Cover
Cover - shares | 9 Months Ended | |
Sep. 25, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 25, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40866 | |
Entity Registrant Name | First Watch Restaurant Group, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4271369 | |
Entity Address, Address Line One | 8725 Pendery Place | |
Entity Address, Address Line Two | Suite 201 | |
Entity Address, City or Town | Bradenton | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 34201 | |
City Area Code | 941 | |
Local Phone Number | 907-9800 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | FWRG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,199,619 | |
Entity Central Index Key | 0001789940 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-25 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 25, 2022 | Dec. 26, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 49,371 | $ 51,864 |
Restricted cash | 251 | 251 |
Accounts receivable | 3,432 | 4,450 |
Inventory | 4,116 | 4,023 |
Prepaid expenses | 4,331 | 5,677 |
Other current assets | 3,724 | 1,432 |
Total current assets | 65,225 | 67,697 |
Goodwill | 345,219 | 345,219 |
Intangible assets, net | 142,988 | 143,000 |
Operating lease right-of-use assets | 349,272 | 324,995 |
Property, fixtures and equipment, net of accumulated depreciation of $138,124 and $115,582, respectively | 186,579 | 164,695 |
Other long-term assets | 1,195 | 1,311 |
Total assets | 1,090,478 | 1,046,917 |
Current liabilities: | ||
Accounts payable | 7,500 | 11,060 |
Accrued liabilities | 23,684 | 15,889 |
Accrued compensation and deferred payroll taxes | 15,306 | 21,196 |
Deferred revenues | 2,387 | 4,654 |
Current portion of operating lease liabilities | 38,039 | 38,186 |
Current portion of long-term debt | 5,628 | 3,186 |
Note payable | 0 | 2,352 |
Total current liabilities | 92,544 | 96,523 |
Operating lease liabilities | 361,172 | 330,495 |
Long-term debt, net | 95,908 | 99,753 |
Deferred income taxes | 16,842 | 12,489 |
Other long-term liabilities | 3,741 | 3,228 |
Total liabilities | 570,207 | 542,488 |
Commitments and contingencies (Note 9) | ||
Equity: | ||
Preferred stock; $0.01 par value; 10,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock; $0.01 par value; 300,000,000 shares authorized; 59,116,723 and 59,048,446 shares issued and outstanding at September 25, 2022 and December 26, 2021, respectively | 591 | 590 |
Additional paid-in capital | 617,326 | 608,878 |
Accumulated deficit | (97,646) | (105,039) |
Total equity | 520,271 | 504,429 |
Total liabilities and equity | $ 1,090,478 | $ 1,046,917 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 25, 2022 | Dec. 26, 2021 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 138,124 | $ 115,582 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 59,116,723 | 59,048,446 |
Common stock, shares outstanding (in shares) | 59,116,723 | 59,048,446 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2022 | Sep. 26, 2021 | Sep. 25, 2022 | Sep. 26, 2021 | |
Revenues: | ||||
Total revenues | $ 186,852 | $ 157,441 | $ 544,417 | $ 438,573 |
Restaurant operating expenses (exclusive of depreciation and amortization shown below): | ||||
Food and beverage costs | 44,578 | 35,871 | 129,200 | 96,383 |
Labor and other related expenses | 61,262 | 50,587 | 175,091 | 136,586 |
Other restaurant operating expenses | 29,685 | 23,905 | 85,761 | 69,348 |
Occupancy expenses | 15,091 | 13,969 | 44,318 | 41,035 |
Pre-opening expenses | 1,490 | 510 | 3,569 | 2,573 |
General and administrative expenses | 21,689 | 17,019 | 63,194 | 44,360 |
Depreciation and amortization | 8,679 | 8,203 | 25,302 | 23,965 |
Impairments and loss on disposal of assets | 338 | 98 | 572 | 261 |
Transaction expenses, net | 1,419 | 126 | 1,976 | 752 |
Total operating costs and expenses | 184,231 | 150,288 | 528,983 | 415,263 |
Income from operations | 2,621 | 7,153 | 15,434 | 23,310 |
Interest expense | (1,362) | (6,051) | (3,494) | (18,656) |
Other income, net | 116 | 215 | 395 | 536 |
Income before income taxes | 1,375 | 1,317 | 12,335 | 5,190 |
Income tax expense | (1,329) | (534) | (4,942) | (2,644) |
Net income | 46 | 783 | $ 7,393 | $ 2,546 |
Comprehensive income | $ 46 | $ 783 | ||
Net (loss) income per common share - basic (in dollars per share) | $ 0 | $ 0.02 | $ 0.13 | $ 0.06 |
Net (loss) income per common share - diluted (in dollars per share) | $ 0 | $ 0.02 | $ 0.12 | $ 0.06 |
Weighted average common shares outstanding - basic (in shares) | 59,089,831 | 45,013,784 | 59,065,423 | 45,013,784 |
Weighted average common shares outstanding - diluted (in shares) | 60,464,062 | 46,085,650 | 60,088,622 | 46,077,196 |
Restaurant sales | ||||
Revenues: | ||||
Total revenues | $ 183,978 | $ 155,082 | $ 536,329 | $ 432,136 |
Franchise revenues | ||||
Revenues: | ||||
Total revenues | $ 2,874 | $ 2,359 | $ 8,088 | $ 6,437 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 27, 2020 | 266,667 | 45,013,784 | |||
Beginning balance at Dec. 27, 2020 | $ 320,866 | $ 3 | $ 450 | $ 423,345 | $ (102,932) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 2,546 | 2,546 | |||
Stock-based compensation | 746 | 746 | |||
Ending balance (in shares) at Sep. 26, 2021 | 266,667 | 45,013,784 | |||
Ending balance at Sep. 26, 2021 | 324,158 | $ 3 | $ 450 | 424,091 | (100,386) |
Beginning balance (in shares) at Jun. 27, 2021 | 266,667 | 45,013,784 | |||
Beginning balance at Jun. 27, 2021 | 322,945 | $ 3 | $ 450 | 423,661 | (101,169) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 783 | 783 | |||
Stock-based compensation | 430 | 430 | |||
Ending balance (in shares) at Sep. 26, 2021 | 266,667 | 45,013,784 | |||
Ending balance at Sep. 26, 2021 | 324,158 | $ 3 | $ 450 | 424,091 | (100,386) |
Beginning balance (in shares) at Dec. 26, 2021 | 59,048,446 | ||||
Beginning balance at Dec. 26, 2021 | 504,429 | $ 590 | 608,878 | (105,039) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 7,393 | 7,393 | |||
Stock-based compensation | 7,821 | 7,821 | |||
Common stock issued upon exercise of stock options, net (in shares) | 68,277 | ||||
Common stock issued upon exercise of stock options, net | 628 | $ 1 | 627 | ||
Ending balance (in shares) at Sep. 25, 2022 | 59,116,723 | ||||
Ending balance at Sep. 25, 2022 | 520,271 | $ 591 | 617,326 | (97,646) | |
Beginning balance (in shares) at Jun. 26, 2022 | 59,075,562 | ||||
Beginning balance at Jun. 26, 2022 | 517,122 | $ 591 | 614,223 | (97,692) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 46 | 46 | |||
Stock-based compensation | 2,719 | 2,719 | |||
Common stock issued upon exercise of stock options, net (in shares) | 41,161 | ||||
Common stock issued upon exercise of stock options, net | 384 | $ 0 | 384 | ||
Ending balance (in shares) at Sep. 25, 2022 | 59,116,723 | ||||
Ending balance at Sep. 25, 2022 | $ 520,271 | $ 591 | $ 617,326 | $ (97,646) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 25, 2022 | Sep. 26, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 7,393 | $ 2,546 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 25,302 | 23,965 |
