Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 25, 2021 | Nov. 02, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 25, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | EUROPEAN WAX CENTER, INC. | |
Entity Central Index Key | 0001856236 | |
Current Fiscal Year End Date | --12-25 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-40714 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-3150064 | |
Entity Address, Address Line One | 5830 Granite Parkway, 3rd Floor | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | (469) | |
Local Phone Number | 264-8123 | |
Title of 12(b) Security | Class A common stock, par value $0.00001 per share | |
Trading Symbol | EWCZ | |
Security Exchange Name | NASDAQ | |
Class A Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 31,370,186 | |
Class B Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 32,252,078 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - European Wax Center, Inc. and Subsidiaries - USD ($) | Sep. 25, 2021 | Dec. 26, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 25,366,000 | $ 36,720,000 |
Accounts receivable, net | 7,312,000 | 5,070,000 |
Inventory | 18,945,000 | 10,280,000 |
Prepaid expenses and other current assets | 7,228,000 | 4,574,000 |
Advances to related parties | 0 | 689,000 |
Total current assets | 58,851,000 | 57,333,000 |
Property and equipment, net | 3,996,000 | 5,039,000 |
Intangible assets, net | 206,747,000 | 213,267,000 |
Goodwill | 328,551,000 | 328,551,000 |
Other non-current assets | 3,386,000 | 2,710,000 |
Total assets | 601,531,000 | 606,900,000 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 18,733,000 | 13,489,000 |
Long-term debt, current portion | 3,375,000 | 2,428,000 |
Deferred revenue, current portion | 2,636,000 | 2,351,000 |
Other current liabilities | 184,000 | 181,000 |
Total current liabilities | 24,928,000 | 18,449,000 |
Long-term debt, net | 174,758,000 | 262,975,000 |
Tax receivable agreement liability | 48,823,000 | 0 |
Deferred revenue, net of current portion | 6,785,000 | 6,528,000 |
Other long-term liabilities | 1,239,000 | 925,000 |
Total liabilities | 256,533,000 | 288,877,000 |
Commitments and contingencies (Note 10) | ||
Members' equity: | ||
Members' deficit | 0 | (61,390,000) |
Preferred stock | 0 | |
Additional paid-in capital | 157,090,000 | 0 |
Accumulated deficit | (5,531,000) | 0 |
Accumulated other comprehensive loss | (134,000) | (527,000) |
Total stockholders' equity attributable to European Wax Center, Inc. | 151,425,000 | |
Noncontrolling interests | 193,573,000 | |
Total stockholders' equity/member's equity | 344,998,000 | 318,023,000 |
Total liabilities, mezzanine equity and stockholders'/member's equity | 601,531,000 | 606,900,000 |
Class A Founders' Units [Member] | ||
Mezzanine equity: | ||
Temporary equity, value | 0 | 89,240,000 |
Class D Units | ||
Mezzanine equity: | ||
Temporary equity, value | 0 | 24,909,000 |
Class A Common Stock [Member] | ||
Members' equity: | ||
Common stock | 0 | 0 |
Class B Common Stock [Member] | ||
Members' equity: | ||
Common stock | 0 | 0 |
Class A LLC Unit [Member] | ||
Members' equity: | ||
Class Units | 0 | 265,791,000 |
Class B LLC Unit [Member] | ||
Members' equity: | ||
Class Units | 0 | 0 |
Class C Units | ||
Members' equity: | ||
Class Units | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
European Wax Center, Inc. and Subsidiaries | ||
Preferred Stock Par Value | $ 0.00001 | |
Preferred Stock, Shares Authorized | 100,000,000 | |
Preferred Stock, Shares Issued | 0 | |
Preferred Stock, Shares Outstanding | 0 | |
European Wax Center, Inc. and Subsidiaries | Class A Founders' Units [Member] | ||
Temporary Equity, Shares Authorized | 0 | 8,309,193 |
Temporary Equity, Shares Issued | 0 | 8,309,193 |
Temporary Equity, Shares Outstanding | 0 | 8,309,193 |
European Wax Center, Inc. and Subsidiaries | Class D Units | ||
Temporary Equity, Shares Authorized | 0 | 2,500,000 |
Temporary Equity, Shares Issued | 0 | 2,500,000 |
Temporary Equity, Shares Outstanding | 0 | 2,500,000 |
Temporary Equity, Liquidation Preference | $ 26,670 | |
European Wax Center, Inc. and Subsidiaries | Class A Common Stock [Member] | ||
Class Units Authorized | 0 | 26,401,089 |
Class Units Issued | 0 | 26,401,089 |
Class Units Outstanding | 0 | 26,401,089 |
Common Stock, Par Value | $ 0.00001 | |
Common Stock, Shares Authorized | 600,000,000 | |
Common Stock, Shares, Issued | 31,370,186 | |
Common Stock, Shares, Outstanding | 31,370,186 | |
European Wax Center, Inc. and Subsidiaries | Class B Common Stock [Member] | ||
Class Units Authorized | 0 | 1 |
Class Units Issued | 0 | 1 |
Class Units Outstanding | 0 | 1 |
Common Stock, Par Value | $ 0.00001 | |
Common Stock, Shares Authorized | 60,000,000 | |
Common Stock, Shares, Issued | 32,372,542 | |
Common Stock, Shares, Outstanding | 32,372,542 | |
European Wax Center, Inc. and Subsidiaries | Class C Units | ||
Class Units Authorized | 0 | 1,000 |
Class Units Issued | 0 | 1,000 |
Class Units Outstanding | 0 | 1,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
OPERATING EXPENSES | ||||
Depreciation and amortization | $ 15,259 | $ 15,012 | ||
Income tax expense | $ 0 | 0 | ||
NET LOSS | (441) | (16,956) | ||
European Wax Center, Inc. and Subsidiaries | ||||
REVENUE | ||||
Total revenue | 49,011 | $ 30,450 | 133,570 | 74,086 |
OPERATING EXPENSES | ||||
Cost of revenue | 12,825 | 15,422 | 34,296 | 27,817 |
Selling, general and administrative | 22,725 | 9,298 | 46,003 | 26,016 |
Advertising | 8,368 | 2,602 | 19,767 | 8,893 |
Depreciation and amortization | 4,850 | 5,074 | 15,259 | 15,012 |
Total operating expenses | 48,768 | 32,396 | 115,325 | 77,738 |
Income (loss) from operations | 243 | (1,946) | 18,245 | (3,652) |
Interest expense | (9,515) | (4,597) | (18,686) | (13,304) |
Loss before Income Taxes | (9,272) | (6,543) | (441) | (16,956) |
NET LOSS | (9,272) | (6,543) | (441) | (16,956) |
Less: net income (loss) attributable to EWC Ventures LLC prior to the Reorganization Transactions | 1,496 | (6,543) | 10,327 | (16,956) |
Less: net loss attributable to noncontrolling interests | (5,237) | (5,237) | ||
NET LOSS ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC. | $ (5,531) | (6,543) | $ (5,531) | |
European Wax Center, Inc. and Subsidiaries | Common Class A [Member] | ||||
Basic and diluted net income (loss) per unit | ||||
Earnings Per Share, Basic and Diluted | $ (0.18) | $ (0.18) | ||
Basic and diluted weighted average units outstanding | ||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 31,370,186 | 31,370,186 | ||
European Wax Center, Inc. and Subsidiaries | Product [Member] | ||||
REVENUE | ||||
Total revenue | $ 27,611 | 17,082 | $ 74,752 | 42,265 |
European Wax Center, Inc. and Subsidiaries | Royalty [Member] | ||||
REVENUE | ||||
Total revenue | 11,941 | 7,136 | 32,821 | 18,138 |
European Wax Center, Inc. and Subsidiaries | Marketing [Member] | ||||
REVENUE | ||||
Total revenue | 6,760 | 4,364 | 18,326 | 9,148 |
European Wax Center, Inc. and Subsidiaries | Other Revenue [Member] | ||||
REVENUE | ||||
Total revenue | $ 2,699 | $ 1,868 | $ 7,671 | $ 4,535 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
European Wax Center, Inc. and Subsidiaries | ||||
Related party consulting fees | $ 17 | $ 33 | $ 117 | $ 133 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | Dec. 26, 2020 | |
Net loss | $ (441) | $ (16,956) | |||
European Wax Center, Inc. and Subsidiaries | |||||
Net loss | $ (9,272) | $ (6,543) | (441) | (16,956) | $ (16,956) |
Items included in other comprehensive loss: | |||||
Unrealized gain (loss) on cash flow hedge | (128) | 30 | 111 | 107 | |
TOTAL COMPREHENSIVE INCOME (LOSS) | (9,400) | (6,513) | (330) | (16,849) | |
Less: total comprehensive income (loss) attributable to EWC Ventures, LLC prior to the Reorganization Transactions | 1,339 | $ (6,513) | 10,409 | $ (16,849) | |
Less: total comprehensive loss attributable to non-controlling interests | (5,223) | (5,223) | |||
European Wax Center, Inc. and Subsidiaries | Parent [Member] | |||||
Items included in other comprehensive loss: | |||||
COMPREHENSIVE LOSS ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC. | $ (5,516) | $ (5,516) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 25, 2021 | Sep. 26, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (441) | $ (16,956) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 15,259 | 15,012 |
Amortization of deferred financing costs | 924 | 732 |
Loss on debt extinguishment | 6,313 | |
Loss on noncancellable contracts | 280 | |
Loss on write-down of obsolete inventory | 6,656 | |
Provision for bad debts | 616 | |
Loss on disposal of property and equipment | 335 | |
Equity compensation | 7,952 | 1,649 |
Changes in assets and liabilities: | ||
Accounts receivable | (3,578) | (2,219) |
Inventory | (8,665) | 1,670 |
Prepaid expenses and other assets | (2,121) | (1,401) |
Accounts payable and accrued liabilities | 4,665 | (11,065) |
Deferred revenue | 542 | (695) |
Other long-term liabilities | 428 | (41) |
Net cash provided by (used in) operating activities | 22,229 | (6,378) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (364) | (2,692) |
Reacquisition of area representative rights | (7,644) | (34,294) |
Net cash used in investing activities | (8,008) | (36,986) |
Cash flows from financing activities: | ||
Proceeds on line of credit | 27,000 | |
Payments on line of credit | (30,000) | |
Proceeds on long-term debt | 179,370 | 15,000 |
Principal payments on long-term debt | (240,553) | (1,790) |
Deferred loan costs | (1,294) | (764) |
Payments of debt extinguishment costs | (2,446) | |
Distributions to EWC Ventures LLC members | (5,198) | (1,876) |
Contributions from EWC Ventures LLC members | 24,909 | |
Proceeds from initial public offering of Class A common stock, net of underwriting discounts and offering expenses | 145,953 | |
Repurchase of Class A Units | (942) | |
Repurchase of Class B common stock and EWC Ventures common units | (70,465) | |
Net cash (used in) provided by financing activities | (25,575) | 62,479 |
Net (decrease) increase in cash | (11,354) | 19,115 |
Cash, beginning of period | 36,720 | 10,264 |
Cash, end of period | 25,366 | 29,379 |
Supplemental cash flow information: | ||
Cash paid for interest | 11,763 | 12,056 |
Non-cash investing and financing activities: | ||
Property purchases included in accounts payable and accrued liabilities | 96 | |
Reacquired rights purchased included in accounts payable and accrued liabilities | 320 | |
Non-cash equity distributions | 689 | $ 122 |
Initial public offering expenses in accounts payable and accrued liabilities | $ 483 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS'/MEMBERS' EQUITY (Unaudited) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Total | Previously Reported [Member] | Class A Founders' Units [Member] | Class B Shares [Member] | Mezzanine Equity [Member]Class A Founders' Units [Member] | Mezzanine Equity [Member]Class A Founders' Units [Member]Previously Reported [Member] | Mezzanine Equity [Member]Class D Units [Member] | Members' Deficit [Member] | Members' Deficit [Member]Previously Reported [Member] | Members' Deficit [Member]Class A Units [Member] | Members' Deficit [Member]Class B Units [Member] | Members' Deficit [Member]Class C Units [Member] | Members' Deficit [Member]Class A Shares [Member] | Members' Deficit [Member]Class B Shares [Member] | Additional Paid in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interest [Member] |
Temporary Equity, Beginning Balance at Dec. 28, 2019 | $ 104,280 | |||||||||||||||||
Temporary Equity, Beginning Balance (Shares) at Dec. 28, 2019 | 8,309,193 | |||||||||||||||||
Beginning Balance at Dec. 28, 2019 | $ 210,038 | $ 265,791 | $ (55,018) | $ (735) | ||||||||||||||
Beginning Balance (Shares) at Dec. 28, 2019 | 26,401,089 | 1 | 1,000 | |||||||||||||||
Equity compensation | 827 | $ 827 | ||||||||||||||||
Distributions | (1,805) | (827) | (978) | |||||||||||||||
Unrealized gain (loss) on cash flow hedge | (665) | (665) | ||||||||||||||||
Net income (loss) prior to reorganization transactions | 959 | 959 | ||||||||||||||||
Accretion/Reduction of Class A Founders' Units to redemption value | 17,781 | $ (17,781) | 17,781 | |||||||||||||||
Temporary Equity, Ending Balance at Mar. 28, 2020 | $ 86,499 | |||||||||||||||||
Temporary Equity, Ending Balance (Shares) at Mar. 28, 2020 | 8,309,193 | |||||||||||||||||
Ending Balance at Mar. 28, 2020 | 227,135 | $ 265,791 | (37,256) | (1,400) | ||||||||||||||
Ending Balance (Shares) at Mar. 28, 2020 | 26,401,089 | 1 | 1,000 | |||||||||||||||
Equity compensation | 419 | 419 | ||||||||||||||||
Other Contributions | 14 | 14 | ||||||||||||||||
Contributions | $ 24,909 | |||||||||||||||||
Contribution from issuance of Class D Units, net of issuance costs of $91 (Shares) | 2,500,000 | |||||||||||||||||
Unrealized gain (loss) on cash flow hedge | 742 | 742 | ||||||||||||||||
Net income (loss) prior to reorganization transactions | (11,372) | (11,372) | ||||||||||||||||
Accretion/Reduction of Class A Founders' Units to redemption value | 2,846 | $ (2,846) | 2,846 | |||||||||||||||
Temporary Equity, Ending Balance at Jun. 27, 2020 | $ 83,653 | $ 24,909 | ||||||||||||||||
Temporary Equity, Ending Balance (Shares) at Jun. 27, 2020 | 8,309,193 | 2,500,000 | ||||||||||||||||
Ending Balance at Jun. 27, 2020 | 219,784 | $ 265,791 | 433 | (45,782) | (658) | |||||||||||||
Ending Balance (Shares) at Jun. 27, 2020 | 26,401,089 | 1 | 1,000 | |||||||||||||||
Equity compensation | 403 | 403 | ||||||||||||||||
Distributions | (207) | (207) | ||||||||||||||||
Unrealized gain (loss) on cash flow hedge | 30 | 30 | ||||||||||||||||
Net income (loss) prior to reorganization transactions | (6,543) | |||||||||||||||||
Accretion/Reduction of Class A Founders' Units to redemption value | (6,087) | $ 6,087 | (629) | (5,458) | ||||||||||||||
Net income (loss) | (6,543) | (6,543) | ||||||||||||||||
Temporary Equity, Ending Balance at Sep. 26, 2020 | $ 89,740 | $ 24,909 | ||||||||||||||||
Temporary Equity, Ending Balance (Shares) at Sep. 26, 2020 | 8,309,193 | 2,500,000 | ||||||||||||||||
Ending Balance at Sep. 26, 2020 | 207,380 | $ 265,791 | (57,783) | (628) | ||||||||||||||
Ending Balance (Shares) at Sep. 26, 2020 | 26,401,089 | 1 | 1,000 | |||||||||||||||
Mezzanine equity Beginning balance, excluding noncontrolling interest at Dec. 26, 2020 | $ 89,240 | $ 89,240 | $ 24,909 | |||||||||||||||
Temporary Equity, Beginning Balance (Shares) at Dec. 26, 2020 | 8,309,193 | 8,309,193 | 2,500,000 | |||||||||||||||
Beginning Balance at Dec. 26, 2020 | 203,874 | |||||||||||||||||
Beginning Balance, excluding noncontrolling interest at Dec. 26, 2020 | $ (61,390) | $ 265,791 | $ 1 | $ 1,000 | (527) | |||||||||||||
Beginning Balance (Shares) at Dec. 26, 2020 | 26,401,089 | |||||||||||||||||
Equity compensation | 298 | 298 | ||||||||||||||||
Repurchase of Class A Units | (942) | $ 942 | ||||||||||||||||
Repurchase of Class A Units (Shares) | (89,919) | |||||||||||||||||
Contributions | 2 | 2 | ||||||||||||||||
Unrealized gain (loss) on cash flow hedge | 159 | 0 | 159 | |||||||||||||||
Net income (loss) prior to reorganization transactions | 1,102 | 1,102 | ||||||||||||||||
Accretion/Reduction of Class A Founders' Units to redemption value | (31,991) | $ 31,991 | (31,991) | |||||||||||||||
Mezzanine equity Ending balance, excluding noncontrolling interest at Mar. 27, 2021 | $ 121,231 | $ 24,909 | ||||||||||||||||
Temporary Equity, Ending Balance (Shares) at Mar. 27, 2021 | 8,309,193 | 2,500,000 | ||||||||||||||||
Ending Balance at Mar. 27, 2021 | 172,502 | |||||||||||||||||
Ending Balance, excluding noncontrolling interest at Mar. 27, 2021 | (91,979) | $ 264,849 | (368) | |||||||||||||||
Ending Balance (Shares) at Mar. 27, 2021 | 26,311,170 | 1 | 1,000 | |||||||||||||||
