Wingstop (WING) 10-Q 3 Nov 21 2021 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 25, 2021	Nov. 02, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 25, 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)		29,825,763
Entity Central Index Key	0001636222
Current Fiscal Year End Date	--12-25
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 25, 2021	Dec. 26, 2020
Current assets
Cash and cash equivalents	$ 50,125	$ 40,858
Restricted cash	3,456	4,815
Accounts receivable, net	6,052	4,929
Prepaid expenses and other current assets	4,156	5,532
Advertising fund assets, restricted	25,013	16,486
Total current assets	88,802	72,620
Property and equipment, net	49,151	27,948
Goodwill	56,877	53,690
Trademarks	32,700	32,700
Customer relationships, net	10,626	11,600
Other non-current assets	22,243	13,007
Total assets	260,399	211,565
Current liabilities
Accounts payable	4,382	3,658
Other current liabilities	29,914	26,729
Current portion of debt	0	3,600
Advertising fund liabilities	25,013	16,486
Total current liabilities	59,309	50,473
Long-term debt, net	469,084	466,933
Deferred revenues, net of current	27,154	24,962
Deferred income tax liabilities, net	6,475	4,480
Other non-current liabilities	12,509	6,027
Total liabilities	574,531	552,875
Commitments and contingencies
Stockholders' deficit
Common stock, $0.01 par value; 100,000,000 shares authorized; 29,825,763 and 29,687,123 shares issued and outstanding as of September 25, 2021 and December 26, 2020, respectively	299	297
Additional paid-in-capital	1,067	421
Retained deficit	(315,326)	(342,028)
Accumulated other comprehensive loss	(172)	0
Total stockholders' deficit	(314,132)	(341,310)
Total liabilities and stockholders' deficit	$ 260,399	$ 211,565

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 25, 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)	29,825,763	29,687,123
Common stock, shares outstanding (in shares)	29,825,763	29,687,123

