was recognized during the corresponding periods, as discussed above under "Impairment of Long-Lived and ROU Assets" (in thousands): Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 2,955 Certain ROU assets, net $ 902 $ — $ — $ 902 $ 543 The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 25, 2019 for which an impairment loss was recognized during the corresponding periods, as discussed above under "Impairment of Long-Lived and ROU Assets" (in thousands): Fair Value Measurements Using Impairment Total Level 1 Level 2 Level 3 Losses Certain property and equipment, net $ — $ — $ — $ — $ 339 Certain ROU assets, net $ 6,196 $ — $ — $ 6,196 $ 3,220 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and certain accrued expenses approximate fair value due to their short-term maturities. The recorded value of the TRA approximates fair value, based on borrowing rates currently available to the Company for debts with similar terms and remaining maturities (Level 3 measurement). |
Stock Based Compensation | Stock-Based Compensation Stock-based compensation expense is recognized using a fair-value based method for costs related to all share-based payments including stock options and restricted stock issued under the Company’s employee stock plans. The fair value of stock option awards is estimated on the date of grant using an option pricing model, which require the input of subjective assumptions. The Company is required to use judgment in estimating the amount of stock-based awards that are expected to be forfeited. If actual forfeitures differ significantly from the original estimate, stock-based compensation expense and the results of operations could be affected. The cost is recognized on a straight-line basis over the period during which an employee is required to provide service, usually the vesting period. For options or restricted shares that are based on a performance requirement, the cost is recognized on an accelerated basis over the period to which the performance criteria relate. |
Earnings per Share | Earnings per Share Earnings per share (“EPS”) is calculated using the weighted average number of common shares outstanding during each period. Diluted EPS assumes the conversion, exercise or issuance of all potential common stock equivalents unless the effect is to reduce a loss or increase the income per share. For purposes of this calculation, options and restricted stock awards are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. The shares used to compute basic and diluted net income per share represent the weighted-average common shares outstanding. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” which requires business entities to disclose in notes to their financial statements information about certain types of government assistance that they receive. The Company adopted this ASU during the fourth quarter of 2021 and made appropriate disclosures in accordance with this standard. The adoption of ASU 2021-10 did not have a significant impact on the Company’s consolidated financial position or results of operations. For additional information on the impact of the adoption of ASU 2021-10, see above under “Income Taxes” in this Note 2, “Summary of Significant Accounting Policies.” In July 2021, the FASB issued ASU No. 2021-05, “Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments” which no longer requires a lessor to recognize a selling loss upon commencement of a lease with variable lease payments that prior to the amendment would have been classified as a sales-type or direct financing lease. The Company adopted this ASU during the third quarter of 2021. The adoption of ASU 2021-05 did not have a significant impact on the Company’s consolidated financial position or results of operations. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope” which clarifies the FASB’s recent rate reform guidance in Topic 848, Reference Rate Reform, that optional expedients and exceptions therein for contract modification and hedge accounting apply to derivatives that are affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and the use of new interest rate benchmarks. ASU 2021-01 is effective immediately. Entities may choose to apply the amendments retrospectively as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively to new modifications from any date within an interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. The Company adopted this ASU on January 7, 2021. The adoption of ASU 2021-01 did not have a significant impact on the Company’s consolidated financial position or results of operations. In October 2020, the FASB issued ASU No. 2020-10, “Codification Improvements,” which improve the consistency of the codification by including all disclosure guidance in the appropriate Disclosure Section (Section 50). ASU 2020-10 is effective for annual periods beginning after December 15, 2020, and for interim periods within annual periods beginning after December 15, 2020. The Company adopted this ASU during the first quarter of 2021. The adoption of ASU 2020-10 did not have a significant impact on the Company’s consolidated financial position or results of operations. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”, which modifies Topic 740 to simplify the accounting for income taxes. ASU 2019-12 is effective for financial statements issued for annual periods beginning after December 15, 2020, and for the interim periods therein. The Company adopted this ASU during the first quarter of 2021. The adoption of ASU 2019-12 did not have a significant impact on the Company’s consolidated financial position or results of operations. |
Franchise Development Option Agreement with Related Party | Franchise Development Option Agreement with Related Party On July 11, 2014, EPL and LLC entered into a Franchise Development Option Agreement relating to development of restaurants in the New York–Newark, NY–NJ–CT–PA Combined Statistical Area (the “Territory”). EPL granted LLC the exclusive option to develop and open 15 restaurants in the Territory over five years (the “Initial Option”), and, provided that the Initial Option is exercised, the exclusive option to develop and open up to an additional 100 restaurants in the Territory over ten years. The Franchise Development Option Agreement terminates (i) ten years after execution, or (ii) if the Initial Option is exercised, five years after that exercise. LLC may only exercise the Initial Option if EPL first determines to begin development of company-operated restaurants in the Territory or support the development of the Territory. The Company has no current intention to begin development in the Territory and as of December 29, 2021, no stores have been opened in the Territory. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Accounting Policies [Abstract] | |
Summary of estimated useful service lives | The estimated useful service lives are as follows: Buildings 20 years Land improvements 3—30 years Building improvements 3—10 years Restaurant equipment 3—10 years Other equipment 2—10 years Property/equipment held under finance leases Shorter of useful life or lease term Leasehold improvements Shorter of useful life or lease term |
Schedule of fair value measurement | The following table presents fair value for the interest rate swap at December 29, 2021 (in thousands): Fair Value Measurements Using Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ — $ 396 $ — The following table presents fair value for the interest rate swap at December 30, 2020 (in thousands): Fair Value Measurements Using Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ — $ 1,139 $ — |
Summary of Non-Financial Instruments Measured at Fair Value on Nonrecurring Basis | The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 29, 2021 reflecting certain property and equipment and ROU assets, for which an impairment loss was recognized during the corresponding periods, as discussed above under Impairment of Long-Lived and ROU Assets Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 304 Certain ROU assets, net $ 411 $ — $ — $ 411 $ 407 The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 30, 2020 reflecting certain property and equipment and ROU assets for which an impairment loss was recognized during the corresponding periods, as discussed above under "Impairment of Long-Lived and ROU Assets" (in thousands): Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 2,955 Certain ROU assets, net $ 902 $ — $ — $ 902 $ 543 The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 25, 2019 for which an impairment loss was recognized during the corresponding periods, as discussed above under "Impairment of Long-Lived and ROU Assets" (in thousands): Fair Value Measurements Using Impairment Total Level 1 Level 2 Level 3 Losses Certain property and equipment, net $ — $ — $ — $ — $ 339 Certain ROU assets, net $ 6,196 $ — $ — $ 6,196 $ 3,220 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Costs and Related Accumulated Depreciation and Amortization of Major Classes of Property and Equipment | The costs and related accumulated depreciation and amortization of major classes of property are as follows (in thousands): December 29, 2021 December 30, 2020 Land $ 12,323 $ 12,323 Buildings and improvements 144,631 147,939 Other property and equipment 78,383 77,177 Construction in progress 5,333 3,567 240,670 241,006 Less: accumulated depreciation and amortization (165,002) (161,364) $ 75,668 $ 79,642 |