Mezzanine equity Beginning balance, excluding noncontrolling interest at Dec. 26, 2020 | $ 89,240 | $ 89,240 | $ 24,909 | |||||||||||||||
Temporary Equity, Beginning Balance (Shares) at Dec. 26, 2020 | 8,309,193 | 8,309,193 | 2,500,000 | |||||||||||||||
Beginning Balance at Dec. 26, 2020 | 203,874 | |||||||||||||||||
Beginning Balance, excluding noncontrolling interest at Dec. 26, 2020 | (61,390) | $ 265,791 | $ 1 | $ 1,000 | (527) | |||||||||||||
Beginning Balance (Shares) at Dec. 26, 2020 | 26,401,089 | |||||||||||||||||
Distributions | 6,512 | |||||||||||||||||
Net income (loss) prior to reorganization transactions | 10,327 | |||||||||||||||||
Net income (loss) | (5,531) | |||||||||||||||||
Mezzanine equity Ending balance, excluding noncontrolling interest at Sep. 25, 2021 | $ 0 | |||||||||||||||||
Temporary Equity, Ending Balance (Shares) at Sep. 25, 2021 | 0 | |||||||||||||||||
Ending Balance at Sep. 25, 2021 | 344,998 | $ 0 | $ 0 | 157,090 | (5,531) | (134) | $ 193,573 | |||||||||||
Ending Balance, excluding noncontrolling interest at Sep. 25, 2021 | 151,425 | |||||||||||||||||
Common Stock, Shares, Outstanding, Ending Balance at Sep. 25, 2021 | 31,370,186 | 32,372,542 | ||||||||||||||||
Mezzanine equity Beginning balance, excluding noncontrolling interest at Mar. 27, 2021 | $ 121,231 | $ 24,909 | ||||||||||||||||
Temporary Equity, Beginning Balance (Shares) at Mar. 27, 2021 | 8,309,193 | 2,500,000 | ||||||||||||||||
Beginning Balance at Mar. 27, 2021 | 172,502 | |||||||||||||||||
Beginning Balance, excluding noncontrolling interest at Mar. 27, 2021 | (91,979) | $ 264,849 | (368) | |||||||||||||||
Beginning Balance (Shares) at Mar. 27, 2021 | 26,311,170 | 1 | 1,000 | |||||||||||||||
Equity compensation | 259 | 259 | ||||||||||||||||
Contributions | 726 | 726 | ||||||||||||||||
Unrealized gain (loss) on cash flow hedge | 80 | 0 | 80 | |||||||||||||||
Net income (loss) prior to reorganization transactions | 7,729 | 7,729 | ||||||||||||||||
Accretion/Reduction of Class A Founders' Units to redemption value | (30,578) | $ 30,578 | (30,578) | |||||||||||||||
Mezzanine equity Ending balance, excluding noncontrolling interest at Jun. 26, 2021 | $ 151,809 | $ 24,909 | ||||||||||||||||
Temporary Equity, Ending Balance (Shares) at Jun. 26, 2021 | 8,309,193 | 2,500,000 | ||||||||||||||||
Ending Balance at Jun. 26, 2021 | 150,718 | |||||||||||||||||
Ending Balance, excluding noncontrolling interest at Jun. 26, 2021 | (113,843) | $ 264,849 | (288) | |||||||||||||||
Ending Balance (Shares) at Jun. 26, 2021 | 26,311,170 | 1 | 1,000 | |||||||||||||||
Equity compensation | $ 110 | $ 110 | ||||||||||||||||
Distributions | (103) | (6,512) | (6,512) | (103) | ||||||||||||||
Unrealized gain (loss) on cash flow hedge | 29 | (157) | (157) | 15 | 14 | |||||||||||||
Net income (loss) prior to reorganization transactions | 1,496 | 1,496 | ||||||||||||||||
Effect of reorganization transactions | 226,552 | $ (201,643) | $ (24,909) | $ 168,583 | $ (264,849) | $ 0 | $ 0 | 123,615 | 275 | 198,928 | ||||||||
Effect of reorganization transactions (Shares) | (8,309,193) | (2,500,000) | (26,311,170) | (1) | (1,000) | 21,540,982 | 36,740,956 | |||||||||||
Issuance of Class A Common Stock, net of offering costs | 145,470 | $ 0 | 145,470 | |||||||||||||||
Issuance of Class A Common Stock, net of offering costs (Shares) | 9,829,204 | |||||||||||||||||
Repurchase of Class B Common Stock and EWC Ventures Units from selling shareholders | 70,465 | $ 0 | 70,465 | |||||||||||||||
Repurchase of Class B Common Stock and EWC Ventures Units from selling shareholders (Shares) | 4,368,414 | |||||||||||||||||
Equity compensation subsequent to the reorganization transactions | 7,285 | 7,285 | ||||||||||||||||
Establish tax receivable agreement liability subsequent to the reorganization transactions | (48,823) | (48,823) | ||||||||||||||||
Impact of change in ownership on noncontrolling interest | 111 | 21 | (132) | |||||||||||||||
Accretion/Reduction of Class A Founders' Units to redemption value | 49,834 | $ 49,834 | $ 49,834 | |||||||||||||||
Net income (loss) | (5,531) | $ 1,496 | ||||||||||||||||
Net Income Loss Subsequent To The Reorganization Transactions | (10,768) | (5,531) | (5,237) | |||||||||||||||
Mezzanine equity Ending balance, excluding noncontrolling interest at Sep. 25, 2021 | $ 0 | |||||||||||||||||
Temporary Equity, Ending Balance (Shares) at Sep. 25, 2021 | 0 | |||||||||||||||||
Ending Balance at Sep. 25, 2021 | 344,998 | $ 0 | $ 0 | $ 157,090 | $ (5,531) | $ (134) | $ 193,573 | |||||||||||
Ending Balance, excluding noncontrolling interest at Sep. 25, 2021 | $ 151,425 | |||||||||||||||||
Common Stock, Shares, Outstanding, Ending Balance at Sep. 25, 2021 | 31,370,186 | 32,372,542 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS'/MEMBERS' EQUITY (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 27, 2020 | Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | ||
Net of Issuance Costs | $ 91 | $ 9,930 |
Nature of Business and Organiza
Nature of Business and Organization | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Nature of business and organization | Nature of business and organization European Wax Center, Inc. (the “Company”) was formed as a Delaware corporation on April 1, 2021. The Company was formed for the purpose of completing a public offering and related transactions in order to carry on the business of EWC Ventures, LLC ("EWC Ventures") and its subsidiaries. Through its subsidiaries, the Company is engaged in selling franchises of European Wax Center, distributing proprietary facial and body waxing products to franchisees which are used to perform waxing services and providing branded facial and body waxing products directly to consumers at various locations throughout the United States. The Company operates on a fiscal calendar which, in a given year, consists of a 52 or 53 week period ending on the Saturday closest to December 31st. The quarters ended September 25, 2021 and September 26, 2020 both consisted of 13 weeks. Reorganization Transactions On August 4, 2021, we completed an internal reorganization which is referred to as the (“Reorganization Transactions”). The Reorganization Transactions are more fully described in our prospectus dated August 4, 2021 (referred to herein as the “Prospectus”), filed with the Securities and Exchange Commission (the “SEC”) on August 6, 2021 pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended. The following actions were taken as a result of the Reorganization Transactions: EWC Ventures made a distribution of $ 6,512 to its members for the purpose of funding their tax obligations for periods prior to closing of our initial public offering of the Company's Class A common stock (the "IPO"). $ 5,823 of the distribution was paid in cash and $ 689 was made through settlement of receivables due from related parties. The Company was appointed as the sole managing member of EWC Ventures. EWC Ventures' limited liability company agreement was amended and restated to provide that, among other things, all of the its outstanding equity interests consisting of its Class A Units, Class B Unit, Class C Units and Class D Units were reclassified into EWC Ventures non-voting common units (“EWC Ventures Units”). The Company’s certificate of incorporation was amended and restated under which the Company is authorized to issue up to 600,000,000 shares of Class A common stock, par value $ 0.00001 per share (“Class A common stock”), 60,000,000 shares of Class B common stock, par value $ 0.00001 per share (“Class B common stock”) and 100,000,000 shares of preferred stock, par value $ 0.00001 per share. The Class A common stock and Class B common stock each provide holders with one vote on all matters submitted to a vote of stockholders. The holders of Class B common stock do not have any of the economic rights provided to holders of Class A common stock. The Company consummated the mergers of subsidiaries with and into affiliates of General Atlantic (the “Blocker Companies”) and the surviving entities then merged with and into us. As a result of the mergers, the Company acquired existing equity interests in the Company from the owners of the Blocker Companies in exchange for 21,540,982 shares of the Company's Class A common stock and the rights to receive payments under a tax receivable agreement (the “TRA”), which is described below. The continuing members of EWC Ventures (the “EWC Ventures Post-IPO Members”) subscribed for and purchased 36,740,956 shares of our Class B common stock at a purchase price of $ 0.00001 per share. The amount of Class B common stock purchased was equal to the number of EWC Ventures Units held by the EWC Ventures Post-IPO Members. Subject to certain restrictions EWC Ventures Post-IPO Members have the right to exchange their EWC Ventures Units, together with a corresponding number of shares of our Class B common stock for, at our option, (i) shares of the Company's Class A common stock on a one-for-one basis (the “Share Exchange”) or (ii) cash (based on the market price of the Company's Class A common stock) (the “Cash Exchange”). We entered into the TRA with the EWC Ventures' pre-IPO members. See "Summary of Significant Accounting Policies" below and Note 13 -Income Taxes for more information on the TRA. Initial Public Offering and Debt Refinancing On August 4, 2021, the Company's registration statement on Form S-1 was declared effective by the SEC related to the IPO of its Class A common stock. In connection with the closing of the IPO on August 9, 2021, the following actions were taken: The Company issued and sold 9,829,204 shares of its Class A common stock at a price of $ 17.00 per share for net proceeds of $ 155,400 after deducting underwriting discounts and commissions and prior to paying any offering expenses. In addition, certain of the Company's stockholders (the "selling stockholders") sold an additional 2,360,796 shares of the Company's Class A common stock. The Company received no proceeds from the sale of shares by the selling stockholders. The shares sold by the Company and the selling stockholders were inclusive of 1,590,000 shares of the Company's Class A common stock sold pursuant to the underwriters' option to purchase additional shares of the Company's Class A common stock. We entered into a new credit agreement consisting of a $ 180,000 term loan (“2026 Term Loan”) and a $ 40,000 revolving credit facility (“2026 Revolving Credit Facility”) (together, the “2026 Credit Agreement”). The 2026 term loan and the 2026 revolving credit facility are described in more detail in Note 7- Long-Term Debt. The Company used the proceeds from its IPO to: o Contribute $ 104,935 to EWC Ventures in exchange for 6,637,258 EWC Venture Units. EWC Ventures used these funds, together with proceeds from the 2026 Term Loan and cash on hand to: Purchase 1,176,468 EWC Ventures Units and corresponding shares of Class B common stock for $ 20,000 from certain EWC Ventures Post-IPO Members and employees in satisfaction of the Class C deferred payment obligations (as described in the Prospectus) Repay all $ 268,732 of the outstanding term and revolving loans under our previous credit facility Pay the of fering expenses of $ 9,930 Pay $ 6,869 of accrued interest, fees and expenses related to the refinancing, as well as other corporate expenses; and o Purchase 3,191,946 EWC Ventures Units and corresponding shares of Class B common stock for $ 50,465 from certain EWC Ventures Post-IPO Members Following the Reorganization Transactions, IPO and debt refinancing transactions described above our capital structure consisted of the following: 63,742,728 shares of common stock consisting of: o 31,370,186 shares of our Class A common stock o 32,372,542 shares of our Class B common stock $ 180,000 outstanding under the 2026 Term Loan An undrawn $ 40,000 2026 Revolving Credit Facility Immediately following the Reorganization Transactions and the closing of the IPO, EWC Ventures is the predecessor of the Company for financial reporting purposes. We are a holding company, and our sole material asset is our equity interest in the EWC Ventures. As the sole managing member of EWC Ventures, the Company operates and controls all of the businesses and affairs of EWC Ventures and has a substantial financial interest in EWC Ventures. As such, we consolidate EWC Ventures on our consolidated financial statements and record a noncontrolling interest on our consolidated balance sheets and consolidated statements of operations and consolidated statements of comprehensive income (loss) to reflect the entitlement of the EWC Ventures Post-IPO Members to a portion of EWC Ventures' net income (loss). The Reorganization Transactions were accounted for as a reorganization of entities under common control and the Company recognized the assets and liabilities received in the reorganization at their historical carrying amounts as reflected in the historical consolidated financial statements of EWC Ventures. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Significant Accounting Policies | 2. Summary of significant accounting policies (a) Basis of presentation and consolidation The accompanying unaudited condensed consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC and includes the operations of the Company and EWC Ventures and its wholly owned subsidiaries. EWC Ventures is considered a variable interest entity. The Company is the primary beneficiary of EWC Ventures. As a result, the Company consolidates EWC Ventures. EWC Ventures has been determined to be the predecessor for accounting purposes and, accordingly, the condensed consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from December 28, 2019 through August 4, 2021 presented in the condensed consolidated financial statements and notes to condensed consolidated financial statements herein represent the historical operations of EWC Ventures. The amounts as of September 25, 2021 and for the period from August 4, 2021 reflect the consolidated operations of the Company. The condensed consolidated balance sheet as of December 26, 2020 is derived from the audited consolidated financial statements of EWC Ventures but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 26, 2020 included in the Prospectus. