Wingstop (WING) 10-Q 31 Jul 24 2024 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 29, 2024	Jul. 30, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 29, 2024
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		29,304,401
Entity Central Index Key	0001636222
Current Fiscal Year End Date	--12-28
Document Period Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Current assets
Cash and cash equivalents	$ 96,749	$ 90,216
Restricted cash	11,444	11,444
Accounts receivable, net	16,059	12,408
Prepaid expenses and other current assets	6,768	4,948
Advertising fund assets, restricted	31,768	25,328
Total current assets	162,788	144,344
Property and equipment, net	107,738	91,292
Operating lease assets	55,379	19,092
Goodwill	68,733	67,708
Trademarks	32,700	32,700
Other non-current assets	17,375	14,949
Total assets	451,821	377,825
Current liabilities
Accounts payable	5,752	4,725
Current portion of operating lease liabilities	4,061	2,380
Other current liabilities	42,955	38,571
Advertising fund liabilities	31,768	25,328
Total current liabilities	84,536	71,004
Long-term debt, net	713,258	712,327
Operating lease liabilities	53,943	17,807
Deferred revenues, net of current	32,928	30,145
Deferred income tax liabilities, net	4,626	3,721
Other non-current liabilities	71	187
Total liabilities	889,362	835,191
Commitments and contingencies (see Note 7)
Stockholders' deficit
Common stock, $0.01 par value; 100,000,000 shares authorized; 29,304,401 and 29,337,920 shares issued and outstanding as of June 29, 2024 and December 30, 2023, respectively	293	293
Additional paid-in-capital	1,869	2,676
Retained deficit	(439,326)	(459,994)
Accumulated other comprehensive loss	(377)	(341)
Total stockholders' deficit	(437,541)	(457,366)
Total liabilities and stockholders' deficit	451,821	377,825
Customer relationships, net
Current assets
Customer relationships, net	$ 7,108	$ 7,740

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 29, 2024	Dec. 30, 2023
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)	29,304,401	29,337,920
Common stock, shares outstanding (in shares)	29,304,401	29,337,920