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 25, 2021	Sep. 26, 2020	Sep. 25, 2021	Sep. 26, 2020
Revenue:
Total revenue		$ 65,784	$ 63,988	$ 210,474	$ 185,529
Costs and expenses:
Cost of sales	[1]	15,206	11,804	42,692	36,367
Advertising expenses		16,232	20,240	61,560	57,660
Selling, general and administrative		15,020	16,542	44,872	42,155
Depreciation and amortization		2,061	2,334	5,379	5,287
Gain on sale of restaurants and other expenses, net		(3,567)	(1,233)	(3,567)	(3,249)
Total costs and expenses		44,952	49,687	150,936	138,220
Operating income		20,832	14,301	59,538	47,309
Interest expense, net		3,724	4,405	11,230	12,764
Other income		(22)	0	(22)	0
Income before income tax expense		17,130	9,896	48,330	34,545
Income tax expense (benefit)		5,840	(185)	12,568	4,829
Net income		$ 11,290	$ 10,081	$ 35,762	$ 29,716
Earnings per share
Basic (in USD per share)		$ 0.38	$ 0.34	$ 1.20	$ 1
Diluted (in USD per share)		$ 0.38	$ 0.34	$ 1.19	$ 1
Weighted average shares outstanding
Basic (in shares)		29,799	29,642	29,748	29,572
Diluted (in shares)		29,963	29,854	29,936	29,791
Dividends per share (in USD per share)		$ 0.17	$ 0.14	$ 0.45	$ 0.36
Other comprehensive income (loss)
Currency translation adjustment		$ (63)	$ 0	$ (172)	$ 0
Other comprehensive income (loss)		(63)	0	(172)	0
Comprehensive income		11,227	10,081	35,590	29,716
Royalty revenue, franchise fees and other
Revenue:
Total revenue		32,829	28,806	97,570	80,863
Advertising fees
Revenue:
Revenue from customers		15,575	19,653	59,672	55,590
Company-owned restaurant sales
Revenue:
Total revenue		$ 17,380	$ 15,529	$ 53,232	$ 49,076
[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	29,716
Currency translation adjustment	0
Balance at end of period (in shares) at Sep. 26, 2020		29,683,465
Balance at end of period at Sep. 26, 2020	(183,537)	$ 297	496	(184,330)	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		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)
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
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	10,081			10,081
Shares issued under stock plans (in shares)		87,751
Shares issued under stock plans	329	$ 1	328
Tax payments for restricted stock upon vesting (in shares)		633
Tax payments for restricted stock upon vesting	(99)			(99)
Stock-based compensation expense	3,007		3,007
Dividends declared on common stock and equivalents	(4,183)		(2,882)	(1,301)
Currency translation adjustment	0
Balance at end of period (in shares) at Sep. 26, 2020		29,683,465
Balance at end of period at Sep. 26, 2020	$ (183,537)	$ 297	496	(184,330)	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	35,762
Currency translation adjustment	$ (172)
Balance at end of period (in shares) at Sep. 25, 2021	29,825,763	29,825,763
Balance at end of period at Sep. 25, 2021	$ (314,132)	$ 299	1,067	(315,326)	(172)
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
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
Balance at end of period at Jun. 26, 2021	(322,243)	$ 298	594	(323,026)	(109)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	11,290			11,290
Shares issued under stock plans (in shares)		82,553
Shares issued under stock plans	501	$ 1	500
Tax payments for restricted stock upon vesting (in shares)		(165)
Tax payments for restricted stock upon vesting	(28)			(28)
Stock-based compensation expense	2,051		2,051
Dividends declared on common stock and equivalents	(5,640)		(2,078)	(3,562)
Currency translation adjustment	$ (63)				(63)
Balance at end of period (in shares) at Sep. 25, 2021	29,825,763	29,825,763
Balance at end of period at Sep. 25, 2021	$ (314,132)	$ 299	$ 1,067	$ (315,326)	$ (172)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 25, 2021	Sep. 26, 2020
Operating activities
Net income	$ 35,762	$ 29,716
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	5,379	5,287
Deferred income taxes	2,167	377
Stock-based compensation expense	6,823	6,307
Gain on disposal of assets	(3,567)	(3,247)
Amortization of debt issuance costs	1,056	1,228
Changes in operating assets and liabilities:
Accounts receivable	(1,123)	(203)
Prepaid expenses and other assets	(689)	668
Advertising fund assets and liabilities, net	9,426	12,578
Accounts payable and other current liabilities	(2,224)	(4,165)
Deferred revenue	2,318	958
Other non-current liabilities	(1,283)	(2,725)
Cash provided by operating activities	54,045	46,779
Investing activities
Purchases of property and equipment	(16,543)	(3,729)
Acquisitions of restaurants from franchisees	(4,876)	(5,635)
Proceeds from sales of assets	7,207	4,800
Payments for investments	(4,163)	0
Cash used in investing activities	(18,375)	(4,564)
Financing activities
Proceeds from exercise of stock options	657	891
Borrowings of long-term debt	0	16,000
Repayments of long-term debt	(2,400)	(800)
Tax payments for restricted stock upon vesting	(1,901)	(340)
Dividends paid	(14,690)	(10,683)
Cash provided by (used in) financing activities	(18,334)	5,068
Net increase in cash, cash equivalents, and restricted cash	17,336	47,283
Cash, cash equivalents, and restricted cash at beginning of period	59,270	21,175
Cash, cash equivalents, and restricted cash at end of period	76,606	68,458
Supplemental information:
Accrued capital expenditures	$ 8,943	$ 0

Basis of Presentation and Updat

Basis of Presentation and Update to Significant Accounting Policies	9 Months Ended
	Sep. 25, 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 September 25, 2021, the Company had 1,461 domestic franchised restaurants and 180 international franchised restaurants. As of September 25, 2021, the Company owned and operated 32 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 September 25, 2021 and December 26, 2020, and operating results are for the thirteen and thirty-nine weeks ended September 25, 2021 and September 26, 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- or 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 September 25, 2021 and December 26, 2020 were as follows (in thousands): September 25, 2021 December 26, 2020 Cash and cash equivalents $ 50,125 $ 40,858 Restricted cash 3,456 4,815 Restricted cash, included in Advertising fund assets, restricted 23,025 13,597 Total cash, cash equivalents, and restricted cash $ 76,606 $ 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 $2.0 million for each of the thirteen weeks ended September 25, 2021 and September 26, 2020, and were $5.9 million for each of the thirty-nine weeks ended September 25, 2021 and September 26, 2020. 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	9 Months Ended
	Sep. 25, 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 Thirty-Nine Weeks Ended September 25, September 26, September 25, September 26, Basic weighted average shares outstanding 29,799 29,642 29,748 29,572 Dilutive shares 164 212 188 219 Diluted weighted average shares outstanding 29,963 29,854 29,936 29,791 For each of the thirteen weeks ended September 25, 2021 and September 26, 2020, equity awards representing approximately 400 shares were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

