Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 28, 2022 | Oct. 28, 2022 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 28, 2022 | |
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 $0.01 per share | |
Trading Symbol | LOCO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Emerging Growth Company | false | |
Small Business Entity | false | |
Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,049,182 | |
Entity Central Index Key | 0001606366 | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 28, 2022 | Dec. 29, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 19,275 | $ 30,046 |
Accounts and other receivables, net | 14,946 | 13,407 |
Inventories | 2,209 | 2,318 |
Prepaid expenses and other current assets | 2,977 | 3,732 |
Income tax receivable | 570 | |
Total current assets | 39,977 | 49,503 |
Property and equipment, net | 78,107 | 75,668 |
Property and equipment held under finance lease, net | 1,565 | 1,635 |
Property and equipment held under operating leases, net ("ROU asset") | 167,985 | 171,981 |
Goodwill | 248,674 | 248,674 |
Trademarks | 61,888 | 61,888 |
Deferred tax assets | 1,253 | 2,245 |
Other assets | 2,920 | 2,192 |
Total assets | 602,369 | 613,786 |
Current liabilities: | ||
Current portion of obligations under finance leases | 109 | 143 |
Current portion of obligations under operating leases | 20,063 | 19,959 |
Accounts payable | 12,486 | 10,626 |
Accrued salaries and vacation | 6,975 | 11,539 |
Accrued insurance | 11,286 | 11,193 |
Accrued income taxes payable | 889 | |
Current portion of income tax receivable agreement payable | 417 | 437 |
Other accrued expenses and current liabilities | 18,930 | 19,796 |
Total current liabilities | 70,266 | 74,582 |
Revolver loan | 20,000 | 40,000 |
Obligations under finance leases, net of current portion | 1,653 | 1,712 |
Obligations under operating leases, net of current portion | 167,562 | 171,651 |
Deferred taxes | 6,739 | 5,464 |
Income tax receivable agreement payable, net of current portion | 776 | 1,101 |
Other noncurrent liabilities | 5,862 | 8,653 |
Total liabilities | 272,858 | 303,163 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value, 200,000,000 shares authorized; 37,053,405 and 36,601,648 shares issued and outstanding as September 28, 2022 and December 29, 2021, respectively | 370 | 365 |
Additional paid-in-capital | 347,079 | 342,941 |
Accumulated deficit | (18,128) | (32,393) |
Accumulated other comprehensive income (loss) | 190 | (290) |
Total stockholders' equity | 329,511 | 310,623 |
Total liabilities and stockholders' equity | $ 602,369 | $ 613,786 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 28, 2022 | Dec. 29, 2021 |
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) | 37,053,405 | 36,601,648 |
Common stock, shares outstanding (shares) | 37,053,405 | 36,601,648 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Revenue | ||||
Total revenue | $ 119,878 | $ 115,700 | $ 354,037 | $ 345,406 |
Cost of operations | ||||
Food and paper cost | 30,163 | 26,698 | 89,586 | 78,971 |
Labor and related expenses | 33,279 | 27,802 | 98,966 | 90,060 |
Occupancy and other operating expenses | 26,920 | 25,108 | 76,597 | 74,288 |
Company restaurant expenses | 90,362 | 79,608 | 265,149 | 243,319 |
General and administrative expenses | 9,855 | 9,357 | 29,488 | 30,354 |
Franchise expenses | 9,027 | 8,545 | 27,315 | 24,457 |
Depreciation and amortization | 3,530 | 3,685 | 10,745 | 11,540 |
Loss on disposal of assets | 21 | 83 | 129 | 194 |
Loss on disposition of restaurants | 10 | 1,534 | ||
Impairment and closed-store reserves | 219 | 167 | 598 | 1,091 |
Total expenses | 113,014 | 101,455 | 333,424 | 312,489 |
Income from operations | 6,864 | 14,245 | 20,613 | 32,917 |
Interest expense, net | 108 | 449 | 957 | 1,399 |
Income tax receivable agreement income | (29) | (19) | (345) | (69) |
Income before provision for income taxes | 6,785 | 13,815 | 20,001 | 31,587 |
Provision for income taxes | 1,776 | 3,654 | 5,736 | 8,644 |
Net income | $ 5,009 | $ 10,161 | $ 14,265 | $ 22,943 |
Net income per share | ||||
Basic (usd per share) | $ 0.14 | $ 0.28 | $ 0.39 | $ 0.64 |
Diluted (usd per share) | $ 0.14 | $ 0.28 | $ 0.39 | $ 0.63 |
Weighted-average shares used in computing net income per share | ||||
Basic (shares) | 36,402,899 | 36,067,754 | 36,329,938 | 35,930,246 |
Diluted (shares) | 36,507,050 | 36,525,424 | 36,491,624 | 36,457,110 |
Company-operated restaurant revenue | ||||
Revenue | ||||
Total revenue | $ 103,174 | $ 99,986 | $ 303,585 | $ 301,117 |
Franchise revenue | ||||
Revenue | ||||
Total revenue | 9,543 | 8,918 | 28,862 | 24,919 |
Franchise advertising fee revenue | ||||
Revenue | ||||
Total revenue | $ 7,161 | $ 6,796 | $ 21,590 | $ 19,370 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Statements of Other Comprehensive Income [Abstract] | ||||
Net income | $ 5,009 | $ 10,161 | $ 14,265 | $ 22,943 |
Unrealized net gains (losses) arising during the period from interest rate swap | 43 | (32) | 974 | 44 |
Reclassifications of (gains) losses into net income | (369) | 133 | (197) | 367 |
Income tax expense | (27) | (297) | (111) | |
Other comprehensive (loss) income, net of taxes | (326) | 74 | 480 | 300 |
Comprehensive income | $ 4,683 | $ 10,235 | $ 14,745 | $ 23,243 |
Condensed Consolidated Statem_3
Condensed 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. 30, 2020 | 36,423,505 | ||||
Beginning balance at Dec. 30, 2020 | $ 364 | $ 339,561 | $ (61,514) | $ (833) | $ 277,578 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 2,936 | 2,936 | |||
Issuance of common stock related to restricted shares | $ 2 | (2) | |||
Issuance of common stock related to restricted shares (shares) | 206,098 | ||||
Issuance of common stock upon exercise of stock options, net | $ 1 | 865 | 866 | ||
Issuance of common stock upon exercise of stock options, net (shares) | 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 | $ (1) | 1 | |||
Forfeiture of common stock related to restricted shares (shares) | (50,532) | ||||
Other comprehensive income, net of tax | 300 | 300 | |||
Net income | 22,943 | 22,943 | |||
Ending balance (shares) at Sep. 29, 2021 | 36,671,447 | ||||
Ending balance at Sep. 29, 2021 | $ 366 | 342,656 | (38,571) | (533) | 303,918 |
Beginning balance (shares) at Jun. 30, 2021 | 36,637,761 | ||||
Beginning balance at Jun. 30, 2021 | $ 367 | 341,358 | (48,732) | (607) | 292,386 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,042 | 1,042 | |||
Issuance of common stock upon exercise of stock options, net | 300 | 300 | |||
Issuance of common stock upon exercise of stock options, net (shares) | 41,216 | ||||
Shares repurchased for employee tax withholdings | (45) | (45) | |||
Shares repurchased for employee tax withholdings (shares) | (2,446) | ||||
Forfeiture of common stock related to restricted shares | $ (1) | 1 | |||
Forfeiture of common stock related to restricted shares (shares) | (5,084) | ||||
Other comprehensive income, net of tax | 74 | 74 | |||
Net income | 10,161 | 10,161 | |||
Ending balance (shares) at Sep. 29, 2021 | 36,671,447 | ||||
Ending balance at Sep. 29, 2021 | $ 366 | 342,656 | (38,571) | (533) | 303,918 |
Beginning balance (shares) at Dec. 29, 2021 | 36,601,648 | ||||
Beginning balance at Dec. 29, 2021 | $ 365 | 342,941 | (32,393) | (290) | 310,623 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 2,806 | 2,806 | |||
Issuance of common stock related to restricted shares | $ 4 | (4) | |||
Issuance of common stock related to restricted shares (shares) | 352,114 | ||||
Issuance of common stock upon exercise of stock options, net | $ 1 | 1,579 | $ 1,580 | ||
Issuance of common stock upon exercise of stock options, net (shares) | 150,475 | 150,475 | |||
Shares repurchased for employee tax withholdings | (243) | $ (243) | |||
Shares repurchased for employee tax withholdings (shares) | (22,901) | ||||
Forfeiture of common stock related to restricted shares (shares) | (27,931) | (27,931) | |||
Other comprehensive income, net of tax | 480 | $ 480 | |||
Net income | 14,265 | 14,265 | |||
Ending balance (shares) at Sep. 28, 2022 | 37,053,405 | ||||
Ending balance at Sep. 28, 2022 | $ 370 | 347,079 | (18,128) | 190 | 329,511 |
Beginning balance (shares) at Jun. 29, 2022 | 37,002,513 | ||||
Beginning balance at Jun. 29, 2022 | $ 369 | 346,095 | (23,137) | 516 | 323,843 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,009 | 1,009 | |||
Issuance of common stock related to restricted shares | $ 1 | (1) | |||
Issuance of common stock related to restricted shares (shares) | 53,476 | ||||
Shares repurchased for employee tax withholdings | (24) | (24) | |||
Shares repurchased for employee tax withholdings (shares) | (2,584) | ||||
Other comprehensive income, net of tax | (326) | (326) | |||
Net income | 5,009 | 5,009 | |||
Ending balance (shares) at Sep. 28, 2022 | 37,053,405 | ||||
Ending balance at Sep. 28, 2022 | $ 370 | $ 347,079 | $ (18,128) | $ 190 | $ 329,511 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2022 | Sep. 29, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 14,265 | $ 22,943 |
Adjustments to reconcile net income to net cash flows provided by provided by operating activities: | ||
Depreciation and amortization | 10,745 | 11,540 |
Stock-based compensation expense | 2,806 | 2,936 |
Income tax receivable agreement income | (345) | (69) |
Loss on disposition of restaurants | 1,534 | |
Loss on disposal of assets | 129 | 194 |
Impairment of property and equipment | 392 | 701 |
Amortization of deferred financing costs | 292 | 188 |
Deferred income taxes, net | 2,351 | 2,026 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables | (1,539) | (1,547) |
Inventories | 108 | (27) |
Prepaid expenses and other current assets | 755 | 825 |
Income taxes receivable | (1,459) | 3,616 |
Other assets | (150) | 289 |
Accounts payable | 1,285 | (507) |
Accrued salaries and vacation | (4,564) | (2,116) |
Accrued insurance | 93 | 615 |
Other accrued expenses and liabilities | (3,257) | (809) |
Net cash flows provided by operating activities | 21,907 | 42,332 |
Cash flows from investing activities: | ||
Proceeds from disposition of restaurants | 4,556 | |
Purchase of property and equipment | (13,022) | (12,699) |
Net cash flows used in investing activities | (13,022) | (8,143) |
Cash flows from financing activities: | ||
Payments on revolver and swingline loan | (20,000) | (22,800) |
Minimum tax withholdings related to net share settlements | (243) | (705) |
Proceeds from issuance of common stock upon exercise of stock options, net of expenses | 1,580 | 866 |
Payment of obligations under finance leases | (124) | (100) |
Deferred financing costs for revolver loan | (869) | |
Net cash flows used in financing activities | (19,656) | (22,739) |
Increase (decrease) in cash and cash equivalents | (10,771) | 11,450 |
Cash and cash equivalents, beginning of period | 30,046 | 13,219 |
Cash and cash equivalents, end of period | 19,275 | 24,669 |
Supplemental cash flow information | ||
Cash paid during the period for interest | 819 | 828 |
Cash paid during the period for income taxes | 5,100 | 4,088 |
Unpaid purchases of property and equipment | $ 3,030 | $ 2,259 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 28, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware corporation headquartered in Costa Mesa, California. Holdings and its direct and indirect subsidiaries are collectively referred to herein as 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® and operates under one operating segment. At September 28, 2022, the Company operated 190 and franchised 297 El Pollo Loco restaurants. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position and results of operations and cash flows for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 29, 2021. The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of the calendar year. 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. Every six or seven years, a 53-week fiscal year occurs. Fiscal 2022 and 2021 are both 52-week years, ending on December 28, 2022 and December 29, 2021, respectively. Revenues, expenses, and other financial and operational figures may be elevated in a 53-week year. Holdings has no material assets or operations. Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc. (“Intermediate”), guarantee EPL’s 2022 Revolver (as defined below) on a full and unconditional basis (see Note 4, “Long-Term Debt”), 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, subject to the terms of the 2022 Revolver. Principles of Consolidation The accompanying condensed 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 condensed consolidated financial statements in conformity with 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 condensed consolidated financial statements and revenue and expenses during the periods 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, income tax receivable agreement liability, contingent liabilities and income tax valuation allowances. COVID-19 The Company may face future business disruption and related risks resulting from the ongoing COVID-19 pandemic or from another pandemic, epidemic or infectious disease outbreak, or from broader macroeconomic trends, any of which could have a significant impact on our business. During both thirteen weeks ended September 28, 2022 and September 29, 2021, respectively, the Company incurred $0.5 million in COVID-19 related expenses, primarily due to leaves of absence. During the thirty-nine weeks ended September 28, 2022 and September 29, 2021, respectively, the Company incurred $3.1 million and $3.5 million, in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. While all of the Company’s restaurants had dining rooms open as of September 28, 2022, the Company continues to experience staffing challenges, including higher wage inflation, overtime costs and other labor related costs. Further, the Company continues to experience inflationary pressures, which resulted in increased commodity prices and impacted the Company’s business and results of operations during the thirteen and thirty-nine weeks ended September 28, 2022. The Company expects these pressures to continue during the remainder of fiscal 2022. Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate direct and indirect impact that the COVID-19 pandemic and related economic effects will have on the Company’s condensed 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 condensed consolidated financial condition, liquidity, and future results of operations is uncertain. Cash and Cash Equivalents The Company considers all liquid instruments with an original maturity of three months or less at the date of purchase to be cash equivalents. Liquidity The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodels and maintenance), interest payments on its debt, lease obligations and working capital and general corporate needs. At September 28, 2022, the Company’s total debt was $20.0 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 flow from operations and available cash of $19.3 million at September 28, 2022 will be adequate to meet the Company’s liquidity needs for the next twelve months from the date of filing of these condensed consolidated financial statements. Recently Adopted Accounting Pronouncements None. Subsequent Events On October 11, 2022, the Company announced that its Board of Directors declared a special dividend of $1.50 per share on the common stock, par value $0.01 per share, of the Company (the “Common Stock”). The special dividend is payable on November 9, 2022, to stockholders of record, including holders of restricted stock and restricted stock units, at the close of business on October 24, 2022. In addition, on October 11, 2022, the Company announced that its Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $20.0 million of shares of the Company’s Common Stock. The repurchase program will terminate on March 28, 2024, may be modified, suspended or discontinued at any time, and does not obligate the Company to acquire any particular number of shares. Lastly, on November 3, 2022, the Company borrowed $46.0 million on its 2022 Revolver and outstanding borrowings as of November 3, 2022 were $66.0 million. After payment of the special dividend, the Company is expected to have approximately $10.0 million in cash on hand. Concentration of Risk Cash and cash equivalents are maintained at financial institutions and, at times, these balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances. The Company had one supplier to whom amounts due totaled 25.2% and 26.1% of the Company’s accounts payable at September 28, 2022 and December 29, 2021, respectively. Purchases from the Company’s largest supplier totaled 28.4% and 28.5% of total expenses for the thirteen and thirty-nine and thirty-nine weeks Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.9% and 71.2% of total revenue for the thirteen and thirty-nine weeks ended September 28, 2022 and 71.6% and 70.8% for the thirteen and thirty-nine weeks ended September 29, 2021, respectively. 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 of certain franchise locations. Upon the sale or closure 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 performs an annual impairment test 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 an annual impairment test 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 recognized as an 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 the thirteen and thirty-nine weeks ended September 28, 2022. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the thirteen and thirty-nine weeks ended September 28, 2022. 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 fiscal 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 the Company’s credit risk. The key inputs for the valuation models are observable market prices, discount rates, and forward yield curves. In connection with the Company’s entry into the 2022 Credit Agreement (as defined below), it terminated the interest rate swap in July 2022 previously used to hedge interest rate risk. In settlement of this swap, the Company received approximately $0.6 million. See Note 4, “Long-Term Debt” for further discussion regarding the Company’s interest rate swap and its termination. The following table presents fair value for the interest rate swap at December 29, 2021 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ 396 $ — $ 396 $ — Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances (e.g., when there is evidence of impairment). The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen and thirty-nine weeks ended September 28, 2022, reflecting certain property and equipment assets and right-of-use (“ROU”) assets for which an impairment loss was recognized during the corresponding periods, as discussed under Note 2, “Property and Equipment” and immediately below under “Impairment of Long-Lived Assets and ROU Assets” (in thousands): Thirteen Weeks Thirty-Nine Weeks Fair Value Measurements at September 28, 2022 Using Ended September 28, 2022 Ended September 28, 2022 Total Level 1 Level 2 Level 3 Impairment Losses Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 100 $ 353 Certain ROU assets, net $ 332 $ — $ — $ 332 $ 39 $ 39 The following non-financial instruments were measured at fair value on a nonrecurring basis as of and for the thirteen and thirty-nine weeks ended September 29, 2021, reflecting certain property and equipment assets and ROU assets for which an impairment loss was recognized during the corresponding periods, as discussed immediately below under “Impairment of Long-Lived Assets and ROU Assets” (in thousands): Thirteen Weeks Thirty-Nine Weeks Fair Value Measurements at September 29, 2021 Using Ended September 29, 2021 Ended September 29, 2021 Total Level 1 Level 2 Level 3 Impairment Losses Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 34 $ 293 Certain ROU assets, net $ 424 $ — $ — $ 424 $ — $ 407 Impairment of Long-Lived Assets and ROU Assets The Company reviews its long-lived and 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 average unit volume for the last twelve months is 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 closed or been subleased and future estimated sublease income is less than lease payments under the head lease. 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 restaurants during the thirteen and thirty-nine weeks ended September 28, 2022 that required an impairment review of certain of the Company’s long-lived and ROU assets. Based on the results of the analysis, the Company recorded non-cash impairment charges of $0.1 million and $0.4 million for the thirteen and thirty-nine weeks ended September 28, 2022, respectively, primarily related to the long-lived assets of one restaurant in California. The Company recorded a non-cash impairment charge of $0.1 million and $0.7 million for the thirteen and thirty-nine weeks ended September 29, 2021, respectively, primarily related to the carrying value of the ROU assets of one restaurant in Texas closed in 2019, the carrying value of the ROU assets of one restaurant in California and the long-lived assets of three 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 the thirteen and thirty-nine weeks ended September 28, 2022, the Company recognized less than $0.1 million and $0.2 million, respectively, of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. During the thirteen and thirty-nine weeks ended September 29, 2021, the Company recognized less than $0.1 million and $0.4 million of closed-store reserve expense, respectively, primarily related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. Derivative Financial Instruments The Company used an interest rate swap, a derivative instrument, to hedge interest rate risk and not for trading purposes. The derivative contract was entered into with a financial institution. In connection with the Company’s entry into the 2022 Credit Agreement (as defined below), it terminated the interest rate swap on July 28, 2022. The Company recorded the derivative instrument on its condensed consolidated balance sheets at fair value. The derivative instrument qualified as a hedging instrument in a qualifying cash flow hedge relationship, and the gain or loss on the derivative instrument was 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. 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 the Company 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 percent. 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 at the largest amount of tax benefit that is greater than 50 percent 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 the Company’s condensed consolidated financial position, results of operations, and cash flows. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at September 28, 2022 or at December 29, 2021. The Company did not recognize interest or penalties during the thirteen and thirty-nine weeks ended September 28, 2022 and September 29, 2021, respectively, since there were no material unrecognized tax benefits. Management believes no significant changes to the amount of unrecognized tax benefits will occur within the next twelve months. On July 30, 2014, the Company entered into the income tax receivable agreement (the “TRA”), which calls for the Company to pay to its pre-initial public offering (“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. For the thirteen and thirty-nine weeks ended September 28, 2022, the Company recorded income tax receivable agreement income of less than $0.1 million and $0.3 million, respectively, and for both the thirteen and thirty-nine weeks ended September 29, 2021, the Company recorded income tax receivable agreement income of less than $0.1 million, in each case, related to 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. The Coronavirus Aid, Relief and Economic Security Act 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 was $4.9 million, of which 50% was paid at the end of 2021 and the remaining 50% is due by December 31, 2022. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 28, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 2. PROPERTY AND EQUIPMENT The costs and related accumulated depreciation and amortization of major classes of property and equipment are as follows (in thousands): September 28, 2022 December 29, 2021 Land $ 12,323 $ 12,323 Buildings and improvements 152,089 144,631 Other property and equipment 82,095 78,383 Construction in progress 5,133 5,333 251,640 240,670 Less: accumulated depreciation and amortization (173,533) (165,002) $ 78,107 $ 75,668 Depreciation expense was $3.5 million and $3.7 million for the thirteen weeks ended September 28, 2022 and September 29, 2021, respectively, and $ 10.7 million and $11.5 million for the thirty-nine weeks ended September 28, 2022 and September 29, 2021, respectively Based on the Company’s review of its long-lived assets for impairment, the Company recorded non-cash impairment charges of $0.1 million and $0.4 million for the thirteen and thirty-nine weeks ended September 28, 2022, respectively, primarily related to the carrying value of the long-lived assets of one restaurant in California. During the thirteen and thirty-nine weeks ended September 29, 2021, the Company recorded non-cash impairment charges of less than $0.1 million and $0.3 million, respectively, primarily related to the carrying value of the assets of three restaurants in California. See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies – Impairment of Long-Lived Assets and ROU Assets” for additional information. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 28, 2022 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 3. STOCK-BASED COMPENSATION At September 28, 2022, options to purchase 1,181,944 shares of common stock were outstanding, including 659,861 vested and 522,083 unvested. Unvested options vest over time; however, upon a change in control, the Board of Directors may accelerate vesting. At September 28, 2022, 203,569 premium options, which are options granted above the stock price at date of grant, remained outstanding. A summary of stock option activity as of September 28, 2022 and changes during the thirty-nine weeks ended September 28, 2022 is as follows: Weighted-Average Aggregate Weighted-Average Contractual Life Intrinsic Value Shares Exercise Price Life (Years) (in thousands) Outstanding - December 29, 2021 978,078 $ 11.45 Grants 372,958 10.54 Exercised (150,475) 10.50 Forfeited, cancelled or expired (18,617) $ 15.86 Outstanding - September 28, 2022 1,181,944 $ 11.21 6.06 $ 742 Vested and expected to vest at September 28, 2022 1,172,082 $ 11.21 6.03 $ 742 Exercisable at September 28, 2022 659,861 $ 10.50 3.58 $ 742 The fair value of each stock option was estimated on the grant date using an exercise price of the closing stock price on the day prior to date of grant and the Black-Scholes option-pricing model with the following weighted average assumptions: September 28, 2022 September 29, 2021 Expected volatility 43.0 % 46.9 % Risk-free interest rate 2.9 % 1.1 % Expected term (years) 6.25 6.25 Expected dividends — — At September 28, 2022, the Company had total unrecognized compensation expense of $2.5 million related to unvested stock options, which it expects to recognize over a weighted-average period of 3.20 years. A summary of restricted share activity as of September 28, 2022 and changes during the thirty-nine weeks ended September 28, 2022 is as follows: Weighted-Average Shares Fair Value Unvested shares at December 29, 2021 495,780 $ 13.92 Granted 352,114 $ 10.36 Released (180,696) $ 13.10 Forfeited, cancelled, or expired (27,931) $ 14.01 Unvested shares at September 28, 2022 639,267 $ 12.19 At September 28, 2022, the Company had unrecognized compensation expense of $6.4 million related to unvested restricted shares, which it expects to recognize over a weighted-average period of 2.76 years. Total stock-based compensation expense was $1.0 million and $2.8 million for the thirteen and thirty-nine weeks ended September 28, 2022, respectively, and $1.0 million and $2.9 million for the thirteen and thirty-nine weeks ended September 29, 2021. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 28, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. LONG-TERM DEBT On July 27, 2022, the Company refinanced and terminated its credit agreement (the “2018 Credit Agreement”) among EPL, as borrower, the Company and Intermediate, as guarantors, 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 provided for a $150.0 million five-year senior secured revolving credit facility (the “2018 Revolver”). The 2018 Revolver was refinanced pursuant to a credit agreement (the “2022 Credit Agreement”) among EPL, as borrower, the Company and Intermediate, as guarantors, 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 The 2022 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 2022 Revolver and 2022 Credit Agreement will mature on July 27, 2027. The obligations under the 2022 Credit Agreement and related loan documents are guaranteed by Holdings and Intermediate. The obligations of Holdings, EPL and Intermediate under the 2022 Credit Agreement and related loan documents are secured by a first priority lien on substantially all of their respective assets. The special dividend announced by the Company’s Board of Directors on October 11, 2022 is permitted under the terms of 2022 Revolver pursuant to both subclause (iii)(d) and (iii)(e) of the preceding sentence. Under the 2022 Revolver, Holdings is restricted from making 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 2022 Revolver. Borrowings under the 2022 Credit Agreement (other than any swingline loans) bear interest, at the borrower’s option, at rates based upon either the secured overnight financing rate (“SOFR”) 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) Term SOFR with a term of one-month SOFR Term SOFR The 2022 Credit Agreement contains certain financial covenants. The Company was in compliance with the financial covenants as of September 28, 2022. At September 28, 2022, $10.0 million of letters of credit and $20.0 million in borrowings under the 2022 Revolver were outstanding. The Company had $120.0 million in borrowing availability under the 2022 Revolver at September 28, 2022. Maturities On July 27, 2022, the Company refinanced and terminated the 2018 Revolver pursuant to the 2022 Credit Agreement. During both the thirteen and thirty-nine weeks ended September 28, 2022 the Company paid down $20.0 million on the 2022 Revolver. During the thirty-nine weeks ended September 29, 2021, the Company paid down $22.8 million on the 2018 Revolver none of which was paid during the thirteen weeks ended September 29, 2021. 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 was 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. 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 Accounting Standards Codification (“ASC”) 815 “Derivatives and Hedging.” In connection with the Company’s entry into the 2022 Credit Agreement, it terminated the interest rate swap on July 28, 2022 which was previously used to hedge interest rate risk. Prior to the interest rate swap termination, the swap was a highly effective cash flow hedge. In settlement of this swap, the Company received approximately $0.6 million and derecognized the corresponding interest rate swap asset. The remaining amount in AOCI related to the hedging relationship will be reclassified into earnings when the hedged forecasted transaction is reported in earnings. As of September 28, 2022, the estimated net gains included in AOCI related to the Company’s cash flow hedge that will be reclassified into earnings in the next 12 months is $0.3 million, based on current Term SOFR The following table shows the financial statement line item and amount of the Company’s cash flow hedge accounting on the condensed consolidated balance sheets (in thousands): September 28, 2022 December 29, 2021 Notional Fair value Notional Fair value Other liabilities - Interest rate swap $ — $ — $ 40,000 $ 396 The following table summarizes the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of income (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Interest expense on hedged portion of debt $ 92 $ 97 $ 439 433 Interest (income) expense on interest rate swap (369) 133 (197) 367 Interest (income) expense on debt and derivatives, net $ (277) $ 230 $ 242 $ 800 The following table summarizes the effect of the Company’s cash flow hedge accounting on AOCI for the thirteen and thirty-nine weeks ended September 28, 2022 and September 29, 2021 (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended Loss Reclassified from Loss Reclassified from Net Gain (Loss) Recognized in OCI AOCI into Interest (Income) Expense Net Gain Recognized in OCI AOCI into Interest (Income) Expense September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Interest rate swap $ 43 $ (32) $ (369) $ 133 $ 974 $ 44 $ (197) $ 367 See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” for information about the fair value of the Company’s derivative asset. |
Other Accrued Expenses and Curr
Other Accrued Expenses and Current Liabilities | 9 Months Ended |
Sep. 28, 2022 | |
Payables And Accruals [Abstract] | |
Other Accrued Expenses and Current Liabilities | 5. OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES Other accrued expenses and current liabilities consist of the following (in thousands): September 28, 2022 December 29, 2021 Accrued sales and property taxes $ 5,652 $ 4,726 Gift card liability 3,957 4,622 Loyalty rewards program liability 537 687 Accrued advertising — 3,635 Accrued legal settlements and professional fees 1,161 771 Deferred franchise and development fees 627 637 Employer social security tax deferral 2,543 — Other 4,453 4,718 Total other accrued expenses and current liabilities $ 18,930 $ 19,796 |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | 9 Months Ended |
Sep. 28, 2022 | |
Payables And Accruals [Abstract] | |
Other Noncurrent Liabilities | 6. OTHER NONCURRENT LIABILITIES Other noncurrent liabilities consist of the following (in thousands): September 28, 2022 December 29, 2021 Deferred franchise and development fees $ 5,761 $ 5,691 Derivative liability — 396 Employer social security tax deferral — 2,426 Other 101 140 Total other noncurrent liabilities $ 5,862 $ 8,653 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 28, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. COMMITMENTS AND CONTINGENCIES Legal Matters 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 thirty-nine weeks ended September 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 took place on March 30, 2022. On June 28, 2022, the court’s granting of the motion to dismiss against Trimaran was affirmed. 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, condensed consolidated financial condition, results of operations, and cash flows. Purchasing 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 September 28, 2022, the Company’s total estimated commitment to purchase chicken was $9.3 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 three lease agreements. These leases have various terms, the latest of which expires in 2036. As of September 28, 2022, the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessee was $2.4 million. The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at September 28, 2022 was $1.9 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. Employment Agreements As of September 28, 2022, 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. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 28, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. EARNINGS PER SHARE Basic earnings per share (“EPS”) is calculated using the weighted-average number of shares of common stock outstanding during the thirteen and thirty-nine weeks ended September 28, 2022 and September 29, 2021. 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. Below are basic and diluted EPS data for the periods indicated (in thousands except for share and per share data): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Numerator: Net income $ 5,009 $ 10,161 $ 14,265 $ 22,943 Denominator: Weighted-average shares outstanding—basic 36,402,899 36,067,754 36,329,938 35,930,246 Weighted-average shares outstanding—diluted 36,507,050 36,525,424 36,491,624 36,457,110 Net income per share—basic $ 0.14 $ 0.28 $ 0.39 $ 0.64 Net income per share—diluted $ 0.14 $ 0.28 $ 0.39 $ 0.63 Anti-dilutive securities not considered in diluted EPS calculation 1,434,825 225,308 944,183 118,968 Below is a reconciliation of basic and diluted share counts: Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Weighted-average shares outstanding—basic 36,402,899 36,067,754 36,329,938 35,930,246 Dilutive effect of stock options and restricted shares 104,151 457,670 161,686 526,864 Weighted-average shares outstanding—diluted 36,507,050 36,525,424 36,491,624 36,457,110 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 28, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. RELATED PARTY TRANSACTIONS As of September 28, 2022, Trimaran Pollo Partners, L.L.C. (“LLC”), FS Equity Partners V, L.P. and FS Affiliates V, L.P. own approximately 30.2%, 14.7% and 0.2%, respectively, of our outstanding common stock. FS Equity V and FS Affiliates V, which previously indirectly held shares of our common stock through LLC, received shares directly on August 31, 2022, upon LLC’s pro rata distribution in kind of shares of our common stock to FS Equity V and FS Affiliates V. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 28, 2022 | |
Revenue from Contract with Customer [Abstract] | |
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. Company-operated 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. The Company offers a loyalty rewards program, which awards a customer points for dollars spent. Customers earn points for each dollar spent and 50 points can be redeemed for a $5 reward to be used for a future purchase. 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. As of September 28, 2022 and December 29, 2021, the revenue allocated to loyalty points that have not been redeemed was $0.5 million and $0.7 million, respectively, which is reflected in the Company’s accompanying condensed consolidated balance sheets within other accrued expenses and current liabilities. The Company expects the loyalty points to be redeemed and recognized over a one-year period. 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 condensed consolidated balance sheets. 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. These revenue streams are 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. ● 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 will continue to be 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 allocates 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, 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 for the hardware is considered revenue, and is received upon transfer of the goods from the Company to the franchisee. As of September 28, 2022, there were no performance obligations related to hardware services that were unsatisfied or partially satisfied. Disaggregated revenue The following table presents the Company’s revenues disaggregated by revenue source and market (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 29, September 28, September 29, 2022 2021 2022 2021 Core Market (1) : Company-operated restaurant revenue $ 98,732 $ 95,292 $ 289,798 $ 281,945 Franchise revenue 4,501 4,184 13,559 11,956 Franchise advertising fee revenue 3,336 3,129 10,008 8,989 Total core market $ 106,569 $ 102,605 $ 313,365 $ 302,890 Non-Core Market (2) : Company-operated restaurant revenue $ 4,442 $ 4,694 $ 13,787 $ 19,172 Franchise revenue 5,042 4,733 15,303 12,963 Franchise advertising fee revenue 3,825 3,668 11,582 10,381 Total non-core market $ 13,309 $ 13,095 $ 40,672 $ 42,516 Total revenue $ 119,878 $ 115,700 $ 354,037 $ 345,406 (1) Core Market includes markets with existing company-operated restaurants at the time of the Company’s 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: Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Greater Los Angeles area market 71.9 % 71.6 % 71.2 % 70.8 % Other markets 28.1 % 28.4 % 28.8 % 29.2 % Total 100 % 100 % 100 % 100 % Contract balances The following table provides information about the change in the franchise contract liability balances during the thirty-nine weeks ended September 28, 2022 and September 29, 2021 (in thousands): December 29, 2021 $ 6,328 Revenue recognized - beginning balance (558) Additional contract liability 618 September 28, 2022 $ 6,388 December 30, 2020 $ 5,628 Revenue recognized - beginning balance (514) Additional contract liability 1,330 September 29, 2021 $ 6,444 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 condensed 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. The following table illustrates the estimated revenue to be recognized in future periods related to performance obligations under the applicable contracts that are unsatisfied as of September 28, 2022 (in thousands): Franchise revenues: 2022 $ 167 2023 608 2024 515 2025 468 2026 445 Thereafter 4,185 Total $ 6,388 Changes in the loyalty rewards program liability included in deferred revenue within other accrued expenses and current liabilities on the condensed consolidated balance sheets were as follows (in thousands): September 28, December 29, 2022 2021 Loyalty rewards liability, beginning balance $ 687 $ 900 Revenue deferred 2,039 2,677 Revenue recognized (2,189) (2,890) Loyalty rewards liability, ending balance $ 537 $ 687 The Company expects all loyalty points revenue related to performance obligations unsatisfied as of September 28, 2022 to be recognized within one year . Gift Cards The gift card liability included in other accrued expenses and current liabilities on the condensed consolidated balance sheets was as follows (in thousands): September 28, December 29, 2022 2021 Gift card liability $ 3,957 $ 4,622 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): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Revenue recognized from gift card liability balance at the beginning of the year $ 237 $ 220 $ 967 $ 903 Contract Costs The Company does not currently incur costs to obtain or fulfill a contract that would be considered contract assets under Topic 606. |