Trademarks, Other Intangible _2
Trademarks, Other Intangible Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Domestic Trademarks | Domestic trademarks consist of the following (in thousands): December 29, December 30, 2021 2020 Cost $ 120,700 $ 120,700 Accumulated impairment charges (58,812) (58,812) Trademarks, net $ 61,888 $ 61,888 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Leases [Abstract] | |
Schedule of lease cost | The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Property Equipment Property Equipment Property Equipment Leases Leases Total Leases Leases Total Leases Leases Total Finance lease cost: Amortization of right-of-use assets $ 78 $ 2 $ 80 $ 11 $ — $ 11 $ 9 $ — $ 9 Interest on lease liabilities 58 1 59 27 — 27 27 — 27 Operating lease cost 26,501 1,122 27,623 26,578 1,227 27,805 26,212 1,273 27,485 Short-term lease cost — 21 21 — 23 23 — 34 34 Variable lease cost 539 354 893 444 191 635 455 186 641 Sublease income (3,823) — (3,823) (3,251) — (3,251) (2,430) — (2,430) Total lease cost $ 23,353 $ 1,500 $ 24,853 $ 23,809 $ 1,441 $ 25,250 $ 24,273 $ 1,493 $ 25,766 The following table presents the Company’s total lease cost on the consolidated statement of income (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Lease cost – Occupancy and other operating expenses $ 24,020 $ 23,972 $ 24,540 Lease cost – General & administrative 414 464 463 Lease cost – Depreciation and amortization 78 11 9 Lease cost – Interest expense 58 27 27 Lease cost - Closed-store reserve 283 776 727 Total lease cost $ 24,853 $ 25,250 $ 25,766 The Company had the following cash and non-cash activities associated with its leases (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Property Equipment Property Equipment Property Equipment Leases Leases Total Leases Leases Total Leases Leases Total Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 26,414 $ 1,084 $ 27,498 $ 23,683 $ 1,230 $ 24,913 $ 25,168 $ 1,282 $ 26,450 Financing cash flows used for finance leases $ 102 $ 46 $ 148 $ 34 $ 5 $ 39 $ 68 $ — $ 68 Non-cash investing and financing activities: Operating lease ROU assets obtained in exchange for lease liabilities: Operating lease ROU assets $ 17,763 $ — $ 17,763 $ 5,850 $ 13 $ 5,863 $ 10,339 $ 256 $ 10,595 Finance lease ROU assets obtained in exchange for lease liabilities: Finance lease ROU assets $ — $ 196 $ 196 $ 1,623 $ 54 $ 1,677 $ — $ — $ — Derecognition of ROU assets due to terminations, impairment or modifications $ (4,513) $ (99) $ (4,612) $ (543) $ (26) $ (569) $ (4,574) $ (157) $ (4,731) Other Information Weighted-average remaining lease term—finance leases 18.42 4.02 18.98 4.52 2.83 — Weighted-average remaining lease term—operating leases 11.27 1.44 11.45 2.31 12.08 3.20 Weighted-average discount rate—finance leases 2.78 % 1.54 % 2.50 % 1.68 % 11.10 % — % Weighted-average discount rate—operating leases 4.45 % 3.89 % 4.29 % 3.93 % 4.38 % 3.96 % |
Schedule of Capital Leases | Information regarding the Company’s minimum future lease obligations at December 29, 2021 is as follows (in thousands): Finance Operating Leases Minimum Minimum Minimum Lease Lease Sublease For the Years Ending Payments Payments Income December 28, 2022 $ 190 $ 27,866 $ 3,588 December 27, 2023 145 26,115 3,571 December 25, 2024 145 24,013 3,456 December 31, 2025 141 21,773 3,106 December 30, 2026 108 19,546 2,789 Thereafter 1,582 127,306 23,165 Total $ 2,311 $ 246,619 $ 39,675 Less: imputed interest (1.54% - 4.45%) (456) (55,009) Present value of lease obligations 1,855 191,610 Less: current maturities (143) (19,959) Noncurrent portion $ 1,712 $ 171,651 |
Schedule of Operating Leases | Information regarding the Company’s minimum future lease obligations at December 29, 2021 is as follows (in thousands): Finance Operating Leases Minimum Minimum Minimum Lease Lease Sublease For the Years Ending Payments Payments Income December 28, 2022 $ 190 $ 27,866 $ 3,588 December 27, 2023 145 26,115 3,571 December 25, 2024 145 24,013 3,456 December 31, 2025 141 21,773 3,106 December 30, 2026 108 19,546 2,789 Thereafter 1,582 127,306 23,165 Total $ 2,311 $ 246,619 $ 39,675 Less: imputed interest (1.54% - 4.45%) (456) (55,009) Present value of lease obligations 1,855 191,610 Less: current maturities (143) (19,959) Noncurrent portion $ 1,712 $ 171,651 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table shows the financial statement line item and amount of the Company’s cash flow hedge accounting on the consolidated balance sheet (in thousands): December 29, 2021 December 30, 2020 Notional Fair value Notional Fair value Other liabilities - Interest rate swap $ 40,000 $ 396 $ 40,000 $ 1,139 |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The following table summarizes the effect of the Company’s cash flow hedge accounting on the consolidated statements of income (in thousands): December 29, 2021 December 30, 2020 December 25, 2019 Interest expense on hedged portion of debt $ 568 $ 979 $ 461 Interest expense on interest rate swap 486 278 (84) Interest expense on debt and derivatives, net $ 1,054 $ 1,257 $ 377 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table summarizes the effect of the Company’s cash flow hedge accounting on AOCI for the years ended December 29, 2021, December 30, 2020 and December 25, 2019 (in thousands): Gain (Loss) Reclassified from Net Gain (Loss) Recognized in OCI AOCI into Interest expense December 29, 2021 December 30, 2020 December 25, 2019 December 29, 2021 December 30, 2020 December 25, 2019 Interest rate swap $ 257 $ (1,762) $ 430 $ 486 $ 278 $ (84) |
Other Accrued Expenses and Cu_2
Other Accrued Expenses and Current Liabilities (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Expenses and Current Liabilities | Other accrued expenses and current liabilities consist of the following (in thousands): December 29, 2021 December 30, 2020 Accrued sales and property taxes $ 4,726 $ 5,216 Gift card liability 4,622 4,008 Loyalty rewards program liability 687 900 Accrued advertising 3,635 — Accrued legal settlements and professional fees 771 321 Deferred franchise and development fees 637 503 Current portion of lease payment deferrals — 1,793 Other 4,718 4,063 Total other accrued expenses and current liabilities $ 19,796 $ 16,804 |
Other Noncurrent Liabilities (T
Other Noncurrent Liabilities (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Other Noncurrent Liabilities | Other noncurrent liabilities consist of the following (in thousands): December 29, 2021 December 30, 2020 Deferred franchise and development fees $ 5,691 $ 5,125 Derivative liability 396 1,139 Employer social security tax deferral 2,426 4,853 Other 140 175 Total other noncurrent liabilities $ 8,653 $ 11,292 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes is based on the following components (in thousands): December 29, December 30, December 25, For the Years Ended 2021 2020 2019 Current income taxes: Federal $ 7,163 $ 520 $ — State 2,158 1,123 104 Total current 9,321 1,643 104 Deferred income taxes: Federal 93 3,350 5,991 State 918 658 3,587 Total deferred 1,011 4,008 9,578 Tax provision for income taxes $ 10,332 $ 5,651 $ 9,682 |