Stock-based compensation | 7,821 | 746 |
Non-cash operating lease costs | 11,907 | 9,582 |
Non-cash portion of gain on lease modifications | (84) | 0 |
Deferred income taxes | 4,353 | 2,526 |
Amortization of debt discount and deferred issuance costs | 334 | 958 |
Impairments and loss on disposal of assets | 572 | 261 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,018 | 1,014 |
Inventory | (93) | (558) |
Prepaid expenses | 1,346 | (814) |
Deferred offering costs | 0 | (2,454) |
Other assets, current and long-term | (2,176) | (639) |
Accounts payable | (3,560) | 2,757 |
Accrued liabilities and other long-term liabilities | 6,032 | 8,406 |
Accrued compensation and deferred payroll taxes, current and long-term | (5,890) | 4,399 |
Deferred revenues, current and long-term | (2,061) | (1,714) |
Operating lease liabilities | (5,570) | (6,716) |
Net cash provided by operating activities | 46,644 | 44,265 |
Cash flows from investing activities: | ||
Capital expenditures | (44,985) | (27,065) |
Purchase of intangible assets | (715) | (359) |
Net cash used in investing activities | (45,700) | (27,424) |
Cash flows from financing activities: | ||
Repayments of note payable | (2,352) | 0 |
Repayments of long-term debt, including finance lease liabilities | (1,635) | (2,581) |
Proceeds from exercise of stock options, net of employee taxes paid | 628 | 0 |
Contingent consideration payment | (78) | 0 |
Payment of deferred offering costs | 0 | (1,255) |
Net cash used in financing activities | (3,437) | (3,836) |
Net (decrease) increase in cash and cash equivalents and restricted cash | (2,493) | 13,005 |
Cash and cash equivalents and restricted cash, beginning of period | 52,115 | 39,097 |
Cash and cash equivalents and restricted cash, end of period | 49,622 | 52,102 |
Supplemental cash flow information: | ||
Cash paid for interest | 2,800 | 14,763 |
Cash paid for income taxes, net of refunds | 777 | 55 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Interest converted to long-term debt | 0 | 3,062 |
Leased assets obtained in exchange for new operating lease liabilities | 37,961 | 23,391 |
Leased assets obtained in exchange for new finance lease liabilities | 89 | 185 |
Remeasurements and terminations of operating lease assets and lease liabilities | (1,861) | (2,396) |
Remeasurements and terminations of finance lease assets and lease liabilities | (191) | 9 |
Increase (Decrease) in liabilities from acquisition of property, fixtures and equipment | $ 2,148 | $ (1,153) |
Nature of Business and Organiza
Nature of Business and Organization | 9 Months Ended |
Sep. 25, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Organization | Nature of Business and Organization First Watch Restaurant Group, Inc. (collectively with its wholly-owned subsidiaries, “the Company,” or “Management”) is a Delaware holding company. The Company operates and franchises restaurants in 29 sta tes operating under the “First Watch” trade name, which are focused on made-to-order breakfast, brunch and lunch. The Company does not operate outside of the United States and all of its assets are located in the United States. As of September 25, 2022 and December 26, 2021, the Company operated 356 company-owned restaurants and 341 company-owned restaurants, respectively, and had 103 franchise-owned restaurants and 94 franchise-owned restaurants, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 25, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company reports financial information on a 52- or 53-week fiscal year ending on the last Sunday of each calendar year. The Company’s fiscal quarters are comprised of 13 weeks each, except for fiscal years consisting of 53 weeks for which the fourth quarter will consist of 14 weeks, and end on the 13th Sunday of each quarter (14th Sunday of the fourth quarter, when applicable). The quarters ended September 25, 2022 and September 26, 2021 were both 13-week periods. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 26, 2021 (“2021 Form 10-K”). The accompanying unaudited interim consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in the 2021 Form 10-K and include all adjustments necessary for the fair statement of the consolidated financial statements for the interim periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for other interim periods or the entire fiscal year. Reclassifications The Company reclassified certain items in the accompanying unaudited interim consolidated financial statements for the prior periods to be comparable with the classification for the current period. These reclassifications are related to the presentation of Pre-opening expenses on the Consolidated Statements of Operations and Comprehensive Income for the prior periods presented, which were previously included in Other restaurant operating expenses and Occupancy expenses. These reclassifications had no effect on previously reported net income and comprehensive income. Use of Estimates The preparation of the unaudited interim consolidated financial statements in accordance with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates and such differences could be material. Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The carrying amounts of the Company ’ s financial instruments, including cash equivalents, accounts receivable, accounts payable, accrued expenses, note payable and other current liabilities, approximate their fair values due to their short-term maturities. At September 25, 2022, the Company’s outstanding debt under the facilities pursuant to the credit agreement executed in October 2021 had a fair value of $96.7 million and a carrying value of $98.8 million. Summary of Recently Issued Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ” (“ASU 2020-04”). The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 was effective beginning March 12, 2020 and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Management is currently evaluating its contracts and the optional expedients provided by the new standard. Recent accounting guidance not discussed herein is not applicable, did not have, or is not expected to have a material impact to the Company. |
Revenues
Revenues | 9 Months Ended |