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the audited consolidated financial statements and the related notes thereto for the year ended December 26, 2020 included in the Prospectus. (b) Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the financial statements include revenue recognition, inventory reserves, the expected life of franchise agreements, the useful life of reacquired rights, valuation of equity-based compensation awards, and the evaluation of the recoverability of goodwill and long-lived assets, including indefinite-lived intangible assets. Actual results could differ from those estimates. (c) COVID-19 pandemic The Company is continuing to monitor the ongoing COVID-19 pandemic and its impact on its business. Beginning in March 2020, in response to the COVID-19 pandemic, most franchisees temporarily closed their centers in order to promote the health and safety of its members, team members and their communities. In April 2020, the entire franchise network was temporarily closed. Beginning in May 2020, certain governors announced steps to restart non-essential business operations in their respective states and certain centers began to re-open. By June 2021, all of the Company’s nationwide network had re-opened. However, there is a significant amount of uncertainty about the effects a resurgence in COVID-19 cases could have on our business, our industry and overall economic activity. (d) Implications of being an Emerging Growth Company The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with those standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards. We also intend to take advantage of some of the reduced regulatory and reporting requirements of emerging growth companies pursuant to the JOBS Act so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments. (e) Equity-based Compensation The Company recognizes compensation expense for equity awards to employees based on the estimated fair value of the equity instrument at the time of grant. For time-based awards, such expense is recognized over the requisite service period of the equity award, which is normally the vesting period. Compensation expense for performance-based awards with a market condition is recognized on a straight-line basis over the estimated service period of the award, regardless of whether the market condition is satisfied. The Company accounts for forfeitures as they occur by reversing compensation cost for unvested awards when the award is forfeited. See Note 9 for further information. (f) Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company calculates the interim tax provision in accordance with the provisions of ASC 740-270, Income Taxes; Interim Reporting. For interim periods, the Company estimates the annual effective income tax rate (“AETR”) and applies the estimated rate to the year-to-date income or loss before income taxes. ASC 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. (g) Tax Receivable Agreement We entered into the TRA with the EWC Ventures' pre-IPO members that provides for the payment by the Company to the EWC Ventures pre-IPO members of 85% of the benefits, if any, that the Company realizes, or is deemed to realize (calculated using certain assumptions), as a result of (i) increases in the our allocable share of certain existing tax basis of the tangible and intangible assets of the Company and adjustments to the tax basis of the tangible and intangible assets of the Company, in each case as a result of (a) the purchases of EWC Ventures Units (along with the corresponding shares of our Class B common stock) from certain of the EWC Ventures Post-IPO Members using a portion of the net proceeds from the initial public offering or in any future offering or (b) Share Exchanges and Cash Exchanges by the EWC Ventures pre-IPO members (or their transferees or other assignees) in connection with or after the initial public offering, (ii) our utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies' allocable share of certain existing tax basis of EWC Ventures' assets) and (iii) certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. We record liabilities for amounts payable under the TRA in the period in which the payment is deemed to be probable. Further, payments under the TRA are only expected to be made in periods following the filing of a tax return in which we are able to utilize tax benefits described above to reduce our cash taxes paid to a taxing authority. (h) Noncontrolling Interests The noncontrolling interests represent the economic interests of EWC Ventures held by members other than the Company. Income or loss is attributed to the noncontrolling interests based on their contractual distribution rights, and the relative percentages of EWC Ventures Units held by the Company and the other holders of EWC Ventures Units during the period. (i) Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to Class A common stockholders by the number of weighted-average shares of Class A common stock outstanding. Shares of our Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net income (loss) per share of Class B common stock under the two-class method has not been presented. Diluted net income (loss) per share adjusts the basic net income (loss) per share calculation for the potential dilutive impact of common shares, such as equity awards, using the treasury stock method. Diluted net income (loss) per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock as they are convertible into shares of Class A common stock when exchanged with a corresponding number of EWC Ventures Units. (j) Recently adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . Under this standard, companies will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. The adoption of this new guidance prescribes the balance sheet, statement of operations, and cash flow classification of the capitalized implementation costs and related amortization expense, and additional quantitative and qualitative disclosures. This standard is effective for fiscal years beginning after December 15, 2021. This standard may be applied either prospectively to eligible costs incurred on or after the date of the new guidance or retrospectively. The Company adopted this standard on December 27, 2020 (the beginning of its fiscal year 2021) on a prospective basis. The adoption of this standard did not have a significant impact on our financial statements. (k) Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU 2016-02, Leases and established ASC Topic 842, Leases (“ASC 842”), which supersedes ASC Topic 840, Leases . ASC 842 requires a lessee to recognize a lease right-of-use (“ROU”) asset and a corresponding lease liability on its balance sheet along with additional qualitative and quantitative disclosures. ROU assets and lease liabilities are recognized at the commencement date based on the present value of future payments. ASC 842 is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect the adoption of this standard will have on its financial statements. In June 2017, the FASB issued ASU 2016-13, Financial Instruments (Topic 326)—Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. The standard replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13, and related amendments, are effective for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on its financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update, as well as subsequently issued amendments, provide temporary, optional guidance to ease the burden in accounting for reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include relief related to contract modifications and hedging relationships. The relief provided by this ASU does not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. However, hedging relationships that apply certain optional expedients prior to December 31, 2022, will be retained through the end of the hedging relationship, including for periods after December 31, 2022. We will evaluate the impact of this guidance as contracts are modified through December 2022. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Fair Value Measurements | 3. Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to their present value on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. These two types of inputs create a three-tier fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. GAAP categorizes inputs used in fair value measurements into three broad levels as follows: (Level 1) Quoted prices in active markets for identical assets or liabilities. (Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data. (Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs. The Company uses interest rate caps to manage its interest rate exposure. These interest rate caps are recorded at fair value. Changes in fair value of our interest rate caps are recognized as a component of accumulated other comprehensive loss on the condensed consolidated balance sheets. The Company has elected to use the income approach to value the interest rate cap, using observable Level 2 market expectations at measurement dates and standard valuation techniques to convert future amounts to a single present discounted amount reflecting current market expectations about those future amounts. Level 2 inputs for derivative valuations are limited to inputs other than those quoted prices that are observable for the asset or liability (specifically LIBOR swap rates and credit risk at commonly quoted intervals). Mid-market pricing is used as a practical expedient. Derivatives are discounted to present value at the measurement date at overnight index swap rates. Refer to Note 8— Derivative instruments and hedging activity for additional discussion. Fair value measurements are summarized below: Fair Quoted prices Significant Significant Interest rate cap September 25, 2021 $ ( 416 ) $ — $ ( 416 ) $ — December 26, 2020 $ ( 527 ) $ — $ ( 527 ) $ — The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. Debt under the 2026 Term Loan of $ 180,000 approximates fair value as it has a variable rate and incorporates a measure of our credit risk. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Prepaid expenses and other current assets | 4. Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following: September 25, 2021 December 26, 2020 Prepaid inventory $ — $ 2,000 Prepaid insurance 3,333 324 Prepaid other & other current assets 3,895 2,250 Total $ 7,228 $ 4,574 The prepaid other & other current assets amounts are primarily composed of prepaid technology, marketing and maintenance contracts, sales taxes and rent. |
Intangible Assets Net
Intangible Assets Net | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Intangible assets net | 5. Intangible assets, net A summary of intangible assets as of September 25, 2021 and December 26, 2020 is as follows: September 25, 2021 Weighted Average Gross Accumulated Net Franchisee relationships 7.00 $ 114,594 $ ( 34,396 ) $ 80,198 Reacquired rights 8.56 76,545 ( 13,833 ) 62,712 Favorable lease assets 0.47 170 ( 147 ) 23 191,309 ( 48,376 ) 142,933 Indefinite-lived intangible: Trade name N/A 63,814 — 63,814 Total intangible assets $ 255,123 $ ( 48,376 ) $ 206,747 December 26, 2020 Weighted Average Gross Accumulated Net Franchisee relationships 7.74 $ 114,594 $ ( 25,870 ) $ 88,724 Reacquired rights 9.19 68,973 ( 8,304 ) 60,669 Favorable lease assets 1.24 170 ( 110 ) 60 183,737 ( 34,284 ) 149,453 Indefinite-lived intangible: Trade name N/A 63,814 — 63,814 Total intangible assets $ 247,551 $ ( 34,284 ) $ 213,267 Area representative rights represent an agreement with area representatives to sell franchise licenses and provide support to franchisees in a geographic region. From time to time, the Company enters into agreements to reacquire certain area representative rights. During the 39 weeks ended September 25, 2021, reacquisition costs totaled $ 7,644 . During the 39 weeks ende d September 26, 2020, reacquisition costs totaled $ 34,614 which consisted of $ 34,294 of cash consideration paid during the period and $ 320 of certain purchase price holdbacks, which were paid during the remainder of fiscal year 2020. The initial term of the area representative agreements is ten years with an additional ten-year renewal at the option of the area representative. The reacquired rights are amortized on a straight-line basis over the remaining expected term of the agreement prior to the reacquisition. Amortization expense for reacquired rights was $ 1,699 and $ 1,771 for the 13 weeks ended September 25, 2021 and September 26, 2020, respectively, and $ 5,529 and $ 5,199 for the 39 weeks ended September 25, 2021 and September 26, 2020, respectively. Franchisee relationships are amortized on a straight-line basis over the estimated useful life of the asset. Amortization expense for franchisee relationships was $ 2,812 and $ 2,857 for the 13 weeks ended September 25, 2021 and September 26, 2020, respectively, and $ 8,526 an d $ 8,571 for the 39 weeks ended September 25, 2021 and September 26, 2020, respectively. Amortization expense for franchisee relationships and reacquired rights is included in depreciation and amortization expense on the condensed consolidated statements of operations. Favorable lease assets are amortized on a straight-line basis over the estimated useful life of the asset. Amortization of favorable lease assets of $ 13 and $ 12 was recorded within depreciation and amortization expense in the condensed consolidated statements of operations for the 13 weeks ended September 25, 2021, and September 26, 2020, respectively, and $ 37 and $ 36 for the 39 weeks ended September 25, 2021 and September 26, 2020, respectively. Future expected amortization expense of the Company’s intangible assets as of September 25, 2021 is as follows: Fiscal Years Ending Franchisee Reacquired Favorable 2021 (from September 26, 2021) $ 2,899 $ 1,840 $ 14 2022 11,595 7,363 9 2023 11,595 7,363 — 2024 11,595 7,363 — 2025 11,595 7,363 — Thereafter 30,919 31,420 — Total $ 80,198 $ 62,712 $ 23 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 25, 2021 | |
Accounts Payable and Accrued Liabilities | 6. Accounts payable and accrued liabilities Accounts payable and accrued liabilities consisted of the following: September 25, 2021 December 26, 2020 Accounts payable $ 4,201 $ 615 Accrued inventory 3,262 3,321 Accrued compensation 4,258 2,169 Accrued taxes and penalties 1,690 1,732 Accrued lease termination costs 348 360 Accrued technology and subscription fees 534 1,536 Accrued interest 764 1,440 Accrued professional fees 2,075 967 Other accrued liabilities 1,601 1,349 Total Accounts payable and accrued liabilities $ 18,733 $ 13,489 |
Long-term Debt, Net
Long-term Debt, Net | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Long-term Debt, Net | 7. Long-term debt, net Long-term debt consists of the following: September 25, 2021 December 26, 2020 2026 Term Loan $ 180,000 $ — Previous Term Loan — 240,552 Previous Revolving Credit Facility — 30,000 Less: current portion ( 3,375 ) ( 2,428 ) Total long-term debt 176,625 268,124 Less: unamortized debt discount and deferred financing costs ( 1,867 ) ( 5,149 ) Total long-term debt, net $ 174,758 $ 262,975 On August 9, 2021, EW Intermediate Holdco, LLC, a Delaware limited liability company (“Holdings”), EW Holdco, LLC, a Delaware limited liability company (the “Borrower”), as borrower (each indirect subsidiaries of the Company), entered into the 2026 Credit Agreement with the lenders party thereto, Bank of America, N.A., as administrative agent (the “Administrative Agent”), and the other parties party thereto. The Credit Agreement is comprised of the 2026 revolving credit facility and the 2026 term loan. The Credit Agreement will mature on August 9, 2026 . The proceeds from the new term loan were used together with proceeds from our initial public offering to fully repay and terminate the previous secured term loan (the “Previous Term Loan”) and the previous secured revolving credit facility (the “Previous Revolving Credit Facility”). In connection with the repayment and termination of the Previous Term Loan and Previous Revolving Credit Facility we incurred a loss on debt extinguishment of $ 6,313 , which was recorded as a component of interest expense in the accompanying condensed consolidated statements of operations. Of this loss, $ 2,446 was attributable to the payment of the prepayment premium and related fees on the Previous Term Loan and $ 3,867 was due to the write-off of unamortized deferred financing costs. We incurred $ 1,924 in various lender and third party fees in conjunction with this transaction. Of these fees, $ 1,574 , along with $ 344 of unamortized deferred issuance costs, related to the 2026 Term Loan and have been recorded as a reduction of long-term debt on the accompanying condensed consolidated balance sheets. The remaining $ 350 of costs, along with $ 77 of unamortized deferred issuance costs, related to the 2026 revolving credit facility and have been recorded as other non-current assets on the accompanying condensed consolidated balance sheets. Obligations under the 2026 Credit Agreement are guaranteed by Holdings and the direct and indirect wholly-owned material domestic subsidiaries of the Borrower, subject to certain exceptions. The obligations