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Revenue:
Total revenue		$ 155,699	$ 107,173	$ 301,488	$ 215,894
Costs and expenses:
Cost of sales	[1]	22,673	16,642	43,944	33,337
Advertising expenses		58,548	38,729	111,740	78,372
Selling, general and administrative		28,097	22,128	53,275	45,773
Depreciation and amortization		5,161	3,218	8,571	6,207
Loss on disposal of assets		0	0	0	77
Total costs and expenses		114,479	80,717	217,530	163,766
Operating income		41,220	26,456	83,958	52,128
Interest expense, net		5,200	4,244	9,744	8,817
Other (income) expense		(471)	(46)	(774)	142
Income before income tax expense		36,491	22,258	74,988	43,169
Income tax expense		9,006	6,077	18,756	11,319
Net income		$ 27,485	$ 16,181	$ 56,232	$ 31,850
Earnings per share
Basic (in USD per share)		$ 0.94	$ 0.54	$ 1.92	$ 1.06
Diluted (in USD per share)		$ 0.93	$ 0.54	$ 1.91	$ 1.06
Weighted average shares outstanding
Basic (in shares)		29,343,000	29,972,000	29,346,000	29,959,000
Diluted (in shares)		29,457,000	30,049,000	29,468,000	30,043,000
Dividends per share (in USD per share)		$ 0.22	$ 0.19	$ 0.44	$ 0.38
Other comprehensive income (loss)
Currency translation adjustment		$ (12)	$ 128	$ (36)	$ 276
Other comprehensive income (loss)		(12)	128	(36)	276
Comprehensive income		27,473	16,309	56,196	32,126
Royalty revenue, franchise fees and other
Revenue:
Total revenue		71,160	47,984	138,257	96,172
Advertising fees
Revenue:
Total revenue		54,654	36,596	104,803	74,059
Company-owned restaurant sales
Revenue:
Total revenue		$ 29,885	$ 22,593	$ 58,428	$ 45,663
[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. 31, 2022		29,932,668
Balance at beginning of period at Dec. 31, 2022	$ (390,861)	$ 300	$ 2,797	$ (393,321)	$ (637)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	15,669			15,669
Shares issued under stock plans (in shares)		49,817
Shares issued under stock plans	111		111
Tax payments for restricted stock upon vesting (in shares)		(13,613)
Tax payments for restricted stock upon vesting	(2,292)			(2,292)
Stock-based compensation expense, net of forfeitures	3,345		3,345
Dividends declared on common stock and equivalents	(5,909)		(5,444)	(465)
Currency translation adjustment	147				147
Balance at end of period (in shares) at Apr. 01, 2023		29,968,872
Balance at end of period at Apr. 01, 2023	(379,790)	$ 300	809	(380,409)	(490)
Balance at beginning of period (in shares) at Dec. 31, 2022		29,932,668
Balance at beginning of period at Dec. 31, 2022	(390,861)	$ 300	2,797	(393,321)	(637)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	31,850
Currency translation adjustment	276
Balance at end of period (in shares) at Jul. 01, 2023		29,977,614
Balance at end of period at Jul. 01, 2023	(365,351)	$ 300	2,038	(367,327)	(362)
Balance at beginning of period (in shares) at Apr. 01, 2023		29,968,872
Balance at beginning of period at Apr. 01, 2023	(379,790)	$ 300	809	(380,409)	(490)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	16,181			16,181
Shares issued under stock plans (in shares)		9,084
Shares issued under stock plans	362		362
Tax payments for restricted stock upon vesting (in shares)		(342)
Tax payments for restricted stock upon vesting	(69)			(69)
Stock-based compensation expense, net of forfeitures	3,546		3,546
Dividends declared on common stock and equivalents	(5,709)		(2,679)	(3,030)
Currency translation adjustment	128				128
Balance at end of period (in shares) at Jul. 01, 2023		29,977,614
Balance at end of period at Jul. 01, 2023	$ (365,351)	$ 300	2,038	(367,327)	(362)
Balance at beginning of period (in shares) at Dec. 30, 2023	29,337,920	29,337,920
Balance at beginning of period at Dec. 30, 2023	$ (457,366)	$ 293	2,676	(459,994)	(341)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	28,747			28,747
Shares issued under stock plans (in shares)		42,918
Shares issued under stock plans	708	$ 1	707
Tax payments for restricted stock upon vesting (in shares)		(10,860)
Tax payments for restricted stock upon vesting	(3,717)			(3,717)
Stock-based compensation expense, net of forfeitures	3,812		3,812
Dividends declared on common stock and equivalents	(6,539)		(6,277)	(262)
Currency translation adjustment	(24)				(24)
Balance at end of period (in shares) at Mar. 30, 2024		29,369,978
Balance at end of period at Mar. 30, 2024	$ (434,379)	$ 294	918	(435,226)	(365)
Balance at beginning of period (in shares) at Dec. 30, 2023	29,337,920	29,337,920
Balance at beginning of period at Dec. 30, 2023	$ (457,366)	$ 293	2,676	(459,994)	(341)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	56,232
Currency translation adjustment	$ (36)
Balance at end of period (in shares) at Jun. 29, 2024	29,304,401	29,304,401
Balance at end of period at Jun. 29, 2024	$ (437,541)	$ 293	1,869	(439,326)	(377)
Balance at beginning of period (in shares) at Mar. 30, 2024		29,369,978
Balance at beginning of period at Mar. 30, 2024	(434,379)	$ 294	918	(435,226)	(365)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	27,485			27,485
Shares issued under stock plans (in shares)		11,323
Shares issued under stock plans	546		546
Purchases of common stock (in shares)		(75,862)
Purchases of common stock	(29,220)	$ (1)	(4,304)	(24,915)
Tax payments for restricted stock upon vesting (in shares)		(1,038)
Tax payments for restricted stock upon vesting	(401)			(401)
Stock-based compensation expense, net of forfeitures	4,926		4,926
Dividends declared on common stock and equivalents	(6,486)		(217)	(6,269)
Currency translation adjustment	$ (12)				(12)
Balance at end of period (in shares) at Jun. 29, 2024	29,304,401	29,304,401
Balance at end of period at Jun. 29, 2024	$ (437,541)	$ 293	$ 1,869	$ (439,326)	$ (377)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023
Operating activities
Net income	$ 56,232	$ 31,850
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	8,571	6,207
Deferred income taxes	905	(1,030)
Stock-based compensation expense	8,738	6,891
Loss on disposal of assets	0	77
Amortization of debt issuance costs	1,037	1,021
Changes in operating assets and liabilities:
Accounts receivable	(3,341)	(1,286)
Prepaid expenses and other assets	(3,040)	(4)
Advertising fund assets and liabilities, net	3,892	6,235
Accounts payable and other current liabilities	3,157	(3,528)
Deferred revenue	3,274	1,442
Other non-current liabilities	1,412	92
Cash provided by operating activities	80,837	47,967
Investing activities
Purchases of property and equipment	(21,459)	(17,002)
Acquisition of restaurants from franchisee	(3,292)	(4,396)
Payments for investments	(500)	(808)
Cash used in investing activities	(25,251)	(22,206)
Financing activities
Proceeds from exercise of stock options	1,254	473
Repayments of long-term debt	0	(3,650)
Purchases of common stock	(29,220)	0
Tax payments for restricted stock upon vesting	(4,118)	(2,361)
Dividends paid	(13,077)	(11,836)
Cash used in financing activities	(45,161)	(17,374)
Net increase in cash, cash equivalents, and restricted cash	10,425	8,387
Cash, cash equivalents, and restricted cash at beginning of period	119,676	205,715
Cash, cash equivalents, and restricted cash at end of period	130,101	214,102
Supplemental information:
Accrued capital expenditures	$ 3,946	$ 4,179