Sep. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The following tables include a detail of liabilities from contracts with customers: (in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021 Deferred revenues: Deferred gift card revenue $ 2,111 $ 4,410 Deferred franchise fee revenue - current 276 244 Total current deferred revenues $ 2,387 $ 4,654 Other long-term liabilities: Deferred franchise fee revenue - non-current $ 2,498 $ 2,292 Changes in deferred gift card contract liabilities were as follows: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Deferred gift card revenue: Balance, beginning of period $ 2,805 $ 2,657 $ 4,410 $ 4,024 Gift card sales 1,218 1,003 4,796 4,088 Gift card redemptions (1,720) (1,483) (6,399) (5,543) Gift card breakage (192) (165) (696) (557) Balance, end of period $ 2,111 $ 2,012 $ 2,111 $ 2,012 Changes in deferred franchise fee contract liabilities were as follows: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Deferred franchise fee revenue: Balance, beginning of period $ 2,637 $ 2,232 $ 2,536 $ 2,274 Cash received 204 400 434 482 Franchise revenues recognized (67) (59) (196) (183) Balance, end of period $ 2,774 $ 2,573 $ 2,774 $ 2,573 Revenues recognized disaggregated by type were as follows: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Restaurant sales: In-restaurant dining sales $ 147,491 $ 123,311 $ 425,222 $ 327,147 Third-party delivery sales 20,105 15,232 60,960 52,584 Take-out sales 16,382 16,539 50,147 52,405 Total restaurant sales $ 183,978 $ 155,082 $ 536,329 $ 432,136 Franchise revenues: Royalty and system fund contributions $ 2,807 $ 2,300 $ 7,892 $ 6,254 Initial fees 67 59 196 183 Total franchise revenues $ 2,874 $ 2,359 $ 8,088 $ 6,437 Total revenues $ 186,852 $ 157,441 $ 544,417 $ 438,573 |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 25, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consisted of the following: (in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021 Receivables from third-party delivery providers $ 1,163 $ 1,021 Receivables from franchisees 1,230 927 Receivables from vendors 565 428 Receivables related to gift card sales 359 1,453 Other receivables 115 621 Total accounts receivable $ 3,432 $ 4,450 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 25, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: (in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021 Construction liabilities $ 6,593 $ 4,445 Sales tax 3,884 3,337 Self-insurance and general liability reserves 1,223 1,353 Utilities 1,666 1,306 Legal 1,561 105 Credit card fees 1,049 940 Property tax 1,296 638 Contingent rent 911 628 Common area maintenance 624 482 Other 4,877 2,655 Total accrued liabilities $ 23,684 $ 15,889 |
Leases
Leases | 9 Months Ended |
Sep. 25, 2022 | |
Leases [Abstract] | |
Leases | Leases The following table includes a detail of lease assets and liabilities: (in thousands) Consolidated Balance Sheets Classification SEPTEMBER 25, 2022 DECEMBER 26, 2021 Operating lease right-of-use assets Operating lease right-of-use assets $ 349,272 $ 324,995 Finance lease assets Property, fixtures and equipment, net 1,426 1,892 Total lease assets $ 350,698 $ 326,887 Operating lease liabilities (1) - current Current portion of operating lease liabilities 38,039 38,186 Operating lease liabilities - non-current Operating lease liabilities 361,172 330,495 Finance lease liabilities - current Current portion of long-term debt 628 686 Finance lease liabilities - non-current Long-term debt, net 902 1,331 Total lease liabilities $ 400,741 $ 370,698 _____________ (1) Excludes all variable lease expense. The components of lease expense are as follows: (in thousands) Consolidated Statements of Operations and Comprehensive Income Classification THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Operating lease expense Other restaurant operating expenses $ 12,667 $ 11,377 $ 36,843 $ 33,263 Variable lease expense Food and beverage costs 3,676 3,202 10,669 9,294 Finance lease expense: Amortization of leased assets Depreciation and amortization 127 139 394 405 Interest on lease liabilities Interest expense 25 43 101 133 Total lease expense (1) $ 16,495 $ 14,761 $ 48,007 $ 43,095 _____________ (1) Includes contingent rent expense of $0.4 million and $0.3 million during the thirteen weeks ended September 25, 2022 and September 26, 2021, respectively, and $1.2 million and $0.7 million during the thirty-nine weeks ended September 25, 2022 and September 26, 2021, respectively. Supplemental cash flow information related to leases was as follows: THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 30,506 $ 30,388 Operating cash flows - finance leases $ 101 $ 133 Financing cash flows - finance leases $ 385 $ 371 Supplemental information related to leases was as follows: THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Weighted-average remaining lease term (in years) Operating leases 14.8 15.6 Finance leases 3.0 3.7 Weighted-average discount rate (1) Operating leases 8.6 % 9.1 % Finance leases 7.7 % 8.0 % ____________ (1) Based on the Company’s incremental borrowing rate. As of September 25, 2022, future minimum lease payments for operating and finance leases consisted of the following: (in thousands) OPERATING LEASES FINANCE LEASES Fiscal year 2022 $ 10,454 $ 194 2023 41,398 607 2024 49,185 607 2025 48,934 227 2026 48,762 38 Thereafter 540,510 39 Total future minimum lease payments (1) 739,243 1,712 Less: imputed interest (340,032) (182) Total present value of lease liabilities $ 399,211 $ 1,530 _____________ (1) Excludes approxim ately $35.0 million of exec uted operating leases that have not commenced as of September 25, 2022. |
Leases | Leases The following table includes a detail of lease assets and liabilities: (in thousands) Consolidated Balance Sheets Classification SEPTEMBER 25, 2022 DECEMBER 26, 2021 Operating lease right-of-use assets Operating lease right-of-use assets $ 349,272 $ 324,995 Finance lease assets Property, fixtures and equipment, net 1,426 1,892 Total lease assets $ 350,698 $ 326,887 Operating lease liabilities (1) - current Current portion of operating lease liabilities 38,039 38,186 Operating lease liabilities - non-current Operating lease liabilities 361,172 330,495 Finance lease liabilities - current Current portion of long-term debt 628 686 Finance lease liabilities - non-current Long-term debt, net 902 1,331 Total lease liabilities $ 400,741 $ 370,698 _____________ (1) Excludes all variable lease expense. The components of lease expense are as follows: (in thousands) Consolidated Statements of Operations and Comprehensive Income Classification THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Operating lease expense Other restaurant operating expenses $ 12,667 $ 11,377 $ 36,843 $ 33,263 Variable lease expense Food and beverage costs 3,676 3,202 10,669 9,294 Finance lease expense: Amortization of leased assets Depreciation and amortization 127 139 394 405 Interest on lease liabilities Interest expense 25 43 101 133 Total lease expense (1) $ 16,495 $ 14,761 $ 48,007 $ 43,095 _____________ (1) Includes contingent rent expense of $0.4 million and $0.3 million during the thirteen weeks ended September 25, 2022 and September 26, 2021, respectively, and $1.2 million and $0.7 million during the thirty-nine weeks ended September 25, 2022 and September 26, 2021, respectively. Supplemental cash flow information related to leases was as follows: THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 30,506 $ 30,388 Operating cash flows - finance leases $ 101 $ 133 Financing cash flows - finance leases $ 385 $ 371 Supplemental information related to leases was as follows: THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Weighted-average remaining lease term (in years) Operating leases 14.8 15.6 Finance leases 3.0 3.7 Weighted-average discount rate (1) Operating leases 8.6 % 9.1 % Finance leases 7.7 % 8.0 % ____________ (1) Based on the Company’s incremental borrowing rate. As of September 25, 2022, future minimum lease payments for operating and finance leases consisted of the following: (in thousands) OPERATING LEASES FINANCE LEASES Fiscal year 2022 $ 10,454 $ 194 2023 41,398 607 2024 49,185 607 2025 48,934 227 2026 48,762 38 Thereafter 540,510 39 Total future minimum lease payments (1) 739,243 1,712 Less: imputed interest (340,032) (182) Total present value of lease liabilities $ 399,211 $ 1,530 _____________ (1) Excludes approxim ately $35.0 million of exec uted operating leases that have not commenced as of September 25, 2022. |