Schedule of Effective Income Tax rate | The provision for income taxes differs from the amount computed by applying the federal income tax rate of 21.0% for fiscal 2021, 2020 and 2019 as follows: December 29, December 30, December 25, For the Years Ended 2021 2020 2019 Statutory federal income tax rate applied to earnings before income taxes and extraordinary items 21.0 % 21.0 % 21.0 % State income tax expense (net of federal benefit) 5.9 4.3 6.0 Change in valuation allowance 0.1 0.4 2.4 162(m) 0.8 0.2 0.3 WOTC Credit (0.5) (0.9) (0.8) Stock option exercises (1.4) (6.6) (1.0) Other 0.3 0.4 — Total 26.2 % 18.8 % 27.9 % |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets and liabilities as of December 29, 2021 and December 30, 2020 are summarized below. December 29, December 30, 2021 2020 Deferred assets: Capital leases $ 60 $ 27 Accrued vacation 503 506 Accrued workers’ compensation 2,616 1,894 Enterprise zone and other credits 7,524 8,579 Net operating losses 5 5 Fixed assets 4,393 4,643 ROU assets 51,864 53,875 Other 5,694 6,349 Total deferred tax assets 72,659 75,878 Valuation allowance (6,181) (6,127) Net deferred tax assets 66,478 69,751 Deferred liabilities: Goodwill (6,349) (6,218) Trademark (16,727) (16,773) Prepaid expense (498) (720) ROU liabilities (46,484) (48,005) Other 361 (96) Deferred tax liabilities (69,697) (71,812) Net deferred tax liability $ (3,219) $ (2,061) |
Schedule of Deferred Tax Assets Classification | The net deferred tax asset amounts above as of December 29, 2021 and December 30, 2020 have been classified in the accompanying consolidated balance sheets as noncurrent assets and are as follows (in thousands): December 29, December 30, 2021 2020 Noncurrent: Assets - state $ 2,245 $ 3,166 Liabilities - federal (5,464) (5,227) Net deferred tax liability $ (3,219) $ (2,061) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Changes in Stock Options | Weighted-Average Aggregate Weighted-Average Contractual Life Intrinsic Value Shares Exercise Price Life (Years) (in thousands) Outstanding - December 25, 2019 2,077,570 $ 8.14 Exercised (970,736) 6.04 Forfeited, cancelled or expired (75,968) 12.14 Outstanding - December 30, 2020 1,030,866 $ 9.82 Grants 256,172 17.55 Exercised (132,760) 6.52 Forfeited, cancelled or expired (176,200) $ 14.48 Outstanding - December 29, 2021 978,078 $ 11.45 4.59 $ 3,165 Vested and expected to vest at December 29, 2021 974,133 $ 11.43 4.57 $ 3,162 Exercisable at December 29, 2021 699,170 $ 10.01 3.05 $ 2,869 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | December 29, 2021 Expected volatility 46.9 % Risk-free interest rate 1.1 % Expected term (years) 6.25 Expected dividends — |
Schedule of Changes in Restricted Shares | Changes in restricted shares for the years ended December 29, 2021 and December 30, 2020, are as follows: Weighted-Average Shares Fair Value Unvested shares at December 25, 2019 588,008 $ 11.23 Granted 415,022 $ 12.50 Released (158,748) $ 11.73 Forfeited, cancelled, or expired (101,878) $ 12.32 Unvested shares at December 30, 2020 742,404 $ 11.68 Granted 222,741 $ 17.13 Released (248,255) $ 11.99 Forfeited, cancelled, or expired (221,110) $ 11.80 Unvested shares at December 29, 2021 495,780 $ 13.92 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income per Share | Below are basic and diluted EPS data for the periods indicated, which are in thousands except for per share data. For the Years Ended December 29, December 30, December 25, 2021 2020 2019 Numerator: Net income $ 29,121 $ 24,474 $ 24,900 Denominator: Weighted-average shares outstanding—basic 35,973,892 35,193,325 36,739,209 Weighted-average shares outstanding—diluted 36,446,756 35,796,406 37,441,503 Net income per share—basic $ 0.81 $ 0.70 $ 0.68 Net income per share—diluted $ 0.80 $ 0.68 $ 0.67 Anti-dilutive securities not considered in diluted EPS calculation 136,397 81,041 526,295 |
Schedule of Reconciliation of Basic and Diluted Share Counts | Below is a reconciliation of basic and diluted share counts. For the Years Ended December 29, December 30, December 25, 2021 2020 2019 Weighted-average shares outstanding—basic 35,973,892 35,193,325 36,739,209 Dilutive effect of stock options and restricted shares 472,864 603,081 702,294 Weighted-average shares outstanding—diluted 36,446,756 35,796,406 37,441,503 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 29, 2021 | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue | The following table presents the Company’s revenues for the years ended December 29, 2021, December 30, 2020 and December 25, 2019 disaggregated by revenue source and market (in thousands): December 29, December 30, December 25, 2021 2020 2019 Core Market (1) : Company-operated restaurant revenue $ 371,067 $ 346,662 $ 351,624 Franchise revenue 16,062 14,216 14,918 Franchise advertising fee revenue 12,017 10,632 11,049 Total core market $ 399,146 $ 371,510 $ 377,591 Non-Core Market (2) : Company-operated restaurant revenue $ 23,666 $ 27,402 $ 39,488 Franchise revenue 17,667 15,202 13,901 Franchise advertising fee revenue 13,884 11,973 11,350 Total non-core market $ 55,217 $ 54,577 $ 64,739 Total revenue $ 454,363 $ 426,087 $ 442,330 (1) Core Market includes markets with existing company-operated restaurants at the time of the Company’s Initial Public Offering ("IPO") on July 28, 2014. (2) Non-Core Market includes markets entered into by the Company subsequent to the IPO date. The following table presents the Company’s revenues disaggregated by geographic market for the years ended December 29, 2021, December 30, 2020 and December 25, 2019: December 29, 2021 December 30, 2020 December 25, 2019 Greater Los Angeles area market 70.9 % 71.3 % 70.5 % Other markets 29.1 % 28.7 % 29.5 % Total 100 % 100 % 100 % |
Schedule of Estimated Revenue to be Recognized Related to Performance Obligations | The following table illustrates the estimated revenue to be recognized in the future related to performance obligations that are unsatisfied as of December 29, 2021: Franchise revenues: 2022 $ 641 2023 569 2024 477 2025 433 2026 410 Thereafter 3,798 Total $ 6,328 |
Loyalty reward program | |
Disaggregation of Revenue [Line Items] | |
Schedule of Change in Franchise Contract Liability Balances | Changes in the loyalty rewards program liability included in other within other accrued expenses and current liabilities on the consolidated balance sheets were as follows (in thousands): December 29, December 30, December 25, 2021 2020 2019 Loyalty rewards liability, beginning balance $ 900 $ 1,084 $ 1,048 Revenue deferred 2,677 2,463 2,395 Revenue recognized (2,890) (2,647) (2,359) Loyalty rewards liability, ending balance $ 687 $ 900 $ 1,084 |
Gift card liability | |
Disaggregation of Revenue [Line Items] | |
Schedule of Change in Franchise Contract Liability Balances | The gift card liability included in other accrued expenses and current liabilities on the consolidated balance sheets was as follows (in thousands): December 29, December 30, 2021 2020 Gift card liability $ 4,622 $ 4,008 Revenue recognized from the redemption of gift cards that was included in other accrued expenses and current liabilities at the beginning of the year was as follows (in thousands): December 29, December 30, December 25, 2021 2020 2019 Revenue recognized from gift card liability balance at the beginning of the year $ 1,218 $ 1,028 $ 871 |
Franchise revenue | |
Disaggregation of Revenue [Line Items] | |
Schedule of Change in Franchise Contract Liability Balances | The following table provides information about the change in the franchise contract liability balances during the year ended December 29, 2021 and December 30, 2020 (in thousands): December 25, 2019 $ 6,317 Revenue recognized - beginning balance (1,082) Additional contract liability 398 Revenue recognized - additional contract liability (5) December 30, 2020 $ 5,628 Revenue recognized - beginning balance (680) Additional contract liability 1,380 December 29, 2021 $ 6,328 |
Description of Business - Addit
Description of Business - Additional Information (Details) | 12 Months Ended |
Dec. 29, 2021segmentrestaurant | |
Debt Instrument [Line Items] | |
Number of operating segments | segment | 1 |
Philippines | |
Debt Instrument [Line Items] | |
Number of restaurants | 1 |
Company-operated | |
Debt Instrument [Line Items] | |
Number of restaurants | 189 |
Company-operated | Greater Los Angeles area market | |
Debt Instrument [Line Items] | |
Number of restaurants | 141 |
Franchised | |
Debt Instrument [Line Items] | |
Number of restaurants | 291 |
Franchised | Greater Los Angeles area market | |
Debt Instrument [Line Items] | |
Number of restaurants | 135 |
Chicken Acquisition Corp. | |
Debt Instrument [Line Items] | |
Ownership interest | 45.80% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | Aug. 04, 2020USD ($)item | Aug. 03, 2020USD ($)item | Jul. 30, 2014 | Jul. 11, 2014restaurant | Dec. 29, 2021USD ($)segmentitemrestaurant | Dec. 30, 2020USD ($)itemrestaurant | Dec. 29, 2020USD ($) | Dec. 25, 2019USD ($)restaurantitem |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of operating segments | segment | 1 | |||||||
