Wingstop (WING) 10-Q 28 Jul 21 2021 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 26, 2021	Jul. 27, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 26, 2021
Document Transition Report	false
Entity File Number	001-37425
Entity Registrant Name	WINGSTOP INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-3494862
Entity Address, Address Line One	15505 Wright Brothers Drive
Entity Address, City or Town	Addison
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75001
City Area Code	972
Local Phone Number	686-6500
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	WING
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		29,745,482
Entity Central Index Key	0001636222
Current Fiscal Year End Date	--12-25
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 26, 2021	Dec. 26, 2020
Current assets
Cash and cash equivalents	$ 43,504	$ 40,858
Restricted cash	4,657	4,815
Accounts receivable, net	5,854	4,929
Prepaid expenses and other current assets	9,132	5,532
Advertising fund assets, restricted	21,561	16,486
Total current assets	84,708	72,620
Property and equipment, net	39,598	27,948
Goodwill	53,690	53,690
Trademarks	32,700	32,700
Customer relationships, net	10,951	11,600
Other non-current assets	12,617	13,007
Total assets	234,264	211,565
Current liabilities
Accounts payable	3,812	3,658
Other current liabilities	25,072	26,729
Current portion of debt	1,200	3,600
Advertising fund liabilities	21,561	16,486
Total current liabilities	51,645	50,473
Long-term debt, net	468,774	466,933
Deferred revenues, net of current	26,156	24,962
Deferred income tax liabilities, net	5,416	4,480
Other non-current liabilities	4,516	6,027
Total liabilities	556,507	552,875
Commitments and contingencies
Stockholders' deficit
Common stock, $0.01 par value; 100,000,000 shares authorized; 29,743,375 and 29,687,123 shares issued and outstanding as of June 26, 2021 and December 26, 2020, respectively	298	297
Additional paid-in-capital	594	421
Retained deficit	(323,026)	(342,028)
Accumulated other comprehensive loss	(109)	0
Total stockholders' deficit	(322,243)	(341,310)
Total liabilities and stockholders' deficit	$ 234,264	$ 211,565

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 26, 2021	Dec. 26, 2020
Statement of Financial Position [Abstract]
Common stock, par value (in USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	29,743,375	29,687,123
Common stock, shares outstanding (in shares)	29,743,375	29,687,123

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 26, 2021	Jun. 27, 2020	Jun. 26, 2021	Jun. 27, 2020
Revenue:
Advertising fees		$ 22,577	$ 19,923	$ 44,097	$ 35,937
Total revenue		74,000	66,105	144,690	121,541
Costs and expenses:
Cost of sales	[1]	14,207	13,387	27,486	24,563
Advertising expenses		23,301	20,424	45,328	37,420
Selling, general and administrative		16,066	13,375	29,852	25,613
Depreciation and amortization		1,523	1,398	3,318	2,953
Gain on sale of restaurants and other expenses, net		0	(2,016)	0	(2,016)
Total costs and expenses		55,097	46,568	105,984	88,533
Operating income		18,903	19,537	38,706	33,008
Interest expense, net		3,724	4,214	7,506	8,359
Income before income tax expense		15,179	15,323	31,200	24,649
Income tax expense		3,867	3,784	6,728	5,014
Net income		$ 11,312	$ 11,539	$ 24,472	$ 19,635
Earnings per share
Basic (in USD per share)		$ 0.38	$ 0.39	$ 0.82	$ 0.66
Diluted (in USD per share)		$ 0.38	$ 0.39	$ 0.82	$ 0.66
Weighted average shares outstanding
Basic (in shares)		29,739	29,588	29,722	29,538
Diluted (in shares)		29,873	29,793	29,859	29,751
Dividends per share (in USD per share)		$ 0.14	$ 0.11	$ 0.28	$ 0.22
Other comprehensive income (loss)
Currency translation adjustment		$ (109)	$ 0	$ (109)	$ 0
Other comprehensive income (loss)		(109)	0	(109)	0
Comprehensive income		11,203	11,539	24,363	19,635
Royalty revenue, franchise fees and other
Revenue:
Royalty revenue, franchise fees and other		33,135	27,858	64,741	52,057
Company-owned restaurant sales
Revenue:
Total revenue		$ 18,288	$ 18,324	$ 35,852	$ 33,547
[1]	Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, and excludes depreciation and amortization, which are presented separately.

