Wingstop (WING) 10-Q 28 Jul 22 2022 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 25, 2022	Jul. 27, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 25, 2022
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)		29,914,368
Entity Central Index Key	0001636222
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 25, 2022	Dec. 25, 2021
Current assets
Cash and cash equivalents	$ 165,824	$ 48,583
Restricted cash	17,112	3,448
Accounts receivable, net	7,234	6,993
Prepaid expenses and other current assets	5,628	4,928
Advertising fund assets, restricted	13,681	6,197
Total current assets	209,479	70,149
Property and equipment, net	60,854	54,503
Goodwill	56,877	56,877
Trademarks	32,700	32,700
Customer relationships, net	9,660	10,302
Other non-current assets	25,791	24,672
Total assets	395,361	249,203
Current liabilities
Accounts payable	3,121	5,414
Other current liabilities	29,188	28,070
Current portion of debt	6,675	0
Advertising fund liabilities	13,681	6,197
Total current liabilities	52,665	39,681
Long-term debt, net	709,546	469,394
Deferred revenues, net of current	27,056	28,024
Deferred income tax liabilities, net	5,898	7,432
Other non-current liabilities	15,666	14,197
Total liabilities	810,831	558,728
Commitments and contingencies (see Note 7)
Stockholders' deficit
Common stock, $0.01 par value; 100,000,000 shares authorized; 29,914,368 and 29,837,454 shares issued and outstanding as of June 25, 2022 and December 25, 2021, respectively	299	299
Additional paid-in-capital	646	463
Retained deficit	(415,822)	(310,031)
Accumulated other comprehensive loss	(593)	(256)
Total stockholders' deficit	(415,470)	(309,525)
Total liabilities and stockholders' deficit	$ 395,361	$ 249,203

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 25, 2022	Dec. 25, 2021
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)	29,914,368	29,837,454
Common stock, shares outstanding (in shares)	29,914,368	29,837,454