Restaurants sold | restaurant | 4 | |||||||
Leaves of absence and overtime pay due to COVID 19 | $ 3,900,000 | $ 4,900,000 | ||||||
Employee retention credit | 3,400,000 | |||||||
Bad debt expense | 0 | 190,000 | $ 0 | |||||
Total amount of outstanding debt | 40,000,000 | |||||||
Cash available | 30,046,000 | 13,219,000 | ||||||
Gain on recovery of insurance proceeds | 0 | 2,000,000 | 0 | |||||
Proceeds from disposition of restaurants | 4,556,000 | 0 | 4,770,000 | |||||
Net loss on sale of restaurants | (1,534,000) | 0 | $ (5,058,000) | |||||
Number of restaurant sales | item | 3 | |||||||
Impairment of property and equipment | 711,000 | 3,498,000 | $ 3,559,000 | |||||
Number of restaurants closed | restaurant | 1 | |||||||
Unrecognized tax benefits, accrual of interest or penalties | 0 | 0 | ||||||
Interest related to NOPA | 100,000 | |||||||
TRA tax expense (benefit) | 100,000 | 100,000 | $ (100,000) | |||||
Percentage of cash savings in taxes realized as a result of utilizing net operating losses payable to pre-IPO stockholders | 85.00% | |||||||
Income tax receivable agreement (income) expense | $ 58,000 | 139,000 | 57,000 | |||||
AMT Credits, CARES Act | 400,000 | |||||||
Proceeds from Income Tax Refunds | 500,000 | |||||||
Total deferred amount | 4,900,000 | |||||||
Percentage of deferred amount due by current fiscal year | 50.00% | |||||||
Percentage of deferred amount due by next fiscal year | 50.00% | |||||||
Percentage of qualified wages paid for refundable payroll tax credit | 70.00% | |||||||
Employee retention credit | $ 2,400,000 | |||||||
Employee retention tax credit | 3,400,000 | |||||||
Capitalized internal cost | 1,400,000 | 1,000,000 | 1,100,000 | |||||
Expense for payroll and benefits reserves | 9,000,000 | 8,400,000 | 9,600,000 | |||||
Promotional allowances amount | $ 7,700,000 | 7,500,000 | 8,000,000 | |||||
Loyalty Rewards Program, Points Needed For One Reward | item | 50 | 100 | ||||||
Loyalty Rewards Program, Award Earned | $ 5 | $ 10 | ||||||
Loyalty Rewards Program, Expiration Period For Inactivity | 1 year | |||||||
Loyalty Reward Program, unused reward expiration period | 6 months | |||||||
Loyalty Rewards Program, Expected Loyalty Points Redemption Period | 1 year | |||||||
Accrued loyalty rewards program liability | $ 700,000 | 900,000 | ||||||
Advertising expense | 16,100,000 | 15,300,000 | 16,100,000 | |||||
Asset impairment charges | 700,000 | 3,500,000 | 3,600,000 | |||||
Operating Lease ROU assets | 171,981,000 | 177,129,000 | ||||||
Accrued advertising | 3,600,000 | 100,000 | ||||||
Insurance proceeds | 100,000 | |||||||
Recovery of securities lawsuits related legal expenses and other insurance claims | 0 | (123,000) | (10,000,000) | |||||
Charge relating to present value of total expected TRA payments | 1,500,000 | 3,100,000 | ||||||
Payments to pre-IPO stockholders under TRA | $ 1,658,000 | 5,237,000 | 5,764,000 | |||||
Number of commitments to open franchised restaurants | restaurant | 67 | |||||||
Amortization of deferred financing costs | $ 251,000 | 252,000 | $ 251,000 | |||||
Accounts payable | $ 10,626,000 | 7,472,000 | ||||||
Franchise Rights | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||||||
Finite-Lived Intangible Asset, Useful Life Renewal Period | 20 years | |||||||
Minimum | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 10 years | |||||||
Percentage of monthly franchise fee | 4.00% | |||||||
Maximum | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 20 years | |||||||
Percentage of monthly franchise fee | 5.00% | |||||||
Other Assets | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Deferred financing fees net of accumulated amortization | $ 400,000 | 600,000 | ||||||
Franchise Development Initial Option Agreement | Limited Liability Company | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 15 | |||||||
Number of years available under plan | 5 years | |||||||
Franchise Development Additional Option Agreement | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of years available under plan | 10 years | |||||||
Franchise Development Additional Option Agreement | Limited Liability Company | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 100 | |||||||
Number of years available under plan | 5 years | |||||||
Franchise Development Agreement | Limited Liability Company | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Related party agreement, termination period | 10 years | |||||||
Closed Or Subleased Restaurant Locations | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Operating Lease ROU assets | $ 21,900,000 | $ 27,700,000 | ||||||
Accounts Receivable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Franchisees | item | 1 | |||||||
Supplier Concentration Risk | Accounts Payable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number Of Suppliers | item | 1 | 2 | ||||||
Supplier Concentration Risk | Supplier One | Accounts Payable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 26.10% | 24.20% | ||||||
Supplier Concentration Risk | Supplier Two | Accounts Payable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 11.40% | |||||||
Supplier Concentration Risk | Largest Supplier One | Purchased | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 27.10% | 26.90% | 29.00% | |||||
Supplier Concentration Risk | Largest Supplier One | Accounts Payable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Accounts payable | $ 0 | $ 0 | ||||||
Geographic Concentration Risk | Revenue | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 100.00% | 100.00% | 100.00% | |||||
Hardware Services | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Revenue, Remaining Performance Obligation, Amount | $ 0 | |||||||
Texas | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants with ROU asset impairment charges | restaurant | 1 | 1 | ||||||
Number of restaurants closed | restaurant | 2 | |||||||
Texas | Assets held for sale | Restaurant Sales | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants agreed to sell to a third party | restaurant | 5 | |||||||
California | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 3 | 1 | ||||||
Number of restaurants with ROU asset impairment charges | restaurant | 1 | 4 | 1 | |||||
Restaurants sold | restaurant | 4 | |||||||
Number of restaurants closed | restaurant | 2 | |||||||
Greater Los Angeles area market | Geographic Concentration Risk | Revenue | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 70.90% | 71.30% | 70.50% | |||||
Sacramento Area | Assets held for sale | Restaurant Sales | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants agreed to sell to a third party | restaurant | 8 | |||||||
San Francisco | Assets held for sale | Restaurant Sales | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants agreed to sell to a third party | restaurant | 4 | |||||||
Phoenix | Assets held for sale | Restaurant Sales | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants agreed to sell to a third party | restaurant | 7 | |||||||
Interest Expense | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Amortization of deferred financing costs | $ 300,000 | $ 300,000 | $ 300,000 | |||||
General and Administrative Expense | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Preopening costs | 300,000 | 100,000 | 400,000 | |||||
General and Administrative Expense | Maximum | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Abandoned site and other site selection costs | 100,000 | 100,000 | 100,000 | |||||
Closed Store | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Closed-store reserve expense | $ 400,000 | $ 1,200,000 | 1,300,000 | |||||
Company-operated | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 189 | |||||||
Proceeds from disposition of restaurants | 4,800,000 | |||||||
Net loss on sale of restaurants | 5,100,000 | |||||||
Company-operated | Greater Los Angeles area market | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 141 | |||||||
Company-operated | Sacramento Area | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Proceeds from disposition of restaurants | $ 4,600,000 | |||||||
Net loss on sale of restaurants | $ 1,500,000 | |||||||
Franchised | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 291 | |||||||
Advertising fees | $ 25,900,000 | $ 22,600,000 | $ 22,400,000 | |||||
Franchised | Accounts Receivable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Franchisees | item | 1 | |||||||
Franchised | Geographic Concentration Risk | Accounts Receivable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 10.60% | 11.50% | ||||||