Dividends

Dividends	9 Months Ended
	Sep. 25, 2021
Dividends [Abstract]
Dividends	DividendsThe Company’s Board of Directors declared a quarterly dividend of $0.14 per share of common stock in each of the first two quarters, and a quarterly dividend of $0.17 per share of common stock in the third quarter, resulting in aggregate dividend payments of $13.4 million, or $0.45 per share of common stock, during the thirty-nine weeks ended September 25, 2021.Subsequent to the third quarter, on November 2, 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 November 19, 2021. The regular quarterly dividend is to be paid on December 10, 2021, totaling approximately $5.1 million.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 25, 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 September 25, 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 $ 477,600 $ 486,187 $ 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	9 Months Ended
	Sep. 25, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Income tax expense (benefit) and the effective tax rate were $5.8 million and 34.1%, respectively, for the thirteen weeks ended September 25, 2021, and $(0.2) million and (1.9)%, respectively, for the thirteen weeks ended September 26, 2020. Income tax expense and the effective tax rate were $12.6 million and 26.0%, respectively, for the thirty-nine weeks ended September 25, 2021, and $4.8 million and 14.0%, respectively, for the thirty-nine weeks ended September 26, 2020. Income tax expense (benefit) for the thirteen and thirty-nine weeks ended September 25, 2021 included $0.1 million and $0.6 million, respectively, in tax benefits resulting from the recognition of excess tax benefits from stock-based compensation, as compared to $2.9 million and $4.4 million in tax benefits for the thirteen and thirty-nine weeks ended September 26, 2020, respectively.

Investments

Investments	9 Months Ended
	Sep. 25, 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 are recorded on an amortized cost basis. The fair value of the bonds approximates the current carrying value and was determined using level 3 inputs. In addition, the Company received 20% of the

Debt Obligations

Debt Obligations	9 Months Ended
	Sep. 25, 2021
Debt Disclosure [Abstract]
Debt Obligations	Debt Obligations Long-term debt consisted of the following components (in thousands): September 25, 2021 December 26, 2020 2020-1 Class A-2 Senior Secured Notes $ 477,600 $ 480,000 Debt issuance costs, net of amortization (8,516) (9,467) Total debt 469,084 470,533 Less: current portion of debt — (3,600) Long-term debt, net $ 469,084 $ 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 September 25, 2021 and December 26, 2020, the Company had $477.6 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 September 25, 2021 and December 26, 2020. Further, as of September 25, 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 September 25, 2021 or December 26, 2020. As of September 25, 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 has elected to suspend payments following the principal payment made in the third quarter, and the entire 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	9 Months Ended
	Sep. 25, 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	9 Months Ended
	Sep. 25, 2021
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation During the thirty-nine weeks ended September 25, 2021, the Company granted stock options to purchase 42,703 shares of common stock and 23,191 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 $135.51 per unit. In addition, the Company granted 32,733 performance stock units (“PSUs”) to certain employees during the thirty-nine weeks ended September 25, 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 7,110 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 $131.16 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 $6.8 million and $6.3 million for the thirty-nine weeks ended September 25, 2021 and September 26, 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	9 Months Ended
	Sep. 25, 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 thirty-nine weeks ended September 25, 2021 and September 26, 2020 (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Royalty revenue $ 30,039 $ 26,007 $ 89,262 $ 72,761 Advertising fees and related income 15,575 19,653 59,672 55,590 Franchise fees 902 1,151 2,961 2,914

Acquisitions and Refranchising

Acquisitions and Refranchising of Company-owned Restaurants	9 Months Ended
	Sep. 25, 2021
Business Combination and Asset Acquisition [Abstract]
Acquisitions and Refranchising of Company-owned Restaurants	Acquisitions and Refranchising of Company-owned Restaurants During the third fiscal quarter 2021, the Company completed the sale of six company-owned restaurants in the Colorado market to an existing franchisee for aggregate proceeds of $7.2 million. In connection with the sale of the restaurants, the Company recorded a $3.6 million pre-tax gain on the sale of the related assets and liabilities, which was net of an $80,000 reduction in goodwill. The net gain on these store sales was recorded in Gain on sale of restaurants and other expenses, net in the Company’s Consolidated Statements of Comprehensive Income as of September 25, 2021. In the third fiscal quarter 2021, the company acquired three existing restaurants from franchisees. The combined purchase price was $4.9 million and was funded by cash flow from operations. The following table summarizes the preliminary allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands): Purchase Price Allocation Working capital $ 61 Property and equipment 148 Reacquired franchise rights 1,400 Goodwill 3,267 Operating lease right-of-use assets 1,526 Operating lease liabilities (1,526) Total purchase price $ 4,876 The estimates of fair value are preliminary, and are therefore subject to further refinement. The excess of the purchase price over the aggregate fair value of assets acquired was allocated to goodwill and is attributable to the benefits expected as a result of the acquisition, including sales and unit growth opportunities. All of the goodwill from the acquisition is expected to be deductible for federal income tax purposes. Pro-forma financial information of the combined entities is not presented due to the immaterial impact of the financial results of the acquired restaurant on our consolidated financial statements.