Equity and Stock-Based Compensa
Equity and Stock-Based Compensation | 9 Months Ended |
Sep. 25, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity and Stock-Based Compensation | Equity and Stock-Based Compensation Equity Transactions During the thirteen weeks ended September 25, 2022, funds managed by the Company’s majority owner, Advent International Corporation, sold 4,500,000 shares of the Company’s common stock through a secondary public offering that was completed on September 19, 2022 (the “Secondary Offering”). The selling stockholders sold an additional 675,000 shares of common stock on October 6, 2022 pursuant to the terms of the underwriters option associated with the Secondary Offering. All net proceeds from the sale of the shares of common stock were distributed to the selling stockholders. The Company incurred approximately $1.6 million of costs that were recorded within Transaction expenses, net on the Consolidated Statements of Operations and Comprehensive Income. Stock Option Awards Stock-based awards are granted to employees and non-employee directors. The Company has two compensation plans that provide for the granting of stock options and other share-based awards to key employees and non-employee members of the board of directors. The 2017 Omnibus Equity Incentive Plan (the “2017 Equity Plan”) and the 2021 Equity Incentive Plan (the “2021 Equity Plan”) provide for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, stock appreciation rights and stock-based awards. No awards were granted under the 2017 Equity Plan during the thirteen and thirty-nine weeks ended September 25, 2022 and the Company does not intend to grant any further awards under the 2017 Equity Plan. At September 25, 2022, a total of 2,987,536 common shares were available to grant under the 2021 Equity Plan. A total of 1,018,975 time-based stock option awards were granted under the 2021 Equity Plan during the thirty-nine weeks ended September 25, 2022, which vest over a three-year requisite service period from the date of grant and expire 10 years after the grant date. A summary of stock option activity during the thirty-nine weeks ended September 25, 2022 is as follows: NUMBER OF OPTIONS WEIGHTED AVERAGE AGGREGATE INTRINSIC VALUE (in thousands) Outstanding, December 26, 2021 4,409,331 $ 9.48 $ 28,598 Granted 1,018,975 $ 12.67 Forfeited (150,059) $ 10.24 Exercised (68,277) $ 9.19 Outstanding, September 25, 2022 5,209,970 $ 10.09 $ 23,083 Exercisable, September 25, 2022 2,355,416 $ 8.98 $ 13,037 The aggregate intrinsic value is based on the difference between the exercise price of the stock option and the closing price of the Company’s common stock on the Nasdaq Global Select Market. A summary of the non-vested stock option activity during the thirty-nine weeks ended September 25, 2022 is as follows: NUMBER OF OPTIONS WEIGHTED AVERAGE GRANT DATE FAIR VALUE Nonvested, December 26, 2021 2,633,391 $ 7.03 Granted 1,018,975 $ 6.81 Vested (647,753) $ 4.01 Forfeited (150,059) $ 7.29 Nonvested, September 25, 2022 2,854,554 $ 7.62 Fair value of Stock Options The fair value of stock option awards is estimated on the date of grant using the Black-Scholes valuation model. The assumptions utilized to estimate the grant date fair value of the stock option awards granted during the thirty-nine weeks ended September 25, 2022 were as follows: Expected term (years) 6.5 Expected volatility 52.4 % Risk-free interest rate 2.6 % Expected dividend yield — The Company does not have sufficient historical stock option exercise activity and therefore Management estimated the expected term of stock options granted using the simplified method, which represents the mid-point between the vesting period and the contractual term for each grant. The expected volatility of stock options is based on the historical volatilities of a set of publicly traded peer companies in a similar industry. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the expected term of the stock option award. The expected dividend yield is based on the fact that the Company has never paid cash dividends and does not have intentions of paying dividends in the foreseeable future. Restricted Stock Units During the thirty-nine weeks ended September 25, 2022, a total of 38,311 restricted stock units were granted under the 2021 Equity Plan at the weighted average grant date fair value of $14.36. The restricted stock units will vest over a one-year requisite service period from the date of grant. Stock-Based Compensation Expense Stock-based compensation expense was $2.7 million and $7.8 million during the thirteen and thirty-nine weeks ended September 25, 2022, respectively. Stock based compensation expense was $0.4 million and $0.7 million during the thirteen and thirty-nine weeks ended September 26, 2021, respectively. Unrecognized Stock-Based Compensation Expense The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of September 25, 2022: UNRECOGNIZED STOCK-BASED COMPENSATION EXPENSE (in thousands) REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years) Stock options $ 11,267 1.5 Restricted stock units $ 371 0.7 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Income before income taxes $ 1,375 $ 1,317 $ 12,335 $ 5,190 Income tax expense $ (1,329) $ (534) $ (4,942) $ (2,644) Effective income tax rate 96.7 % 40.5 % 40.1 % 50.9 % The change in the effective income tax rates for the thirteen and thirty-nine weeks ended September 25, 2022 as compared to the same periods in the prior year was primarily due to (i) the change in the valuation allowance for federal and state deferred tax assets, (ii) the benefit of tax credits for FICA taxes on certain employees’ tips, (iii) limitations on deductions of certain compensation and (iv) non-deductible costs associated with the Secondary Offering. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 25, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments In July 2022, Management entered into an agreement with a vendor to purchase product. The agreement will remain in effect through the later of (i) the purchase of 585,940 gallons of product or (ii) 5 years from the effective date of the agreement. The remaining minimum purchase commitment as of September 25, 2022 was approximately $9.5 million. Legal Proceedings The Company is subject to legal proceedings, claims and liabilities that arise in the ordinary course of business. The amount of the ultimate liability with respect to these matters was not material as of September 25, 2022. In the event any litigation losses become probable and estimable, the Company will recognize any anticipated losses. Unclaimed Property The Company is subject to unclaimed or abandoned property (escheat) laws which require it to turn over to state governmental authorities the property of others held by the Company that has been unclaimed for specified periods of time. Property subject to escheat laws generally relates to uncashed checks, trade accounts receivable credits and unredeemed gift card balances. During the first quarter of 2022, the Company received a letter from the Delaware Secretary of State inviting the Company to participate in the Delaware Secretary of State’s Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program to avoid being sent an audit notice by the Delaware Department of Finance. On August 31, 2022, the Company was accepted into Delaware’s Voluntary Disclosure Agreement Program, entitling it to certain benefits and protections offered to participants in the program. The Company intends to work in good faith to complete a review of its books and records related to unclaimed or abandoned property during the periods required under the program. The Company will continue to examine its options regarding the escheat laws of Delaware including completing Delaware’s Voluntary Disclosure Agreement Program or proceeding to audit. Any potential loss, or range of loss, that may result from this matter is not currently reasonably estimable. |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 25, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income Per Common Share The following table sets forth the computations of basic and diluted net income per common share: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands, except share and per share data) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Numerator: Net income $ 46 $ 783 $ 7,393 $ 2,546 Denominator: Weighted average common shares outstanding - basic 59,089,831 45,013,784 59,065,423 45,013,784 Weighted average common shares outstanding - diluted 60,464,062 46,085,650 60,088,622 46,077,196 Net income per common share - basic $ — $ 0.02 $ 0.13 $ 0.06 Net income per common share - diluted $ — $ 0.02 $ 0.12 $ 0.06 Stock options outstanding not included in diluted net income per common share as their effect is anti-dilutive 1,255,089 90,045 1,708,602 90,045 Diluted net income per common share is calculated by adjusting the weighted average shares outstanding for the theoretical effect of potential common shares that would be issued for preferred stock using the two-class method, as well as for stock options and restricted stock units outstanding and unvested as of the respective periods using the treasury method. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 25, 2022 | |
Accounting Policies [Abstract] | |
Fiscal Period, Policy | The Company reports financial information on a 52- or 53-week fiscal year ending on the last Sunday of each calendar year. The Company’s fiscal quarters are comprised of 13 weeks each, except for fiscal years consisting of 53 weeks for which the fourth quarter will consist of 14 weeks, and end on the 13th Sunday of each quarter (14th Sunday of the fourth quarter, when applicable). The quarters ended September 25, 2022 and September 26, 2021 were both 13-week periods. |
Basis of Presentation | The accompanying unaudited interim consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). |
Consolidation, Policy | Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in the 2021 Form 10-K and include all adjustments necessary for the fair statement of the consolidated financial statements for the interim periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for other interim periods or the entire fiscal year. |
Reclassifications | ReclassificationsThe Company reclassified certain items in the accompanying unaudited interim consolidated financial statements for the prior periods to be comparable with the classification for the current period. These reclassifications are related to the presentation of Pre-opening expenses on the Consolidated Statements of Operations and Comprehensive Income for the prior periods presented, which were previously included in Other restaurant operating expenses and Occupancy expenses. These reclassifications had no effect on previously reported net income and comprehensive income. |
Use of Estimates | Use of Estimates The preparation of the unaudited interim consolidated financial statements in accordance with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates and such differences could be material. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The carrying amounts of the Company ’ |
Summary of Recently Issued Accounting Pronouncements | Summary of Recently Issued Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ” (“ASU 2020-04”). The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 was effective beginning March 12, 2020 and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Management is currently evaluating its contracts and the optional expedients provided by the new standard. Recent accounting guidance not discussed herein is not applicable, did not have, or is not expected to have a material impact to the Company. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable | The following tables include a detail of liabilities from contracts with customers: (in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021 Deferred revenues: Deferred gift card revenue $ 2,111 $ 4,410 Deferred franchise fee revenue - current 276 244 Total current deferred revenues $ 2,387 $ 4,654 Other long-term liabilities: Deferred franchise fee revenue - non-current $ 2,498 $ 2,292 Changes in deferred gift card contract liabilities were as follows: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Deferred gift card revenue: Balance, beginning of period $ 2,805 $ 2,657 $ 4,410 $ 4,024 Gift card sales 1,218 1,003 4,796 4,088 Gift card redemptions (1,720) (1,483) (6,399) (5,543) Gift card breakage (192) (165) (696) (557) Balance, end of period $ 2,111 $ 2,012 $ 2,111 $ 2,012 Changes in deferred franchise fee contract liabilities were as follows: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Deferred franchise fee revenue: Balance, beginning of period $ 2,637 $ 2,232 $ 2,536 $ 2,274 Cash received 204 400 434 482 Franchise revenues recognized (67) (59) (196) (183) Balance, end of period $ 2,774 $ 2,573 $ 2,774 $ 2,573 |