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 25, 2022	Jun. 26, 2021	Jun. 25, 2022	Jun. 26, 2021
Revenue:
Total revenue		$ 83,777	$ 74,000	$ 159,982	$ 144,690
Costs and expenses:
Cost of sales	[1]	14,899	14,207	30,573	27,486
Advertising expenses		29,685	23,301	52,852	45,328
Selling, general and administrative		13,949	16,066	32,035	29,852
Depreciation and amortization		2,547	1,523	4,774	3,318
Loss on disposal of assets		323	0	767	0
Total costs and expenses		61,403	55,097	121,001	105,984
Operating income		22,374	18,903	38,981	38,706
Interest expense, net		5,986	3,724	10,178	7,506
Loss on debt extinguishment		0	0	814	0
Other expense		26	0	91	0
Income before income tax expense		16,362	15,179	27,898	31,200
Income tax expense		3,055	3,867	5,915	6,728
Net income		$ 13,307	$ 11,312	$ 21,983	$ 24,472
Earnings per share
Basic (in USD per share)		$ 0.45	$ 0.38	$ 0.74	$ 0.82
Diluted (in USD per share)		$ 0.44	$ 0.38	$ 0.73	$ 0.82
Weighted average shares outstanding
Basic (in shares)		29,882	29,739	29,866	29,722
Diluted (in shares)		29,914	29,873	29,944	29,859
Dividends per share (in USD per share)		$ 0.17	$ 0.14	$ 4.34	$ 0.28
Other comprehensive income (loss)
Currency translation adjustment		$ (271)	$ (109)	$ (337)	$ (109)
Other comprehensive income (loss)		(271)	(109)	(337)	(109)
Comprehensive income		13,036	11,203	21,646	24,363
Royalty revenue, franchise fees and other
Revenue:
Total revenue		36,044	33,135	71,114	64,741
Advertising fees
Revenue:
Total revenue		28,987	22,577	51,526	44,097
Company-owned restaurant sales
Revenue:
Total revenue		$ 18,746	$ 18,288	$ 37,342	$ 35,852
[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. 26, 2020		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, net of forfeitures	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
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
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)
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
Tax payments for restricted stock upon vesting (in shares)		(76)
Tax payments for restricted stock upon vesting	(11)			(11)
Stock-based compensation expense, net of forfeitures	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)
Balance at beginning of period (in shares) at Dec. 25, 2021	29,837,454	29,837,454
Balance at beginning of period at Dec. 25, 2021	$ (309,525)	$ 299	463	(310,031)	(256)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	8,676			8,676
Shares issued under stock plans (in shares)		41,289
Shares issued under stock plans	125		125
Tax payments for restricted stock upon vesting (in shares)		(1,923)
Tax payments for restricted stock upon vesting	(298)			(298)
Stock-based compensation expense, net of forfeitures	2,191		2,191
Dividends declared on common stock and equivalents	(125,330)		(2,370)	(122,960)
Currency translation adjustment	(66)				(66)
Balance at end of period (in shares) at Mar. 26, 2022		29,876,820
Balance at end of period at Mar. 26, 2022	$ (424,227)	$ 299	409	(424,613)	(322)
Balance at beginning of period (in shares) at Dec. 25, 2021	29,837,454	29,837,454
Balance at beginning of period at Dec. 25, 2021	$ (309,525)	$ 299	463	(310,031)	(256)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 21,983
Balance at end of period (in shares) at Jun. 25, 2022	29,914,368	29,914,368
Balance at end of period at Jun. 25, 2022	$ (415,470)	$ 299	646	(415,822)	(593)
Balance at beginning of period (in shares) at Mar. 26, 2022		29,876,820
Balance at beginning of period at Mar. 26, 2022	(424,227)	$ 299	409	(424,613)	(322)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	13,307			13,307
Shares issued under stock plans (in shares)		37,594
Shares issued under stock plans	1,838		1,838
Tax payments for restricted stock upon vesting (in shares)		(46)
Tax payments for restricted stock upon vesting	(4)			(4)
Stock-based compensation expense, net of forfeitures	(1,601)		(1,601)
Dividends declared on common stock and equivalents	(4,512)			(4,512)
Currency translation adjustment	$ (271)				(271)
Balance at end of period (in shares) at Jun. 25, 2022	29,914,368	29,914,368
Balance at end of period at Jun. 25, 2022	$ (415,470)	$ 299	$ 646	$ (415,822)	$ (593)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 25, 2022	Jun. 26, 2021
Operating activities
Net income	$ 21,983	$ 24,472
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	4,774	3,318
Deferred income taxes	(1,534)	936
Stock-based compensation expense	590	4,772
Loss on disposal of assets	767	0
Amortization of debt issuance costs	879	711
Loss on debt extinguishment	814	0
Changes in operating assets and liabilities:
Accounts receivable	(241)	(925)
Prepaid expenses and other assets	(1,173)	(2,217)
Advertising fund assets and liabilities, net	5,814	4,897
Accounts payable and other current liabilities	(2,216)	(5,231)
Deferred revenue	(844)	1,315
Other non-current liabilities	(149)	(436)
Cash provided by operating activities	29,464	31,612
Investing activities
Purchases of property and equipment	(12,695)	(8,258)
Proceeds from sales of assets	3,637	0
Payments for investments	0	(4,163)
Cash used in investing activities	(9,058)	(12,421)
Financing activities
Proceeds from exercise of stock options	1,963	156
Borrowings of long-term debt	250,000	0
Repayments of long-term debt	0	(1,200)
Payment of deferred financing costs and other debt-related costs	(5,442)	0
Tax payments for restricted stock upon vesting	(302)	(1,873)
Dividends paid	(129,906)	(8,889)
Cash provided by (used in) financing activities	116,313	(11,806)
Net increase in cash, cash equivalents, and restricted cash	136,719	7,385
Cash, cash equivalents, and restricted cash at beginning of period	54,906	59,270
Cash, cash equivalents, and restricted cash at end of period	191,625	66,655
Supplemental information:
Accrued capital expenditures	$ 6,831	$ 6,325