Leases
Leases | 9 Months Ended |
Sep. 28, 2022 | |
Leases [Abstract] | |
Leases | 11. 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 September 28, 2022, the Company had one lease 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 one facility and ten 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 that 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 CAM, 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 renewal options, which have generally been excluded in the calculation of the ROU asset and lease liability, as they are not considered reasonably certain to be exercised, unless (1) the renewal had already occurred as of the time of adoption of Topic 842, or (2) there have been significant leasehold improvements that have a useful life that extend past the original lease term. Furthermore, there are no residual value guarantees and no restrictions imposed by the lease. During the thirteen and thirty-nine weeks ended September 28, 2022, the Company reassessed the lease terms on five and 18 restaurants, respectively, due to certain triggering events, such as the addition of significant leasehold improvements with useful lives that extend past the current lease expiration, the decision to terminate a lease, or the decision to renew. As a result of the reassessment, an additional $2.0 million and $10.5 million of ROU asset and lease liabilities for the thirteen and thirty-nine weeks ended September 28, 2022, respectively, were recognized and will be amortized over the new lease term. During the thirteen and thirty-nine weeks ended September 29, 2021, the Company reassessed the lease terms on four and 16 restaurants, respectively, due to certain triggering events, such as the addition of significant leasehold improvements with useful lives that extend past the current lease expiration, the decision to terminate a lease, or the decision to renew. This reassessment resulted in an additional $2.6 million and $13.8 million of ROU asset and lease liabilities for the thirteen and thirty-nine weeks ended September 29, 2021, respectively, which were recognized and will be amortized over the new lease term. The reassessments had an impact on the original lease classification of one property during the thirty-nine weeks ended September 28, 2022 which represented $0.7 million of the $10.5 million total additional ROU asset and lease liabilities for the period. There were no reassessments that impacted the original lease classification during the thirteen weeks ended September 28, 2022. 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 the thirty-nine weeks ended September 28, 2022, the Company recorded a less than $0.1 million non-cash impairment charge related to one restaurant in California. The Company recorded a $0.4 million non-cash impairment charge for the thirty-nine weeks ended September 29, 2021 related to one restaurant closed in Texas in 2019 and one restaurant in California. See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies – Impairment of Long-Lived Assets and ROU Assets” for additional information. 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): Thirteen Weeks Ended September 28, 2022 September 29, 2021 Property Equipment Property Equipment Leases Leases Total Leases Leases Total Finance lease cost: Amortization of right-of-use assets $ 18 $ 1 $ 19 $ 18 $ 1 $ 19 Interest on lease liabilities 10 1 11 14 1 15 Operating lease cost 6,646 256 6,902 6,552 267 6,819 Short-term lease cost — 4 4 — 7 7 Variable lease cost 151 196 347 138 70 208 Sublease income (1,130) — (1,130) (1,128) — (1,128) Total lease cost $ 5,695 $ 458 $ 6,153 $ 5,594 $ 346 $ 5,940 Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 Property Equipment Property Equipment Leases Leases Total Leases Leases Total Finance lease cost: Amortization of right-of-use assets $ 55 $ 2 $ 57 $ 60 $ 2 $ 62 Interest on lease liabilities 32 2 34 44 2 46 Operating lease cost 19,795 776 20,571 19,935 861 20,796 Short-term lease cost — 11 11 — 17 17 Variable lease cost 458 463 921 413 260 673 Sublease income (3,387) — (3,387) (2,722) — (2,722) Total lease cost $ 16,953 $ 1,254 $ 18,207 $ 17,730 $ 1,142 $ 18,872 The following table presents the Company’s total lease cost on the condensed consolidated statements of income (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Lease cost – Occupancy and other operating expenses $ 5,969 $ 5,811 $ 17,709 $ 18,191 Lease cost – General & administrative 133 97 343 316 Lease cost – Depreciation and amortization 18 18 55 60 Lease cost – Interest expense 11 14 35 44 Lease cost – Closed-store reserve 22 — 65 261 Total lease cost $ 6,153 $ 5,940 $ 18,207 $ 18,872 During the thirteen and thirty-nine weeks ended September 28, 2022 and September 29, 2021, the Company had the following cash and non-cash activities associated with its leases (dollars in thousands): Thirty-Nine Weeks Ended September 28, 2022 Thirty-Nine Weeks Ended September 29, 2021 Property Equipment Property Equipment Leases Leases Total Leases Leases Total Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 20,364 $ 737 $ 21,101 $ 19,371 $ 831 $ 20,202 Financing cash flows used for finance leases $ 82 $ 42 $ 124 $ 67 $ 33 $ 100 Non-cash investing and financing activities: Operating lease ROU assets obtained in exchange for lease liabilities: Operating lease ROU assets $ 10,486 $ 86 $ 10,572 $ 13,848 $ — $ 13,848 Finance lease ROU assets obtained in exchange for lease liabilities: Finance lease ROU assets $ — $ 28 $ 28 $ — $ 196 $ 196 Derecognition of ROU assets due to terminations, impairment or modifications $ (39) $ (24) $ (63) $ (4,513) $ (99) $ (4,612) Other Information Weighted-average remaining years in lease term—finance leases 18.12 3.44 18.56 4.27 Weighted-average remaining years in lease term—operating leases 10.91 1.57 11.37 1.66 Weighted-average discount rate—finance leases 2.57 % 1.53 % 2.84 % 1.54 % Weighted-average discount rate—operating leases 4.49 % 3.82 % 4.43 % 3.91 % Information regarding the Company’s minimum future lease obligations as of September 28, 2022 is as follows (in thousands): Finance Operating Leases Minimum Minimum Minimum Lease Lease Sublease For the Years Ending Payments Payments Income December 28, 2022 $ 38 $ 7,073 $ 937 December 27, 2023 151 27,673 3,698 December 25, 2024 151 25,348 3,510 December 31, 2025 147 23,186 3,115 December 30, 2026 114 21,048 2,789 Thereafter 1,583 135,928 23,165 Total $ 2,184 $ 240,256 $ 37,214 Less: imputed interest (1.53% - 4.49%) (422) (52,631) Present value of lease obligations 1,762 187,625 Less: current maturities (109) (20,063) Noncurrent portion $ 1,653 $ 167,562 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 condensed consolidated statements 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 was incurred. 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 three 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. The Company received $0.1 million of lease income from company-owned locations for each of the thirteen weeks ended September 28, 2022 and September 29, 2021. The Company received $0.3 million of lease income from company-owned locations for each of the thirty-nine weeks ended September 28, 2022 and September 29, 2021. |
Basis Of Presentation and Sum_2
Basis Of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 28, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position and results of operations and cash flows for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 29, 2021. The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of the calendar year. 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. Every six or seven years, a 53-week fiscal year occurs. Fiscal 2022 and 2021 are both 52-week years, ending on December 28, 2022 and December 29, 2021, respectively. Revenues, expenses, and other financial and operational figures may be elevated in a 53-week year. Holdings has no material assets or operations. Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc. (“Intermediate”), guarantee EPL’s 2022 Revolver (as defined below) on a full and unconditional basis (see Note 4, “Long-Term Debt”), 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, subject to the terms of the 2022 Revolver. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed 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 condensed consolidated financial statements in conformity with 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 condensed consolidated financial statements and revenue and expenses during the periods 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, income tax receivable agreement liability, contingent liabilities and income tax valuation allowances. |
COVID-19 | COVID-19 The Company may face future business disruption and related risks resulting from the ongoing COVID-19 pandemic or from another pandemic, epidemic or infectious disease outbreak, or from broader macroeconomic trends, any of which could have a significant impact on our business. During both thirteen weeks ended September 28, 2022 and September 29, 2021, respectively, the Company incurred $0.5 million in COVID-19 related expenses, primarily due to leaves of absence. During the thirty-nine weeks ended September 28, 2022 and September 29, 2021, respectively, the Company incurred $3.1 million and $3.5 million, in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. While all of the Company’s restaurants had dining rooms open as of September 28, 2022, the Company continues to experience staffing challenges, including higher wage inflation, overtime costs and other labor related costs. Further, the Company continues to experience inflationary pressures, which resulted in increased commodity prices and impacted the Company’s business and results of operations during the thirteen and thirty-nine weeks ended September 28, 2022. The Company expects these pressures to continue during the remainder of fiscal 2022. Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate direct and indirect impact that the COVID-19 pandemic and related economic effects will have on the Company’s condensed 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 condensed 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 an original maturity of three months or less at the date of purchase to be cash equivalents. |
Liquidity | Liquidity The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodels and maintenance), interest payments on its debt, lease obligations and working capital and general corporate needs. At September 28, 2022, the Company’s total debt was $20.0 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 flow from operations and available cash of $19.3 million at September 28, 2022 will be adequate to meet the Company’s liquidity needs for the next twelve months from the date of filing of these condensed consolidated financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements None. |
Subsequent Events | Subsequent Events On October 11, 2022, the Company announced that its Board of Directors declared a special dividend of $1.50 per share on the common stock, par value $0.01 per share, of the Company (the “Common Stock”). The special dividend is payable on November 9, 2022, to stockholders of record, including holders of restricted stock and restricted stock units, at the close of business on October 24, 2022. In addition, on October 11, 2022, the Company announced that its Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $20.0 million of shares of the Company’s Common Stock. The repurchase program will terminate on March 28, 2024, may be modified, suspended or discontinued at any time, and does not obligate the Company to acquire any particular number of shares. Lastly, on November 3, 2022, the Company borrowed $46.0 million on its 2022 Revolver and outstanding borrowings as of November 3, 2022 were $66.0 million. After payment of the special dividend, the Company is expected to have approximately $10.0 million in cash on hand. |