Franchised | Greater Los Angeles area market | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of restaurants | restaurant | 135 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment Owned, Net (Details) | 12 Months Ended |
Dec. 29, 2021 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 20 years |
Land improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 3 years |
Land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 30 years |
Building improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 3 years |
Building improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 10 years |
Restaurant equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 3 years |
Restaurant equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 10 years |
Other equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 2 years |
Other equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful service lives | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property and equipment, net | $ 75,668 | $ 79,642 | |
Impairment of property and equipment | 300 | 3,000 | $ 300 |
Impairment of Right-of-Use Assets | 500 | 3,200 | |
Fair Value, Measurements, Recurring [Member] | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | 396 | 1,139 | |
Fair Value, Measurements, Recurring [Member] | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 | |
Fair Value, Measurements, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property and equipment, net | 0 | 0 | 0 |
Right-of-Use Assets, Net | 411 | 902 | 6,196 |
Impairment of property and equipment | 304 | 2,955 | 339 |
Impairment of Right-of-Use Assets | 407 | 543 | 3,220 |
Fair Value, Measurements, Nonrecurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property and equipment, net | 0 | 0 | 0 |
Right-of-Use Assets, Net | 0 | 0 | |
Fair Value, Measurements, Nonrecurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property and equipment, net | 0 | 0 | 0 |
Right-of-Use Assets, Net | 0 | 0 | |
Fair Value, Measurements, Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Property and equipment, net | 0 | 0 | 0 |
Right-of-Use Assets, Net | $ 411 | $ 902 | $ 6,196 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Costs and Related Accumulated Depreciation and Amortization of Major Classes of Property (Details) - USD ($) $ in Thousands | Dec. 29, 2021 | Dec. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 240,670 | $ 241,006 |
Less: accumulated depreciation and amortization | (165,002) | (161,364) |
Property and equipment, net | 75,668 | 79,642 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12,323 | 12,323 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 144,631 | 147,939 |
Other property and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 78,383 | 77,177 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,333 | $ 3,567 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 15.2 | $ 16.9 | $ 17.9 |
Impairment of property and equipment | $ 0.3 | $ 3 | $ 0.3 |
Trademarks, Other Intangible _3
Trademarks, Other Intangible Assets and Liabilities - Schedule of Domestic Trademarks (Details) - Trademarks - USD ($) $ in Thousands | Dec. 29, 2021 | Dec. 30, 2020 |
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | $ 120,700 | $ 120,700 |
Accumulated impairment charges | (58,812) | (58,812) |
Trademarks, net | $ 61,888 | $ 61,888 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021USD ($)restaurantleaseitem | Dec. 30, 2020USD ($)restaurant | Dec. 25, 2019USD ($)restaurant | |
Lessee, Lease, Description [Line Items] | |||
Property and equipment held under operating leases, net ("ROU asset") | $ | $ 171,981 | $ 177,129 | |
Operating Lease, Liability | $ | $ 191,610 | ||
Initial lease term | 20 years | ||
Number of renewable options | item | 4 | ||
Renewal term | 5 years | ||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ | $ 17,763 | 5,863 | $ 10,595 |
Number of restaurants primarily responsible for impairment | 2 | ||
Impairment of Right-of-Use Assets | $ | $ 500 | $ 3,200 | |
Restaurants sold | 4 | ||
Number of restaurants closed | 1 | ||
Texas | |||
Lessee, Lease, Description [Line Items] | |||
Number of restaurants primarily responsible for impairment | 1 | 1 | |
Operating Lease, Impairment Loss | $ | $ 400 | ||
Number of restaurants closed | 2 | ||
California | |||
Lessee, Lease, Description [Line Items] | |||
Number of restaurants primarily responsible for impairment | 1 | ||
Restaurants sold | 4 | ||
Number of restaurants closed | 2 | ||
Lease Not Yet Commenced [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Number Of Leases | lease | 2 | ||
Property Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Number Of Finance Leases | 2 | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ | $ 17,763 | $ 5,850 | $ 10,339 |
Equipment Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Number Of Finance Leases | lease | 9 | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ | $ 0 | $ 13 | $ 256 |
Property lease modification [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Number of Restaurants with lease modification | 22 | 12 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ | $ 17,800 | $ 3,900 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Amortization of right-to-use assets | $ 80 | $ 11 | $ 9 |
Interest on lease liabilities | 59 | 27 | 27 |
Operating Lease, Cost | 27,623 | 27,805 | 27,485 |
Short-term Lease, Cost | 21 | 23 | 34 |
Variable Lease, Cost | 893 | 635 | 641 |
Sublease Income | (3,823) | (3,251) | (2,430) |
Total lease cost | 24,853 | 25,250 | 25,766 |
Operating Expense [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Total lease cost | 24,020 | 23,972 | 24,540 |
General and Administrative Expense | |||
Lessee, Lease, Description [Line Items] | |||
Total lease cost | 414 | 464 | 463 |
Depreciation and amortization [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Total lease cost | 78 | 11 | 9 |
Interest Expense | |||
Lessee, Lease, Description [Line Items] | |||
Total lease cost | 58 | 27 | 27 |
Restructuring Charges [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Total lease cost | 283 | 776 | 727 |
Property Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Amortization of right-to-use assets | 78 | 11 | 9 |
Interest on lease liabilities | 58 | 27 | 27 |
Operating Lease, Cost | 26,501 | 26,578 | 26,212 |
Variable Lease, Cost | 539 | 444 | 455 |
Sublease Income | (3,823) | (3,251) | (2,430) |
Total lease cost | 23,353 | 23,809 | 24,273 |
Equipment Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Amortization of right-to-use assets | 2 | ||
Interest on lease liabilities | 1 | ||
Operating Lease, Cost | 1,122 | 1,227 | 1,273 |
Short-term Lease, Cost | 21 | 23 | 34 |
Variable Lease, Cost | 354 | 191 | 186 |
Total lease cost | $ 1,500 | $ 1,441 | $ 1,493 |
Leases - Cash and Non-cash Leas
Leases - Cash and Non-cash Lease Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Payments | $ 27,498 | $ 24,913 | $ 26,450 |
Finance Lease, Principal Payments | 148 | 39 | 68 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 17,763 | 5,863 | 10,595 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 196 | 1,677 | 0 |
Derecognition of ROU assets due to terminations, impairment or modifications | (4,612) | (569) | (4,731) |
Operating Lease ROU assets | 171,981 | 177,129 | |
Operating lease liabilities | 191,610 | ||
Property Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Payments | 26,414 | 23,683 | 25,168 |
Finance Lease, Principal Payments | 102 | 34 | 68 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 17,763 | 5,850 | 10,339 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 0 | 1,623 | 0 |
Derecognition of ROU assets due to terminations, impairment or modifications | $ (4,513) | $ (543) | $ (4,574) |
Finance Lease, Weighted-average remaining lease term | 18 years 5 months 1 day | 18 years 11 months 23 days | 2 years 9 months 29 days |
Operating Lease, Weighted-average remaining lease term | 11 years 3 months 7 days | 11 years 5 months 12 days | 12 years 29 days |
Finance Lease, Weighted Average Discount Rate, Percent | 2.78% | 2.50% | 11.10% |
Operating Lease, Weighted Average Discount Rate, Percent | 4.45% | 4.29% | 4.38% |
Equipment Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Payments | $ 1,084 | $ 1,230 | $ 1,282 |
Finance Lease, Principal Payments | 46 | 5 | 0 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 0 | 13 | 256 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 196 | 54 | 0 |
Derecognition of ROU assets due to terminations, impairment or modifications | $ (99) | $ (26) | $ (157) |