Basis of Presentation and Updat

Basis of Presentation and Update to Significant Accounting Policies	6 Months Ended
	Jun. 25, 2022
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 25, 2022, the Company had a total of 1,858 restaurants in its system. The Company's restaurant base is approximately 98% franchised, with 1,819 franchised locations (including 219 international locations) and 39 company-owned restaurants as of June 25, 2022. 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 25, 2022 and December 25, 2021, and operating results are for the thirteen and twenty-six weeks ended June 25, 2022 and June 26, 2021. 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 25, 2021. Fiscal year. The Company uses a 52- or 53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2022 and 2021 have 53- and 52-weeks, respectively. 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 25, 2022 and December 25, 2021 were as follows (in thousands): June 25, 2022 December 25, 2021 Cash and cash equivalents $ 165,824 $ 48,583 Restricted cash 17,112 3,448 Restricted cash, included in Advertising fund assets, restricted 8,689 2,875 Total cash, cash equivalents, and restricted cash $ 191,625 $ 54,906 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. 25, 2022
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 25, June 26, June 25, June 26, Basic weighted average shares outstanding 29,882 29,739 29,866 29,722 Dilutive shares 32 134 78 137 Diluted weighted average shares outstanding 29,914 29,873 29,944 29,859 For the thirteen weeks ended June 25, 2022 and June 26, 2021, equity awards representing approximately 77,000 and 8,000 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. 25, 2022
Dividends [Abstract]
Dividends	Dividends In each of the first two quarters of 2022, the Company’s Board of Directors declared a quarterly dividend of $0.17 per share of common stock, which, in the aggregate, totaled $10.2 million, or $0.34 per share of common stock, and which was paid during the twenty-six weeks ended June 25, 2022. Subsequent to the second quarter, on July 27, 2022, the Company’s Board of Directors declared a quarterly dividend of $0.19 per share of common stock for stockholders of record as of August 12, 2022. The regular quarterly dividend is to be paid on September 2, 2022, totaling approximately $5.7 million. Separate from the Company’s regular dividend program, on March 9, 2022, the Company’s Board of Directors declared a special dividend of $4.00 per share of common stock, resulting in a total dividend of approximately $119.5 million. This dividend was paid on April 7, 2022 to stockholders of record as of March 24, 2022.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 25, 2022
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 and the investment in bonds held by the Company’s United Kingdom master franchisee, Lemon Pepper Holdings Ltd. (“LPH”), are determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy June 25, 2022 December 25, 2021 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 477,600 $ 415,192 $ 477,600 $ 480,676 2022-1 Class A-2 Senior Secured Notes (1) Level 2 $ 250,000 $ 218,125 $ — $ — Investment in bonds of LPH (2) Level 2 $ 3,723 $ 3,723 $ 4,151 $ 4,151 (1) The fair value of the 2020-1 and 2022-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value approximates discounted cash flows using current market rates for debt investments with similar maturities and credit risk. 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. 25, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesIncome tax expense and the effective tax rate were $3.1 million and 18.7%, respectively, for the thirteen weeks ended June 25, 2022, and $3.9 million and 25.5%, respectively, for the thirteen weeks ended June 26, 2021. Income tax expense and the effective tax rate were $5.9 million and 21.2%, respectively, for the twenty-six weeks ended June 25, 2022, and $6.7 million and 21.6%, respectively, for the twenty-six weeks ended June 26, 2021. The major components of the year-over-year decrease in effective tax rates were the impact of stock awards forfeited during the twenty-six weeks ended June 25, 2022, partially offset by the impact of excess tax benefits associated with stock options exercised in the prior year comparable period.