Basis of Presentation and Updat

Basis of Presentation and Update to Significant Accounting Policies	6 Months Ended
	Jun. 29, 2024
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 29, 2024, the Company had a total of 2,352 restaurants system-wide. The Company’s restaurant base is approximately 98% franchised, with 2,300 franchised locations (including 312 restaurants in international locations and U.S. territories) and 52 company-owned restaurants as of June 29, 2024. 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 29, 2024 and December 30, 2023, and operating results are for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023. Certain prior period information on the Consolidated Balance Sheets have been reclassified to conform to the current presentation. 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 30, 2023. Fiscal year. The Company uses a 52- or 53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2024 and 2023 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 29, 2024 and December 30, 2023 were as follows (in thousands): June 29, 2024 December 30, 2023 Cash and cash equivalents $ 96,749 $ 90,216 Restricted cash 11,444 11,444 Restricted cash, included in Advertising fund assets, restricted 21,908 18,016 Total cash, cash equivalents, and restricted cash $ 130,101 $ 119,676 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. There have been no changes to the recently issued accounting pronouncements not yet adopted disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

Earnings per Share

Earnings per Share	6 Months Ended
	Jun. 29, 2024
Earnings Per Share [Abstract]
Earnings per Share	Earnings per Share Basic 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 service-based and performance-based 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 29, July 1, June 29, July 1, Basic weighted average shares outstanding 29,343 29,972 29,346 29,959 Dilutive shares 114 77 122 84 Diluted weighted average shares outstanding 29,457 30,049 29,468 30,043 For the thirteen weeks ended June 29, 2024 and July 1, 2023, equity awards representing approximately 0 and 1,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

Stockholders_ Deficit

Stockholders’ Deficit	6 Months Ended
	Jun. 29, 2024
Dividends [Abstract]
Stockholders’ Deficit	Stockholders’ Deficit Dividends In connection with the Company’s regular dividend program, in each of the first two quarters of 2024, our Board of Directors declared a quarterly dividend of $0.22 per share of common stock, which, in aggregate, totaled $12.9 million, or $0.44 per share of common stock, and which was paid during the twenty-six weeks ended June 29, 2024. Share Repurchase Program On August 17, 2023, the Company announced a share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Program”). During the thirteen weeks ended June 29, 2024, the Company repurchased and retired 75,862 shares of its common stock at an average price of $381.29 per share. As of June 29, 2024, $96.1 million remained available under the Share Repurchase Program.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 29, 2024
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 issued 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 29, 2024 December 30, 2023 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 472,800 $ 429,548 $ 472,800 $ 423,823 2022-1 Class A-2 Senior Secured Notes (1) Level 2 $ 248,125 $ 222,370 $ 248,125 $ 222,370 Investments in bonds of LPH (2) Level 3 $ 3,624 $ 4,367 $ 3,557 $ 4,306 (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. 29, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Income tax expense and the effective tax rate were $9.0 million and 24.7%, respectively, for the thirteen weeks ended June 29, 2024, and $6.1 million and 27.3%, respectively, for the thirteen weeks ended July 1, 2023. Income tax expense and the effective tax rate were $18.8 million and 25.0%, respectively, for the twenty-six weeks ended June 29, 2024, and $11.3 million and 26.2%, respectively, for the twenty-six weeks ended July 1, 2023. The decrease in the effective tax rate is primarily related to an increase in excess tax benefits recognized from stock-based compensation in income tax expense as compared to the prior fiscal period.