Finance Lease, Weighted-average remaining lease term | 4 years 7 days | 4 years 6 months 7 days | |
Operating Lease, Weighted-average remaining lease term | 1 year 5 months 8 days | 2 years 3 months 21 days | 3 years 2 months 12 days |
Finance Lease, Weighted Average Discount Rate, Percent | 1.54% | 1.68% | 0.00% |
Operating Lease, Weighted Average Discount Rate, Percent | 3.89% | 3.93% | 3.96% |
Leases - Minimum Future Lease O
Leases - Minimum Future Lease Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 29, 2021 | Dec. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Finance Lease, Liability, Payments Due Year One | $ 190 | |
Finance Lease, Liability, Payments, Due Year Two | 145 | |
Finance Lease, Liability, Payments, Due Year Three | 145 | |
Finance Lease, Liability, Payments, Due Year Four | 141 | |
Finance Lease, Liability, Payments, Due Year Five | 108 | |
Finance Leases, Future Minimum Payments Due Thereafter | 1,582 | |
Total | 2,311 | |
Finance Lease, Liability, Undiscounted Excess Amount | (456) | |
Present value of lease obligations | 1,855 | |
Less: current maturities | (143) | $ (70) |
Obligations under finance leases, net of current portion | 1,712 | 1,692 |
Operating Leases, Future Minimum Payments, Due in One Year | 27,866 | |
Operating Leases, Future Minimum Payments, Due in Two Years | 26,115 | |
Operating Leases, Future Minimum Payments, Due in Three Years | 24,013 | |
Operating Leases, Future Minimum Payments, Due in Four Years | 21,773 | |
Operating Leases, Future Minimum Payments, Due in Five Years | 19,546 | |
Operating Leases, Future Minimum Payments, Due Thereafter | 127,306 | |
Total | 246,619 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (55,009) | |
Present value of lease obligations | 191,610 | |
Less: current maturities | (19,959) | (19,907) |
Noncurrent portion | 171,651 | $ 178,658 |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, Next Twelve Months | 3,588 | |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Two Years | 3,571 | |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Three Years | 3,456 | |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Four Years | 3,106 | |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Five Years | 2,789 | |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, Thereafter | 23,165 | |
Total | $ 39,675 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Imputed interest rate | 1.54% | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Imputed interest rate | 4.45% |
Leases - Lessor (Details)
Leases - Lessor (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Lessor, Lease, Description [Line Items] | |||
Operating Lease, Lease Income | $ 0.4 | $ 0.6 | $ 0.5 |
Minimum | |||
Lessor, Lease, Description [Line Items] | |||
Lessor, Operating Lease, Term of Contract | 3 years | ||
Maximum | |||
Lessor, Lease, Description [Line Items] | |||
Lessor, Operating Lease, Term of Contract | 20 years |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021USD ($) | Dec. 30, 2020USD ($) | Dec. 25, 2019USD ($) | |
Debt Instrument [Line Items] | |||
Revolving line of credit | $ 40,000 | $ 62,800 | |
Repayments of Lines of Credit | 22,800 | 93,700 | $ 19,000 |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 600 | ||
Net Gain (Loss) recognized in OCI | 257 | (1,762) | 430 |
Interest expense (income) on interest rate swap | 1,054 | 1,257 | 377 |
Loss Reclassified from AOCI into Interest expense | (486) | (278) | 84 |
Derivative liabilities fair value | 396 | $ 1,139 | |
Revolving Credit Facility | 2018 Credit Agreement | |||
Debt Instrument [Line Items] | |||
Senior secured revolving facility | $ 150,000 | ||
Senior secured revolving facility term | 5 years | ||
Debt instrument, interest rate | 1.40% | 1.60% | |
Revolving line of credit | $ 40,000 | $ 62,800 | |
Amount of borrowings available | 100,000 | 78,800 | |
Proceeds from repayments of lines of credit | 59,500 | ||
Repayments of Lines of Credit | 22,800 | ||
Proceeds from lines of credit | $ 34,200 | ||
Principal payments prior to maturity | 0 | ||
Interest expense | 1,200 | ||
Debt Instrument, Restrictive Covenants, Maximum Annual Repurchase or Redemption of Qualified Entity Interests | 1,000 | ||
Debt Instrument, Restrictive Covenants, Maximum Annual Redemption, Repurchase, Acquired Equity Interests | 500 | ||
Debt Instrument, Restrictive Covenants, Maximum Annual Payment For Stock Option Plans, Employment Agreements and Incentive Plans | 2,500 | ||
Debt Instrument, Restrictive Covenants, Maximum Annual Payment For Other Restricted Payments | $ 5,000 | ||
Debt Instrument, Covenant Description, Maximum Leverage Ratio | 4.25 | ||
Revolving Credit Facility | 2018 Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.30% | 1.60% | |
Revolving Credit Facility | 2018 Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.60% | 3.30% | |
Revolving Credit Facility | 2018 Credit Agreement | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument basis percentage | 0.50% | ||
Revolving Credit Facility | 2018 Credit Agreement | LIBOR | |||
Debt Instrument [Line Items] | |||
Debt instrument basis percentage | 1.00% | ||
Revolving Credit Facility | 2018 Credit Agreement | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument basis percentage | 1.25% | ||
Revolving Credit Facility | 2018 Credit Agreement | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument basis percentage | 2.25% | ||
Revolving Credit Facility | 2018 Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument basis percentage | 0.25% | ||
Revolving Credit Facility | 2018 Credit Agreement | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument basis percentage | 1.25% | ||
Revolving Credit Facility | 2018 and 2014 Agreements | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 2,700 | ||
Revolving Credit Facility | Credit Agreement Two Thousand Fourteen [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | 3,100 | ||
Letter of Credit | 2018 Credit Agreement | |||
Debt Instrument [Line Items] | |||
Sub limit of revolving facility | $ 15,000 | ||
Letters of credit outstanding | 10,000 | 8,400 | |
Swing Line Loans | 2018 Credit Agreement | |||
Debt Instrument [Line Items] | |||
Sub limit of revolving facility | $ 15,000 | ||
Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, Fixed Interest Rate | 1.31% | ||
Derivative, Variable Interest Rate | 1.50% | ||
Net Gain (Loss) recognized in OCI | $ 257 | (1,762) | 430 |
Interest expense (income) on interest rate swap | 486 | 278 | (84) |
Loss Reclassified from AOCI into Interest expense | 486 | 278 | (84) |
Derivative Asset, Notional Amount | 40,000 | ||
Derivative Liability, Notional Amount | 40,000 | 40,000 | |
Derivative liabilities fair value | 396 | 1,139 | |
Hedged Debt Instrument [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense (income) on interest rate swap | $ 568 | $ 979 | $ 461 |
Other Accrued Expenses and Cu_3
Other Accrued Expenses and Current Liabilities - Schedule of Other Accrued Expenses and Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 29, 2021 | Dec. 30, 2020 |
Payables and Accruals [Abstract] | ||
Accrued sales and property taxes | $ 4,726 | $ 5,216 |
Gift card liability | 4,622 | 4,008 |
Loyalty reward program liability | 687 | 900 |
Accrued advertising | 3,635 | |
Accrued legal settlements and professional fees | 771 | 321 |
Deferred franchise and development fees | 637 | 503 |
Current portion of lease payment deferrals | 1,793 | |
Other | 4,718 | 4,063 |
Total other accrued expenses and current liabilities | $ 19,796 | $ 16,804 |
Other Noncurrent Liabilities -
Other Noncurrent Liabilities - Schedule of Other Noncurrent Liabilities (Detail) - USD ($) $ in Thousands | Dec. 29, 2021 | Dec. 30, 2020 |
Payables and Accruals [Abstract] | ||
Deferred franchise and development fees | $ 5,691 | $ 5,125 |
Derivative liability | 396 | 1,139 |
Employer social security tax deferral | 2,426 | 4,853 |
Other | 140 | 175 |
Total other noncurrent liabilities | $ 8,653 | $ 11,292 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Current income taxes: | |||
Federal | $ 7,163 | $ 520 | $ 0 |
State | 2,158 | 1,123 | 104 |
Total current | 9,321 | 1,643 | 104 |
Deferred income taxes: | |||
Federal | 93 | 3,350 | 5,991 |
State | 918 | 658 | 3,587 |
Total deferred | 1,011 | 4,008 | 9,578 |
Tax provision for income taxes | $ 10,332 | $ 5,651 | $ 9,682 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate applied to earnings before income taxes and extraordinary items | 21.00% | 21.00% | 21.00% |