Debt Obligations

Debt Obligations	6 Months Ended
	Jun. 25, 2022
Debt Disclosure [Abstract]
Debt Obligations	Debt Obligations Long-term debt consisted of the following components (in thousands): June 25, 2022 December 25, 2021 2020-1 Class A-2 Senior Secured Notes $ 477,600 $ 477,600 2022-1 Class A-2 Senior Secured Notes 250,000 — Debt issuance costs, net of amortization (11,379) (8,206) Total debt 716,221 469,394 Less: current portion of debt (6,675) — Long-term debt, net $ 709,546 $ 469,394 On March 9, 2022, the Company completed a securitized financing transaction, in which Wingstop Funding LLC, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company (the “Issuer”), issued $250 million of its Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”). The Issuer also entered into a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit. The proceeds from the securitized financing transaction were used to pay related transaction fees and expenses, strengthen the Company's liquidity position and for general corporate purposes, which included a return of capital to the Company’s stockholders. In addition to the 2022 Notes, the Company’s outstanding debt consists of its existing Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Notes”). The Company’s existing revolving financing facility of Series 2020-1 Class A-1 Notes (“the 2020 Variable Funding Notes”) was terminated in connection with the transaction. As of December 25, 2021, $3.5 million of letters of credit were outstanding against the 2020 Variable Funding Notes, which related primarily to required interest reserves, and there were no amounts drawn down on the letters of credit as of December 25, 2021. No borrowings were outstanding under the 2022 Variable Funding Notes as of June 25, 2022. The 2022 Notes were issued in a securitization transaction, which is guaranteed by certain limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company and secured by a security interest in substantially all of their assets, including certain domestic and foreign revenue-generating assets, consisting principally of franchise-related agreements, intellectual property, and vendor rebate contracts. The 2022 Notes were issued pursuant to a base indenture and related supplemental indentures (collectively, the “Indenture”). Interest and principal payments on the 2022 Class A-2 Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the 2022 Class A-2 Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the 2022 Notes is in March of 2052, but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the 2022 Class A-2 Notes is March 2029. If the Issuer has not repaid or refinanced the 2022 Class A-2 Notes prior to the anticipated repayment date, additional interest will accrue on the Notes. The 2022 Variable Funding Notes accrue interest at a variable rate based on (i) the prime rate, (ii) the overnight federal funds rates, (iii) the secured overnight financing rate, or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin, as more fully set forth in the 2022 Variable Funding Note Purchase Agreement, dated March 9, 2022, and the indenture supplement. Commitment fees and other usage fees apply to the 2022 Variable Funding Notes facility depending on the type of borrowing requested. There is a 60-basis points draw fee on borrowings requested pursuant to the terms of the 2022 Variable Fund Notes. Additionally, during a commitment availability period, there is a 30-basis point commitment fee on the committed portion of the 2022 Variable Funding Notes. There were no amounts drawn down on the letters of credit as of June 25, 2022. The 2022 Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Issuer maintains specified reserve accounts to be used to make required payments in respect of the 2022 Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the 2022 Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, that the assets pledged as collateral for the 2022 Notes are in stated ways defective or ineffective, and (iv) covenants relating to recordkeeping, access to information, and similar matters. The 2022 Class A-2 Notes are also subject to customary rapid amortization events provided for in the indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain change of control and manager termination events, an event of default, and the failure to repay or refinance the 2022 Class A-2 Notes on the applicable scheduled maturity date. The 2022 Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the 2022 Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. As of June 25, 2022, the Company was in compliance with all financial covenants. During the first quarter of 2022, as a result of the termination of the 2020 Variable Funding Notes, the Company recorded a loss on debt extinguishment of $0.8 million related to the write-off of previously capitalized financing costs. Total debt issuance costs incurred and capitalized in connection with the issuance of the 2022 Notes were $5.5 million. As of December 25, 2021, the Company’s leverage ratio was less than 5.0x, and accordingly, per the terms of the applicable debt agreements, the Company elected to suspend principal payments and classified the balance of the 2020 Notes as long-term debt. Subsequent to the closing of the 2022 Notes, the Company had a leverage ratio of greater than 5.0x and, accordingly, the Company will resume making scheduled amortization payments on the notes in the third quarter of 2022. The 2020 Class A-2 Notes and the 2022 Class A-2 Notes are generally subject to 1% annual amortization.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 25, 2022
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. 25, 2022
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation During the twenty-six weeks ended June 25, 2022, the Company granted stock options to purchase 37,787 shares of common stock and 56,493 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 $144.94 per share and had a weighted-average grant-date fair value of $49.10 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 $111.56 per unit. In addition, the Company granted 42,556 performance stock units (“PSUs”) to certain employees during the twenty-six weeks ended June 25, 2022. The PSUs cliff-vest at the end of a three year service period or vest in equal annual amounts over a three year period. Vested amounts may range from 0% to a maximum of 500% of targeted amounts depending on the achievement of performance measures at the end of each vesting period. Such performance measures are based on the Company meeting certain return on incremental investment targets or unit development targets for the vesting period. The PSUs had a weighted-average grant-date fair value of $126.78 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, net of forfeitures recognized, was $0.6 million and $4.8 million for the twenty-six weeks ended June 25, 2022 and June 26, 2021, respectively, and was included in Selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Comprehensive Income. The Company recognized forfeitures of $4.2 million during the thirteen and twenty-six weeks ended June 25, 2022.