Concentration of Risk | Concentration of Risk Cash and cash equivalents are maintained at financial institutions and, at times, these balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances. The Company had one supplier to whom amounts due totaled 25.2% and 26.1% of the Company’s accounts payable at September 28, 2022 and December 29, 2021, respectively. Purchases from the Company’s largest supplier totaled 28.4% and 28.5% of total expenses for the thirteen and thirty-nine and thirty-nine weeks Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.9% and 71.2% of total revenue for the thirteen and thirty-nine weeks ended September 28, 2022 and 71.6% and 70.8% for the thirteen and thirty-nine weeks ended September 29, 2021, respectively. |
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 of certain franchise locations. Upon the sale or closure 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 performs an annual impairment test 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 an annual impairment test 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 recognized as an 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 the thirteen and thirty-nine weeks ended September 28, 2022. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the thirteen and thirty-nine weeks ended September 28, 2022. |
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 fiscal 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 the Company’s credit risk. The key inputs for the valuation models are observable market prices, discount rates, and forward yield curves. In connection with the Company’s entry into the 2022 Credit Agreement (as defined below), it terminated the interest rate swap in July 2022 previously used to hedge interest rate risk. In settlement of this swap, the Company received approximately $0.6 million. See Note 4, “Long-Term Debt” for further discussion regarding the Company’s interest rate swap and its termination. The following table presents fair value for the interest rate swap at December 29, 2021 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ 396 $ — $ 396 $ — Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances (e.g., when there is evidence of impairment). The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen and thirty-nine weeks ended September 28, 2022, reflecting certain property and equipment assets and right-of-use (“ROU”) assets for which an impairment loss was recognized during the corresponding periods, as discussed under Note 2, “Property and Equipment” and immediately below under “Impairment of Long-Lived Assets and ROU Assets” (in thousands): Thirteen Weeks Thirty-Nine Weeks Fair Value Measurements at September 28, 2022 Using Ended September 28, 2022 Ended September 28, 2022 Total Level 1 Level 2 Level 3 Impairment Losses Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 100 $ 353 Certain ROU assets, net $ 332 $ — $ — $ 332 $ 39 $ 39 The following non-financial instruments were measured at fair value on a nonrecurring basis as of and for the thirteen and thirty-nine weeks ended September 29, 2021, reflecting certain property and equipment assets and ROU assets for which an impairment loss was recognized during the corresponding periods, as discussed immediately below under “Impairment of Long-Lived Assets and ROU Assets” (in thousands): Thirteen Weeks Thirty-Nine Weeks Fair Value Measurements at September 29, 2021 Using Ended September 29, 2021 Ended September 29, 2021 Total Level 1 Level 2 Level 3 Impairment Losses Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 34 $ 293 Certain ROU assets, net $ 424 $ — $ — $ 424 $ — $ 407 |
Impairment of Long-Lived Assets and ROU Assets | Impairment of Long-Lived Assets and ROU Assets The Company reviews its long-lived and 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 average unit volume for the last twelve months is 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 closed or been subleased and future estimated sublease income is less than lease payments under the head lease. 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 restaurants during the thirteen and thirty-nine weeks ended September 28, 2022 that required an impairment review of certain of the Company’s long-lived and ROU assets. Based on the results of the analysis, the Company recorded non-cash impairment charges of $0.1 million and $0.4 million for the thirteen and thirty-nine weeks ended September 28, 2022, respectively, primarily related to the long-lived assets of one restaurant in California. The Company recorded a non-cash impairment charge of $0.1 million and $0.7 million for the thirteen and thirty-nine weeks ended September 29, 2021, respectively, primarily related to the carrying value of the ROU assets of one restaurant in Texas closed in 2019, the carrying value of the ROU assets of one restaurant in California and the long-lived assets of three 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 the thirteen and thirty-nine weeks ended September 28, 2022, the Company recognized less than $0.1 million and $0.2 million, respectively, of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. During the thirteen and thirty-nine weeks ended September 29, 2021, the Company recognized less than $0.1 million and $0.4 million of closed-store reserve expense, respectively, primarily related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. |
Derivative Financial Instruments | Derivative Financial Instruments The Company used an interest rate swap, a derivative instrument, to hedge interest rate risk and not for trading purposes. The derivative contract was entered into with a financial institution. In connection with the Company’s entry into the 2022 Credit Agreement (as defined below), it terminated the interest rate swap on July 28, 2022. The Company recorded the derivative instrument on its condensed consolidated balance sheets at fair value. The derivative instrument qualified as a hedging instrument in a qualifying cash flow hedge relationship, and the gain or loss on the derivative instrument was 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. |
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 the Company 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 percent. 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 at the largest amount of tax benefit that is greater than 50 percent 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 the Company’s condensed consolidated financial position, results of operations, and cash flows. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at September 28, 2022 or at December 29, 2021. The Company did not recognize interest or penalties during the thirteen and thirty-nine weeks ended September 28, 2022 and September 29, 2021, respectively, since there were no material unrecognized tax benefits. Management believes no significant changes to the amount of unrecognized tax benefits will occur within the next twelve months. On July 30, 2014, the Company entered into the income tax receivable agreement (the “TRA”), which calls for the Company to pay to its pre-initial public offering (“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. For the thirteen and thirty-nine weeks ended September 28, 2022, the Company recorded income tax receivable agreement income of less than $0.1 million and $0.3 million, respectively, and for both the thirteen and thirty-nine weeks ended September 29, 2021, the Company recorded income tax receivable agreement income of less than $0.1 million, in each case, related to 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. The Coronavirus Aid, Relief and Economic Security Act 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 was $4.9 million, of which 50% was paid at the end of 2021 and the remaining 50% is due by December 31, 2022. |
Basis Of Presentation and Sum_3
Basis Of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
Accounting Policies [Abstract] | |
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 Fair Value Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ 396 $ — $ 396 $ — |
Summary of Non-Financial Instruments Measured at Fair Value on Nonrecurring Basis | The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen and thirty-nine weeks ended September 28, 2022, reflecting certain property and equipment assets and right-of-use (“ROU”) assets for which an impairment loss was recognized during the corresponding periods, as discussed under Note 2, “Property and Equipment” and immediately below under “Impairment of Long-Lived Assets and ROU Assets” (in thousands): Thirteen Weeks Thirty-Nine Weeks Fair Value Measurements at September 28, 2022 Using Ended September 28, 2022 Ended September 28, 2022 Total Level 1 Level 2 Level 3 Impairment Losses Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 100 $ 353 Certain ROU assets, net $ 332 $ — $ — $ 332 $ 39 $ 39 The following non-financial instruments were measured at fair value on a nonrecurring basis as of and for the thirteen and thirty-nine weeks ended September 29, 2021, reflecting certain property and equipment assets and ROU assets for which an impairment loss was recognized during the corresponding periods, as discussed immediately below under “Impairment of Long-Lived Assets and ROU Assets” (in thousands): Thirteen Weeks Thirty-Nine Weeks Fair Value Measurements at September 29, 2021 Using Ended September 29, 2021 Ended September 29, 2021 Total Level 1 Level 2 Level 3 Impairment Losses Impairment Losses Certain property and equipment, net $ — $ — $ — $ — $ 34 $ 293 Certain ROU assets, net $ 424 $ — $ — $ 424 $ — $ 407 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
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 and equipment are as follows (in thousands): September 28, 2022 December 29, 2021 Land $ 12,323 $ 12,323 Buildings and improvements 152,089 144,631 Other property and equipment 82,095 78,383 Construction in progress 5,133 5,333 251,640 240,670 Less: accumulated depreciation and amortization (173,533) (165,002) $ 78,107 $ 75,668 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
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 29, 2021 978,078 $ 11.45 Grants 372,958 10.54 Exercised (150,475) 10.50 Forfeited, cancelled or expired (18,617) $ 15.86 Outstanding - September 28, 2022 1,181,944 $ 11.21 6.06 $ 742 Vested and expected to vest at September 28, 2022 1,172,082 $ 11.21 6.03 $ 742 Exercisable at September 28, 2022 659,861 $ 10.50 3.58 $ 742 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | September 28, 2022 September 29, 2021 Expected volatility 43.0 % 46.9 % Risk-free interest rate 2.9 % 1.1 % Expected term (years) 6.25 6.25 Expected dividends — — |
Schedule of Changes in Restricted Shares | Weighted-Average Shares Fair Value Unvested shares at December 29, 2021 495,780 $ 13.92 Granted 352,114 $ 10.36 Released (180,696) $ 13.10 Forfeited, cancelled, or expired (27,931) $ 14.01 Unvested shares at September 28, 2022 639,267 $ 12.19 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
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 condensed consolidated balance sheets (in thousands): September 28, 2022 December 29, 2021 Notional Fair value Notional Fair value Other liabilities - Interest rate swap $ — $ — $ 40,000 $ 396 |
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 condensed consolidated statements of income (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Interest expense on hedged portion of debt $ 92 $ 97 $ 439 433 Interest (income) expense on interest rate swap (369) 133 (197) 367 Interest (income) expense on debt and derivatives, net $ (277) $ 230 $ 242 $ 800 |
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 thirteen and thirty-nine weeks ended September 28, 2022 and September 29, 2021 (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended Loss Reclassified from Loss Reclassified from Net Gain (Loss) Recognized in OCI AOCI into Interest (Income) Expense Net Gain Recognized in OCI AOCI into Interest (Income) Expense September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Interest rate swap $ 43 $ (32) $ (369) $ 133 $ 974 $ 44 $ (197) $ 367 |
Other Accrued Expenses and Cu_2
Other Accrued Expenses and Current Liabilities (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
Payables And Accruals [Abstract] | |
Schedule of Other Accrued Expenses and Current Liabilities | Other accrued expenses and current liabilities consist of the following (in thousands): September 28, 2022 December 29, 2021 Accrued sales and property taxes $ 5,652 $ 4,726 Gift card liability 3,957 4,622 Loyalty rewards program liability 537 687 Accrued advertising — 3,635 Accrued legal settlements and professional fees 1,161 771 Deferred franchise and development fees 627 637 Employer social security tax deferral 2,543 — Other 4,453 4,718 Total other accrued expenses and current liabilities $ 18,930 $ 19,796 |
Other Noncurrent Liabilities (T
Other Noncurrent Liabilities (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
Payables And Accruals [Abstract] | |