State income tax (net of federal benefit) | 5.90% | 4.30% | 6.00% |
Change in valuation allowance | 0.10% | 0.40% | 2.40% |
162(m) | 0.80% | 0.20% | 0.30% |
WOTC Credit | (0.50%) | (0.90%) | (0.80%) |
Stock option exercises | (1.40%) | (6.60%) | (1.00%) |
Other | 0.30% | 0.40% | |
Total | 26.20% | 18.80% | 27.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Jul. 30, 2014 | Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 |
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Increase in valuation allowance | $ 100 | $ 900 | ||
Valuation allowance | $ 6,181 | 6,127 | ||
Percentage of cash savings in taxes realized as a result of utilizing net operating losses payable to pre-IPO stockholders | 85.00% | |||
TRA tax expense (benefit) | 100 | 100 | (100) | |
AMT Credits, CARES Act | 400 | |||
Payments to pre-IPO stockholders under TRA | 1,658 | 5,237 | 5,764 | |
Deferred tax asset credit | 7,524 | 8,579 | ||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 0 | |||
Unrecognized Tax Benefits, Income Tax Penalties Accrued | 0 | 0 | ||
Proceeds from Income Tax Refunds | 500 | |||
Payment to Stockholders Under Tax Receivable Agreement | $ 1,700 | 5,200 | $ 5,800 | |
Total deferred amount | 4,900 | |||
Percentage of deferred amount due by current fiscal year | 50.00% | |||
Percentage of deferred amount due by next fiscal year | 50.00% | |||
Percentage of qualified wages paid for refundable payroll tax credit | 70.00% | |||
Employee retention credit | $ 2,400 | |||
Employee retention tax credit | 3,400 | |||
Maximum | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Increase in valuation allowance | 100 | |||
Federal | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Net operating loss carryforwards | 0 | |||
State | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Net operating loss carryforwards | 100 | |||
Enterprise Zone | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Tax credits carry forward | 9,500 | |||
California | Enterprise Zone | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Deferred tax asset credit | $ 1,300 | $ 2,500 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 29, 2021 | Dec. 30, 2020 |
Deferred assets: | ||
Capital leases | $ 60 | $ 27 |
Accrued vacation | 503 | 506 |
Accrued workers' compensation | 2,616 | 1,894 |
Enterprise zone and other credits | 7,524 | 8,579 |
Net operating losses | 5 | 5 |
Fixed assets | 4,393 | 4,643 |
ROU assets | 51,864 | 53,875 |
Other | 5,694 | 6,349 |
Total deferred tax assets | 72,659 | 75,878 |
Valuation allowance | (6,181) | (6,127) |
Net deferred tax assets | 66,478 | 69,751 |
Deferred liabilities: | ||
Goodwill | (6,349) | (6,218) |
Trademark | (16,727) | (16,773) |
Prepaid expense | (498) | (720) |
ROU liabilities | (46,484) | (48,005) |
Other | 361 | (96) |
Deferred tax liabilities | (69,697) | (71,812) |
Net deferred tax liability | $ (3,219) | $ (2,061) |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Asset Classification (Details) - USD ($) $ in Thousands | Dec. 29, 2021 | Dec. 30, 2020 |
Income Tax [Line Items] | ||
Assets | $ 66,478 | $ 69,751 |
Liabilities | (69,697) | (71,812) |
Net deferred tax liability | (3,219) | (2,061) |
State | ||
Income Tax [Line Items] | ||
Assets | 2,245 | 3,166 |
Federal | ||
Income Tax [Line Items] | ||
Liabilities | $ (5,464) | $ (5,227) |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Qualified compensation of employees that may be contributed, maximum | 25.00% | ||
Benefit contribution | $ 0.8 | $ 0.8 | $ 0.8 |
First 3% of Annual Qualified Compensation | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer's matching contribution | 100.00% | ||
Percentage of employees' annual qualified compensation matched | 3.00% | ||
Next 2 % of Annual Qualified Compensation | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer's matching contribution | 50.00% | ||
Percentage of employees' annual qualified compensation matched | 2.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | Jun. 08, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Authorized number of common stock for issuance (shares) | 5,652,240 | |||
Number of share available for grant (shares) | 721,924 | |||
Stock-based compensation expense | $ 3,200 | $ 3,100 | $ 2,500 | |
Common stock, options outstanding (shares) | 978,078 | 1,030,866 | 2,077,570 | |
Common stock, options vested (shares) | 699,170 | |||
Common stock, options unvested (shares) | 278,908 | |||
Options to purchase common stock granted (shares) | 256,172 | |||
Options expiration period | 10 years | |||
Aggregate intrinsic value of options outstanding | $ 3,165 | |||
Intrinsic value of options exercised | $ 1,600 | $ 9,900 | $ 2,100 | |
Weighted average grant date fair value (usd per share) | $ 8.10 | |||
Unrecognized compensation expense, recognition period | 2 years 10 months 24 days | |||
Granted (shares) | 222,741 | 415,022 | ||
Unvested restricted shares outstanding (shares) | 495,780 | 742,404 | 588,008 | |
Stock-based compensation expense | $ 3,220 | $ 3,093 | $ 2,474 | |
Unrecognized compensation expense | $ 1,400 | |||
Omnibus Equity Incentive Plan 2018 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Authorized number of common stock for issuance (shares) | 2,000,000 | |||
Exercise price equal to the fair market value of the common stock on the date of grant | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options to purchase common stock granted (shares) | 256,172 | |||
Option vesting period | 4 years | |||
Premium Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, options outstanding (shares) | 212,196 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 46.90% | |||
Risk-free interest rate | 1.10% | |||
Expected term (years) | 6 years 3 months | |||
Expected dividends | 0.00% | 0.00% | ||
Restricted Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, recognition period | 2 years 5 months 26 days | |||
Granted (shares) | 222,741 | 415,022 | ||
Unrecognized compensation expense | $ 5,300 | |||
Restricted Shares | Nonemployee Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Option vesting period | 3 years | |||
Restricted Shares | Employee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Option vesting period | 4 years |
Stock-Based Compensation - Chan
Stock-Based Compensation - Changes in Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 29, 2021 | Dec. 30, 2020 | |
Shares | ||
Outstanding-beginning balance (shares) | 1,030,866 | 2,077,570 |
Grants (shares) | 256,172 | |
Exercised (shares) | (132,760) | (970,736) |
Forfeited, cancelled or expired (shares) | (176,200) | (75,968) |
Outstanding-ending balance (shares) | 978,078 | 1,030,866 |
Vested and expected to vest at end of period (shares) | 974,133 | |
Exercisable at end of period (shares) | 699,170 | |
Weighted-Average Exercise Price | ||
Outstanding-beginning balance (usd per share) | $ 9.82 | $ 8.14 |
Grants (usd per share) | 17.55 | |
Exercised (usd per share) | 6.52 | 6.04 |
Forfeited, cancelled or expired (usd per share) | 14.48 | 12.14 |
Outstanding-ending balance (usd per share) | 11.45 | $ 9.82 |
Vested and expected to vest at end of period (usd per share) | 11.43 | |
Exercisable at end of period (usd per share) | $ 10.01 | |
Weighted-Average Contractual Life (Years) | ||
Outstanding contractual life (years) | 4 years 7 months 2 days | |
Vested and expected to vest contractual life (years) | 4 years 6 months 25 days | |
Exercisable contractual life (years) | 3 years 18 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 3,165 | |
Vested and expected to vest | 3,162 | |
Exercisable | $ 2,869 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Changes in Restricted Shares (Details) - $ / shares | 12 Months Ended | |
Dec. 29, 2021 | Dec. 30, 2020 | |
Shares | ||
Unvested shares, beginning balance (shares) | 742,404 | 588,008 |
Granted (shares) | 222,741 | 415,022 |
Released (shares) | (248,255) | (158,748) |
Forfeited, cancelled, or expired (shares) | (221,110) | (101,878) |
Unvested shares, ending balance (shares) | 495,780 | 742,404 |
Weighted-Average Fair Value | ||
Unvested shares Weighted-Average Fair Value, beginning balance (usd per share) | $ 11.68 | $ 11.23 |
Granted, Weighted-Average Fair Value (usd per share) | 17.13 | 12.50 |
Released, Weighted-Average Fair Value (usd per share) | 11.99 | 11.73 |
Forfeited, cancelled, or expired, Weighted-Average Fair Value (usd per share) | 11.80 | 12.32 |
Unvested shares Weighted-Average Fair Value, ending balance (usd per share) | $ 13.92 | $ 11.68 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Numerator: | |||
Net income | $ 29,121 | $ 24,474 | $ 24,900 |