Revenue from Contracts with Cus

Revenue from Contracts with Customers	6 Months Ended
	Jun. 25, 2022
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 25, 2022 and June 26, 2021 (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 25, 2022 June 26, 2021 June 25, 2022 June 26, 2021 Royalty revenue $ 33,037 $ 30,414 $ 65,241 $ 59,223 Advertising fees 28,987 22,577 51,526 44,097 Franchise fees 1,004 864 1,963 2,060

Basis of Presentation and Upd_2

Basis of Presentation and Update to Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 25, 2022
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 2022 and 2021 have 53- and 52-weeks, respectively.
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. 25, 2022
Accounting Policies [Abstract]
Schedule of Cash and Cash Equivalents	Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of June 25, 2022 and December 25, 2021 were as follows (in thousands): June 25, 2022 December 25, 2021 Cash and cash equivalents $ 165,824 $ 48,583 Restricted cash 17,112 3,448 Restricted cash, included in Advertising fund assets, restricted 8,689 2,875 Total cash, cash equivalents, and restricted cash $ 191,625 $ 54,906
Schedule of Restricted Cash	Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of June 25, 2022 and December 25, 2021 were as follows (in thousands): June 25, 2022 December 25, 2021 Cash and cash equivalents $ 165,824 $ 48,583 Restricted cash 17,112 3,448 Restricted cash, included in Advertising fund assets, restricted 8,689 2,875 Total cash, cash equivalents, and restricted cash $ 191,625 $ 54,906

Earnings per Share (Tables)

Earnings per Share (Tables)	6 Months Ended
	Jun. 25, 2022
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 25, June 26, June 25, June 26, Basic weighted average shares outstanding 29,882 29,739 29,866 29,722 Dilutive shares 32 134 78 137 Diluted weighted average shares outstanding 29,914 29,873 29,944 29,859

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 25, 2022
Fair Value Disclosures [Abstract]
Schedule of Fair Value Measurements, Nonrecurring	Fair value of debt and the investment in bonds held by the Company’s United Kingdom master franchisee, Lemon Pepper Holdings Ltd. (“LPH”), are determined on a non-recurring basis, which results are summarized as follows (in thousands): Fair Value Hierarchy June 25, 2022 December 25, 2021 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 477,600 $ 415,192 $ 477,600 $ 480,676 2022-1 Class A-2 Senior Secured Notes (1) Level 2 $ 250,000 $ 218,125 $ — $ — Investment in bonds of LPH (2) Level 2 $ 3,723 $ 3,723 $ 4,151 $ 4,151 (1) The fair value of the 2020-1 and 2022-1 Class A-2 Senior Secured Notes was estimated using available market information. (2) The fair value approximates discounted cash flows using current market rates for debt investments with similar maturities and credit risk.