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Deficit	Accumulated Other Comprehensive Loss
Balance at beginning of period (in shares) at Dec. 28, 2019		29,457,228
Balance at beginning of period at Dec. 28, 2019	$ (209,428)	$ 295	$ 552	$ (210,275)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	8,096			8,096
Shares issued under stock plans (in shares)		128,585
Shares issued under stock plans	505	$ 1	504
Tax payments for restricted stock upon vesting (in shares)		(2,419)
Tax payments for restricted stock upon vesting	(229)			(229)
Stock-based compensation expense	1,331		1,331
Dividends declared on common stock and equivalents	(3,223)		(2,168)	(1,055)
Balance at end of period (in shares) at Mar. 28, 2020		29,583,394
Balance at end of period at Mar. 28, 2020	(202,948)	$ 296	219	(203,463)	0
Balance at beginning of period (in shares) at Dec. 28, 2019		29,457,228
Balance at beginning of period at Dec. 28, 2019	(209,428)	$ 295	552	(210,275)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	19,635
Currency translation adjustment	0
Balance at end of period (in shares) at Jun. 27, 2020		29,596,347
Balance at end of period at Jun. 27, 2020	(192,672)	$ 296	43	(193,011)	0
Balance at beginning of period (in shares) at Mar. 28, 2020		29,583,394
Balance at beginning of period at Mar. 28, 2020	(202,948)	$ 296	219	(203,463)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	11,539			11,539
Shares issued under stock plans (in shares)		13,057
Shares issued under stock plans	57	$ 0	57
Tax payments for restricted stock upon vesting (in shares)		(104)
Tax payments for restricted stock upon vesting	(12)			(12)
Stock-based compensation expense	1,969		1,969
Dividends declared on common stock and equivalents	(3,277)		(2,202)	(1,075)
Currency translation adjustment	0
Balance at end of period (in shares) at Jun. 27, 2020		29,596,347
Balance at end of period at Jun. 27, 2020	$ (192,672)	$ 296	43	(193,011)	0
Balance at beginning of period (in shares) at Dec. 26, 2020	29,687,123	29,687,123
Balance at beginning of period at Dec. 26, 2020	$ (341,310)	$ 297	421	(342,028)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	13,160			13,160
Shares issued under stock plans (in shares)		60,958
Shares issued under stock plans	156	$ 1	155
Tax payments for restricted stock upon vesting (in shares)		(11,243)
Tax payments for restricted stock upon vesting	(1,862)			(1,862)
Stock-based compensation expense	2,316		2,316
Dividends declared on common stock and equivalents	(4,188)		(2,866)	(1,322)
Balance at end of period (in shares) at Mar. 27, 2021		29,736,838
Balance at end of period at Mar. 27, 2021	$ (331,728)	$ 298	26	(332,052)	0
Balance at beginning of period (in shares) at Dec. 26, 2020	29,687,123	29,687,123
Balance at beginning of period at Dec. 26, 2020	$ (341,310)	$ 297	421	(342,028)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	24,472
Currency translation adjustment	$ (109)
Balance at end of period (in shares) at Jun. 26, 2021	29,743,375	29,743,375
Balance at end of period at Jun. 26, 2021	$ (322,243)	$ 298	594	(323,026)	(109)
Balance at beginning of period (in shares) at Mar. 27, 2021		29,736,838
Balance at beginning of period at Mar. 27, 2021	(331,728)	$ 298	26	(332,052)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	11,312			11,312
Shares issued under stock plans (in shares)		6,613
Shares issued under stock plans	0		0
Tax payments for restricted stock upon vesting (in shares)		(76)
Tax payments for restricted stock upon vesting	(11)			(11)
Stock-based compensation expense	2,456		2,456
Dividends declared on common stock and equivalents	(4,163)		(1,888)	(2,275)
Currency translation adjustment	$ (109)				(109)
Balance at end of period (in shares) at Jun. 26, 2021	29,743,375	29,743,375
Balance at end of period at Jun. 26, 2021	$ (322,243)	$ 298	$ 594	$ (323,026)	$ (109)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 26, 2021	Jun. 27, 2020
Operating activities
Net income	$ 24,472	$ 19,635
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	3,318	2,953
Deferred income taxes	936	1,720
Stock-based compensation expense	4,772	3,300
(Gain)/Loss on disposal of assets	0	(2,016)
Amortization of debt issuance costs	711	815
Changes in operating assets and liabilities:
Accounts receivable	(925)	(405)
Prepaid expenses and other assets	(2,217)	(652)
Advertising fund assets and liabilities, net	4,897	2,004
Accounts payable and other current liabilities	(5,231)	(675)
Deferred revenue	1,315	10
Other non-current liabilities	(436)	(1,077)
Cash provided by operating activities	31,612	25,612
Investing activities
Purchases of property and equipment	(8,258)	(2,670)
Proceeds from sales of assets	0	2,300
Payments for investments (Note 6)	(4,163)	0
Cash used in investing activities	(12,421)	(370)
Financing activities
Proceeds from exercise of stock options	156	562
Borrowings of long-term debt	0	16,000
Repayments of long-term debt	(1,200)	(800)
Tax payments for restricted stock upon vesting	(1,873)	(241)
Dividends paid	(8,889)	(6,500)
Cash provided by (used in) financing activities	(11,806)	9,021
Net increase in cash, cash equivalents, and restricted cash	7,385	34,263
Cash, cash equivalents, and restricted cash at beginning of period	59,270	21,175
Cash, cash equivalents, and restricted cash at end of period	66,655	55,438
Supplemental information:
Accrued capital expenditures	$ 6,325	$ 0