Schedule of Other Noncurrent Liabilities | Other noncurrent liabilities consist of the following (in thousands): September 28, 2022 December 29, 2021 Deferred franchise and development fees $ 5,761 $ 5,691 Derivative liability — 396 Employer social security tax deferral — 2,426 Other 101 140 Total other noncurrent liabilities $ 5,862 $ 8,653 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income per Share | Below are basic and diluted EPS data for the periods indicated (in thousands except for share and per share data): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Numerator: Net income $ 5,009 $ 10,161 $ 14,265 $ 22,943 Denominator: Weighted-average shares outstanding—basic 36,402,899 36,067,754 36,329,938 35,930,246 Weighted-average shares outstanding—diluted 36,507,050 36,525,424 36,491,624 36,457,110 Net income per share—basic $ 0.14 $ 0.28 $ 0.39 $ 0.64 Net income per share—diluted $ 0.14 $ 0.28 $ 0.39 $ 0.63 Anti-dilutive securities not considered in diluted EPS calculation 1,434,825 225,308 944,183 118,968 |
Schedule of Reconciliation of Basic and Diluted Share Counts | Below is a reconciliation of basic and diluted share counts: Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Weighted-average shares outstanding—basic 36,402,899 36,067,754 36,329,938 35,930,246 Dilutive effect of stock options and restricted shares 104,151 457,670 161,686 526,864 Weighted-average shares outstanding—diluted 36,507,050 36,525,424 36,491,624 36,457,110 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue | The following table presents the Company’s revenues disaggregated by revenue source and market (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, September 29, September 28, September 29, 2022 2021 2022 2021 Core Market (1) : Company-operated restaurant revenue $ 98,732 $ 95,292 $ 289,798 $ 281,945 Franchise revenue 4,501 4,184 13,559 11,956 Franchise advertising fee revenue 3,336 3,129 10,008 8,989 Total core market $ 106,569 $ 102,605 $ 313,365 $ 302,890 Non-Core Market (2) : Company-operated restaurant revenue $ 4,442 $ 4,694 $ 13,787 $ 19,172 Franchise revenue 5,042 4,733 15,303 12,963 Franchise advertising fee revenue 3,825 3,668 11,582 10,381 Total non-core market $ 13,309 $ 13,095 $ 40,672 $ 42,516 Total revenue $ 119,878 $ 115,700 $ 354,037 $ 345,406 (1) Core Market includes markets with existing company-operated restaurants at the time of the Company’s 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: Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Greater Los Angeles area market 71.9 % 71.6 % 71.2 % 70.8 % Other markets 28.1 % 28.4 % 28.8 % 29.2 % Total 100 % 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 future periods related to performance obligations under the applicable contracts that are unsatisfied as of September 28, 2022 (in thousands): Franchise revenues: 2022 $ 167 2023 608 2024 515 2025 468 2026 445 Thereafter 4,185 Total $ 6,388 |
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 deferred revenue within other accrued expenses and current liabilities on the condensed consolidated balance sheets were as follows (in thousands): September 28, December 29, 2022 2021 Loyalty rewards liability, beginning balance $ 687 $ 900 Revenue deferred 2,039 2,677 Revenue recognized (2,189) (2,890) Loyalty rewards liability, ending balance $ 537 $ 687 |
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 condensed consolidated balance sheets was as follows (in thousands): September 28, December 29, 2022 2021 Gift card liability $ 3,957 $ 4,622 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): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Revenue recognized from gift card liability balance at the beginning of the year $ 237 $ 220 $ 967 $ 903 |
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 thirty-nine weeks ended September 28, 2022 and September 29, 2021 (in thousands): December 29, 2021 $ 6,328 Revenue recognized - beginning balance (558) Additional contract liability 618 September 28, 2022 $ 6,388 December 30, 2020 $ 5,628 Revenue recognized - beginning balance (514) Additional contract liability 1,330 September 29, 2021 $ 6,444 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2022 | |
Leases [Abstract] | |
Schedule of lease cost | The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands): Thirteen Weeks Ended September 28, 2022 September 29, 2021 Property Equipment Property Equipment Leases Leases Total Leases Leases Total Finance lease cost: Amortization of right-of-use assets $ 18 $ 1 $ 19 $ 18 $ 1 $ 19 Interest on lease liabilities 10 1 11 14 1 15 Operating lease cost 6,646 256 6,902 6,552 267 6,819 Short-term lease cost — 4 4 — 7 7 Variable lease cost 151 196 347 138 70 208 Sublease income (1,130) — (1,130) (1,128) — (1,128) Total lease cost $ 5,695 $ 458 $ 6,153 $ 5,594 $ 346 $ 5,940 Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 Property Equipment Property Equipment Leases Leases Total Leases Leases Total Finance lease cost: Amortization of right-of-use assets $ 55 $ 2 $ 57 $ 60 $ 2 $ 62 Interest on lease liabilities 32 2 34 44 2 46 Operating lease cost 19,795 776 20,571 19,935 861 20,796 Short-term lease cost — 11 11 — 17 17 Variable lease cost 458 463 921 413 260 673 Sublease income (3,387) — (3,387) (2,722) — (2,722) Total lease cost $ 16,953 $ 1,254 $ 18,207 $ 17,730 $ 1,142 $ 18,872 The following table presents the Company’s total lease cost on the condensed consolidated statements of income (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, 2022 September 29, 2021 September 28, 2022 September 29, 2021 Lease cost – Occupancy and other operating expenses $ 5,969 $ 5,811 $ 17,709 $ 18,191 Lease cost – General & administrative 133 97 343 316 Lease cost – Depreciation and amortization 18 18 55 60 Lease cost – Interest expense 11 14 35 44 Lease cost – Closed-store reserve 22 — 65 261 Total lease cost $ 6,153 $ 5,940 $ 18,207 $ 18,872 During the thirteen and thirty-nine weeks ended September 28, 2022 and September 29, 2021, the Company had the following cash and non-cash activities associated with its leases (dollars in thousands): Thirty-Nine Weeks Ended September 28, 2022 Thirty-Nine Weeks Ended September 29, 2021 Property Equipment Property Equipment Leases Leases Total Leases Leases Total Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 20,364 $ 737 $ 21,101 $ 19,371 $ 831 $ 20,202 Financing cash flows used for finance leases $ 82 $ 42 $ 124 $ 67 $ 33 $ 100 Non-cash investing and financing activities: Operating lease ROU assets obtained in exchange for lease liabilities: Operating lease ROU assets $ 10,486 $ 86 $ 10,572 $ 13,848 $ — $ 13,848 Finance lease ROU assets obtained in exchange for lease liabilities: Finance lease ROU assets $ — $ 28 $ 28 $ — $ 196 $ 196 Derecognition of ROU assets due to terminations, impairment or modifications $ (39) $ (24) $ (63) $ (4,513) $ (99) $ (4,612) Other Information Weighted-average remaining years in lease term—finance leases 18.12 3.44 18.56 4.27 Weighted-average remaining years in lease term—operating leases 10.91 1.57 11.37 1.66 Weighted-average discount rate—finance leases 2.57 % 1.53 % 2.84 % 1.54 % Weighted-average discount rate—operating leases 4.49 % 3.82 % 4.43 % 3.91 % |
Schedule of Financing Leases | Information regarding the Company’s minimum future lease obligations as of September 28, 2022 is as follows (in thousands): Finance Operating Leases Minimum Minimum Minimum Lease Lease Sublease For the Years Ending Payments Payments Income December 28, 2022 $ 38 $ 7,073 $ 937 December 27, 2023 151 27,673 3,698 December 25, 2024 151 25,348 3,510 December 31, 2025 147 23,186 3,115 December 30, 2026 114 21,048 2,789 Thereafter 1,583 135,928 23,165 Total $ 2,184 $ 240,256 $ 37,214 Less: imputed interest (1.53% - 4.49%) (422) (52,631) Present value of lease obligations 1,762 187,625 Less: current maturities (109) (20,063) Noncurrent portion $ 1,653 $ 167,562 |
Schedule of Operating Leases | Information regarding the Company’s minimum future lease obligations as of September 28, 2022 is as follows (in thousands): Finance Operating Leases Minimum Minimum Minimum Lease Lease Sublease For the Years Ending Payments Payments Income December 28, 2022 $ 38 $ 7,073 $ 937 December 27, 2023 151 27,673 3,698 December 25, 2024 151 25,348 3,510 December 31, 2025 147 23,186 3,115 December 30, 2026 114 21,048 2,789 Thereafter 1,583 135,928 23,165 Total $ 2,184 $ 240,256 $ 37,214 Less: imputed interest (1.53% - 4.49%) (422) (52,631) Present value of lease obligations 1,762 187,625 Less: current maturities (109) (20,063) Noncurrent portion $ 1,653 $ 167,562 |
Basis Of Presentation And Sum_4
Basis Of Presentation And Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 03, 2022 USD ($) | Jul. 28, 2022 USD ($) | Jul. 27, 2022 USD ($) | Jul. 30, 2014 | Sep. 28, 2022 USD ($) restaurant $ / shares | Sep. 29, 2021 USD ($) restaurant | Sep. 28, 2022 USD ($) restaurant item segment $ / shares | Sep. 29, 2021 USD ($) restaurant | Dec. 29, 2021 USD ($) item $ / shares | Oct. 11, 2022 USD ($) $ / shares | Dec. 30, 2020 USD ($) | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number of operating segments | segment | 1 | ||||||||||
Leaves of absence and overtime pay due to COVID 19 | $ 500 | $ 500 | $ 3,100 | $ 3,500 | |||||||
Revolver loan | 20,000 | 20,000 | $ 40,000 | ||||||||
Total amount of outstanding debt | 20,000 | 20,000 | |||||||||
Cash available | $ 19,275 | $ 19,275 | $ 30,046 | ||||||||
Common stock, par value (usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Proceeds from swap | $ 600 | ||||||||||
Impairment of property and equipment | $ 100 | 100 | $ 392 | 701 | |||||||
Unrecognized tax benefits, accrual of interest or penalties | 0 | 0 | $ 0 | ||||||||
Unrecognized tax benefits, interest or penalties expenses | 0 | 0 | 0 | 0 | |||||||
Percentage of cash savings in taxes realized as a result of utilizing net operating losses payable to pre-IPO stockholders | 85% | ||||||||||
Income tax receivable agreement income | (29) | (19) | $ (345) | (69) | |||||||
Total deferred amount | $ 4,900 | ||||||||||
Percentage of deferred amount due by current fiscal year | 50% | ||||||||||
Percentage of deferred amount due by next fiscal year | 50% | ||||||||||
Maximum | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Income tax receivable agreement income | $ (100) | $ (100) | $ (100) | ||||||||
Supplier Concentration Risk | Supplier One | Accounts Payable | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number Of Suppliers | item | 1 | 1 | |||||||||
Percentage of concentration | 25.20% | 26.10% | |||||||||
Supplier Concentration Risk | Largest Supplier One | Purchased | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Percentage of concentration | 28.40% | 27% | 28.50% | 28.10% | |||||||
Geographic Concentration Risk | Revenue | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Percentage of concentration | 100% | 100% | 100% | 100% | |||||||
Subsequent Event | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Authorized amount under share repurchase agreement | $ 20,000 | ||||||||||
Cash available | $ 10,000 | ||||||||||
Dividend amount per share | $ / shares | $ 1.50 | ||||||||||
Common stock, par value (usd per share) | $ / shares | $ 0.01 | ||||||||||
2018 Credit Agreement | Revolving Credit Facility | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Senior secured revolving facility | $ 150,000 | ||||||||||
Senior secured revolving facility term | 5 years | ||||||||||
2022 Credit Agreement | Revolving Credit Facility | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Senior secured revolving facility | $ 150,000 | ||||||||||
Senior secured revolving facility term | 5 years | ||||||||||
Debt Instrument, Maturity Date | Jul. 27, 2027 | ||||||||||
Revolver loan | $ 20,000 | $ 20,000 | |||||||||
2022 Credit Agreement | Revolving Credit Facility | SOFR | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Debt instrument basis percentage | 1% | ||||||||||
2022 Credit Agreement | Revolving Credit Facility | Federal Funds Rate | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Debt instrument basis percentage | 0.50% | ||||||||||
2022 Credit Agreement | Revolving Credit Facility | Minimum | SOFR | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Debt instrument basis percentage | 1.25% | ||||||||||
2022 Credit Agreement | Revolving Credit Facility | Minimum | Base Rate | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Debt instrument basis percentage | 0.25% | ||||||||||
2022 Credit Agreement | Revolving Credit Facility | Maximum | SOFR | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Debt instrument basis percentage | 2.25% | ||||||||||
2022 Credit Agreement | Revolving Credit Facility | Maximum | Base Rate | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Debt instrument basis percentage | 1.25% | ||||||||||
2022 Credit Agreement | Revolving Credit Facility | Subsequent Event | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Proceeds from Lines of Credit | 46,000 | ||||||||||
Revolver loan | $ 66,000 | ||||||||||
2022 Credit Agreement | Letter of Credit | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Sub limit of revolving facility | $ 15,000 | ||||||||||
2022 Credit Agreement | Swing Line Loans | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Sub limit of revolving facility | $ 15,000 | ||||||||||
Texas | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number of restaurants with ROU asset impairment charges | restaurant | 1 | 1 | |||||||||
California | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number of restaurants | restaurant | 1 | 3 | 1 | 3 | |||||||
Number of restaurants with ROU asset impairment charges | restaurant | 1 | 1 | |||||||||
Greater Los Angeles area market | Geographic Concentration Risk | Revenue | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Percentage of concentration | 71.90% | 71.60% | 71.20% | 70.80% | |||||||
Closed Store | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Closed-store reserve expense | $ 200 | $ 400 | |||||||||