Basis of Presentation and Upd_2

Basis of Presentation and Update to Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 25, 2021
Accounting Policies [Abstract]
Fiscal Year	Fiscal year. The Company uses a 52- or 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)	9 Months Ended
	Sep. 25, 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 September 25, 2021 and December 26, 2020 were as follows (in thousands): September 25, 2021 December 26, 2020 Cash and cash equivalents $ 50,125 $ 40,858 Restricted cash 3,456 4,815 Restricted cash, included in Advertising fund assets, restricted 23,025 13,597 Total cash, cash equivalents, and restricted cash $ 76,606 $ 59,270

Earnings per Share (Tables)

Earnings per Share (Tables)	9 Months Ended
	Sep. 25, 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 Thirty-Nine Weeks Ended September 25, September 26, September 25, September 26, Basic weighted average shares outstanding 29,799 29,642 29,748 29,572 Dilutive shares 164 212 188 219 Diluted weighted average shares outstanding 29,963 29,854 29,936 29,791

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 25, 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 September 25, 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 $ 477,600 $ 486,187 $ 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)	9 Months Ended
	Sep. 25, 2021
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt consisted of the following components (in thousands): September 25, 2021 December 26, 2020 2020-1 Class A-2 Senior Secured Notes $ 477,600 $ 480,000 Debt issuance costs, net of amortization (8,516) (9,467) Total debt 469,084 470,533 Less: current portion of debt — (3,600) Long-term debt, net $ 469,084 $ 466,933

Revenue from Contracts with C_2

Revenue from Contracts with Customers (Tables)	9 Months Ended
	Sep. 25, 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 thirty-nine weeks ended September 25, 2021 and September 26, 2020 (in thousands): Thirteen Weeks Ended Thirty-Nine Weeks Ended September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Royalty revenue $ 30,039 $ 26,007 $ 89,262 $ 72,761 Advertising fees and related income 15,575 19,653 59,672 55,590 Franchise fees 902 1,151 2,961 2,914

Acquisitions and Refranchisin_2

Acquisitions and Refranchising of Company-owned Restaurants (Tables)	9 Months Ended
	Sep. 25, 2021
Business Combination and Asset Acquisition [Abstract]
Schedule of Results of Operations of Locations included in Comprehensive Income	The following table summarizes the preliminary allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands): Purchase Price Allocation Working capital $ 61 Property and equipment 148 Reacquired franchise rights 1,400 Goodwill 3,267 Operating lease right-of-use assets 1,526 Operating lease liabilities (1,526) Total purchase price $ 4,876

Basis of Presentation and Upd_4

Basis of Presentation and Update to Significant Accounting Policies - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 25, 2021USD ($)restaurant	Sep. 26, 2020USD ($)	Sep. 25, 2021USD ($)restaurant	Sep. 26, 2020USD ($)
Franchisor Disclosure [Line Items]
Advertising expenses | $	$ 2	$ 2	$ 5.9	$ 5.9
Franchised Units | United States
Franchisor Disclosure [Line Items]
Number of restaurants	1,461		1,461
Franchised Units | Non-US
Franchisor Disclosure [Line Items]
Number of restaurants	180		180
Entity Operated Units
Franchisor Disclosure [Line Items]
Number of restaurants	32		32

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	Sep. 25, 2021	Dec. 26, 2020	Sep. 26, 2020	Dec. 28, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 50,125	$ 40,858
Restricted cash	3,456	4,815
Restricted cash, included in Advertising fund assets, restricted	23,025	13,597
Total cash, cash equivalents, and restricted cash	$ 76,606	$ 59,270	$ 68,458	$ 21,175

Earnings per Share (Details)

Earnings per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 25, 2021	Sep. 26, 2020	Sep. 25, 2021	Sep. 26, 2020
Earnings Per Share [Abstract]
Basic weighted average shares outstanding (in shares)	29,799,000	29,642,000	29,748,000	29,572,000
Dilutive shares (in shares)	164,000	212,000	188,000	219,000
Diluted weighted average shares outstanding (in shares)	29,963,000	29,854,000	29,936,000	29,791,000
Equity awards outstanding (in shares)	400	400	4,000	400

Dividends (Details)