Basis of Presentation and Updat

Basis of Presentation and Update to Significant Accounting Policies	6 Months Ended
	Jun. 26, 2021
Accounting Policies [Abstract]
Basis of Presentation and Update to Significant Accounting Policies	Basis of Presentation and Update to Significant Accounting Policies Nature of operations. Wingstop Inc., together with its consolidated subsidiaries (collectively, “Wingstop” or the “Company”), is in the business of franchising and operating Wingstop restaurants. As of June 26, 2021, the Company had 1,415 domestic franchised restaurants and 175 international franchised restaurants. As of June 26, 2021, the Company owned and operated 34 restaurants. Basis of presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Consequently, financial information and disclosures normally included in financial statements prepared annually in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. Balance sheet amounts are as of June 26, 2021 and December 26, 2020, and operating results are for the thirteen and twenty-six weeks ended June 26, 2021 and June 27, 2020. The foreign currency translation adjustment included in the Consolidated Statements of Comprehensive Income represents the unrealized impact of translating our foreign investment. This amount is not included in Net Income and would only be realized upon disposition of our investment. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets. In the Company’s opinion, all necessary adjustments have been made for the fair presentation of the results of the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2020. Fiscal year. The Company uses a 52/53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2021 and 2020 each have 52 weeks. Cash, Cash Equivalents, and Restricted Cash. Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of June 26, 2021 and December 26, 2020 were as follows (in thousands): June 26, 2021 December 26, 2020 Cash and cash equivalents $ 43,504 $ 40,858 Restricted cash 4,657 4,815 Restricted cash, included in Advertising fund assets, restricted 18,494 13,597 Total cash, cash equivalents, and restricted cash $ 66,655 $ 59,270 Change in presentation. Beginning in the first quarter of 2021, headcount related expenses that support our national advertising fund are presented within “Advertising expenses” on the Consolidated Statements of Comprehensive Income. Prior to the first quarter of 2021, these expenses were presented within “Selling, general and administrative expenses.” Prior period amounts have been reclassified to conform to the current presentation. This reclassification had no impact on operating income, balance sheets or statements of cash flows. Headcount related expenses associated with the national advertising fund were $1.9 million and $1.8 million for the thirteen weeks ended June 26, 2021 and June 27, 2020, respectively, and were $4.0 million and $3.9 million for the twenty-six weeks ended June 26, 2021 and June 27, 2020, respectively. Recently issued accounting pronouncements. We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements.