Debt Obligations

Debt Obligations	6 Months Ended
	Jun. 29, 2024
Debt Disclosure [Abstract]
Debt Obligations	Debt Obligations Long-term debt consisted of the following components (in thousands): June 29, 2024 December 30, 2023 2020-1 Class A-2 Senior Secured Notes $ 472,800 $ 472,800 2022-1 Class A-2 Senior Secured Notes 248,125 248,125 Debt issuance costs, net of amortization (7,667) (8,598) Total debt 713,258 712,327 The Company’s outstanding debt was issued by Wingstop Funding LLC, a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of Wingstop Inc. and consists of (i) Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”), (ii) Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”), and (iii) 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. No borrowings were outstanding under the 2022 Variable Funding Notes as of June 29, 2024 and December 30, 2023. As of June 29, 2024, the Company’s leverage ratio under the 2020 Class A-2 Notes and the 2022 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 elected to suspend payments following the principal payment made in the second quarter of 2023, and the entire outstanding balance of $720.9 million of the 2020 Class A-2 Notes and the 2022 Class A-2 Notes has been classified as long-term debt due after fiscal year 2026. The 2020 Class A-2 Notes and 2022 Notes were issued in securitization transactions, and are 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.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 29, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company is subject to legal proceedings, claims, and liabilities, including claims and actions resulting from employment-related and franchise-related matters, 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.

Leases

Leases	6 Months Ended
	Jun. 29, 2024
Leases [Abstract]
Leases	Leases The Company has operating leases for retail store locations, office space, and equipment. The Company determines whether an arrangement is a lease at inception. The Company's leases have remaining terms of 0.3 years to 13.7 years, some of which include options to extend the lease term for up to ten years. The years remaining on the Company’s lease terms may include years that may be added to the lease terms by the exercise of options to renew when it is reasonably certain that the Company will exercise such options. During the first fiscal quarter 2024, the Company executed a lease for an office building, which commenced in May 2024. The operating lease has an initial lease term of 13.8 years with undiscounted fixed payments of $66.9 million over the initial term. Components of lease expense were as follows (in thousands): Twenty-Six Weeks Ended June 29, July 1, Operating lease cost (1) 2,480 1,685 Variable lease cost (2) 370 293 Total lease cost 2,850 1,978 (1) Includes short-term leases, which are immaterial. (2) Primarily related to adjustments for inflation, common area maintenance, and property tax. Supplemental cash flow information related to leases is as follows (in thousands): Twenty-Six Weeks Ended June 29, July 1, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,564 $ 1,629 Right-of-use assets obtained in exchange for new operating lease liabilities $ 37,950 $ 1,963

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 29, 2024
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation During the twenty-six weeks ended June 29, 2024, the Company granted 23,114 restricted stock units (“RSUs”) to certain employees. 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 $371.17 per unit. In addition, the Company granted 23,874 performance stock units (“PSUs”) to certain employees during the twenty-six weeks ended June 29, 2024. Of the total PSUs granted, 20,593 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 3,281 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 $370.95 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.