Closed Store | Maximum | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Closed-store reserve expense | $ 100 | $ 100 | |||||||||
Company-operated | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number of restaurants | restaurant | 190 | 190 | |||||||||
Franchised | |||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number of restaurants | restaurant | 297 | 297 |
Basis Of Presentation And Sum_5
Basis Of Presentation And Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | Dec. 29, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Property and equipment, net | $ 78,107 | $ 78,107 | $ 75,668 | ||
Impairment of property and equipment | $ 100 | $ 34 | $ 353 | $ 293 | |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Restructuring Costs and Asset Impairment Charges | Restructuring Costs and Asset Impairment Charges | |||
Impairment of Right-of-Use Assets | $ 39 | 0 | $ 39 | 407 | |
Fair Value, Measurements, Recurring [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative Liability, Fair Value, Gross Liability | 396 | ||||
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 | ||||
Fair Value, Measurements, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Property and equipment, net | 0 | 0 | 0 | 0 | |
Right-of-Use Assets, Net | 332 | 424 | 332 | 424 | |
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 | 0 | |
Right-of-Use Assets, Net | 0 | 0 | 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 | 0 | |
Right-of-Use Assets, Net | 0 | 0 | 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 | 0 | |
Right-of-Use Assets, Net | $ 332 | $ 424 | $ 332 | $ 424 |
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 | Sep. 28, 2022 | Dec. 29, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 251,640 | $ 240,670 |
Less: accumulated depreciation and amortization | (173,533) | (165,002) |
Property and equipment, net | 78,107 | 75,668 |
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 | 152,089 | 144,631 |
Other property and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 82,095 | 78,383 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,133 | $ 5,333 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 USD ($) restaurant | Sep. 29, 2021 USD ($) restaurant | Sep. 28, 2022 USD ($) restaurant | Sep. 29, 2021 USD ($) restaurant | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 3,500 | $ 3,700 | $ 10,700 | $ 11,500 |
Impairment of property and equipment | 100 | $ 34 | 353 | 293 |
California | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of property and equipment | $ 100 | $ 400 | $ 300 | |
Number of restaurants primarily responsible for impairment | restaurant | 1 | 3 | 1 | 3 |
California | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of property and equipment | $ 100 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | Dec. 29, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, options outstanding (shares) | 1,181,944 | 1,181,944 | 978,078 | ||
Common stock, options vested (in shares) | 659,861 | 659,861 | |||
Common stock, options unvested (shares) | 522,083 | 522,083 | |||
Expected volatility | 43% | 46.90% | |||
Risk-free interest rate | 2.90% | 1.10% | |||
Expected term (years) | 6 years 3 months | 6 years 3 months | |||
Unrecognized compensation expense, recognition period | 3 years 2 months 12 days | ||||
Stock-based compensation expense | $ 1,000 | $ 1,000 | $ 2,806 | $ 2,936 | |
Unrecognized compensation expense | $ 2,500 | $ 2,500 | |||
Premium Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, options outstanding (shares) | 203,569 | 203,569 | |||
Restricted Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 6,400 | $ 6,400 | |||
Unrecognized compensation expense, recognition period | 2 years 9 months 3 days |
Stock-Based Compensation - Chan
Stock-Based Compensation - Changes in Stock Options (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 28, 2022 USD ($) $ / shares shares | |
Shares | |
Outstanding-beginning balance (shares) | shares | 978,078 |
Grants (shares) | shares | 372,958 |
Exercised (shares) | shares | (150,475) |
Forfeited, cancelled or expired (shares) | shares | (18,617) |
Outstanding-ending balance (shares) | shares | 1,181,944 |
Vested and expected to vest at end of period (shares) | shares | 1,172,082 |
Exercisable at end of period (shares) | shares | 659,861 |
Weighted-Average Exercise Price | |
Outstanding-beginning balance (usd per share) | $ / shares | $ 11.45 |
Grants (usd per share) | $ / shares | 10.54 |
Exercised (usd per share) | $ / shares | 10.50 |
Forfeited, cancelled or expired (usd per share) | $ / shares | 15.86 |
Outstanding-ending balance (usd per share) | $ / shares | 11.21 |
Vested and expected to vest at end of period (usd per share) | $ / shares | 11.21 |
Exercisable at end of period (usd per share) | $ / shares | $ 10.50 |
Weighted-Average Contractual Life (Years) | |
Outstanding contractual life (years) | 6 years 21 days |
Vested and expected to vest contractual life (years) | 6 years 10 days |
Exercisable contractual life (years) | 3 years 6 months 29 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 742 |
Vested and expected to vest | $ | 742 |
Exercisable | $ | $ 742 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Changes in Restricted Shares (Details) | 9 Months Ended |
Sep. 28, 2022 $ / shares shares | |
Shares | |
Unvested shares, beginning balance (shares) | shares | 495,780 |
Granted (shares) | shares | 352,114 |
Released (shares) | shares | (180,696) |
Forfeited, cancelled, or expired (shares) | shares | (27,931) |
Unvested shares, ending balance (shares) | shares | 639,267 |
Weighted-Average Fair Value | |
Unvested shares Weighted-Average Fair Value, beginning balance (usd per share) | $ / shares | $ 13.92 |
Granted, Weighted-Average Fair Value (usd per share) | $ / shares | 10.36 |
Released, Weighted-Average Fair Value (usd per share) | $ / shares | 13.10 |
Forfeited, cancelled, or expired, Weighted-Average Fair Value (usd per share) | $ / shares | 14.01 |
Unvested shares Weighted-Average Fair Value, ending balance (usd per share) | $ / shares | $ 12.19 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Nov. 03, 2022 USD ($) | Jul. 28, 2022 USD ($) | Jul. 27, 2022 USD ($) | Sep. 28, 2022 USD ($) | Sep. 29, 2021 USD ($) | Sep. 28, 2022 USD ($) | Sep. 29, 2021 USD ($) | Dec. 29, 2021 USD ($) | Dec. 25, 2019 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Revolving line of credit | $ 20,000 | $ 20,000 | $ 40,000 | ||||||
Repayments of Lines of Credit | 20,000 | $ 22,800 | |||||||
Proceeds from swap | $ 600 | ||||||||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 300 | ||||||||
Net Gain (Loss) recognized in OCI | 43 | $ (32) | 974 | 44 | |||||
Interest expense (income) on interest rate swap | (277) | 230 | 242 | 800 | |||||
Gain (Loss) Reclassified from AOCI into Interest expense | 369 | $ (133) | 197 | $ (367) | |||||
Derivative liabilities fair value | 396 | ||||||||
2022 Credit Agreement | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Letters of credit outstanding | 10,000 | $ 10,000 | |||||||
Revolving Credit Facility | 2022 Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior secured revolving facility | $ 150,000 | ||||||||
Senior secured revolving facility term | 5 years | ||||||||
Debt Instrument, Maturity Date | Jul. 27, 2027 | ||||||||
Revolving line of credit | 20,000 | $ 20,000 | |||||||
Amount of borrowings available | 120,000 | 120,000 | |||||||
Repayments of Lines of Credit | $ 20,000 | $ 20,000 | |||||||
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 | 2022 Credit Agreement | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving line of credit | $ 66,000 | ||||||||
Proceeds from lines of credit | $ 46,000 | ||||||||
Revolving Credit Facility | 2022 Credit Agreement | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate | 2.87% | 1.34% | 1.35% | 1.34% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate | 6% | 1.35% | 6% | 1.65% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument basis percentage | 0.50% | ||||||||
Revolving Credit Facility | 2022 Credit Agreement | SOFR | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument basis percentage | 1% | ||||||||
Revolving Credit Facility | 2022 Credit Agreement | SOFR | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument basis percentage | 1.25% | ||||||||
Revolving Credit Facility | 2022 Credit Agreement | SOFR | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument basis percentage | 2.25% | ||||||||
Revolving Credit Facility | 2022 Credit Agreement | Base Rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument basis percentage | 0.25% | ||||||||
Revolving Credit Facility | 2022 Credit Agreement | Base Rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument basis percentage | 1.25% | ||||||||
Revolving Credit Facility | 2018 Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior secured revolving facility | $ 150,000 | ||||||||
Senior secured revolving facility term | 5 years | ||||||||
Repayments of Lines of Credit | $ 0 | $ 22,800 | |||||||
Letter of Credit | 2022 Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Sub limit of revolving facility | $ 15,000 | ||||||||
Swing Line Loans | 2022 Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Sub limit of revolving facility | $ 15,000 | ||||||||
Interest Rate Swap [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Net Gain (Loss) recognized in OCI | $ 43 | (32) | $ 974 | 44 | |||||
Interest expense (income) on interest rate swap | (369) | 133 | (197) | 367 | |||||
Gain (Loss) Reclassified from AOCI into Interest expense | $ (369) | 133 | $ (197) | 367 | |||||
Derivative Asset, Notional Amount | $ 40,000 | ||||||||
Derivative Liability, Notional Amount | 40,000 | ||||||||
Derivative liabilities fair value | $ 396 | ||||||||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | ||||||
Hedged Debt Instrument [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest expense (income) on interest rate swap | $ 92 | $ 97 | $ 439 | $ 433 |
Other Accrued Expenses and Cu_3
Other Accrued Expenses and Current Liabilities - Schedule of Other Accrued Expenses and Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 28, 2022 | Dec. 29, 2021 |
Payables And Accruals [Abstract] | ||
Accrued sales and property taxes | $ 5,652 | $ 4,726 |
Gift card liability | 3,957 | 4,622 |
Loyalty rewards program liability | 537 | 687 |
Accrued advertising | 3,635 | |
Accrued legal settlements and professional fees | 1,161 | 771 |
Deferred franchise and development fees | 627 | 637 |
Employer social security tax deferral | 2,543 | |
Other | 4,453 | 4,718 |
Total other accrued expenses and current liabilities | $ 18,930 | $ 19,796 |
Other Noncurrent Liabilities -
Other Noncurrent Liabilities - Schedule of Other Noncurrent Liabilities (Detail) - USD ($) $ in Thousands | Sep. 28, 2022 | Dec. 29, 2021 |
Payables And Accruals [Abstract] | ||
Deferred franchise and development fees | $ 5,761 | $ 5,691 |
Derivative liability | 396 | |
Employer social security tax deferral | 2,426 | |
Other | 101 | 140 |
Total other noncurrent liabilities | $ 5,862 | $ 8,653 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 9 Months Ended | ||
Sep. 10, 2021 USD ($) | Sep. 28, 2022 USD ($) agreement lease | Sep. 29, 2021 USD ($) | |
Officers | |||
Other Commitments [Line Items] | |||
Number of at-will employment agreements | agreement | 3 | ||
Property Lease Guarantee | |||
Other Commitments [Line Items] | |||
Number of leases assigned to franchisees | lease | 3 | ||
Latest lease expiration year | 2036 | ||
Contingent lease obligations, maximum exposure | $ 2,400,000 | ||
Contingent lease obligations, maximum exposure, if discounted at estimated pre-tax cost of debt | 1,900,000 | ||
Chicken Acquisition Corp | |||
Other Commitments [Line Items] | |||
Purchase commitments, estimated obligations | $ 9,300,000 | ||
Diep action | |||
Other Commitments [Line Items] | |||
Proposed settlement payment | $ 625,000 | ||
Litigation Settlement, Expense | $ 156,250 | ||
Insurance proceeds | $ 469,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Numerator: | ||||
Net income | $ 5,009 | $ 10,161 | $ 14,265 | $ 22,943 |
Denominator: | ||||
Weighted-average shares outstanding-Basic (shares) | 36,402,899 | 36,067,754 | 36,329,938 | 35,930,246 |
Weighted-average shares outstanding-Diluted (shares) | 36,507,050 | 36,525,424 | 36,491,624 | 36,457,110 |
Net income per share-Basic (usd per share) | $ 0.14 | $ 0.28 | $ 0.39 | $ 0.64 |
Net income per share-Diluted (usd per share) | $ 0.14 | $ 0.28 | $ 0.39 | $ 0.63 |
Anti-dilutive securities not considered in diluted EPS calculation (shares) | 1,434,825 | 225,308 | 944,183 | 118,968 |
Earnings Per Share- Schedule of
Earnings Per Share- Schedule of Reconciliation of Basic and Diluted Share Counts (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Earnings Per Share [Abstract] | ||||
Weighted-average shares outstanding-Basic (shares) | 36,402,899 | 36,067,754 | 36,329,938 | 35,930,246 |
Dilutive effect of stock options and restricted shares (shares) | 104,151 | 457,670 | 161,686 | 526,864 |
Weighted-average shares outstanding-Diluted (shares) | 36,507,050 | 36,525,424 | 36,491,624 | 36,457,110 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - El Pollo Loco Holdings, Inc | Sep. 28, 2022 |
Trimaran Pollo Partners, LLC | |
Related Party Transaction [Line Items] | |
Noncontrolling ownership percentage | 30.20% |
FS Equity Partners V, L.P | |
Related Party Transaction [Line Items] | |
Noncontrolling ownership percentage | 14.70% |
FS Affiliates V, L.P | |
Related Party Transaction [Line Items] | |