are secured by a pledge of the Borrower’s capital stock directly held by Holdings and a security interest in substantially all of the assets of Holdings, the Borrower and its subsidiaries, subject to certain exceptions. Borrowings under the 2026 Credit Agreement will bear interest at a rate equal to, at the Borrower’s option, either (a) a LIBOR rate determined by reference to the cost of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50 %, (ii) the prime rate of Bank of America, N.A. and (iii) the one month adjusted LIBOR plus 1.00 %, in each case plus an applicable margin. In addition, the Credit Agreement requires the Borrower to pay a commitment fee in respect of unused revolving credit facility commitments ranging between 0.30 % and 0.45 % per annum (determined based on the Borrower’s total net leverage ratio) in respect of the unused commitments under the Credit Agreement. Borrowings under the 2026 Term Loan bear interest at an index rate as defined above plus an applicable margin of 3.0 % ( 3.1 % at September 25, 2021). The 2026 Term Loan requires principal payments payable in quarterly installments with the final scheduled principal payment on the outstanding 2026 Term Loan borrowings due on August 9, 2026. The 2026 revolving credit facility has a maximum borrowing capacity of $ 40,000 and as of September 25, 2021 there were no outstanding borrowings. The 2026 Credit Agreement contains certain customary events of default, including in the event of a change of control, and certain covenants and restrictions that limit the Borrower’s and its subsidiaries’ ability to, among other things, incur additional debt; create liens on certain assets; pay dividends on or make distributions in respect of their capital stock or make other restricted payments; consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets; and enter into certain transactions with their affiliates. The Company is also subject to certain financial maintenance covenants under the 2026 Credit Agreement, which require the Company and its subsidiaries to (i) not exceed certain specified total net leverage ratios and (ii) not fall below a certain fixed charge coverage ratio, in each case, at the end of each fiscal quarter. If the Company fails to perform its obligations under these and other covenants, or should any event of default occur, the term loan and revolving credit facility commitments under the 2026 Credit Agreement may be terminated and any outstanding borrowings, together with accrued interest, under the 2026 Credit Agreement could be declared immediately due and payable. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Derivative Instruments and Hedging Activities | 8. Derivative instruments and hedging activities In December 2018, the Company entered into an interest rate cap derivative instrument which was designated as a cash flow hedge. The Company’s objective is to mitigate the impact of interest expense fluctuations on the Company’s profitability resulting from interest rate changes by capping the LIBOR component of the interest rate at 4.5 % on $ 175,000 of principal outstanding under its long-term debt arrangement, as the interest rate cap provides for payments from the counterparty when LIBOR rises above 4.5 %. The interest rate cap has a $ 175,000 notional amount and is effective December 31, 2018, for the monthly periods from and including January 31, 2019 through September 25, 2024 . The interest rate cap has a deferred premium; accordingly, the Company will pay a monthly premium for the interest rate cap over the term of the agreement. The annual premium is equal to 0.11486 % on the notional amount. Changes in the cash flows of interest rate cap derivatives designated as hedges are expected to be highly effective in offsetting the changes in interest payments on a principal balance equal to the designated derivative’s notional amount, attributable to the hedged risk. Changes in the fair value of the interest rate cap are recognized in other comprehensive income and are reclassified out of accumulated other comprehensive income and into interest expense when the hedged interest obligations affect earnings. Cash flows related to derivatives qualifying as hedges are included in the same section of the condensed consolidated statements of cash flows as the underlying assets and liabilities being hedged. Refer to Note 3— Fair value measurements for information on the fair value of the Company’s interest rate cap derivative instrument. Our cash flow hedge position related to the interest rate cap derivative instrument is as follows: Balance Sheet September 25, 2021 December 26, 2020 Derivatives designated as hedging instruments: Interest rate cap, current portion Other current liabilities $ ( 184 ) $ ( 181 ) Interest rate cap, non-current portion Other long-term liabilities ( 232 ) ( 346 ) Total derivative liabilities designated as $ ( 416 ) $ ( 527 ) The table below presents the net unrealized gain (loss) recognized in other comprehensive income (loss) (“OCI”) resulting from fair value adjustments of hedging instruments: Net Unrealized Gain (Loss) Thirteen Weeks Thirteen Weeks Thirty-Nine Thirty-Nine Derivatives designated as hedging instruments: Interest rate cap $ ( 128 ) $ 30 $ 111 $ 107 Total $ ( 128 ) $ 30 $ 111 $ 107 |
Equity Based Compensation
Equity Based Compensation | 9 Months Ended |
Sep. 25, 2021 | |
E W C Ventures L L C And Subsidiaries [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity Based Compensation | 9. Equity Based Compensation 2021 Omnibus Incentive Plan In August 2021, our board of directors adopted the 2021 Omnibus Incentive Plan (the “2021 Incentive Plan”) which became effective upon consummation of our IPO and provides for the grant of equity-based awards to employees, consultants, and non-employee directors. The 2021 Incentive Plan provides for an aggregate of 6,374,273 shares of Class A common stock that are reserved for issuance in respect of awards granted under the 2021 Incentive Plan. In addition, the number of shares reserved for issuance under the 2021 Incentive Plan will automatically increase each fiscal year beginning with fiscal year 2022 and ending with fiscal year 2031 by the lesser of (a) 1 % of the total number of shares outstanding on the last day of the immediately preceding fiscal year on a fully diluted basis assuming that all shares available for issuance under the 2021 Incentive Plan are issued and outstanding or (b) such number of shares determined by our board of directors. Class A Common Stock Options During the 13 weeks ended September 25, 2021, we granted 322,997 stock options with an exercise price of $ 17.00 per share to certain directors and employees under the 2021 Incentive Plan. The stock options granted will cliff vest on the third anniversary of the date of grant, subject in all cases to continued employment on the applicable vesting date. The weighted average grant date fair value of the stock options was $ 7.48 . The total grant date fair value of the stock options will be recognized as equity-based compensation expense over the vesting period. A summary of activity related to the options is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 26, 2020 — — Granted 322,997 $ 17.00 Exercised — — Expired — — Forfeited — — Outstanding at September 25, 2021 322,997 $ 17.00 9.8 $ 3,682 Exercisable at September 25, 2021 — — — — During the 13 and 39 weeks ended September 25, 2021, we recognized $ 134 of equity-based compensation expense related to the options in Selling, general, and administrative expense. As the options were granted in connection with the IPO, there was no expense recorded in 2020. As of September 25, 2021, there was $ 2,280 of total unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted average period of 2.8 years. The Company estimates the fair value of the options using the Black-Scholes option pricing model. The following table presents the assumptions used in the Black-Scholes model to determine the fair value of the stock options for the 13 weeks ended September 25, 2021. Black-Scholes assumptions have not been disclosed for any other periods presented as there were no stock options granted in those periods. For the 13 Weeks Ended September 25, 2021 Expected dividend yield 0.0 % Expected volatility 43.8 % Risk-free rate 0.9 % Expected term (in years) 6.5 A description of each of the inputs to the Black-Scholes model is as follows: Expected dividend yield - An increase in the expected dividend yield would decrease compensation expense. Expected volatility - This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. The expected volatility was based on the historical volatility of a group of guideline companies. An increase in expected volatility would increase compensation expense. Risk-free interest rate - This is the U.S. Treasury rate as of the measurement date having a term approximating the expected life of the award. An increase in the risk-free interest rate would increase compensation expense. Expected term - The period of time over which the awards are expected to remain outstanding. The Company estimates the expected term as the mid-point between actual or expected vesting date and the contractual term. An increase in the expected term would increase compensation expense Restricted Stock Units During the 13 weeks ended September 25, 2021, we granted 485,792 restricted stock units (“RSUs”) to certain directors and employees under the 2021 Incentive Plan that will vest in three equal installments of 33.33 % on each of the first three anniversaries of the date of grant, subject in all cases to continued employment on the applicable vesting date. The total grant date fair value of the restricted stock units will be recognized as equity-based compensation expense over the vesting period. The grant date fair value of the restricted stock units is determined based on the fair value of the underlying Class A common stock on the date of grant. A summary of activity related to the RSUs is as follows: Number of RSUs Weighted Average Grant Date Outstanding at December 26, 2020 — — Granted 485,792 $ 17.24 Vested — — Forfeited ( 3,382 ) $ 17.00 Outstanding at September 25, 2021 482,410 $ 17.24 During the 13 and 39 weeks ended September 25, 2021, we recognized $ 454 of equity-based compensation expense related to the RSUs in Selling, general, and administrative expense. As the RSUs were granted in connection with the IPO, there was no expense recorded in 2020. As of September 25, 2021, there was $ 7,861 of total unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted average period of 2.8 years. Management Holdco Incentive Plan On December 12, 2018, EWC Ventures LLC and Management Holdco adopted the Amended and Restated EWC Management Holdco, LLC Equity Incentive Plan (the “LLC Incentive Plan”), under which Management Holdco granted units of Management Holdco (“Incentive Units”) to employees, directors, and consultants of EWC Ventures LLC and its subsidiaries. In connection with the Reorganization Transactions, modifications to certain pre-reorganization equity-based awards outstanding under the LLC Incentive Plan were made, primarily with respect to certain vesting conditions, which resulted in the Company recording additional equity-based compensation expense of $ 6,547 during the 13 weeks ended September 25, 2021. The terms of awards outstanding under the LLC Incentive plan are described below. Time-based Units Prior to the consummation of the Reorganization Transactions, EWC Ventures LLC granted time-based Incentive Units under the Incentive Plan. The time-based Incentive Units generally vest over 5 years, and the Company expenses time-based Incentive Units based on the grant date fair value of the award on a straight-line basis over the associated service period of the award. In connection with the Reorganization Transactions, the time-based Incentive Units were recapitalized into a new number of EWC Ventures Units (which we refer to as the “Time-based Units” both before and after the Reorganization Transactions), equal to the same aggregate fair value as the award immediately prior to the Reorganization Transactions, and subject to the original vesting schedules. No incremental expense was recognized as there was no change to the fair value of the awards as a result of the Reorganization Transactions. Accordingly, we continue to recognize the original grant date fair value of the Time-based Units over the remaining service period. The Company estimated the fair value of the Time-based Units as of the grant date based on a determination of the total fair value of the Company’s equity as of the valuation date which was then run through a hypothetical liquidation model. During the 13 weeks ended September 25, 2021, and September 26, 2020, we recognized $ 260 and $ 403 , respectively, of equity-based compensation expense related to Time-based Units in Selling, general, and administrative expense. During the 39 weeks ended September 25, 2021, and September 26, 2020, we recognized $ 817 and 1,649 , respectively related to Time-based Units in Selling, general, and administrative expense. As of September 25, 2021, there were 1,038,391 unvested Time-based Units outstanding. As of September 25, 2021, there was $ 2,863 of total unrecognized compensation expense related to unvested time-based Incentive Units expected to be recognized over a weighted average period of 2.4 years. 2.0x Units and 2.5x Units Prior to the consummation of the Reorganization Transactions, EWC Ventures LLC granted Incentive Units with performance-based vesting criteria that vest in one or more tranches contingent upon the achievement of certain targets, including a tranche which vested upon the achievement of 2.0x multiple on invested capital (“MOIC”) and a tranche which vested upon achievement of a 2.5x MOIC. Equity-based compensation expense was not previously recognized for these awards, based on the projected probability of achievement of the respective target(s). In connection with the Reorganization Transactions, these awards were recapitalized into a new number of EWC Ventures Units (which we refer to as the “2.0x Units” and 2.5x Units” both before and after the Reorganization Transactions). The vesting conditions were modified to include a time-based vesting condition such that the units will vest as if the units were time-based units on the initial date of grant; provided that, such units shall still fully vest upon achievement of the original performance targets, as applicable. As a result of the modification, the Company recorded equity-based compensation expense of $ 5,645 , which is the modification date fair value of the shares which became immediately vested. The modification date fair value of the 2.0x Units and 2.5x Units is recognized straight line over the remaining service period. The modification date fair value was determined based on the fair value of the underlying EWC Ventures Units on the modification date, which was determined based on the initial public offering price per share of the Company’s Class A common stock. During the 13 and 39 weeks ended September 25, 2021, we recognized $ 6,052 of equity-based compensation expense related to the 2.0x Units and 2.5x Units included in Selling, general and administrative expense. As of September 25, 2021, there were 237,472 unvested 2.0x Units and 118,992 unvested 2.5x Units outstanding. As of September 25, 2021, there was $ 5,289 of total unrecognized compensation expense related to unvested 2.0x Units and unvested 2.5X Units expected to be recognized over a weighted average period of 2.7 years. 