Earnings per Share

Earnings per Share	6 Months Ended
	Jun. 26, 2021
Earnings Per Share [Abstract]
Earnings per Share	Earnings per ShareBasic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities convertible into, or other contracts to issue, common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of the exercise and vesting of stock options and restricted stock units, respectively, as determined using the treasury stock method. Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 26, June 27, June 26, June 27, Basic weighted average shares outstanding 29,739 29,588 29,722 29,538 Dilutive shares 134 205 137 213 Diluted weighted average shares outstanding 29,873 29,793 29,859 29,751 For the thirteen weeks ended June 26, 2021 and June 27, 2020, equity awards representing approximately 8,000 and 1,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

Dividends

Dividends	6 Months Ended
	Jun. 26, 2021
Dividends [Abstract]
Dividends	DividendsIn each of the first two quarters of 2021, the Company’s Board of Directors declared a quarterly dividend of $0.14 per share of common stock, which, in the aggregate, totaled $8.4 million, or $0.28 per share of common stock, and which was paid during the twenty-six weeks ended June 26, 2021.Subsequent to the second quarter, on July 27, 2021, the Company’s Board of Directors declared a quarterly dividend of $0.17 per share of common stock for stockholders of record as of August 13, 2021. The regular quarterly dividend is to be paid on September 3, 2021, totaling approximately $5.1 million.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 26, 2021
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Assets and liabilities are classified using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows: Level 1 — Unadjusted quoted prices for identical instruments traded in active markets. Level 2 — Observable market-based inputs or unobservable inputs corroborated by market data. Level 3 — Unobservable inputs reflecting management’s estimates and assumptions. The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short-term nature. Fair value of debt is determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy June 26, 2021 December 26, 2020 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 478,800 $ 488,826 $ 480,000 $ 483,365 (1) The fair value of the 2020-1 Class A-2 Senior Secured Notes was estimated using available market information. The Company also measures certain non-financial assets (primarily long-lived assets, intangible assets, and goodwill) at fair value on a non-recurring basis in connection with its periodic evaluations of such assets for potential impairment.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 26, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Income tax expense and the effective tax rate were $3.9 million and 25.5%, respectively, for the thirteen weeks ended June 26, 2021, and $3.8 million and 24.7%, respectively, for the thirteen weeks ended June 27, 2020. Income tax expense and the effective tax rate were $6.7 million and 21.6%, respectively, for the twenty-six weeks ended June 26, 2021, and $5.0 million and 20.3%, respectively, for the twenty-six weeks ended June 27, 2020. Income tax expense for the thirteen and twenty-six weeks ended June 26, 2021 included $0.1 million and $1.5 million, respectively, in tax benefits resulting from the recognition of excess tax benefits from stock-based compensation, as compared to $0.2 million and $1.5 million in tax benefits for the thirteen and twenty-six weeks ended June 27, 2020, respectively.

Investments

Investments	6 Months Ended
	Jun. 26, 2021
Equity Method Investments and Joint Ventures [Abstract]
Investments	Investments In the second quarter of 2021, a wholly-owned subsidiary of the Company acquired a 20% non-controlling interest in Wingstop’s United Kingdom master franchisee , Lemon Pepper Holdings Ltd., (“LPH”) for an aggregate amount of $4.2 million. Substantially all of the investment consisted of bonds issued by a subsidiary of LPH, which do not have a readily determinable fair value and are recorded at cost with adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer or impairments within long-term other assets in the Company’s consolidated balance sheet. In addition, the Company received 20% of the outstanding stock, which will be accounted for using the equity method of accounting, under which the Company’s share of the income (loss) of the investee will be recorded in our results of operations in “Other operating income, net.” The Company did not record any adjustments to the carrying amount of $4.2 million in the second quarter ended June 26, 2021