Noncontrolling ownership percentage | 0.20% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) | 9 Months Ended | |
Sep. 28, 2022 USD ($) item | Dec. 29, 2021 USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of revenue streams | item | 2 | |
Accrued Loyalty Rewards Program Liability, Current | $ | $ 500,000 | $ 700,000 |
Loyalty Rewards Program, Expected Loyalty Points Redemption Period | 1 year | |
Loyalty Rewards Program, Award Earned | $ | $ 5 | |
Loyalty Rewards Program, Expiration Period For Inactivity | 1 year | |
Loyalty Rewards Program, Points Needed For One Reward | item | 50 | |
Loyalty Reward Program, unused reward expiration period | 6 months | |
Franchise Rights | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Renewal period | 20 years | |
Franchise agreement term | 20 years | |
Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract with Customer, Liability, Revenue Recognized, Period | 10 years | |
Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract with Customer, Liability, Revenue Recognized, Period | 20 years |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Revenues Disaggregated by Revenue Source and Market (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 119,878 | $ 115,700 | $ 354,037 | $ 345,406 |
Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 106,569 | 102,605 | 313,365 | 302,890 |
Non-Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 13,309 | 13,095 | 40,672 | 42,516 |
Company-operated restaurant revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 103,174 | 99,986 | 303,585 | 301,117 |
Company-operated restaurant revenue | Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 98,732 | 95,292 | 289,798 | 281,945 |
Company-operated restaurant revenue | Non-Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,442 | 4,694 | 13,787 | 19,172 |
Franchise revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 9,543 | 8,918 | 28,862 | 24,919 |
Franchise revenue | Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,501 | 4,184 | 13,559 | 11,956 |
Franchise revenue | Non-Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,042 | 4,733 | 15,303 | 12,963 |
Franchise advertising fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 7,161 | 6,796 | 21,590 | 19,370 |
Franchise advertising fee revenue | Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,336 | 3,129 | 10,008 | 8,989 |
Franchise advertising fee revenue | Non-Core Market | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 3,825 | $ 3,668 | $ 11,582 | $ 10,381 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Revenues Disaggregated by Geographic Market (Details) - Revenue - Geographic Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Percentage of concentration | 100% | 100% | 100% | 100% |
Greater Los Angeles area market | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of concentration | 71.90% | 71.60% | 71.20% | 70.80% |
Other markets | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of concentration | 28.10% | 28.40% | 28.80% | 29.20% |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Change in Contract Liabilities (Details) - Franchise revenue - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 28, 2022 | Sep. 29, 2021 | Dec. 29, 2021 | |
Change in Contract with Customer, Liability [Roll Forward] | |||
Loyalty rewards liability, beginning balance | $ 6,328 | $ 5,628 | $ 5,628 |
Revenue recognized - beginning balance | (558) | (514) | |
Additional contract liability | 618 | 1,330 | |
Loyalty rewards liability, ending balance | $ 6,388 | $ 6,444 | $ 6,328 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Unsatisfied Performance Obligation (Details) $ in Thousands | Sep. 28, 2022 USD ($) |
Hardware Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 0 |
Franchise revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 6,388 |
Franchise revenue | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
Unsatisfied performance obligations | $ 167 |
Franchise revenue | 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 | $ 608 |
Franchise revenue | 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 | $ 515 |
Franchise revenue | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Unsatisfied performance obligations | $ 468 |
Franchise revenue | 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 | $ 445 |
Franchise revenue | 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 | $ 4,185 |
Loyalty reward program | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue from Contracts with C_8
Revenue from Contracts with Customers - Loyalty Reward Liability and Gift Card Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | Dec. 29, 2021 | |
Change in Contract with Customer, Liability [Roll Forward] | |||||
Gift card liability | $ 3,957 | $ 3,957 | $ 4,622 | ||
Gift card liability | |||||
Change in Contract with Customer, Liability [Roll Forward] | |||||
Gift card liability | 3,957 | 3,957 | 4,622 | ||
Revenue recognized from gift card liability balance at the beginning of the year | 237 | $ 220 | 967 | $ 903 | |
Loyalty reward program | |||||
Change in Contract with Customer, Liability [Roll Forward] | |||||
Loyalty rewards liability, beginning balance | 687 | $ 900 | 900 | ||
Revenue deferred | 2,039 | 2,677 | |||
Revenue recognized | (2,189) | (2,890) | |||
Loyalty rewards liability, ending balance | $ 537 | $ 537 | $ 687 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 USD ($) lease restaurant | Sep. 29, 2021 USD ($) restaurant | Sep. 28, 2022 USD ($) restaurant lease item property | Sep. 29, 2021 USD ($) restaurant | |
Lessee, Lease, Description [Line Items] | ||||
Initial lease term | 20 years | 20 years | ||
Number of renewable options | item | 4 | |||
Renewal term | 5 years | 5 years | ||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 10,572 | $ 13,848 | ||
Impairment of Right-of-Use Assets | $ 39 | $ 0 | $ 39 | 407 |
Texas | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Impairment Loss | $ 400 | |||
California | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of restaurants primarily responsible for impairment | restaurant | 1 | 3 | 1 | 3 |
California | Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Impairment Loss | $ 100 | |||
Lease Not Yet Commenced | ||||
Lessee, Lease, Description [Line Items] | ||||
Number Of Leases | lease | 1 | 1 | ||
Property Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 10,486 | $ 13,848 | ||
Property Lease | Texas | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of restaurants primarily responsible for impairment | restaurant | 1 | |||
Property Lease | California | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of restaurants primarily responsible for impairment | restaurant | 1 | 1 | ||
Equipment Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Number Of Finance Leases | lease | 10 | 10 | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 86 | |||
Property lease modification | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of Restaurants with lease modification | restaurant | 5 | 4 | 18 | 16 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 2,000 | $ 2,600 | $ 10,500 | $ 13,800 |
Number of properties impacted on original lease classification | property | 1 | |||
Original impact of original lease classification | $ 700 | |||
Facility Leases | ||||
Lessee, Lease, Description [Line Items] | ||||
Number Of Finance Leases | lease | 1 | 1 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Amortization of right-to-use assets | $ 19 | $ 19 | $ 57 | $ 62 |
Interest on lease liabilities | 11 | 15 | 34 | 46 |
Operating Lease, Cost | 6,902 | 6,819 | 20,571 | 20,796 |
Short-term Lease, Cost | 4 | 7 | 11 | 17 |
Variable Lease, Cost | 347 | 208 | 921 | 673 |
Sublease Income | (1,130) | (1,128) | (3,387) | (2,722) |
Total lease cost | 6,153 | 5,940 | 18,207 | 18,872 |
Operating Expense [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 5,969 | 5,811 | 17,709 | 18,191 |
General and Administrative Expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 133 | 97 | 343 | 316 |
Depreciation and amortization [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 18 | 18 | 55 | 60 |
Interest Expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 11 | 14 | 35 | 44 |
Restructuring Charges [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 22 | 65 | 261 | |
Property Lease [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Amortization of right-to-use assets | 18 | 18 | 55 | 60 |
Interest on lease liabilities | 10 | 14 | 32 | 44 |
Operating Lease, Cost | 6,646 | 6,552 | 19,795 | 19,935 |
Variable Lease, Cost | 151 | 138 | 458 | 413 |
Sublease Income | (1,130) | (1,128) | (3,387) | (2,722) |
Total lease cost | 5,695 | 5,594 | 16,953 | 17,730 |
Equipment Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Amortization of right-to-use assets | 1 | 1 | 2 | 2 |
Interest on lease liabilities | 1 | 1 | 2 | 2 |
Operating Lease, Cost | 256 | 267 | 776 | 861 |
Short-term Lease, Cost | 4 | 7 | 11 | 17 |
Variable Lease, Cost | 196 | 70 | 463 | 260 |
Total lease cost | $ 458 | $ 346 | $ 1,254 | $ 1,142 |
Leases - Cash and Non-cash Leas
Leases - Cash and Non-cash Lease Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Dec. 29, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Payments | $ 21,101 | $ 20,202 | |
Finance Lease, Principal Payments | 124 | 100 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 10,572 | 13,848 | |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 28 | 196 | |
Derecognition of ROU assets due to terminations, impairment or modifications | (63) | (4,612) | |
Operating Lease ROU assets | 167,985 | $ 171,981 | |
Operating lease liabilities | 187,625 | ||
Property Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Payments | 20,364 | 19,371 | |
Finance Lease, Principal Payments | 82 | 67 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 10,486 | 13,848 | |
Derecognition of ROU assets due to terminations, impairment or modifications | $ (39) | $ (4,513) | |
Finance Lease, Weighted-average remaining lease term | 18 years 1 month 13 days | 18 years 6 months 21 days | |
Operating Lease, Weighted-average remaining lease term | 10 years 10 months 28 days | 11 years 4 months 13 days | |
Finance Lease, Weighted Average Discount Rate, Percent | 2.57% | 2.84% | |
Operating Lease, Weighted Average Discount Rate, Percent | 4.49% | 4.43% | |
Equipment Lease | |||
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Payments | $ 737 | $ 831 | |
Finance Lease, Principal Payments | 42 | 33 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 86 | ||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 28 | 196 | |
Derecognition of ROU assets due to terminations, impairment or modifications | $ (24) | $ (99) | |
Finance Lease, Weighted-average remaining lease term | 3 years 5 months 8 days | 4 years 3 months 7 days | |
Operating Lease, Weighted-average remaining lease term | 1 year 6 months 25 days | 1 year 7 months 28 days | |
Finance Lease, Weighted Average Discount Rate, Percent | 1.53% | 1.54% | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.82% | 3.91% |
Leases - Minimum Future Lease O
Leases - Minimum Future Lease Obligations (Details) - USD ($) $ in Thousands | Sep. 28, 2022 | Dec. 29, 2021 |
Finance Minimum Lease Payments | ||
For the Years Ending December 28, 2022 | $ 38 | |
For the Years Ending December 27, 2023 | 151 | |
For the Years Ending December 25, 2024 | 151 | |
For the Years Ending December 31, 2025 | 147 | |
For the Years Ending December 30, 2026 | 114 | |
Thereafter | 1,583 | |
Total | 2,184 | |
Less: imputed interest | (422) | |
Present value of lease obligations | 1,762 | |
Less: current maturities | (109) | $ (143) |
Noncurrent portion | 1,653 | 1,712 |
Operating Leases Minimum Lease Payments | ||
For the Years Ending December 28, 2022 | 7,073 | |
For the Years Ending December 27, 2023 | 27,673 | |
For the Years Ending December 25, 2024 | 25,348 | |
For the Years Ending December 31, 2025 | 23,186 | |
For the Years Ending December 30, 2026 | 21,048 | |
Thereafter | 135,928 | |
Total | 240,256 | |
Less: imputed interest | (52,631) | |
Present value of lease obligations | 187,625 | |
Less: current maturities | (20,063) | (19,959) |
Noncurrent portion | 167,562 | $ 171,651 |
Operating Leases Minimum Sublease Payments | ||
For the Years Ending December 28, 2022 | 937 | |
For the Years Ending December 27, 2023 | 3,698 | |
For the Years Ending December 25, 2024 | 3,510 | |
For the Years Ending December 31, 2025 | 3,115 | |
For the Years Ending December 31, 2026 | 2,789 | |
Thereafter | 23,165 | |
Total | $ 37,214 | |
Minimum | ||
Operating Leases Minimum Sublease Payments | ||
Imputed interest rate | 1.53% | |
Maximum | ||
Operating Leases Minimum Sublease Payments | ||
Imputed interest rate | 4.49% |
Leases - Lessor (Details)
Leases - Lessor (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2022 | Sep. 29, 2021 | Sep. 28, 2022 | Sep. 29, 2021 | |
Lessor, Lease, Description [Line Items] | ||||
Operating Lease, Lease Income | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.3 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue from Contract with Customer, Excluding Assessed Tax | Revenue from Contract with Customer, Excluding Assessed Tax | Revenue from Contract with Customer, Excluding Assessed Tax | Revenue from Contract with Customer, Excluding Assessed Tax |
Minimum | ||||
Lessor, Lease, Description [Line Items] | ||||
Lessor, Operating Lease, Term of Contract | 3 years | 3 years | ||
Maximum | ||||
Lessor, Lease, Description [Line Items] | ||||
Lessor, Operating Lease, Term of Contract | 20 years | 20 years |