3.0x Units Prior to the consummation of the Reorganization Transactions, EWC Ventures LLC granted Incentive Units with performance-based vesting criteria that would have vested upon achievement of 3.0x MOIC. In connection with the Reorganization Transactions, these awards were recapitalized into a new number of EWC Ventures Units (which we refer to as the “3.0x Units” both before and after the Reorganization Transactions). These awards were modified such that the awards will also be eligible to vest upon the occurrence of either (i) the achievement of a 2.0x MOIC at such time as General Atlantic’s investment in the Company is no less than 35% of the fully diluted units of the Company or (ii) the first of December 31, 2022, March 31, 2023, June 30, 2023, September 30, 2023 or December 31, 2023 on which a specific volume weighted average trading price of our Class A common stock is achieved. Equity-based compensation expense was not previously recognized for these awards, based on the projected probability of achievement of the target. The modified vesting conditions described above represent market conditions. Compensation expense for performance-based awards with a market condition is recognized on a straight-line basis over the estimated service period of the award, regardless of whether the market condition is satisfied. Accordingly, following the Reorganization Transactions, expense will be recognized prospectively based on the modification date fair value of the modified award. The Company used a Geometric Brownian Motion simulation formula to determine the fair value and the derived service periods of these 3.0x Units as of the modification date. During the 13 and 39 weeks ended September 25, 2021 we recognized $ 495 of equity-based compensation expense related to the 3.0x Units in Selling, general, and administrative expense. As of September 25, 2021, total unrecognized equity-based compensation related to the 3.0x Units was $ 4,442 , which is expected to be recognized over a weighted-average period of approximately 1.5 years. Summary of Equity-Based Compensation Expense The Company recognized equity-based compensation expense in the following amounts within in Selling, general and administrative expense on the condensed consolidated statements of operations: Thirteen Weeks Thirteen Weeks Thirty-Nine Thirty-Nine Class A Common Stock Options $ 134 $ — $ 134 $ — Restricted Stock Units 454 — 454 — Time-based Units 260 403 817 1,649 2.0x and 2.5x Units 6,052 — 6,052 — 3.0x Units 495 — 495 — Total $ 7,395 $ 403 $ 7,952 $ 1,649 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Commitments and contingencies | . Commitments and contingencies Exit or Disposal Activities During fiscal year 2019, the Company relocated its corporate headquarters from Hallandale Beach, Florida to Plano, Texas. As a result of this relocation, the Company vacated a portion of its leased properties in Hallandale Beach and recognized an exit obligation charge and related exit obligation liability on the cease-use date, in accordance with ASC 420, Exit or Disposal Cost Obligations . In fiscal year 2020, the Company vacated the remaining portion of the leased property in Hallandale Beach and recognized an exit obligation charge and related liability on the cease-use date for the remaining portion of the property. A summary of the exit liability and related activity for the periods presented is as follows: Exit Cost Exit cost obligation at December 26, 2020 $ 615 Accretion 6 Payments ( 273 ) Exit cost obligation at September 25, 2021 $ 348 The charges, recorded as selling, general and administrative expenses on the condensed consolidated statements of operations, primarily included the present value of the remaining lease obligation on the cease use dates, net of estimated sublease income. The current and non-current components of the exit liabilities related to the leased property were included within accounts payable and accrued liabilities and other long-term liabilities on the condensed consolidated balance sheets, respectively, as follows: September 25, 2021 December 26, 2020 Accounts payable and accrued liabilities $ 348 $ 360 Other long-term liabilities — 255 Total exit cost obligation $ 348 $ 615 Litigation The Company is exposed to various asserted and unasserted potential claims encountered in the normal course of business. Although the outcomes of potential legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these occasional legal proceedings to have a material effect on its financial position, results of operations, or cash flow. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Revenue from Contract with Customers | 11. Revenue from contracts with customers Contract liabilities consist of deferred revenue resulting from franchise fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement. Also included are service revenues from corporate-owned centers, including customer prepayments in connection with the Wax Pass program. Contract liabilities are classified as deferred revenue on the condensed consolidated balance sheets. Deferred franchise fees are reduced as fees are recognized in revenue over the term of the franchise license for the respective center. Deferred service revenues are recognized over time as the services are performed. The following table reflects the change in contract liabilities for the periods indicated: Contract liabilities Balance at December 26, 2020 $ 8,879 Revenue recognized that was included in the contract liability at the beginning ( 1,394 ) Increase, excluding amounts recognized as revenue during the period 1,936 Balance at September 25, 2021 $ 9,421 The weighted average remaining amortization period for deferred revenue is 4 .8 years. The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 25, 2021. The Company has elected to exclude short term contracts, sales-based royalties and any other variable consideration recognized on an “as invoiced” basis. Contract liabilities to be recognized in: Amount 2021 (from September 26, 2021) $ 594 2022 2,316 2023 1,068 2024 1,009 2025 939 Thereafter 3,495 Total $ 9,421 The summary set forth below represents the balances in deferred revenue as of September 25, 2021 and December 26, 2020: September 25, 2021 December 26, 2020 Franchise fees $ 7,887 $ 7,542 Service revenue 1,534 1,337 Total deferred revenue 9,421 8,879 Long-term portion of deferred revenue 6,785 6,528 Current portion of deferred revenue $ 2,636 $ 2,351 |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Related Party Transactions | 12. Related party transactions The Company recognized advances to certain related party members of zero and $ 689 as of September 25, 2021 and December 26, 2020, respectively, related to payments of fees on behalf of the members in connection with the GA Acquisition. These advances are reported in advances to related parties within the condensed consolidated balance sheets. These advances were settled in August 2021 through a reduction of the tax distribution to members made in connection with the Reorganization Transactions discussed in Note 1. Additionally, the Company paid fees to certain members for consulting services provided to the Company. Related party consulting fees of $ 17 and $ 33 for the 13 weeks ended September 25, 2021 and September 26, 2020, respectively, and $ 117 and $ 133 for the 39 weeks ended September 25, 2021 and September 26, 2020, respectively, are included in selling, general, and administrative expenses in the condensed consolidated statements of operations. The term of the consulting services agreement ended in August 2021. |
Noncontrolling interest
Noncontrolling interest | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Noncontrolling interest | 14. Noncontrolling interest In connection with the Reorganization Transactions, we became the sole managing member of EWC Ventures and, as a result of this control, and because we have a substantial financial interest in EWC Ventures, we consolidate the financial results of EWC Ventures. We report noncontrolling interests representing the economic interests in EWC Ventures held by the other members of EWC Ventures. Income or loss is attributed to the noncontrolling interests based on their contractual distribution rights, and the relative percentages of EWC Ventures Units by us and the other holders of EWC Ventures Units during the period. The EWC Ventures LLC Agreement permits the members of EWC Ventures to exchange EWC Ventures Units, together with related shares of our Class B common stock, for shares of our Class A common stock on a one-for-one basis or, at the election of the Company, for cash at the current fair value on the date of the exchange. Changes in the Company’s ownership interest in EWC Ventures while retaining control of EWC Ventures will be accounted for as equity transactions. As such, future redemptions or direct exchanges of EWC Ventures Units by the other members will result in a change in ownership and reduce the amount recorded as noncontrolling interest and increase additional paid-in capital. Additionally, certain members of EWC Ventures hold unvested EWC Ventures Units that are subject to service, performance, and/or market conditions (See Note 9-Equity Based Compensation). The vesting of EWC Ventures units will result in a change in ownership and increase the amount recorded as noncontrolling interest and decrease additional paid-in capital. The following table summarizes the ownership of EWC Ventures as of September 25, 2021: September 25, 2021 Units Owned Ownership Percentage European Wax Center, Inc. 31,370,186 50.8 % Noncontrolling Interest 30,333,993 49.2 % Total 61,704,179 100.0 % |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Income Taxes | 13. Income Taxes As a result of the Reorganization Transactions we were appointed as the sole managing member of EWC Ventures. EWC Ventures is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income tax purposes. As a partnership, EWC Ventures is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by EWC Ventures is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis, subject to applicable tax regulations. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of EWC Ventures. We recorded zero income tax expense for the period of August 4, 2021 through September 25, 2021, which is the period following the IPO and Reorganization Transactions, as we incurred a pre-tax loss for the period and recorded a full valuation allowance against our deferred tax assets. EWC Ventures, our financial reporting predecessor, is not subject to income taxes. As such, there was no income tax expense recorded in 2020. This effective tax rate differs from the current U.S. federal income tax rate and the statutory rates apportioned to each state and local jurisdiction primarily due to the effect of the full valuation allowance against net deferred tax assets. We evaluate our deferred tax assets on a quarterly basis to determine whether a valuation allowance is required. In accordance with ASC 740 we assess whether it is more likely than not that some or all of our deferred tax assets will not be realized. Significant judgment is required in estimating valuation allowances for deferred tax assets. The realization of a deferred tax asset ultimately depends on the existence of sufficient taxable income in the applicable carryback or carryforward periods. We consider the nature, frequency, and severity of current and cumulative losses as well as the reversal of existing deferred tax liabilities, historical and forecasted taxable income (exclusive of reversing temporary differences and carryforwards) in our assessment. In evaluating such projections, the Company considers its history of profitability and cumulative earnings/losses, the competitive environment, and general economic conditions. In addition, the Company considers the time frame over which it would take to utilize the deferred tax assets prior to their expiration. Changes in our estimates of future taxable income will affect our estimate of the realization of the tax benefits of these tax carryforwards. To the extent we generate sufficient taxable income in the future to fully utilize the tax benefits of the net deferred tax assets on which a valuation allowance was recorded, our effective tax rate may decrease as the valuation allowance is reversed. We are in a cumulative loss position for the past three years. We believe this represents significant negative evidence in considering whether our deferred tax assets are realizable. Further, we do not believe that relying on projections of future taxable income to support the recovery of deferred tax assets is sufficient. Based on an evaluation of positive and negative evidence, we concluded that the negative evidence regarding our ability to realize our deferred tax assets outweighed the positive evidence as of September 25, 2021. To the extent we generate sufficient taxable income in the future to utilize the benefits of our deferred tax assets we may reverse some or all of the valuation allowance. However, simply coming out of a cumulative loss is not viewed as a bright line and may not be considered sufficient positive evidence to reverse some or all of the valuation allowance if there are other negative factors which outweigh the positive evidence. In upcoming quarters, we will continue to evaluate both the positive and negative evidence surrounding our ability to realize our deferred tax assets. We base our estimate of deferred tax assets and liabilities on current tax laws and rates. In certain cases, we also base our estimate on business plan forecasts and other expectations about future outcomes. Changes in existing tax laws or rates could affect our actual tax results, and future business results may affect the amount of our deferred tax liabilities or the valuation of our deferred tax assets over time. Due to uncertainties in the estimation process, particularly with respect to changes in facts and circumstances in future reporting periods it is possible that actual results could differ from the estimates used in previous analyses. Differences between the anticipated and actual outcomes of these future results could have a material impact on our consolidated results of operations and/or financial position. The Company has not recorded a liability for uncertain tax positions as of September 25, 2021. The Company remains subject to periodic audits and reviews by the taxing authorities, and the Company’s returns since its formation remain open for examination. Tax Receivable Agreement As of September 25, 2021, future payments under the TRA with respect to the purchase of EWC Ventures Units which occurred as part of the IPO are expected to be $ 69,320 . Payments made under the TRA represent payments that otherwise would have been made to taxing authorities in the absence of attributes obtained by us as a result of exchanges by our pre-IPO members. Such amounts will be paid only when a cash tax savings is realized as a result of attributes subject to the TRA. That is, payments under the TRA are only expected to be made in periods following the filing of a tax return in which we are able to utilize certain tax benefits to reduce our cash taxes paid to a taxing authority. The impact of any changes in the projected obligations under the TRA as a result of changes in the geographic mix of the Company’s earnings, changes in tax legislation and tax rates or other factors that may impact the Company’s tax savings will be reflected in income before taxes on the consolidated statement of operations in the period in which the change occurs. As of September 25, 2021, the TRA liability recorded was $ 48,823 based on current projections of future taxable income taking into consideration the Company’s full valuation allowance against its net deferred tax asset. |
Net loss per share