Debt Obligations

Debt Obligations	6 Months Ended
	Jun. 26, 2021
Debt Disclosure [Abstract]
Debt Obligations	Debt Obligations Long-term debt consisted of the following components (in thousands): June 26, 2021 December 26, 2020 2020-1 Class A-2 Senior Secured Notes $ 478,800 $ 480,000 Debt issuance costs, net of amortization (8,826) (9,467) Total debt 469,974 470,533 Less: current portion of debt (1,200) (3,600) Long-term debt, net $ 468,774 $ 466,933 The Company’s outstanding debt consists of (i) Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”) issued by Wingstop Funding LLC (the “Issuer”), a limited-purpose, bankruptcy-remote, wholly owned indirect subsidiary of Wingstop Inc. and (ii) Series 2020-1 Variable Funding Senior Notes, Class A-1 (the “2020 Variable Funding Notes” and together with the Class A-2 Notes, the “2020 Notes”), which permit borrowings of up to a maximum principal amount of $50 million which may be used to borrow amounts on a revolving basis and to issue letters of credit. As of June 26, 2021 and December 26, 2020, the Company had $478.8 million and $480.0 million of 2020 Class A-2 Notes outstanding, respectively. There were no borrowings outstanding under the 2020 Variable Funding Notes as of June 26, 2021 and December 26, 2020. Further, as of June 26, 2021 and December 26, 2020, $3.5 million and $4.9 million, respectively, of letters of credit were outstanding against the 2020 Variable Funding Notes, which relate primarily to interest reserves required under the base indenture and related supplemental indenture. There were no amounts drawn down on the letters of credit as of June 26, 2021 or December 26, 2020. As of June 26, 2021, the Company’s leverage ratio under the Class A-2 Notes was less than 5.0x. Per the terms of the Company’s debt agreements, principal payments can be suspended at the borrower’s election until the repayment date as long as the Company maintains a leverage ratio of less than 5.0x. Accordingly, the Company expects to suspend payments following the principal payment due in the third quarter, and the remaining outstanding balance of the Class A-2 notes has been classified as long-term debt. The 2020 Notes were issued in a securitization transaction pursuant to which certain of the Company’s domestic and foreign revenue-generating assets, consisting principally of franchise-related agreements and intellectual property, were contributed or otherwise transferred to the Issuer and certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company that act as guarantors of the Notes and that have pledged substantially all of their assets.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 26, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesThe Company is subject to legal proceedings, claims, and liabilities, such as employment-related claims and premises-liability cases, which arise in the ordinary course of business and are generally covered by insurance. In the opinion of management, the amount of ultimate liability with respect to such actions is not likely to have a material adverse impact on the Company’s financial position, results of operations, or cash flows.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 26, 2021
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation During the twenty-six weeks ended June 26, 2021, the Company granted stock options to purchase 42,703 shares of common stock and 19,967 restricted stock units (“RSUs”) to certain employees. The stock options vest in equal annual amounts over a three-year period subsequent to the grant date, and have a maximum contractual term of ten years. The stock options were granted with a weighted-average exercise price of $129.11 per share and had a weighted-average grant-date fair value of $42.51 per share. The RSUs granted to certain employees generally vest in equal annual amounts over a three-year period, subsequent to the grant date and had a weighted-average grant-date fair value of $130.16 per unit. In addition, the Company granted 31,564 performance stock units (“PSUs”) to certain employees during the twenty-six weeks ended June 26, 2021. Of the total PSUs granted, 25,623 PSUs are subject to a service condition and a performance vesting condition based on return on incremental invested capital (“ROI PSUs”). The ROI PSUs are generally eligible to cliff-vest approximately three years from the grant date, and the maximum vesting percentage that could be realized for each of the ROI PSUs is 250% based on the level of performance achieved for the awards. The remaining 5,941 PSUs granted are subject to a service condition and a performance vesting condition based on the number of net new restaurants opened over the performance period (“NNR PSUs”). The NNR PSUs vest in equal annual amounts over a three-year period, and the maximum vesting percentage that could be realized for each of the NNR PSUs is 100% based on the level of performance achieved for the awards. The PSUs had a weighted-average grant-date fair value of $129.77 per unit. Total compensation cost for the PSUs is determined based on the most likely outcome of the performance condition and the number of awards expected to vest based on the outcome. Total compensation expense related to all share-based awards was $4.8 million and $3.3 million for the twenty-six weeks ended June 26, 2021 and June 27, 2020, respectively, and was included in Selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Comprehensive Income.