Debt Obligations (Tables)

Debt Obligations (Tables)	6 Months Ended
	Jun. 25, 2022
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt consisted of the following components (in thousands): June 25, 2022 December 25, 2021 2020-1 Class A-2 Senior Secured Notes $ 477,600 $ 477,600 2022-1 Class A-2 Senior Secured Notes 250,000 — Debt issuance costs, net of amortization (11,379) (8,206) Total debt 716,221 469,394 Less: current portion of debt (6,675) — Long-term debt, net $ 709,546 $ 469,394

Revenue from Contracts with C_2

Revenue from Contracts with Customers (Tables)	6 Months Ended
	Jun. 25, 2022
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 25, 2022 and June 26, 2021 (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 25, 2022 June 26, 2021 June 25, 2022 June 26, 2021 Royalty revenue $ 33,037 $ 30,414 $ 65,241 $ 59,223 Advertising fees 28,987 22,577 51,526 44,097 Franchise fees 1,004 864 1,963 2,060

Basis of Presentation and Upd_4

Basis of Presentation and Update to Significant Accounting Policies - Narrative (Details)	6 Months Ended
	Jun. 25, 2022 restaurant
Franchisor Disclosure [Line Items]
Number of restaurants	1,858
Franchised Units
Franchisor Disclosure [Line Items]
Number of restaurants	1,819
Proportion of restaurants that are franchised (as a percent)	98%
Franchised Units | Non-US
Franchisor Disclosure [Line Items]
Number of restaurants	219
Entity Operated Units
Franchisor Disclosure [Line Items]
Number of restaurants	39

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. 25, 2022	Dec. 25, 2021	Jun. 26, 2021	Dec. 26, 2020
Accounting Policies [Abstract]
Cash and cash equivalents	$ 165,824	$ 48,583
Restricted cash	17,112	3,448
Restricted cash, included in Advertising fund assets, restricted	8,689	2,875
Total cash, cash equivalents, and restricted cash	$ 191,625	$ 54,906	$ 66,655	$ 59,270

Earnings per Share (Details)

Earnings per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 25, 2022	Jun. 26, 2021	Jun. 25, 2022	Jun. 26, 2021
Earnings Per Share [Abstract]
Basic weighted average shares outstanding (in shares)	29,882,000	29,739,000	29,866,000	29,722,000
Dilutive shares (in shares)	32,000	134,000	78,000	137,000
Diluted weighted average shares outstanding (in shares)	29,914,000	29,873,000	29,944,000	29,859,000
Equity awards outstanding (in shares)	77,000	8,000	38,000	7,000

Dividends (Details)

Dividends (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended			6 Months Ended
	Jul. 27, 2022	Mar. 09, 2022	Jun. 25, 2022	Mar. 26, 2022	Jun. 26, 2021	Jun. 25, 2022	Jun. 26, 2021
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)			$ 0.17		$ 0.14	$ 4.34	$ 0.28
Subsequent Event
Dividends Payable [Line Items]
Dividends payable per share (in USD per share)	$ 0.19
Dividends payable	$ 5.7
Quarterly Dividend
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)			$ 0.17	$ 0.17		$ 0.34
Dividends paid						$ 10.2
Special Dividend
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)		$ 4
Dividends paid		$ 119.5

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Level 2 - Nonrecurring - USD ($) $ in Thousands	Jun. 25, 2022	Dec. 25, 2021
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	$ 3,723	$ 4,151
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	3,723	4,151
2020-1 Class A-2 Senior Secured Notes | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	477,600	477,600
2020-1 Class A-2 Senior Secured Notes | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	415,192	480,676
2022-1 Class A-2 Secured Senior Notes | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	250,000	0
2022-1 Class A-2 Secured Senior Notes | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	$ 218,125	$ 0

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 25, 2022	Jun. 26, 2021	Jun. 25, 2022	Jun. 26, 2021
Income Tax Disclosure [Abstract]
Income tax expense	$ 3,055	$ 3,867	$ 5,915	$ 6,728
Effective income tax rate (as a percent)	18.70%	25.50%	21.20%	21.60%