Disaggregation of Revenue | Revenues recognized disaggregated by type were as follows: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Restaurant sales: In-restaurant dining sales $ 147,491 $ 123,311 $ 425,222 $ 327,147 Third-party delivery sales 20,105 15,232 60,960 52,584 Take-out sales 16,382 16,539 50,147 52,405 Total restaurant sales $ 183,978 $ 155,082 $ 536,329 $ 432,136 Franchise revenues: Royalty and system fund contributions $ 2,807 $ 2,300 $ 7,892 $ 6,254 Initial fees 67 59 196 183 Total franchise revenues $ 2,874 $ 2,359 $ 8,088 $ 6,437 Total revenues $ 186,852 $ 157,441 $ 544,417 $ 438,573 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 25, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts receivable consisted of the following: (in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021 Receivables from third-party delivery providers $ 1,163 $ 1,021 Receivables from franchisees 1,230 927 Receivables from vendors 565 428 Receivables related to gift card sales 359 1,453 Other receivables 115 621 Total accounts receivable $ 3,432 $ 4,450 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 25, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: (in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021 Construction liabilities $ 6,593 $ 4,445 Sales tax 3,884 3,337 Self-insurance and general liability reserves 1,223 1,353 Utilities 1,666 1,306 Legal 1,561 105 Credit card fees 1,049 940 Property tax 1,296 638 Contingent rent 911 628 Common area maintenance 624 482 Other 4,877 2,655 Total accrued liabilities $ 23,684 $ 15,889 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 25, 2022 | |
Leases [Abstract] | |
Supplemental Information Related to Leases | The following table includes a detail of lease assets and liabilities: (in thousands) Consolidated Balance Sheets Classification SEPTEMBER 25, 2022 DECEMBER 26, 2021 Operating lease right-of-use assets Operating lease right-of-use assets $ 349,272 $ 324,995 Finance lease assets Property, fixtures and equipment, net 1,426 1,892 Total lease assets $ 350,698 $ 326,887 Operating lease liabilities (1) - current Current portion of operating lease liabilities 38,039 38,186 Operating lease liabilities - non-current Operating lease liabilities 361,172 330,495 Finance lease liabilities - current Current portion of long-term debt 628 686 Finance lease liabilities - non-current Long-term debt, net 902 1,331 Total lease liabilities $ 400,741 $ 370,698 _____________ (1) Excludes all variable lease expense. Supplemental information related to leases was as follows: THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Weighted-average remaining lease term (in years) Operating leases 14.8 15.6 Finance leases 3.0 3.7 Weighted-average discount rate (1) Operating leases 8.6 % 9.1 % Finance leases 7.7 % 8.0 % ____________ (1) Based on the Company’s incremental borrowing rate. |
Supplemental Cash Flow Information | The components of lease expense are as follows: (in thousands) Consolidated Statements of Operations and Comprehensive Income Classification THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Operating lease expense Other restaurant operating expenses $ 12,667 $ 11,377 $ 36,843 $ 33,263 Variable lease expense Food and beverage costs 3,676 3,202 10,669 9,294 Finance lease expense: Amortization of leased assets Depreciation and amortization 127 139 394 405 Interest on lease liabilities Interest expense 25 43 101 133 Total lease expense (1) $ 16,495 $ 14,761 $ 48,007 $ 43,095 _____________ (1) Includes contingent rent expense of $0.4 million and $0.3 million during the thirteen weeks ended September 25, 2022 and September 26, 2021, respectively, and $1.2 million and $0.7 million during the thirty-nine weeks ended September 25, 2022 and September 26, 2021, respectively. Supplemental cash flow information related to leases was as follows: THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 30,506 $ 30,388 Operating cash flows - finance leases $ 101 $ 133 Financing cash flows - finance leases $ 385 $ 371 |
Operating Lease Maturity | As of September 25, 2022, future minimum lease payments for operating and finance leases consisted of the following: (in thousands) OPERATING LEASES FINANCE LEASES Fiscal year 2022 $ 10,454 $ 194 2023 41,398 607 2024 49,185 607 2025 48,934 227 2026 48,762 38 Thereafter 540,510 39 Total future minimum lease payments (1) 739,243 1,712 Less: imputed interest (340,032) (182) Total present value of lease liabilities $ 399,211 $ 1,530 _____________ (1) Excludes approxim ately $35.0 million of exec |
Finance Lease Maturity | As of September 25, 2022, future minimum lease payments for operating and finance leases consisted of the following: (in thousands) OPERATING LEASES FINANCE LEASES Fiscal year 2022 $ 10,454 $ 194 2023 41,398 607 2024 49,185 607 2025 48,934 227 2026 48,762 38 Thereafter 540,510 39 Total future minimum lease payments (1) 739,243 1,712 Less: imputed interest (340,032) (182) Total present value of lease liabilities $ 399,211 $ 1,530 _____________ (1) Excludes approxim ately $35.0 million of exec |
Equity and Stock-Based Compen_2
Equity and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 25, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options Roll Forward | A summary of stock option activity during the thirty-nine weeks ended September 25, 2022 is as follows: NUMBER OF OPTIONS WEIGHTED AVERAGE AGGREGATE INTRINSIC VALUE (in thousands) Outstanding, December 26, 2021 4,409,331 $ 9.48 $ 28,598 Granted 1,018,975 $ 12.67 Forfeited (150,059) $ 10.24 Exercised (68,277) $ 9.19 Outstanding, September 25, 2022 5,209,970 $ 10.09 $ 23,083 Exercisable, September 25, 2022 2,355,416 $ 8.98 $ 13,037 |
Schedule of Fair Value Non-vested Options at Grant Dates | A summary of the non-vested stock option activity during the thirty-nine weeks ended September 25, 2022 is as follows: NUMBER OF OPTIONS WEIGHTED AVERAGE GRANT DATE FAIR VALUE Nonvested, December 26, 2021 2,633,391 $ 7.03 Granted 1,018,975 $ 6.81 Vested (647,753) $ 4.01 Forfeited (150,059) $ 7.29 Nonvested, September 25, 2022 2,854,554 $ 7.62 |
Details of Weighted-Average Grant-Date Fair Values and Assumptions Used for Estimating Fair Values | The assumptions utilized to estimate the grant date fair value of the stock option awards granted during the thirty-nine weeks ended September 25, 2022 were as follows: Expected term (years) 6.5 Expected volatility 52.4 % Risk-free interest rate 2.6 % Expected dividend yield — |