Net loss per share | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Net Income (Loss) Per Unit | 15. Net loss per share Basic net loss per share of Class A common stock is computed by dividing net loss attributable to Class A common shareholders for the periods subsequent to the Reorganization Transactions by the weighted average number of shares of Class A common stock outstanding for the same period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period in which the shares were outstanding. Diluted net loss per share of Class A common stock is computed by dividing net loss attributable to Class A common shareholders by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. Prior to the Reorganization Transactions, the EWC Ventures capital structure included Class A, Class B, Class C, and Class D Units. We determined that the presentation of net income (loss) per unit for the period prior to the Reorganization Transactions would not be meaningful to the users of these unaudited condensed consolidated financial statements due to the significant nature of the Reorganization Transactions on the capital structure. Therefore, net income (loss) per unit information has not been presented for periods prior to the Reorganization Transactions. The following table sets forth the computation of basic and diluted net loss per share of Class A common stock for the period from August 4, 2021 to September 25, 2021, which represents the period subsequent to the Reorganization Transactions: Period of August 4- September 25, 2021 (in thousands, except for share and per share amounts) Net loss $ ( 10,768 ) Less: net loss attributable to noncontrolling interests ( 5,237 ) Net loss applicable to Class A common shareholders $ ( 5,531 ) Basic and diluted weighted average outstanding shares Class A Common Stock 31,370,186 Basic and diluted net loss per unit applicable to shareholders: Class A Common Stock $ ( 0.18 ) Shares of Class B common stock do not share in the earnings or losses attributable to the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net loss per share of Class B common stock under the two-class method has not been presented. Shares of Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related EWC Ventures Units, are exchangeable into shares of Class A common stock on a one-for-one basis. The 32,372,542 shares of Class B common stock outstanding as of September 25, 2021 were determined to be anti-dilutive as we recorded a net loss for the period, and have therefore been excluded from the computation of diluted net income (loss) per share of Class A common stock In addition, 322,997 stock options and 482,410 restricted stock units were excluded from the computation of diluted net income (loss) per share of Class A common stock, because the effect would have been anti-dilutive as we recorded a net loss for the period. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 25, 2021 | |
Net Income (Loss) Per Share | (i) Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to Class A common stockholders by the number of weighted-average shares of Class A common stock outstanding. Shares of our Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net income (loss) per share of Class B common stock under the two-class method has not been presented. Diluted net income (loss) per share adjusts the basic net income (loss) per share calculation for the potential dilutive impact of common shares, such as equity awards, using the treasury stock method. Diluted net income (loss) per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock as they are convertible into shares of Class A common stock when exchanged with a corresponding number of EWC Ventures Units. |
European Wax Center, Inc. and Subsidiaries | |
Basis of presentation and consolidation | (a) Basis of presentation and consolidation The accompanying unaudited condensed consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC and includes the operations of the Company and EWC Ventures and its wholly owned subsidiaries. EWC Ventures is considered a variable interest entity. The Company is the primary beneficiary of EWC Ventures. As a result, the Company consolidates EWC Ventures. EWC Ventures has been determined to be the predecessor for accounting purposes and, accordingly, the condensed consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from December 28, 2019 through August 4, 2021 presented in the condensed consolidated financial statements and notes to condensed consolidated financial statements herein represent the historical operations of EWC Ventures. The amounts as of September 25, 2021 and for the period from August 4, 2021 reflect the consolidated operations of the Company. The condensed consolidated balance sheet as of December 26, 2020 is derived from the audited consolidated financial statements of EWC Ventures but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 26, 2020 included in the Prospectus. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the audited consolidated financial statements and the related notes thereto for the year ended December 26, 2020 included in the Prospectus. |
Use of estimates | (b) Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the financial statements include revenue recognition, inventory reserves, the expected life of franchise agreements, the useful life of reacquired rights, valuation of equity-based compensation awards, and the evaluation of the recoverability of goodwill and long-lived assets, including indefinite-lived intangible assets. Actual results could differ from those estimates. |
COVID 19 pandemic | (c) COVID-19 pandemic The Company is continuing to monitor the ongoing COVID-19 pandemic and its impact on its business. Beginning in March 2020, in response to the COVID-19 pandemic, most franchisees temporarily closed their centers in order to promote the health and safety of its members, team members and their communities. In April 2020, the entire franchise network was temporarily closed. Beginning in May 2020, certain governors announced steps to restart non-essential business operations in their respective states and certain centers began to re-open. By June 2021, all of the Company’s nationwide network had re-opened. However, there is a significant amount of uncertainty about the effects a resurgence in COVID-19 cases could have on our business, our industry and overall economic activity. |
Implications of being an emerging growth company | (d) Implications of being an Emerging Growth Company The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with those standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards. |
Income Taxes | (f) Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company calculates the interim tax provision in accordance with the provisions of ASC 740-270, Income Taxes; Interim Reporting. For interim periods, the Company estimates the annual effective income tax rate (“AETR”) and applies the estimated rate to the year-to-date income or loss before income taxes. ASC 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. |
Tax Receivable Agreement | (g) Tax Receivable Agreement We entered into the TRA with the EWC Ventures' pre-IPO members that provides for the payment by the Company to the EWC Ventures pre-IPO members of 85% of the benefits, if any, that the Company realizes, or is deemed to realize (calculated using certain assumptions), as a result of (i) increases in the our allocable share of certain existing tax basis of the tangible and intangible assets of the Company and adjustments to the tax basis of the tangible and intangible assets of the Company, in each case as a result of (a) the purchases of EWC Ventures Units (along with the corresponding shares of our Class B common stock) from certain of the EWC Ventures Post-IPO Members using a portion of the net proceeds from the initial public offering or in any future offering or (b) Share Exchanges and Cash Exchanges by the EWC Ventures pre-IPO members (or their transferees or other assignees) in connection with or after the initial public offering, (ii) our utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies' allocable share of certain existing tax basis of EWC Ventures' assets) and (iii) certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. We record liabilities for amounts payable under the TRA in the period in which the payment is deemed to be probable. Further, payments under the TRA are only expected to be made in periods following the filing of a tax return in which we are able to utilize tax benefits described above to reduce our cash taxes paid to a taxing authority. |
Noncontrolling Interests | (h) Noncontrolling Interests The noncontrolling interests represent the economic interests of EWC Ventures held by members other than the Company. Income or loss is attributed to the noncontrolling interests based on their contractual distribution rights, and the relative percentages of EWC Ventures Units held by the Company and the other holders of EWC Ventures Units during the period. |
Recently adopted accounting pronouncements | (j) Recently adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . Under this standard, companies will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. The adoption of this new guidance prescribes the balance sheet, statement of operations, and cash flow classification of the capitalized implementation costs and related amortization expense, and additional quantitative and qualitative disclosures. This standard is effective for fiscal years beginning after December 15, 2021. This standard may be applied either prospectively to eligible costs incurred on or after the date of the new guidance or retrospectively. The Company adopted this standard on December 27, 2020 (the beginning of its fiscal year 2021) on a prospective basis. The adoption of this standard did not have a significant impact on our financial statements. |
Recently issued accounting pronouncements not yet adopted | (k) Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU 2016-02, Leases and established ASC Topic 842, Leases (“ASC 842”), which supersedes ASC Topic 840, Leases . ASC 842 requires a lessee to recognize a lease right-of-use (“ROU”) asset and a corresponding lease liability on its balance sheet along with additional qualitative and quantitative disclosures. ROU assets and lease liabilities are recognized at the commencement date based on the present value of future payments. ASC 842 is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect the adoption of this standard will have on its financial statements. In June 2017, the FASB issued ASU 2016-13, Financial Instruments (Topic 326)—Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. The standard replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13, and related amendments, are effective for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on its financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update, as well as subsequently issued amendments, provide temporary, optional guidance to ease the burden in accounting for reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include relief related to contract modifications and hedging relationships. The relief provided by this ASU does not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. However, hedging relationships that apply certain optional expedients prior to December 31, 2022, will be retained through the end of the hedging relationship, including for periods after December 31, 2022. We will evaluate the impact of this guidance as contracts are modified through December 2022. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Schedule of fair value measurements | Fair value measurements are summarized below: Fair Quoted prices Significant Significant Interest rate cap September 25, 2021 $ ( 416 ) $ — $ ( 416 ) $ — December 26, 2020 $ ( 527 ) $ — $ ( 527 ) $ — |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Schedule of Prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following: September 25, 2021 December 26, 2020 Prepaid inventory $ — $ 2,000 Prepaid insurance 3,333 324 Prepaid other & other current assets 3,895 2,250 Total $ 7,228 $ 4,574 |
Intangible Assets Net (Tables)
Intangible Assets Net (Tables) - European Wax Center, Inc. and Subsidiaries | 9 Months Ended |
Sep. 25, 2021 | |
Summary of Intangible Assets | A summary of intangible assets as of September 25, 2021 and December 26, 2020 is as follows: September 25, 2021 Weighted Average Gross Accumulated Net Franchisee relationships 7.00 $ 114,594 $ ( 34,396 ) $ 80,198 Reacquired rights 8.56 76,545 ( 13,833 ) 62,712 Favorable lease assets 0.47 170 ( 147 ) 23 191,309 ( 48,376 ) 142,933 Indefinite-lived intangible: Trade name N/A 63,814 — 63,814 Total intangible assets $ 255,123 $ ( 48,376 ) $ 206,747 December 26, 2020 Weighted Average Gross Accumulated Net Franchisee relationships 7.74 $ 114,594 $ ( 25,870 ) $ 88,724 Reacquired rights 9.19 68,973 ( 8,304 ) 60,669 Favorable lease assets 1.24 170 ( 110 ) 60 183,737 ( 34,284 ) 149,453 Indefinite-lived intangible: Trade name N/A 63,814 — 63,814 Total intangible assets $ 247,551 $ ( 34,284 ) $ 213,267 |
Schedule of Future Amortization Expenses of Intangible Assets | Future expected amortization expense of the Company’s intangible assets as of September 25, 2021 is as follows: Fiscal Years Ending Franchisee Reacquired Favorable 2021 (from September 26, 2021) $ 2,899 $ 1,840 $ 14 2022 11,595 7,363 9 2023 11,595 7,363 — 2024 11,595 7,363 — 2025 11,595 7,363 — Thereafter 30,919 31,420 — Total $ 80,198 $ 62,712 $ 23 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: September 25, 2021 December 26, 2020 Accounts payable $ 4,201 $ 615 Accrued inventory 3,262 3,321 Accrued compensation 4,258 2,169 Accrued taxes and penalties 1,690 1,732 Accrued lease termination costs 348 360 Accrued technology and subscription fees 534 1,536 Accrued interest 764 1,440 Accrued professional fees 2,075 967 Other accrued liabilities 1,601 1,349 Total Accounts payable and accrued liabilities $ 18,733 $ 13,489 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Schedule of Debt | Long-term debt consists of the following: September 25, 2021 December 26, 2020 2026 Term Loan $ 180,000 $ — Previous Term Loan — 240,552 Previous Revolving Credit Facility — 30,000 Less: current portion ( 3,375 ) ( 2,428 ) Total long-term debt 176,625 268,124 Less: unamortized debt discount and deferred financing costs ( 1,867 ) ( 5,149 ) Total long-term debt, net $ 174,758 $ 262,975 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) - European Wax Center, Inc. and Subsidiaries | 9 Months Ended |
Sep. 25, 2021 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |
Schedule of Interest Rate Derivatives | Our cash flow hedge position related to the interest rate cap derivative instrument is as follows: Balance Sheet September 25, 2021 December 26, 2020 Derivatives designated as hedging instruments: Interest rate cap, current portion Other current liabilities $ ( 184 ) $ ( 181 ) Interest rate cap, non-current portion Other long-term liabilities ( 232 ) ( 346 ) Total derivative liabilities designated as $ ( 416 ) $ ( 527 ) |
Schedule of Net Unrealized Gain Recognized in Other Comprehensive Income (“OCI”) | The table below presents the net unrealized gain (loss) recognized in other comprehensive income (loss) (“OCI”) resulting from fair value adjustments of hedging instruments: Net Unrealized Gain (Loss) Thirteen Weeks Thirteen Weeks Thirty-Nine Thirty-Nine Derivatives designated as hedging instruments: Interest rate cap $ ( 128 ) $ 30 $ 111 $ 107 Total $ ( 128 ) $ 30 $ 111 $ 107 |
Equity Based Compensation (Tabl