Revenue from Contracts with Cus

Revenue from Contracts with Customers	6 Months Ended
	Jun. 26, 2021
Revenue from Contract with Customer [Abstract]
Revenue from Contracts with Customers	Revenue from Contracts with Customers The following table represents a disaggregation of revenue from contracts with customers for the thirteen and twenty-six weeks ended June 26, 2021 and June 27, 2020 (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 Royalty revenue $ 30,414 $ 25,447 $ 59,223 $ 46,755 Advertising fees and related income 22,577 19,923 44,097 35,937 Franchise fees 864 881 2,060 1,763

Acquisitions and Refranchising

Acquisitions and Refranchising of Company-owned Restaurants	6 Months Ended
	Jun. 26, 2021
Business Combination and Asset Acquisition [Abstract]
Acquisitions and Refranchising of Company-owned Restaurants	Acquisitions and Refranchising of Company-owned Restaurants During the first fiscal quarter 2021, the Company entered into an arrangement to re-franchise six company-owned restaurants in the Colorado market for a total purchase price of approximately $6.7 million. This transaction is subject to customary closing conditions, and the Company expects the transaction to close in the third fiscal quarter 2021. The assets associated with these restaurants held for sale totaled $4.5 million and were included in Prepaid expenses and other current assets on the Consolidated Balance Sheet as of June 26, 2021. Subsequent to the end of second fiscal quarter 2021, the company acquired two existing restaurants from franchisees. The total purchase price was $3.9 million and was funded by cash flow from operations. The restaurant acquisitions will be accounted for as business combinations. The Company is still determining the estimated fair value of assets acquired and liabilities assumed. The excess of the purchase price over the aggregate fair value of assets acquired will be allocated to goodwill. The results of operations of these locations will be included in our Consolidated Statements of Comprehensive Income as of the respective dates of acquisition.

Basis of Presentation and Upd_2

Basis of Presentation and Update to Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 26, 2021
Accounting Policies [Abstract]
Fiscal Year	Fiscal year. The Company uses a 52/53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2021 and 2020 each have 52 weeks
Recently Issued Accounting Pronouncements	Recently issued accounting pronouncements. We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements.

Basis of Presentation and Upd_3

Basis of Presentation and Update to Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 26, 2021
Accounting Policies [Abstract]
Schedule of Cash, Cash Equivalents, and Restricted Cash	Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of June 26, 2021 and December 26, 2020 were as follows (in thousands): June 26, 2021 December 26, 2020 Cash and cash equivalents $ 43,504 $ 40,858 Restricted cash 4,657 4,815 Restricted cash, included in Advertising fund assets, restricted 18,494 13,597 Total cash, cash equivalents, and restricted cash $ 66,655 $ 59,270

Earnings per Share (Tables)

Earnings per Share (Tables)	6 Months Ended
	Jun. 26, 2021
Earnings Per Share [Abstract]
Schedule of Reconciliation of Basic Shares Outstanding to Diluted Shares Outstanding	Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 26, June 27, June 26, June 27, Basic weighted average shares outstanding 29,739 29,588 29,722 29,538 Dilutive shares 134 205 137 213 Diluted weighted average shares outstanding 29,873 29,793 29,859 29,751

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 26, 2021
Fair Value Disclosures [Abstract]
Schedule of Fair Value Measurements, Nonrecurring	Fair value of debt is determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy June 26, 2021 December 26, 2020 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 478,800 $ 488,826 $ 480,000 $ 483,365 (1) The fair value of the 2020-1 Class A-2 Senior Secured Notes was estimated using available market information.