Revenue from Contracts with Cus

Revenue from Contracts with Customers	6 Months Ended
	Jun. 29, 2024
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 29, 2024 and July 1, 2023 (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Royalty revenue $ 64,201 $ 43,271 $ 125,393 $ 86,785 Advertising fees and related income 54,654 36,596 104,803 74,059 Franchise fees 1,440 1,107 2,682 2,169

Acquisitions of Company-owned R

Acquisitions of Company-owned Restaurants	6 Months Ended
	Jun. 29, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Acquisitions of Company-owned Restaurants	Acquisitions of Company-owned Restaurants During the second fiscal quarter ended June 29, 2024, the Company acquired one existing restaurant from a franchisee. The total purchase price was $3.3 million and was funded by cash flow from operations. The following table summarizes the 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 $ 8 Property and equipment 65 Reacquired franchise rights 2,200 Goodwill 1,025 Total purchase price $ 3,298 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 acquisition on our consolidated financial statements. Subsequent to the end of the fiscal second quarter 2024, the Company acquired two existing restaurants from a franchisee. The purchase price, in the aggregate, was $7.0 million, funded by cash flow from operations. The restaurant acquisitions are 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 acquisitions will be included in our Consolidated Statements of Comprehensive Income as of the dates of acquisition.

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 29, 2024	Mar. 30, 2024	Jul. 01, 2023	Apr. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Pay vs Performance Disclosure
Net income	$ 27,485	$ 28,747	$ 16,181	$ 15,669	$ 56,232	$ 31,850

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Jun. 29, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Basis of Presentation and Upd_2

Basis of Presentation and Update to Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 29, 2024
Accounting Policies [Abstract]
Basis of presentation	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 29, 2024 and December 30, 2023, and operating results are for the thirteen and twenty-six weeks ended June 29, 2024 and July 1, 2023. Certain prior period information on the Consolidated Balance Sheets have been reclassified to conform to the current presentation. 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 30, 2023.
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 2024 and 2023 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. There have been no changes to the recently issued accounting pronouncements not yet adopted disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

Basis of Presentation and Upd_3

Basis of Presentation and Update to Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 29, 2024
Accounting Policies [Abstract]
Schedule of Cash, Cash Equivalents, and Restricted Cash	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 29, 2024 and December 30, 2023 were as follows (in thousands): June 29, 2024 December 30, 2023 Cash and cash equivalents $ 96,749 $ 90,216 Restricted cash 11,444 11,444 Restricted cash, included in Advertising fund assets, restricted 21,908 18,016 Total cash, cash equivalents, and restricted cash $ 130,101 $ 119,676

Earnings per Share (Tables)

Earnings per Share (Tables)	6 Months Ended
	Jun. 29, 2024
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 29, July 1, June 29, July 1, Basic weighted average shares outstanding 29,343 29,972 29,346 29,959 Dilutive shares 114 77 122 84 Diluted weighted average shares outstanding 29,457 30,049 29,468 30,043

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 29, 2024
Fair Value Disclosures [Abstract]
Schedule of Fair Value Measurements	Fair value of debt and the investment in bonds issued 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 29, 2024 December 30, 2023 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 472,800 $ 429,548 $ 472,800 $ 423,823 2022-1 Class A-2 Senior Secured Notes (1) Level 2 $ 248,125 $ 222,370 $ 248,125 $ 222,370 Investments in bonds of LPH (2) Level 3 $ 3,624 $ 4,367 $ 3,557 $ 4,306 (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. 29, 2024
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt consisted of the following components (in thousands): June 29, 2024 December 30, 2023 2020-1 Class A-2 Senior Secured Notes $ 472,800 $ 472,800 2022-1 Class A-2 Senior Secured Notes 248,125 248,125 Debt issuance costs, net of amortization (7,667) (8,598) Total debt 713,258 712,327

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 29, 2024
Leases [Abstract]
Schedule of Lease Expense and Supplemental Cash Flow Information	Components of lease expense were as follows (in thousands): Twenty-Six Weeks Ended June 29, July 1, Operating lease cost (1) 2,480 1,685 Variable lease cost (2) 370 293 Total lease cost 2,850 1,978 (1) Includes short-term leases, which are immaterial. (2) Primarily related to adjustments for inflation, common area maintenance, and property tax. Supplemental cash flow information related to leases is as follows (in thousands): Twenty-Six Weeks Ended June 29, July 1, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,564 $ 1,629 Right-of-use assets obtained in exchange for new operating lease liabilities $ 37,950 $ 1,963