Dividends (Details) - USD ($) $ / shares in Units, $ in Millions	Nov. 02, 2021	Sep. 25, 2021	Jun. 26, 2021	Mar. 27, 2021	Sep. 26, 2020	Sep. 25, 2021	Sep. 26, 2020
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)		$ 0.17	$ 0.14	$ 0.14	$ 0.14	$ 0.45	$ 0.36
Dividends paid						$ 13.4
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)						$ 0.45

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Level 2 - 2020-1 Class A-2 Senior Secured Notes - Nonrecurring - USD ($) $ in Thousands	Sep. 25, 2021	Dec. 26, 2020
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument	$ 477,600	$ 480,000
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument	$ 486,187	$ 483,365

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 25, 2021	Sep. 26, 2020	Sep. 25, 2021	Sep. 26, 2020
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 5,840	$ (185)	$ 12,568	$ 4,829
Effective income tax rate (as a percent)	34.10%	(1.90%)	26.00%	14.00%
Tax benefits from stock-based compensation	$ 100	$ 2,900	$ 600	$ 4,400

Investments (Details)

Investments (Details) - Lemmon Pepper Topco Ltd $ in Millions	Jun. 26, 2021USD ($)
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	Sep. 25, 2021	Dec. 26, 2020
Debt Instrument [Line Items]
Debt issuance costs, net of amortization	$ (8,516)	$ (9,467)
Total debt	469,084	470,533
Less: current portion of debt	0	(3,600)
Long-term debt, net	469,084	466,933
2020-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Gross debt	$ 477,600	$ 480,000

Debt Obligations - Narrative (D

Debt Obligations - Narrative (Details) - USD ($)	Sep. 25, 2021	Dec. 26, 2020
Debt Instrument [Line Items]
Maximum borrowing capacity for line of credit	$ 50,000,000
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	$ 477,600,000	480,000,000
Leverage ratio	5
2020 Variable Funding Notes
Debt Instrument [Line Items]
Amount of debt drawn	$ 0	$ 0

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 25, 2021	Sep. 26, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 6.8	$ 6.3
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)	23,191
Vesting period	3 years
Weighted average grant date fair value of RSUs granted (in USD per share)	$ 135.51
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	32,733
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)	7,110
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)	$ 131.16
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		9 Months Ended
	Sep. 25, 2021	Sep. 26, 2020	Sep. 25, 2021	Sep. 26, 2020	Dec. 26, 2020
Disaggregation of Revenue [Line Items]
Average franchise license term	10 years		10 years
Deferred revenue not yet being amortized	$ 10,300		$ 10,300		$ 9,800
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-26
Disaggregation of Revenue [Line Items]
Remaining amortization period for deferred revenue related to open restaurants	7 years 3 months 18 days		7 years 3 months 18 days
Royalty revenue
Disaggregation of Revenue [Line Items]
Revenue from customers	$ 30,039	$ 26,007	$ 89,262	$ 72,761
Advertising fees and related income
Disaggregation of Revenue [Line Items]
Revenue from customers	15,575	19,653	59,672	55,590
Franchise fees
Disaggregation of Revenue [Line Items]
Revenue from customers	$ 902	$ 1,151	$ 2,961	$ 2,914

Acquisitions and Refranchisin_3

Acquisitions and Refranchising of Company-owned Restaurants - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 25, 2021USD ($)restaurant	Mar. 27, 2021restaurant	Sep. 25, 2021USD ($)
Existing Restaurants from Franchisees
Business Acquisition [Line Items]
Combined purchase price	$ 4,900
Held-for-sale | Re-Franchised Company Owned Restaurants In Colorado
Business Acquisition [Line Items]
Purchase price of restaurants sold	7,200		$ 7,200
Held for sale assets	$ 3,600		3,600
Net of reduction in goodwill			$ 80
Franchised Units
Business Acquisition [Line Items]
Number of restaurants re-franchised | restaurant		6
Entity Operated Units | Existing Restaurants from Franchisees
Business Acquisition [Line Items]
Number of restaurants acquired | restaurant	3

Acquisitions and Refranchisin_4

Acquisitions and Refranchising of Company-owned Restaurants - Purchase Price for Acquisition (Details) - USD ($) $ in Thousands	Sep. 25, 2021	Dec. 26, 2020
Business Acquisition [Line Items]
Goodwill	$ 56,877	$ 53,690
Existing Restaurants from Franchisees
Business Acquisition [Line Items]
Working capital	61
Property and equipment	148
Reacquired franchise rights	1,400
Goodwill	3,267
Operating lease right-of-use assets	1,526
Operating lease liabilities	(1,526)
Total purchase price	$ 4,876