Debt Obligations (Tables)

Debt Obligations (Tables)	6 Months Ended
	Jun. 26, 2021
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt consisted of the following components (in thousands): June 26, 2021 December 26, 2020 2020-1 Class A-2 Senior Secured Notes $ 478,800 $ 480,000 Debt issuance costs, net of amortization (8,826) (9,467) Total debt 469,974 470,533 Less: current portion of debt (1,200) (3,600) Long-term debt, net $ 468,774 $ 466,933

Revenue from Contracts with C_2

Revenue from Contracts with Customers (Tables)	6 Months Ended
	Jun. 26, 2021
Revenue from Contract with Customer [Abstract]
Schedule of Disaggregation of Revenue	The following table represents a disaggregation of revenue from contracts with customers for the thirteen and twenty-six weeks ended June 26, 2021 and June 27, 2020 (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 26, 2021 June 27, 2020 June 26, 2021 June 27, 2020 Royalty revenue $ 30,414 $ 25,447 $ 59,223 $ 46,755 Advertising fees and related income 22,577 19,923 44,097 35,937 Franchise fees 864 881 2,060 1,763

Basis of Presentation and Upd_4

Basis of Presentation and Update to Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2021USD ($)restaurant	Jun. 27, 2020USD ($)	Jun. 26, 2021USD ($)restaurant	Jun. 27, 2020USD ($)
Franchisor Disclosure [Line Items]
Advertising expenses | $	$ 23,301	$ 20,424	$ 45,328	$ 37,420
Lemmon Pepper Topco Ltd
Franchisor Disclosure [Line Items]
Proportionate equity interest (as a percent)	20.00%		20.00%
Advertising
Franchisor Disclosure [Line Items]
Advertising expenses | $	$ 1,900	$ 1,800	$ 4,000	$ 3,900
Franchised Units | United States
Franchisor Disclosure [Line Items]
Number of Restaurants	1,415		1,415
Franchised Units | Non-US
Franchisor Disclosure [Line Items]
Number of Restaurants	175		175
Entity Operated Units
Franchisor Disclosure [Line Items]
Number of Restaurants	34		34

Basis of Presentation and Upd_5

Basis of Presentation and Update to Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 26, 2021	Dec. 26, 2020	Jun. 27, 2020	Dec. 28, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 43,504	$ 40,858
Restricted cash	4,657	4,815
Restricted cash, included in Advertising fund assets, restricted	18,494	13,597
Total cash, cash equivalents, and restricted cash	$ 66,655	$ 59,270	$ 55,438	$ 21,175

Earnings per Share (Details)

Earnings per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2021	Jun. 27, 2020	Jun. 26, 2021	Jun. 27, 2020
Earnings Per Share [Abstract]
Basic weighted average shares outstanding (in shares)	29,739	29,588	29,722	29,538
Dilutive shares (in shares)	134	205	137	213
Diluted weighted average shares outstanding (in shares)	29,873	29,793	29,859	29,751
Equity awards outstanding (in shares)	8	1	7	1

Dividends (Details)

Dividends (Details) - USD ($) $ / shares in Units, $ in Millions	Jul. 27, 2021	Jun. 26, 2021	Mar. 27, 2021	Jun. 27, 2020	Jun. 26, 2021	Jun. 27, 2020
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)		$ 0.14		$ 0.11	$ 0.28	$ 0.22
Subsequent Event
Dividends Payable [Line Items]
Dividends payable per share (in USD per share)	$ 0.17
Dividends payable	$ 5.1
Dividend Paid
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)		$ 0.14	$ 0.14		$ 0.28
Dividends paid					$ (8.4)

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Level 2 - 2020-1 Class A-2 Senior Secured Notes - Nonrecurring - USD ($) $ in Thousands	Jun. 26, 2021	Dec. 26, 2020
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument	$ 478,800	$ 480,000
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument	$ 488,826	$ 483,365

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2021	Jun. 27, 2020	Jun. 26, 2021	Jun. 27, 2020
Income Tax Disclosure [Abstract]
Income tax expense	$ 3,867	$ 3,784	$ 6,728	$ 5,014
Effective tax rate (as a percent)	25.50%	24.70%	21.60%	20.30%
Excess tax benefit from stock-based compensation	$ 100	$ 200	$ 1,500	$ 1,500

Investments (Details)