Schedule of Unrecognized Stock-based Compensation Expense | The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of September 25, 2022: UNRECOGNIZED STOCK-BASED COMPENSATION EXPENSE (in thousands) REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years) Stock options $ 11,267 1.5 Restricted stock units $ 371 0.7 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) and Effective Income Tax Rate | THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Income before income taxes $ 1,375 $ 1,317 $ 12,335 $ 5,190 Income tax expense $ (1,329) $ (534) $ (4,942) $ (2,644) Effective income tax rate 96.7 % 40.5 % 40.1 % 50.9 % |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 25, 2022 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Net Income Per Common Share | The following table sets forth the computations of basic and diluted net income per common share: THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED (in thousands, except share and per share data) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 Numerator: Net income $ 46 $ 783 $ 7,393 $ 2,546 Denominator: Weighted average common shares outstanding - basic 59,089,831 45,013,784 59,065,423 45,013,784 Weighted average common shares outstanding - diluted 60,464,062 46,085,650 60,088,622 46,077,196 Net income per common share - basic $ — $ 0.02 $ 0.13 $ 0.06 Net income per common share - diluted $ — $ 0.02 $ 0.12 $ 0.06 Stock options outstanding not included in diluted net income per common share as their effect is anti-dilutive 1,255,089 90,045 1,708,602 90,045 |
Nature of Business and Organi_2
Nature of Business and Organization - Additional Information (Details) | Sep. 25, 2022 restaurant state | Dec. 26, 2021 restaurant |
Franchisor Disclosure [Line Items] | ||
Number of states where company operates and franchises restaurants | state | 29 | |
Company-owned restaurants | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 356 | 341 |
Franchise-owned restaurants | ||
Franchisor Disclosure [Line Items] | ||
Number of restaurants | 103 | 94 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - Term Facility - New Facilities - Line of Credit $ in Millions | Sep. 25, 2022 USD ($) |
Debt Instrument [Line Items] | |
Fair value of outstanding debt, excluding finance lease liabilities and financing obligations | $ 96.7 |
Long-term debt | $ 98.8 |
Revenues - Detail of Contract L
Revenues - Detail of Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 25, 2022 | Dec. 26, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Deferred gift card revenue | $ 2,111 | $ 4,410 |
Deferred franchise fee revenue - current | 276 | 244 |
Total current deferred revenues | 2,387 | 4,654 |
Deferred franchise fee revenue - non-current | $ 2,498 | $ 2,292 |
Revenues - Change in Contract L
Revenues - Change in Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2022 | Sep. 26, 2021 | Sep. 25, 2022 | Sep. 26, 2021 | |
Changes in contract liabilities, deferred gift card revenue | ||||
Balance, beginning of period | $ 2,805 | $ 2,657 | $ 4,410 | $ 4,024 |
Gift card sales | 1,218 | 1,003 | 4,796 | 4,088 |
Gift card redemptions | (1,720) | (1,483) | (6,399) | (5,543) |
Gift card breakage | (192) | (165) | (696) | (557) |
Balance, end of period | 2,111 | 2,012 | 2,111 | 2,012 |
Changes in contract liabilities, deferred franchise fee revenue | ||||
Balance, beginning of period | 2,637 | 2,232 | 2,536 | 2,274 |
Cash received | 204 | 400 | 434 | 482 |
Franchise revenues recognized | (67) | (59) | (196) | (183) |
Balance, end of period | $ 2,774 | $ 2,573 | $ 2,774 | $ 2,573 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2022 | Sep. 26, 2021 | Sep. 25, 2022 | Sep. 26, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 186,852 | $ 157,441 | $ 544,417 | $ 438,573 |
Restaurant sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 183,978 | 155,082 | 536,329 | 432,136 |
In-restaurant dining sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 147,491 | 123,311 | 425,222 | 327,147 |
Third-party delivery sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 20,105 | 15,232 | 60,960 | 52,584 |
Take-out sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 16,382 | 16,539 | 50,147 | 52,405 |
Franchise revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,874 | 2,359 | 8,088 | 6,437 |
Royalty and system fund contributions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,807 | 2,300 | 7,892 | 6,254 |
Initial fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 67 | $ 59 | $ 196 | $ 183 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 25, 2022 | Dec. 26, 2021 |
Receivables [Abstract] | ||
Receivables from third-party delivery providers | $ 1,163 | $ 1,021 |
Receivables from franchisees | 1,230 | 927 |
Receivables from vendors | 565 | 428 |
Receivables related to gift card sales | 359 | 1,453 |
Other receivables | 115 | 621 |
Total accounts receivable | $ 3,432 | $ 4,450 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 25, 2022 | Dec. 26, 2021 |
Payables and Accruals [Abstract] | ||
Construction liabilities | $ 6,593 | $ 4,445 |
Sales tax | 3,884 | 3,337 |
Self-insurance and general liability reserves | 1,223 | 1,353 |
Utilities | 1,666 | 1,306 |
Legal | 1,561 | 105 |
Credit card fees | 1,049 | 940 |
Property tax | 1,296 | 638 |
Contingent rent | 911 | 628 |
Common area maintenance | 624 | 482 |
Other | 4,877 | 2,655 |
Total accrued liabilities | $ 23,684 | $ 15,889 |
Leases - Lease Assets and Lease
Leases - Lease Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 25, 2022 | Dec. 26, 2021 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 349,272 | $ 324,995 |
Finance lease assets | 1,426 | 1,892 |
Total lease assets | 350,698 | 326,887 |
Operating lease liabilities - current | 38,039 | 38,186 |
Operating lease liabilities - non-current | 361,172 | 330,495 |
Finance lease liabilities - current | 628 | 686 |
Finance lease liabilities - non-current | 902 | 1,331 |
Total lease liabilities | $ 400,741 | $ 370,698 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, fixtures and equipment, net of accumulated depreciation of $138,124 and $115,582, respectively | Property, fixtures and equipment, net of accumulated depreciation of $138,124 and $115,582, respectively |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt, net | Long-term debt, net |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2022 | Sep. 26, 2021 | Sep. 25, 2022 | Sep. 26, 2021 | |
Leases [Abstract] | ||||
Operating lease expense | $ 12,667 | $ 11,377 | $ 36,843 | $ 33,263 |
Variable lease expense | 3,676 | 3,202 | 10,669 | 9,294 |
Amortization of leased assets | 127 | 139 | 394 | 405 |
Interest on lease liabilities | 25 | 43 | 101 | 133 |
Total lease expense | 16,495 | 14,761 | 48,007 | 43,095 |
Contingent rent expense | $ 400 | $ 300 | $ 1,200 | $ 700 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 25, 2022 | Sep. 26, 2021 | |
Leases [Abstract] | ||
Operating cash flows - operating leases | $ 30,506 | $ 30,388 |
Operating cash flows - finance leases | 101 | 133 |
Financing cash flows - finance leases | $ 385 | $ 371 |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Details) | Sep. 25, 2022 | Sep. 26, 2021 |
Weighted-average remaining lease term (in years) | ||
Operating leases | 14 years 9 months 18 days | 15 years 7 months 6 days |
Finance leases | 3 years | 3 years 8 months 12 days |
Weighted-average discount rate | ||
Operating leases | 8.60% | 9.10% |
Finance leases | 7.70% | 8% |
Leases - Operating and Finance
Leases - Operating and Finance Lease Maturity (Details) $ in Thousands | Sep. 25, 2022 USD ($) |
OPERATING LEASES | |
2022 | $ 10,454 |
2023 | 41,398 |
2024 | 49,185 |
2025 | 48,934 |