Denominator: | |||
Weighted-average shares outstanding-Basic (shares) | 35,973,892 | 35,193,325 | 36,739,209 |
Weighted-average shares outstanding-Diluted (shares) | 36,446,756 | 35,796,406 | 37,441,503 |
Net income per share-Basic (usd per share) | $ 0.81 | $ 0.70 | $ 0.68 |
Net income per share-Diluted (usd per share) | $ 0.80 | $ 0.68 | $ 0.67 |
Anti-dilutive securities not considered in diluted EPS calculation (shares) | 136,397 | 81,041 | 526,295 |
Earnings Per Share- Schedule of
Earnings Per Share- Schedule of Reconciliation of Basic and Diluted Share Counts (Details) - shares | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Earnings Per Share [Abstract] | |||
Weighted-average shares outstanding-Basic (shares) | 35,973,892 | 35,193,325 | 36,739,209 |
Dilutive effect of stock options and restricted shares (shares) | 472,864 | 603,081 | 702,294 |
Weighted-average shares outstanding-Diluted (shares) | 36,446,756 | 35,796,406 | 37,441,503 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | Apr. 30, 2019 | Aug. 02, 2018 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Payment for repurchase of shares | $ 0 | $ 0 | $ 48,382 | ||
2018 Stock Repurchase Plan | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount under share repurchase agreement | $ 20,000 | ||||
Repurchase of shares | 1,558,836 | ||||
Payment for repurchase of shares | $ 18,400 | ||||
2019 Stock Repurchase Plan | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount under share repurchase agreement | $ 30,000 | ||||
Repurchase of shares | 2,836,768 | ||||
Payment for repurchase of shares | $ 30,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Sep. 10, 2021USD ($) | Sep. 23, 2020USD ($) | Dec. 29, 2021USD ($)agreementlease | Dec. 30, 2020USD ($) | Dec. 25, 2019USD ($) |
Other Commitments [Line Items] | |||||
Litigation Settlement, Expense | $ 0 | $ 2,566,000 | $ 0 | ||
Insurance proceeds | 100,000 | ||||
Loss contingency accrual, reduction due to payment by affiliates | $ 100,000 | ||||
Officers | |||||
Other Commitments [Line Items] | |||||
Number of at-will employment agreements | agreement | 3 | ||||
Property Lease Guarantee | |||||
Other Commitments [Line Items] | |||||
Accrual associated with loss contingencies | 100,000 | ||||
Number of leases assigned to franchisees | lease | 4 | ||||
Latest lease expiration year | 2036 | ||||
Contingent lease obligations, maximum exposure | $ 2,600,000 | ||||
Contingent lease obligations, maximum exposure, if discounted at estimated pre-tax cost of debt | 2,400,000 | ||||
Chicken Acquisition Corp | |||||
Other Commitments [Line Items] | |||||
Purchase commitments, estimated obligations | 38,700,000 | ||||
Janice P. Handlers-Bryman and Michael D. Bryman v. El Pollo Loco, Inc | |||||
Other Commitments [Line Items] | |||||
Litigation Settlement, Expense | $ 2,500,000 | $ 2,500,000 | |||
Diep action | |||||
Other Commitments [Line Items] | |||||
Proposed settlement payment | $ 625,000 | ||||
Litigation Settlement, Expense | $ 156,250 | ||||
Insurance proceeds | $ 469,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | 12 Months Ended |
Dec. 29, 2021 | |
Trimaran Pollo Partners, LLC | Minimum | |
Related Party Transaction [Line Items] | |
Ownership percentage to remove board member | 40.00% |
Trimaran Pollo Partners, LLC | |
Related Party Transaction [Line Items] | |
Noncontrolling ownership percentage | 45.80% |
Ownership percentage to call special meeting of stockholders | 40.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) $ in Millions | 12 Months Ended | |
Dec. 29, 2021USD ($)item | Dec. 30, 2020USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of revenue streams | item | 2 | |
Accrued Loyalty Rewards Program Liability, Current | $ | $ 0.7 | $ 0.9 |
Loyalty Rewards Program, Expected Loyalty Points Redemption Period | 1 year | |
Restaurant Sale | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Sacramento Area | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of Restaurants | item | 8 | |
Additional contract liability | $ | $ 0.7 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Revenues Disaggregated by Revenue Source and Market (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 454,363 | $ 426,087 | $ 442,330 |
Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 399,146 | 371,510 | 377,591 |
Non-Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 55,217 | 54,577 | 64,739 |
Company-operated restaurant revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 394,733 | 374,064 | 391,112 |
Company-operated restaurant revenue | Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 371,067 | 346,662 | 351,624 |
Company-operated restaurant revenue | Non-Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 23,666 | 27,402 | 39,488 |
Franchise revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 33,729 | 29,418 | 28,819 |
Franchise revenue | Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 16,062 | 14,216 | 14,918 |
Franchise revenue | Non-Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 17,667 | 15,202 | 13,901 |
Franchise advertising fee revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 25,901 | 22,605 | 22,399 |
Franchise advertising fee revenue | Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 12,017 | 10,632 | 11,049 |
Franchise advertising fee revenue | Non-Core Market | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 13,884 | $ 11,973 | $ 11,350 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Revenues Disaggregated by Geographic Market (Details) - Revenue - Geographic Concentration Risk | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Percentage of concentration | 100.00% | 100.00% | 100.00% |
Greater Los Angeles area market | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of concentration | 70.90% | 71.30% | 70.50% |
Other markets | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of concentration | 29.10% | 28.70% | 29.50% |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Change in Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Gift card liability | |||
Change in Contract with Customer, Liability [Roll Forward] | |||
Revenue recognized - beginning balance | $ (1,218) | $ (1,028) | $ (871) |
Franchise revenue | |||
Change in Contract with Customer, Liability [Roll Forward] | |||
Contract with Customer, Liability | 5,628 | 6,317 | |
Revenue recognized - beginning balance | (680) | (1,082) | |
Additional contract liability | 1,380 | 398 | |
Revenue recognized - additional contract liability | (5) | ||
Contract with Customer, Liability | $ 6,328 | $ 5,628 | $ 6,317 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Unsatisfied Performance Obligation (Details) - Franchise revenue $ in Thousands | Dec. 29, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 6,328 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Unsatisfied performance obligations | $ 641 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Unsatisfied performance obligations | $ 569 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-26 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Unsatisfied performance obligations | $ 477 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-12-25 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Unsatisfied performance obligations | $ 433 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Unsatisfied performance obligations | $ 410 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-12-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Unsatisfied performance obligations | $ 3,798 |
Revenue from Contracts with C_8
Revenue from Contracts with Customers - Loyalty Reward Liability and Gift Card Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2021 | Dec. 30, 2020 | Dec. 25, 2019 | |
Change in Contract with Customer, Liability [Roll Forward] | |||
Gift card liability | $ 4,622 | $ 4,008 | |
Loyalty reward program | |||
Change in Contract with Customer, Liability [Roll Forward] | |||
Contract with Customer, Liability | 900 | 1,084 | $ 1,048 |
Revenue deferred | 2,677 | 2,463 | 2,395 |
Revenue recognized | (2,890) | (2,647) | (2,359) |
Contract with Customer, Liability | $ 687 | 900 | 1,084 |
Loyalty reward program | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |||
Change in Contract with Customer, Liability [Roll Forward] | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | ||
Gift card liability | |||
Change in Contract with Customer, Liability [Roll Forward] | |||
Gift card liability | $ 4,622 | 4,008 | |
Revenue recognized from gift card liability | $ 1,218 | $ 1,028 | $ 871 |