Investments (Details) $ in Millions	Jun. 26, 2021USD ($)
Schedule of Equity Method Investments [Line Items]
Carrying amount	$ 4.2
Lemmon Pepper Topco Ltd
Schedule of Equity Method Investments [Line Items]
Proportionate equity interest (as a percent)	20.00%
Aggregate amount	$ 4.2

Debt Obligations - Components o

Debt Obligations - Components of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 26, 2021	Dec. 26, 2020
Debt Instrument [Line Items]
Debt issuance costs, net of amortization	$ (8,826)	$ (9,467)
Total debt	469,974	470,533
Less: current portion of debt	(1,200)	(3,600)
Long-term debt, net	468,774	466,933
2020-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Gross debt	$ 478,800	$ 480,000

Debt Obligations - Narrative (D

Debt Obligations - Narrative (Details)	Jun. 26, 2021USD ($)	Dec. 26, 2020USD ($)	Oct. 31, 2020USD ($)
Debt Instrument [Line Items]
Maximum borrowing capacity for line of credit			$ 50,000,000
Amount of debt drawn	$ 0	$ 0
Letter of Credit
Debt Instrument [Line Items]
Amount of debt drawn	0	0
Interest reserve	3,500,000	4,900,000
2020-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Senior secured note fixed interest rate (as a percent)			2.84%
Debt outstanding	$ 478,800,000	$ 480,000,000
Leverage ratio	5

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 26, 2021	Jun. 27, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4.8	$ 3.3
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	42,703
Vesting period	3 years
Contractual term	10 years
Weighted average exercise price of options granted (in USD per share)	$ 129.11
Weighted average grant date fair value of options granted (in USD per share)	$ 42.51
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	19,967
Vesting period	3 years
Weighted average grant date fair value of RSUs granted (in USD per share)	$ 130.16
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	31,564
Performance Shares | Share-based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	25,623
Performance units, service period (in years)	3 years
Performance Shares | PSUs based on operational targets
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	5,941
Performance units, service period (in years)	3 years
Performance Shares | PSUs based on operational targets | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSU vesting percentage	250.00%
Performance Shares | Market-based vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value of RSUs granted (in USD per share)	$ 129.77
Performance Shares | Market-based vesting | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSU vesting percentage	100.00%

Revenue from Contracts with C_3

Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 26, 2021	Jun. 27, 2020	Jun. 26, 2021	Jun. 27, 2020	Dec. 26, 2020
Disaggregation of Revenue [Line Items]
Average franchise license term	10 years		10 years
Deferred revenue not yet being amortized	$ 9,900		$ 9,900		$ 9,800
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-06-27
Disaggregation of Revenue [Line Items]
Remaining amortization period for deferred revenue related to open restaurants	7 years 2 months 12 days		7 years 2 months 12 days
Royalty revenue
Disaggregation of Revenue [Line Items]
Revenue from customers	$ 30,414	$ 25,447	$ 59,223	$ 46,755
Advertising fees and related income
Disaggregation of Revenue [Line Items]
Revenue from customers	22,577	19,923	44,097	35,937
Franchise fees
Disaggregation of Revenue [Line Items]
Revenue from customers	$ 864	$ 881	$ 2,060	$ 1,763

Acquisitions and Refranchisin_2

Acquisitions and Refranchising of Company-owned Restaurants - Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 26, 2021USD ($)restaurant	Mar. 27, 2021USD ($)restaurant	Jun. 26, 2021USD ($)
Existing Restaurants from Franchisees
Business Acquisition [Line Items]
Acquisitions of restaurants from franchisees			$ 3.9
Held-for-sale | Re-Franchised Company Owned Restaurants In Colorado
Business Acquisition [Line Items]
Purchase price of restaurants sold		$ 6.7
Held-for-sale | Re-Franchised Company Owned Restaurants In Colorado | Prepaid Expenses and Other Current Assets
Business Acquisition [Line Items]
Held for sale assets	$ 4.5		$ 4.5
Franchised Units
Business Acquisition [Line Items]
Number of restaurants re-franchised | restaurant		6
Number of restaurants acquired | restaurant	2