Debt Obligations - Components o

Debt Obligations - Components of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 25, 2022	Mar. 26, 2022	Dec. 25, 2021
Debt Instrument [Line Items]
Debt issuance costs, net of amortization	$ (11,379)		$ (8,206)
Total debt	716,221		469,394
Less: current portion of debt	(6,675)		0
Long-term debt, net	709,546		469,394
2020-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Gross debt	477,600		477,600
2022-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Gross debt	$ 250,000		$ 0
Debt issuance costs, net of amortization		$ (5,500)

Debt Obligations - Narrative (D

Debt Obligations - Narrative (Details)	3 Months Ended			6 Months Ended
	Jun. 25, 2022 USD ($)	Mar. 26, 2022 USD ($)	Jun. 26, 2021 USD ($)	Jun. 25, 2022 USD ($)	Jun. 26, 2021 USD ($)	Mar. 09, 2022 USD ($)	Dec. 25, 2021 USD ($)
Debt Instrument [Line Items]
Maximum borrowing capacity for line of credit						$ 200,000,000
Loss on debt extinguishment	$ 0		$ 0	$ 814,000	$ 0
Debt issuance costs incurred	$ 11,379,000			$ 11,379,000			$ 8,206,000
Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity for line of credit							3,500,000
Amount of debt drawn							$ 0
2022-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Securitized financing transaction						$ 250,000,000
Senior secured note fixed interest rate (as a percent)						3.734%
Debt issuance costs incurred		$ 5,500,000
Annual amortization (as a percent)							1%
2020-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Senior secured note fixed interest rate (as a percent)	2.84%			2.84%
Leverage ratio							5
Annual amortization (as a percent)							1%
2022 Variable Funding Notes
Debt Instrument [Line Items]
Draw fee on unused portion of note facility (in basis points)				0.60%
Commitment fee on unused portion of note facility (in basis points)				0.30%
2022 Variable Funding Notes | Line of Credit
Debt Instrument [Line Items]
Amount of debt drawn	$ 0			$ 0
2022 Variable Funding Notes | Letter of Credit
Debt Instrument [Line Items]
Amount of debt drawn	$ 0			$ 0
2020 Variable Funding Notes
Debt Instrument [Line Items]
Loss on debt extinguishment		$ 800,000

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 25, 2022	Jun. 25, 2022	Jun. 26, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 0.6	$ 4.8
Share-based payment arrangement, forfeited	$ 4.2	$ 4.2
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)		37,787
Vesting period (in years)		3 years
Contractual term (in years)		10 years
Weighted average exercise price of options granted (in USD per share)		$ 144.94
Weighted average grant date fair value of options granted (in USD per share)		$ 49.10
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)		56,493
Vesting period (in years)		3 years
Weighted average grant date fair value of RSUs granted (in USD per share)		$ 111.56
Performance Stock Units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)		42,556
Vesting period (in years)		3 years
Requisite service period (in years)		3 years
Performance Stock Units (PSUs) | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSU vesting rate (as a percent)		0%
Performance Stock Units (PSUs) | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSU vesting rate (as a percent)		500%
Performance Stock Units (PSUs) | 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)		$ 126.78

Revenue from Contracts with C_3

Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 25, 2022	Mar. 26, 2022	Jun. 26, 2021	Jun. 25, 2022	Jun. 26, 2021	Dec. 25, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 83,777		$ 74,000	$ 159,982	$ 144,690
Average franchise license term (in years)	10 years	10 years
Deferred revenue not yet being amortized	$ 8,700			$ 8,700		$ 10,400
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-27
Disaggregation of Revenue [Line Items]
Remaining amortization period for deferred revenue related to open restaurants (in years)	7 years			7 years
Royalty revenue
Disaggregation of Revenue [Line Items]
Revenues	$ 33,037		30,414	$ 65,241	59,223
Advertising fees
Disaggregation of Revenue [Line Items]
Revenues	28,987		22,577	51,526	44,097
Franchise fees
Disaggregation of Revenue [Line Items]
Revenues	$ 1,004		$ 864	$ 1,963	$ 2,060