Equity Based Compensation (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of summary of option activity | A summary of activity related to the options is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 26, 2020 — — Granted 322,997 $ 17.00 Exercised — — Expired — — Forfeited — — Outstanding at September 25, 2021 322,997 $ 17.00 9.8 $ 3,682 Exercisable at September 25, 2021 — — — — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The Company estimates the fair value of the options using the Black-Scholes option pricing model. The following table presents the assumptions used in the Black-Scholes model to determine the fair value of the stock options for the 13 weeks ended September 25, 2021. Black-Scholes assumptions have not been disclosed for any other periods presented as there were no stock options granted in those periods. For the 13 Weeks Ended September 25, 2021 Expected dividend yield 0.0 % Expected volatility 43.8 % Risk-free rate 0.9 % Expected term (in years) 6.5 |
Summary of restricted stock awards activity | A summary of activity related to the RSUs is as follows: Number of RSUs Weighted Average Grant Date Outstanding at December 26, 2020 — — Granted 485,792 $ 17.24 Vested — — Forfeited ( 3,382 ) $ 17.00 Outstanding at September 25, 2021 482,410 $ 17.24 |
Schedule Of Stock Based Compensation Expenses | Summary of Equity-Based Compensation Expense Thirteen Weeks Thirteen Weeks Thirty-Nine Thirty-Nine Class A Common Stock Options $ 134 $ — $ 134 $ — Restricted Stock Units 454 — 454 — Time-based Units 260 403 817 1,649 2.0x and 2.5x Units 6,052 — 6,052 — 3.0x Units 495 — 495 — Total $ 7,395 $ 403 $ 7,952 $ 1,649 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) - European Wax Center, Inc. and Subsidiaries | 9 Months Ended |
Sep. 25, 2021 | |
Summary of Exit Liability And Related Activity | A summary of the exit liability and related activity for the periods presented is as follows: Exit Cost Exit cost obligation at December 26, 2020 $ 615 Accretion 6 Payments ( 273 ) Exit cost obligation at September 25, 2021 $ 348 |
Summary of Current And Non Current Components of Exit Liabilities | The current and non-current components of the exit liabilities related to the leased property were included within accounts payable and accrued liabilities and other long-term liabilities on the condensed consolidated balance sheets, respectively, as follows: September 25, 2021 December 26, 2020 Accounts payable and accrued liabilities $ 348 $ 360 Other long-term liabilities — 255 Total exit cost obligation $ 348 $ 615 |
Revenue from Contract with Cu_2
Revenue from Contract with Customers (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Summary of Balances in Deferred Revenue | The summary set forth below represents the balances in deferred revenue as of September 25, 2021 and December 26, 2020: September 25, 2021 December 26, 2020 Franchise fees $ 7,887 $ 7,542 Service revenue 1,534 1,337 Total deferred revenue 9,421 8,879 Long-term portion of deferred revenue 6,785 6,528 Current portion of deferred revenue $ 2,636 $ 2,351 |
European Wax Center, Inc. and Subsidiaries | |
Schedule of Changes in Contract Liabilities | The following table reflects the change in contract liabilities for the periods indicated: Contract liabilities Balance at December 26, 2020 $ 8,879 Revenue recognized that was included in the contract liability at the beginning ( 1,394 ) Increase, excluding amounts recognized as revenue during the period 1,936 Balance at September 25, 2021 $ 9,421 |
Schedule of Revenue Expected to be Recognized in Future Related to Performance Obligations | The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 25, 2021. The Company has elected to exclude short term contracts, sales-based royalties and any other variable consideration recognized on an “as invoiced” basis. Contract liabilities to be recognized in: Amount 2021 (from September 26, 2021) $ 594 2022 2,316 2023 1,068 2024 1,009 2025 939 Thereafter 3,495 Total $ 9,421 |
Noncontrolling interest (Tables
Noncontrolling interest (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
E W C Ventures L L C And Subsidiaries [Member] | |
Noncontrolling Interest [Line Items] | |
Summary of ownership of EWC Ventures LLC | The following table summarizes the ownership of EWC Ventures as of September 25, 2021: September 25, 2021 Units Owned Ownership Percentage European Wax Center, Inc. 31,370,186 50.8 % Noncontrolling Interest 30,333,993 49.2 % Total 61,704,179 100.0 % |
Net loss per share (Tables)
Net loss per share (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
European Wax Center, Inc. and Subsidiaries | |
Schedule of Computation Of Basic And Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share of Class A common stock for the period from August 4, 2021 to September 25, 2021, which represents the period subsequent to the Reorganization Transactions: Period of August 4- September 25, 2021 (in thousands, except for share and per share amounts) Net loss $ ( 10,768 ) Less: net loss attributable to noncontrolling interests ( 5,237 ) Net loss applicable to Class A common shareholders $ ( 5,531 ) Basic and diluted weighted average outstanding shares Class A Common Stock 31,370,186 Basic and diluted net loss per unit applicable to shareholders: Class A Common Stock $ ( 0.18 ) |
Nature of business and organi_2
Nature of business and organization - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 09, 2021 | Aug. 04, 2021 | Sep. 25, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Sep. 25, 2021 |
Nature of business and organization | |||||||
Refinancing fees and expenses | $ 6,869 | ||||||
Common stock, shares, outstanding | 63,742,728 | ||||||
2026 Term Loan [Member] | |||||||
Nature of business and organization | |||||||
Term loan | $ 180,000 | $ 180,000 | |||||
2026 Revolving Credit Facility [Member] | |||||||
Nature of business and organization | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | 40,000 | $ 40,000 | |||||
Common Class A [Member] | |||||||
Nature of business and organization | |||||||
Shares issued, price per share | $ 17 | ||||||
Common Stock, Shares, Issued | 9,829,204 | ||||||
Proceeds from Issuance of Common Stock | $ 155,400 | ||||||
Common stock, shares, outstanding | 31,370,186 | ||||||
Common Class A [Member] | Blocker Companies [Member] | |||||||
Nature of business and organization | |||||||
Existing Equity Interests Acquired | 21,540,982 | ||||||
Common Class B [Member] | |||||||
Nature of business and organization | |||||||
Venture units purchased | 3,191,946 | ||||||
Payment in exchange for units | $ 50,465 | ||||||
Common stock, shares, outstanding | 32,372,542 | ||||||
European Wax Center, Inc. and Subsidiaries | |||||||
Nature of business and organization | |||||||
Payments of Capital Distribution | 5,823 | ||||||
Distributions | $ (103) | $ (207) | $ (1,805) | $ 6,512 | |||
Receivables due from related parties | $ 689 | ||||||
Preferred Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Venture units purchased | 6,637,258 | ||||||
Payment in exchange for units | $ 104,935 | ||||||
Payments of stock issuance costs | $ 91 | $ 9,930 | |||||
European Wax Center, Inc. and Subsidiaries | 2026 Revolving Credit Facility [Member] | |||||||
Nature of business and organization | |||||||
Repayments of long-term lines of credit | $ 268,732 | ||||||
European Wax Center, Inc. and Subsidiaries | Preferred Stock [Member] | |||||||
Nature of business and organization | |||||||
Common Stock, Par Value | $ 0.00001 | ||||||
Common stock, par or stated value per share | $ 0.00001 | ||||||
European Wax Center, Inc. and Subsidiaries | Common Class A [Member] | |||||||
Nature of business and organization | |||||||
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 | 600,000,000 | ||||
Common Stock, Par Value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Common Stock, Shares, Issued | 1,590,000 | 31,370,186 | 31,370,186 | ||||
Common stock sold by selling shareholders | 2,360,796 | ||||||
Common stock, par or stated value per share | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Common stock, shares, outstanding | 31,370,186 | 31,370,186 | |||||
European Wax Center, Inc. and Subsidiaries | Common Class B [Member] | |||||||
Nature of business and organization | |||||||
Common Stock, Shares Authorized | 60,000,000 | 60,000,000 | 60,000,000 | ||||
Common Stock, Par Value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Venture units purchased | 1,176,468 | ||||||
Common shares purchased by LLC members | 36,740,956 | ||||||
Common Stock, Shares, Issued | 32,372,542 | 32,372,542 | |||||
Common stock, par or stated value per share | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Payment in exchange for units | $ 20,000 | ||||||
Common stock, shares, outstanding | 32,372,542 | 32,372,542 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Details) | Aug. 09, 2021shares |
Common Stock, Shares, Outstanding | 63,742,728 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | $ (416) | $ (527) |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | 0 | 0 |
Significant observable inputs (Level 2) | ||
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | (416) | (527) |
Significant unobservable inputs (Level 3) | ||
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Thousands | Sep. 26, 2021USD ($) |
European Wax Center, Inc. and Subsidiaries | 2026 Term Loan [Member] | |
Fair Value Option Quantitative Disclosures [Line Items] | |
Debt Instrument, Fair Value Disclosure | $ 180,000 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
Prepaid Expenses And Other Current Assets Details [Line Items] | ||
Prepaid inventory | $ 0 | $ 2,000 |
Prepaid insurance | 3,333 | 324 |
Prepaid other & other current assets | 3,895 | 2,250 |
Total | $ 7,228 | $ 4,574 |
Intangible Assets Net - Summary
Intangible Assets Net - Summary of Intangible Assets (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 25, 2021 | Dec. 26, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 255,123 | $ 247,551 |
Net Carrying Value | $ 206,747 | 213,267 |
Weighted Average Remaining Useful Life (Years) | 10 years | |
Accumulated Amortization | $ (48,376) | (34,284) |
Finite-Lived Intangible Assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 191,309 | 183,737 |
Accumulated Amortization | (48,376) | (34,284) |
Total | 142,933 | $ 149,453 |
Franchisee Relationships [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total | $ 80,198 | |
Franchisee Relationships [Member] | Finite-Lived Intangible Assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (Years) | 7 years | 7 years 8 months 26 days |
Gross Carrying Value | $ 114,594 | $ 114,594 |
Accumulated Amortization | (34,396) | (25,870) |
Total | 80,198 | $ 88,724 |
Reacquired Rights [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total | $ 62,712 | |
Reacquired Rights [Member] | Finite-Lived Intangible Assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (Years) | 8 years 6 months 21 days | 9 years 2 months 8 days |
Gross Carrying Value | $ 76,545 | $ 68,973 |
Accumulated Amortization | (13,833) | (8,304) |
Total | 62,712 | $ 60,669 |
Favorable Lease Assets [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total | $ 23 | |
Favorable Lease Assets [Member] | Finite-Lived Intangible Assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (Years) | 5 months 19 days | 1 year 2 months 26 days |
Gross Carrying Value | $ 170 | $ 170 |
Accumulated Amortization | (147) | (110) |
Total | 23 | 60 |
Trade Name [Member] | Indefinite lived Intangible Assets [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 63,814 | 63,814 |
Accumulated Amortization | 0 | 0 |
Net Carrying Value | $ 63,814 | $ 63,814 |
Intangible Assets Net - Additio
Intangible Assets Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Consideration amount | $ 7,644 | $ 34,294 | ||
Consideration Amount Related To Purchase Price Holdbacks | 320 | |||
European Wax Center, Inc. and Subsidiaries | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Reacquisition Costs | $ 7,644 | 34,614 | ||
Consideration amount | 34,294 | |||
Consideration Amount Related To Purchase Price Holdbacks | 320 | |||
Term of Representative Agreements | 10 years | |||
European Wax Center, Inc. and Subsidiaries | Reacquired Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Expense For Reacquired Rights | $ 1,699 | $ 1,771 | $ 5,529 | 5,199 |
European Wax Center, Inc. and Subsidiaries | Franchisee Relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Expense For Reacquired Rights | 2,812 | 2,857 | 8,526 | 8,571 |
European Wax Center, Inc. and Subsidiaries | Favorable Lease Assets [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Expense For Reacquired Rights | $ 13 | $ 12 | $ 37 | $ 36 |
European Wax Center, Inc. and Subsidiaries | Additional Agreements Term [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Term of Representative Agreements | 10 years |
Intangible Assets Net - Schedul
Intangible Assets Net - Schedule of Future Expected Amortization Expense of Intangible Assets (Details) - European Wax Center, Inc. and Subsidiaries $ in Thousands | Sep. 25, 2021USD ($) |
Franchisee Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2021 (from September 26, 2021) | $ 2,899 |
2022 | 11,595 |
2023 | 11,595 |
2024 | 11,595 |
2025 | 11,595 |
Thereafter | 30,919 |
Total | 80,198 |
Reacquired Rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2021 (from September 26, 2021) | 1,840 |
2022 | 7,363 |
2023 | 7,363 |
2024 | 7,363 |
2025 | 7,363 |
Thereafter | 31,420 |
Total | 62,712 |
Favorable Lease Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2021 (from September 26, 2021) | 14 |
2022 | 9 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total | $ 23 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
Payables And Accruals [Line Items] | ||
Accounts payable | $ 4,201 | $ 615 |
Accrued inventory | 3,262 | 3,321 |
Accrued compensation | 4,258 | 2,169 |
Accrued taxes and penalties | 1,690 | 1,732 |
Accrued lease termination costs | 348 | 360 |
Accrued technology and subscription fees | 534 | 1,536 |
Accrued interest | 764 | 1,440 |
Accrued professional fees | 2,075 | 967 |
Other accrued liabilities | 1,601 | 1,349 |
Total Accounts payable and accrued liabilities | $ 18,733 | $ 13,489 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
Debt Instrument [Line Items] | ||
Less: current portion | $ (3,375) | $ (2,428) |
Total long-term debt | 176,625 | 268,124 |
Less: unamortized debt discount and deferred financing costs | (1,867) | (5,149) |
Total long-term debt, net | 174,758 | 262,975 |
Previous Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Previous Revolving Credit Facility | 0 | 30,000 |
2026 Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan | 180,000 | 0 |
Previous Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan | $ 0 | $ 240,552 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) $ in Thousands | Aug. 09, 2021 | Sep. 25, 2021 | Dec. 26, 2020 |
Debt Instrument [Line Items] | |||
Refinancing fees and expenses | $ 6,869 | ||
Payments of debt extinguishment costs | 2,446 | ||
Loss on debt extinguishment | (6,313) | ||
2026 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Unamortized deferred financing costs | 344 | ||
Refinancing fees and expenses | $ 1,574 | ||
Credit Facility, Interest Rate During Period | 3.10% | ||
Debt Instrument, Basis Spread on Variable Rate | 3.00% | ||
Previous Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Payments of debt extinguishment costs | $ 2,446 | ||
Previous Revolving Credit Facility [Member] | Previous Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Refinancing fees and expenses | 1,924 | ||
Loss on debt extinguishment | 6,313 | ||
Unamortized deferred financing costs | 3,867 | ||
2026 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Unamortized deferred financing costs | 77 | ||
Refinancing fees and expenses | 350 | ||