Revenue from Contracts with C_2

Revenue from Contracts with Customers (Tables)	6 Months Ended
	Jun. 29, 2024
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 29, 2024 and July 1, 2023 (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Royalty revenue $ 64,201 $ 43,271 $ 125,393 $ 86,785 Advertising fees and related income 54,654 36,596 104,803 74,059 Franchise fees 1,440 1,107 2,682 2,169

Acquisitions of Company-owned_2

Acquisitions of Company-owned Restaurants (Tables)	6 Months Ended
	Jun. 29, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Schedule of Purchase Price Allocation for Acquisitions	The following table summarizes the 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 $ 8 Property and equipment 65 Reacquired franchise rights 2,200 Goodwill 1,025 Total purchase price $ 3,298

Basis of Presentation and Upd_4

Basis of Presentation and Update to Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 29, 2024 restaurant
Franchisor Disclosure [Line Items]
Number of restaurants	2,352
Franchised units
Franchisor Disclosure [Line Items]
Number of restaurants	2,300
Proportion of restaurants that are franchised (as a percent)	98%
Franchised units | International and US locations
Franchisor Disclosure [Line Items]
Number of restaurants	312
Entity operated units
Franchisor Disclosure [Line Items]
Number of restaurants	52

Basis of Presentation and Upd_5

Basis of Presentation and Update to Significant Accounting Policies -Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023	Jul. 01, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 96,749	$ 90,216
Restricted cash	11,444	11,444
Restricted cash, included in Advertising fund assets, restricted	21,908	18,016
Total cash, cash equivalents, and restricted cash	$ 130,101	$ 119,676	$ 214,102	$ 205,715

Earnings per Share - Schedule o

Earnings per Share - Schedule of Reconciliation of Basic Shares Outstanding to Diluted Shares Outstanding (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Earnings Per Share [Abstract]
Basic weighted average shares outstanding (in shares)	29,343,000	29,972,000	29,346,000	29,959,000
Dilutive shares (in shares)	114,000	77,000	122,000	84,000
Diluted weighted average shares outstanding (in shares)	29,457,000	30,049,000	29,468,000	30,043,000

Earnings per Share - Additional

Earnings per Share - Additional Information (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Earnings Per Share [Abstract]
Equity awards outstanding (in shares)	0	1	28	3

Stockholders_ Deficit (Details)

Stockholders’ Deficit (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended			6 Months Ended
	Jul. 30, 2024	Jun. 29, 2024	Mar. 30, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023	Aug. 17, 2023
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)		$ 0.22		$ 0.19	$ 0.44	$ 0.38
Dividends paid					$ 12,900
Stock repurchased and retired average share price (in USD per share)		$ 381.29			$ 381.29
Subsequent event
Dividends Payable [Line Items]
Dividends payable per share (in USD per share)	$ 0.27
Dividends payable	$ 7,900
Share Repurchase Authorization
Dividends Payable [Line Items]
Stock repurchase, authorized amount		$ 96,100			$ 96,100		$ 250,000
Stock repurchased and retired (in shares)		75,862
Dividend paid
Dividends Payable [Line Items]
Dividends paid per share (in USD per share)		$ 0.22	$ 0.22		$ 0.44

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Nonrecurring - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Level 3 | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	$ 3,624	$ 3,557
Level 3 | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	4,367	4,306
2020-1 Class A-2 Senior Secured Notes | Level 2 | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	472,800	472,800
2020-1 Class A-2 Senior Secured Notes | Level 2 | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	429,548	423,823
2022-1 Class A-2 Senior Secured Notes | Level 2 | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	248,125	248,125
2022-1 Class A-2 Senior Secured Notes | Level 2 | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument at fair value	$ 222,370	$ 222,370

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 9,006	$ 6,077	$ 18,756	$ 11,319
Effective income tax rate (as a percent)	24.70%	27.30%	25%	26.20%

Debt Obligations - Schedule of

Debt Obligations - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Debt Instrument [Line Items]
Debt issuance costs, net of amortization	$ (7,667)	$ (8,598)
Total debt	713,258	712,327
2020-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Gross debt	472,800	472,800
2022-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Gross debt	$ 248,125	$ 248,125