2026 | 48,762 |
Thereafter | 540,510 |
Total future minimum lease payments | 739,243 |
Less: imputed interest | (340,032) |
Total present value of lease liabilities | 399,211 |
FINANCE LEASES | |
2022 | 194 |
2023 | 607 |
2024 | 607 |
2025 | 227 |
2026 | 38 |
Thereafter | 39 |
Total future minimum lease payments | 1,712 |
Less: imputed interest | (182) |
Total present value of lease liabilities | 1,530 |
Executed operating leases that have not commenced | $ 35,000 |
Equity and Stock-Based Compen_3
Equity and Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 19, 2022 | Sep. 14, 2022 | Sep. 25, 2022 | Sep. 26, 2021 | Sep. 25, 2022 | Sep. 26, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Transaction expenses, net | $ 1,600 | $ 1,419 | $ 126 | $ 1,976 | $ 752 | |
Common stock available for grant (in shares) | 2,987,536 | 2,987,536 | ||||
Options granted (in shares) | 1,018,975 | |||||
Requisite service period | 3 years | |||||
Share-based payment award, expiration period | 10 years | |||||
Options granted (in shares) | 1,018,975 | |||||
Options granted, grant date fair value (in dollars per share) | $ 6.81 | |||||
Stock-based compensation expense | $ 2,700 | $ 400 | $ 7,800 | $ 700 | ||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Requisite service period | 1 year | 1 year | ||||
Options granted (in shares) | 38,311 | 38,311 | ||||
Options granted, grant date fair value (in dollars per share) | $ 14.36 | $ 14.36 | ||||
Secondary Public Offering | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares of common stock sold (in shares) | 4,500,000 | |||||
Over-Allotment Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares of common stock sold (in shares) | 675,000 |
Equity and Stock-Based Compen_4
Equity and Stock-Based Compensation - Schedule of Stock Options Roll Forward (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 25, 2022 USD ($) $ / shares shares | |
NUMBER OF OPTIONS | |
Options outstanding, beginning of period (in shares) | shares | 4,409,331 |
Options granted (in shares) | shares | 1,018,975 |
Options forfeited (in shares) | shares | (150,059) |
Options exercised (in shares) | shares | (68,277) |
Options outstanding, end of period (in shares) | shares | 5,209,970 |
Options exercisable, end of period (in shares) | shares | 2,355,416 |
WEIGHTED AVERAGE EXERCISE PRICE | |
Options outstanding, beginning of period, weighted average exercise price (in dollars per share) | $ / shares | $ 9.48 |
Options granted, weighted average exercise price (in dollars per share) | $ / shares | 12.67 |
Options forfeited, weighted average exercise price (in dollars per share) | $ / shares | 10.24 |
Options exercised, weighted average exercise price (in dollars per share) | $ / shares | 9.19 |
Options outstanding, end of period, weighted average exercise price (in dollars per share) | $ / shares | 10.09 |
Options exercisable, end of period, weighted average exercise price (in dollars per share) | $ / shares | $ 8.98 |
AGGREGATE INTRINSIC VALUE (in thousands) | |
Options outstanding, beginning of period, aggregate intrinsic value | $ | $ 28,598 |
Options outstanding, end of period, aggregate intrinsic value | $ | 23,083 |
Options exercisable, end of period, aggregate intrinsic value | $ | $ 13,037 |
Equity and Stock-Based Compen_5
Equity and Stock-Based Compensation - Schedule of Fair Value Non-vested Options at Grant Dates (Details) | 9 Months Ended |
Sep. 25, 2022 $ / shares shares | |
NUMBER OF OPTIONS | |
Nonvested options, beginning balance (in shares) | shares | 2,633,391 |
Options granted (in shares) | shares | 1,018,975 |
Options vested (in shares) | shares | (647,753) |
Options forfeited (in shares) | shares | (150,059) |
Nonvested options, ending balance (in shares) | shares | 2,854,554 |
WEIGHTED AVERAGE GRANT DATE FAIR VALUE | |
Nonvested grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 7.03 |
Options granted, grant date fair value (in dollars per share) | $ / shares | 6.81 |
Options vested, grant date fair value (in dollars per share) | $ / shares | 4.01 |
Options forfeited, grant date fair value (in dollars per share) | $ / shares | 7.29 |
Nonvested grant date fair value, ending balance (in dollars per share) | $ / shares | $ 7.62 |
Equity and Stock-Based Compen_6
Equity and Stock-Based Compensation - Details of Weighted-Average Grant-Date Fair Values and Assumptions Used for Estimating Fair Values (Details) | 9 Months Ended |
Sep. 25, 2022 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Expected term (years) | 6 years 6 months |
Expected volatility | 52.40% |
Risk-free interest rate | 2.60% |
Expected dividend yield | $ 0 |
Equity and Stock-Based Compen_7
Equity and Stock-Based Compensation - Schedule of Unrecognized Stock-based Compensation Expense (Details) $ in Thousands | 9 Months Ended |
Sep. 25, 2022 USD ($) | |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock compensation expense | $ 11,267 |
REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years) | 1 year 6 months |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock compensation expense | $ 371 |
REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years) | 8 months 12 days |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) and Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2022 | Sep. 26, 2021 | Sep. 25, 2022 | Sep. 26, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 1,375 | $ 1,317 | $ 12,335 | $ 5,190 |
Income tax expense | $ (1,329) | $ (534) | $ (4,942) | $ (2,644) |
Effective income tax rate | 96.70% | 40.50% | 40.10% | 50.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 9 Months Ended |
Sep. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Blended federal and state statutory rate | 25% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 1 Months Ended | |
Jul. 31, 2022 gal | Sep. 25, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Long term purchase commitment, maximum gallons to be purchased | gal | 585,940 | |
Long-term purchase commitment, period | 5 years | |
Purchase commitment, remaining minimum amount committed | $ | $ 9.5 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2022 | Sep. 26, 2021 | Sep. 25, 2022 | Sep. 26, 2021 | |
Numerator | ||||
Net income | $ 46 | $ 783 | $ 7,393 | $ 2,546 |
Net income | $ 46 | $ 783 | $ 7,393 | $ 2,546 |
Denominator | ||||
Weighted average common shares outstanding - basic (in shares) | 59,089,831 | 45,013,784 | 59,065,423 | 45,013,784 |
Weighted average common shares outstanding - diluted (in shares) | 60,464,062 | 46,085,650 | 60,088,622 | 46,077,196 |
Net (loss) income per common share - basic (in dollars per share) | $ 0 | $ 0.02 | $ 0.13 | $ 0.06 |
Net (loss) income per common share - diluted (in dollars per share) | $ 0 | $ 0.02 | $ 0.12 | $ 0.06 |
Stock options | ||||
Denominator | ||||
Stock options and restricted stock units outstanding not included in diluted net income per common share as their effect is anti-dilutive (in shares) | 1,255,089 | 90,045 | 1,708,602 | 90,045 |