European Wax Center, Inc. and Subsidiaries | 2026 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Term Loan | 180,000 | $ 0 | |
European Wax Center, Inc. and Subsidiaries | Previous Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Term Loan | 0 | 240,552 | |
European Wax Center, Inc. and Subsidiaries | Previous Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Previous Revolving Credit Facility | 0 | 30,000 | |
Outstanding borrowings | $ 0 | $ 30,000 | |
European Wax Center, Inc. and Subsidiaries | 2026 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility maturity date | Aug. 9, 2026 | ||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
European Wax Center, Inc. and Subsidiaries | 2026 Revolving Credit Facility [Member] | 2026 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000 | ||
Previous Revolving Credit Facility | 0 | ||
Outstanding borrowings | $ 0 | ||
European Wax Center, Inc. and Subsidiaries | 2026 Revolving Credit Facility [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Commitment Fee Percentage | 0.30% | ||
European Wax Center, Inc. and Subsidiaries | 2026 Revolving Credit Facility [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Commitment Fee Percentage | 0.45% | ||
European Wax Center, Inc. and Subsidiaries | 2026 Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.00% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Details) - European Wax Center, Inc. and Subsidiaries | 1 Months Ended |
Dec. 31, 2018USD ($) | |
Derivatives Fair Value [Line Items] | |
Derivative Liability, Notional Amount | $ 175,000 |
Derivative, Notional Amount | $ 175,000 |
Derivative, Inception Date | Jan. 31, 2019 |
Derivative, Maturity Date | Sep. 25, 2024 |
Interest Rate Floor | London Interbank Offered Rate (LIBOR) [Member] | |
Derivatives Fair Value [Line Items] | |
Derivative, Variable Interest Rate | 4.50% |
Interest Rate Cap | |
Derivatives Fair Value [Line Items] | |
Derivative, premium percentage | 0.11486% |
Interest Rate Cap | London Interbank Offered Rate (LIBOR) [Member] | |
Derivatives Fair Value [Line Items] | |
Derivative, Cap Interest Rate | 4.50% |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Summary of Interest Rate Derivative (Details) - European Wax Center, Inc. and Subsidiaries - Interest Rate Cap - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
Derivatives designated as hedging instruments: | ||
Total derivative liabilities designated as hedging instruments | $ (416) | $ (527) |
Other Current Liabilities [Member] | ||
Derivatives designated as hedging instruments: | ||
Total derivative liabilities designated as hedging instruments | (184) | (181) |
Other Long-Term Liabilities [Member] | ||
Derivatives designated as hedging instruments: | ||
Total derivative liabilities designated as hedging instruments | $ (232) | $ (346) |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Summary of Unrealized Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 25, 2021 | Jun. 26, 2021 | Mar. 27, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
Derivatives designated as hedging instruments: | ||||||||
Total | $ 29 | $ 80 | $ 159 | $ 30 | $ 742 | $ (665) | ||
Other Comprehensive Income (Loss) | Designated as Hedging Instrument | ||||||||
Derivatives designated as hedging instruments: | ||||||||
Total | (128) | 30 | $ 111 | $ 107 | ||||
Other Comprehensive Income (Loss) | Interest Rate Cap | Designated as Hedging Instrument | ||||||||
Derivatives designated as hedging instruments: | ||||||||
Total | $ (128) | $ 30 | $ 111 | $ 107 |
Equity Based Compensation - Add
Equity Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | Dec. 26, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Granted | 322,997 | ||||
Weighted average exercise price, granted | $ 17 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 322,997 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 322,997 | 322,997 | 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 322,997 | 322,997 | 0 | ||
EWC Ventures LLC [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 6,547 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Unrecognized compensation expense, other than options | $ 7,861 | $ 7,861 | |||
Weighted average period for unrecognized compensation expense | 2 years 9 months 18 days | ||||
Granted | 485,792 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 482,410 | 482,410 | 0 | ||
Restricted Stock Units (RSUs) [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 454 | $ 454 | |||
Stock Option [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Unrecognized compensation expense, stock options | 2,280 | $ 2,280 | |||
Weighted average period for unrecognized compensation expense | 2 years 9 months 18 days | ||||
Stock Option [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | 134 | $ 134 | |||
Time Based Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Unrecognized compensation expense | $ 2,863 | $ 2,863 | |||
Weighted average period for unrecognized compensation expense | 2 years 4 months 24 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 1,038,391 | 1,038,391 | |||
Time Based Units [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 260 | $ 403 | $ 817 | $ 1,649 | |
Two Point Zero And Two Point Five Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | 5,645 | ||||
Unrecognized compensation expense | 5,289 | $ 5,289 | |||
Weighted average period for unrecognized compensation expense | 2 years 8 months 12 days | ||||
Two Point Zero And Two Point Five Units [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 6,052 | $ 6,052 | |||
Two Point Zero Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 237,472 | 237,472 | |||
Two Point Five Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 118,992 | 118,992 | |||
Three Point Zero Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Unrecognized compensation expense | $ 4,442 | $ 4,442 | |||
Weighted average period for unrecognized compensation expense | 1 year 6 months | ||||
Three Point Zero Units [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 495 | $ 495 | |||
Common Class A [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Weighted-Average Grant Date Fair Value, Granted | $ 7.48 | ||||
Common Class A [Member] | Directors and Employees [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Granted | 322,997 | ||||
Weighted average exercise price, granted | $ 17 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 322,997 | ||||
The 2021 Incentive Plan [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 7,395 | 403 | $ 7,952 | 1,649 | |
The 2021 Incentive Plan [Member] | Minimum [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Percentage of increase in shares of common stock reserved for issuance | 1.00% | ||||
The 2021 Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 454 | 0 | $ 454 | 0 | |
The 2021 Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Directors and Employees [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Granted | 485,792 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.33% | ||||
The 2021 Incentive Plan [Member] | Time Based Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 260 | 403 | 817 | 1,649 | |
The 2021 Incentive Plan [Member] | Two Point Zero And Two Point Five Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | 6,052 | 0 | 6,052 | 0 | |
The 2021 Incentive Plan [Member] | Three Point Zero Units [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 495 | 0 | $ 495 | 0 | |
The 2021 Incentive Plan [Member] | Common Class A [Member] | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Common stock reserved for future issuance | 6,374,273 | 6,374,273 | |||
Equity based compensation | $ 134 | $ 0 | $ 134 | $ 0 |
Equity Based Compensation - Sum
Equity Based Compensation - Summary of Outstanding Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 25, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Beginning balance | 0 |
Granted | 322,997 |
Exercised | 0 |
Expired | 0 |
Forfeited | 0 |
Ending balance | 322,997 |
Exercisable | 0 |
Weighted average exercise price, Beginning balance | $ 0 |
Weighted average exercise price, granted | 17 |
Weighted average exercise price, exercised | 0 |
Weighted average exercise price, expired | 0 |
Weighted average exercise price, forfeited | 0 |
Weighted average exercise price, Ending balance | $ 17 |
Weighted average remaining contractual term (years), ending | 9 years 9 months 18 days |
Weighted average exercise price, options exercisable | $ 0 |
Aggregate intrinsic value, ending | $ 3,682 |
Aggregate intrinsic value, options exercisable | $ 0 |
Equity Based Compensation - Sch
Equity Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 3 Months Ended |
Sep. 25, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield | 0.00% |
Expected volatility | 43.80% |
Risk-free interest rate | 0.90% |
Expected term (in years) | 6 years 6 months |
Equity Based Compensation - S_2
Equity Based Compensation - Summary of restricted stock awards activity (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 25, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning balance | shares | 0 |
Granted | shares | 485,792 |
Vested | shares | 0 |
Forfeited | shares | 3,382 |
Ending balance | shares | 482,410 |
Weighted average grant date fair value, Beginning Balance | $ / shares | $ 0 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 17.24 |
Weighted average grant date fair value, vested | $ / shares | 0 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 17 |
Weighted-Average Grant Date Fair Value, ending | $ / shares | $ 17.24 |
Equity Based Compensation - S_3
Equity Based Compensation - Schedule Of Stock Based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
The 2021 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation | $ 7,395 | $ 403 | $ 7,952 | $ 1,649 |
Common Class A [Member] | The 2021 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation | 134 | 0 | 134 | 0 |
Restricted Stock Units (RSUs) [Member] | The 2021 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation | 454 | 0 | 454 | 0 |
Time Based Units [Member] | The 2021 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation | 260 | 403 | 817 | 1,649 |
Two Point Zero And Two Point Five Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation | 5,645 | |||
Two Point Zero And Two Point Five Units [Member] | The 2021 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation | 6,052 | 0 | 6,052 | 0 |
Three Point Zero Units [Member] | The 2021 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity based compensation | $ 495 | $ 0 | $ 495 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Exit Liability And Related Activity (Details) - European Wax Center, Inc. and Subsidiaries $ in Thousands | 9 Months Ended |
Sep. 25, 2021USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve, Beginning Balance | $ 615 |
Accretion | 6 |
Payments | (273) |
Restructuring Reserve, Ending Balance | $ 348 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Current And Non Current Components of Exit Liabilities (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
Restructuring Cost and Reserve [Line Items] | ||
Accounts payable and accrued liabilities | $ 348 | $ 360 |
Other long-term liabilities | 0 | 255 |
Restructuring Reserve, Total | $ 348 | $ 615 |
Revenue from Contract with Cu_3
Revenue from Contract with Customers - Schedule of Changes in Contract Liabilities (Details) - European Wax Center, Inc. and Subsidiaries $ in Thousands | 9 Months Ended |
Sep. 25, 2021USD ($) | |
Disaggregation Of Revenue [Line Items] | |
Balance at December 26, 2020 | $ 8,879 |
Revenue recognized that was included in the contract liability at the beginning of the year | (1,394) |
Increase, excluding amounts recognized as revenue during the period | 1,936 |
Balance at June 26, 2021 | $ 9,421 |
Revenue from Contract with Cu_4
Revenue from Contract with Customers - Additional Information (Details) | Sep. 25, 2021 |
European Wax Center, Inc. and Subsidiaries | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-26 | |
Disaggregation Of Revenue [Line Items] | |
Weighted average remaining amortization period of deferred revenue | 4 years 9 months 18 days |
Revenue from Contract with Cu_5
Revenue from Contract with Customers - Schedule of Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) - European Wax Center, Inc. and Subsidiaries $ in Thousands | Sep. 25, 2021USD ($) |
Disaggregation Of Revenue [Line Items] | |
2021 (from June 27, 2021) | $ 594 |
2022 | 2,316 |
2023 | 1,068 |
2024 | 1,009 |
2025 | 939 |
Thereafter | 3,495 |
Total | $ 9,421 |
Revenue from Contract with Cu_6
Revenue from Contract with Customers - Summary of Balances in Deferred Revenue (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Sep. 25, 2021 | Dec. 26, 2020 |
Disaggregation Of Revenue [Line Items] | ||
Total deferred revenue | $ 9,421 | $ 8,879 |
Deferred revenue, net of current portion | 6,785 | 6,528 |
Current portion of deferred revenue | 2,636 | 2,351 |
Franchise Fees [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total deferred revenue | 7,887 | 7,542 |
Service Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total deferred revenue | $ 1,534 | $ 1,337 |
Related Party Transactions (Det
Related Party Transactions (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | Dec. 26, 2020 | |
Related Party Transaction [Line Items] | |||||
Advances to related parties | $ 0 | $ 0 | $ 689,000 | ||
Consulting Fees, Related Party | $ 17,000 | $ 33,000 | $ 117,000 | $ 133,000 |
Income Taxes (Additional Inform
Income Taxes (Additional Information) (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 25, 2021 | Sep. 25, 2021 | Sep. 25, 2021 | Dec. 26, 2020 | |
Income tax expense | $ 0 | $ 0 | ||
European Wax Center, Inc. and Subsidiaries | ||||
Income tax expense | $ 0 | $ 0 | ||
Future payments under tax receivable agreement | 69,320 | 69,320 | 69,320 | |
Liability under tax receivable agreement | $ 48,823 | $ 48,823 | $ 48,823 | $ 0 |
Noncontrolling interest - Summa
Noncontrolling interest - Summary of the ownership of EWC Ventures LLC (Details) | Sep. 25, 2021shares |
Noncontrolling Interest [Line Items] | |
Units owned | 61,704,179 |
Ownership percentage | 100.00% |
European Wax Center, Inc. [Member] | |
Noncontrolling Interest [Line Items] | |
Units owned by parent | 31,370,186 |
Ownership percentage by parent | 50.80% |
Noncontrolling Interest [Member] | |
Noncontrolling Interest [Line Items] | |
Units owned by noncontrolling interest | 30,333,993 |
Ownership percentage by noncontrolling interest | 49.20% |
Net loss per share - Schedule o
Net loss per share - Schedule of Computation of Basic And Diluted Net Loss Per Share (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 25, 2021 | Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income (loss) | $ (10,768) | $ (5,531) | $ (6,543) | $ (5,531) |
Less: net loss attributable to noncontrolling interests | (5,237) | $ (5,237) | $ (5,237) | |
Class A Units [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss applicable to Class A common shareholders | $ (5,531) | |||
Basic and diluted weighted average outstanding shares | ||||
Basic and diluted weighted average outstanding shares | 31,370,186 | |||
Basic and diluted net loss per unit applicable to shareholders: | ||||
Basic and diluted net loss per unit applicable to shareholders: | $ (0.18) |
Net loss per share - Additional
Net loss per share - Additional Information (Details) | 2 Months Ended |
Sep. 25, 2021shares | |
Stock Options [Member] | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Securities excluded from computations of diluted net income (loss) per share | 322,997 |
Restricted Stock Units [Member] | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Securities excluded from computations of diluted net income (loss) per share | 482,410 |