Debt Obligations - Additional I

Debt Obligations - Additional Information (Details) - USD ($)	Jun. 29, 2024	Dec. 30, 2023
Debt Instrument [Line Items]
Maximum borrowing capacity for line of credit	$ 200,000,000
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	$ 472,800,000	$ 472,800,000
2020-1 Class A-2 Senior Secured Notes | Senior notes
Debt Instrument [Line Items]
Debt outstanding	$ 720,900,000
2022-1 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Senior secured note fixed interest rate (as a percent)	3.734%
Debt outstanding	$ 248,125,000	248,125,000
2020 Variable Funding Notes | Line of credit
Debt Instrument [Line Items]
Line of credit	$ 0	$ 0
2020 and 2022 Class A-2 Senior Secured Notes
Debt Instrument [Line Items]
Covenant, leverage ratio	5

Leases - Additional Information

Leases - Additional Information (Details) - USD ($) $ in Millions	Jun. 29, 2024	Mar. 30, 2024
Lessee, Lease, Description [Line Items]
Lease term		13 years 9 months 18 days
Lessee, undiscounted fixed payments		$ 66.9
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	3 months 18 days
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	13 years 8 months 12 days

Leases - Components of Lease Ex

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023
Leases [Abstract]
Operating lease cost	$ 2,480	$ 1,685
Variable lease cost	370	293
Total lease cost	$ 2,850	$ 1,978

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 1,564	$ 1,629
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 37,950	$ 1,963

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 8.7	$ 6.9
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	23,114
Vesting period (in years)	3 years
Weighted average grant date fair value of RSUs granted (in USD per share)	$ 371.17
Performance shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	23,874
Performance shares | Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)	20,593
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)	3,281
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 (as a percent)	250%
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)	$ 370.95
Performance shares | Market-Based Vesting | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSU vesting (as a percent)	100%

Revenue from Contracts with C_3

Revenue from Contracts with Customers - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 29, 2024	Jul. 01, 2023	Jun. 29, 2024	Jul. 01, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 155,699	$ 107,173	$ 301,488	$ 215,894
Royalty revenue
Disaggregation of Revenue [Line Items]
Total revenue	64,201	43,271	125,393	86,785
Advertising fees and related income
Disaggregation of Revenue [Line Items]
Total revenue	54,654	36,596	104,803	74,059
Franchise fees
Disaggregation of Revenue [Line Items]
Total revenue	$ 1,440	$ 1,107	$ 2,682	$ 2,169

Revenue from Contracts with C_4

Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 29, 2024	Jun. 29, 2024	Dec. 30, 2023
Disaggregation of Revenue [Line Items]
Average franchise license term (in years)	10 years	10 years
Deferred revenue not yet being amortized	$ 10.3	$ 10.3	$ 9.3
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-30
Disaggregation of Revenue [Line Items]
Remaining amortization period for deferred revenue related to open restaurants (in years)	7 years 1 month 6 days	7 years 1 month 6 days

Acquisitions of Company-owned_3

Acquisitions of Company-owned Restaurants- Additional Information (Details) $ in Thousands	3 Months Ended
	Jun. 29, 2024 USD ($) restaurant
Business Acquisition [Line Items]
Number of restaurants re-franchised | restaurant	2
Total purchase price	$ 3,298
Company acquired existing restaurants from franchisees
Business Acquisition [Line Items]
Combined purchase price	$ 7,000
Company acquired existing restaurants from franchisees | Entity operated units
Business Acquisition [Line Items]
Number of restaurants re-franchised | restaurant	1
Existing Restaurants From Franchisees
Business Acquisition [Line Items]
Total purchase price	$ 3,300

Acquisitions of Company-owned_4

Acquisitions of Company-owned Restaurants -Schedule of Purchase Price for Acquisition (Details) - USD ($) $ in Thousands	Jun. 29, 2024	Dec. 30, 2023
Business Acquisition [Line Items]
Goodwill	$ 68,733	$ 67,708
Total purchase price	3,298
Series of Individually Immaterial Business Acquisitions
Business Acquisition [Line Items]
Working capital	8
Property and equipment	65
Reacquired franchise rights	2,200
Goodwill	1,025
Existing Restaurants From Franchisees
Business Acquisition [Line Items]
Total purchase price	$ 3,300