| Leases |
Note 10 – Leases
The components of lease expense for the nine periods ended September 28, 2025 and the nine months ended September 30, 2024 are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
September 28, |
|
September 30, |
|
|
|
2025 |
|
2024 |
|
Lease cost |
|
|
|
|
|
|
|
Operating lease cost |
|
$ |
34,756 |
|
$ |
25,825 |
|
Finance lease cost |
|
|
|
|
|
|
|
Amortization of ROU assets |
|
|
155 |
|
|
157 |
|
Interest on lease liabilities |
|
|
65 |
|
|
66 |
|
Total finance lease cost |
|
|
220 |
|
|
223 |
|
Variable lease cost (1) |
|
|
14,620 |
|
|
16,860 |
|
Short-term lease cost |
|
|
3,073 |
|
|
1,447 |
|
Total lease cost |
|
$ |
52,669 |
|
$ |
44,355 |
|
|
|
|
|
|
|
|
|
Weighted average remaining lease term |
|
|
|
|
|
|
|
Operating leases |
|
|
13 years |
|
|
13 years |
|
Finance leases |
|
|
3 years |
|
|
4 years |
|
Weighted average discount rate |
|
|
|
|
|
|
|
Operating leases |
|
|
10.40 |
% |
|
10.31 |
% |
Finance leases |
|
|
11.14 |
% |
|
11.14 |
% |
| (1) |
Variable lease cost is comprised of percentage rent and common area maintenance. |
During the three and nine periods ended September 28, 2025, the Company recorded non-cash impairment charges of $0.7 million on operating lease right-of-use assets related to restauarants with upcoming lease expirations
Supplemental cash flow information related to leases for the period was as follows (in thousands):
|
|
|
|
|
|
|
|
|
September 28, |
|
December 31, |
|
|
2025 |
|
2024 |
Finance lease right-of-use assets (1) |
|
$ |
592 |
|
$ |
849 |
Current portion of finance lease liabilities (1) |
|
|
178 |
|
|
189 |
Long-term portion of finance lease liabilities (1) |
|
|
494 |
|
|
754 |
| (1) |
Finance lease assets and liabilities are included in other assets, other current liabilities, and other long-term liabilities on the condensed consolidated balance sheet. |
|
|
|
|
|
|
|
|
|
September 28, |
|
September 30, |
|
|
2025 |
|
2024 |
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
31,309 |
|
$ |
21,479 |
Operating cash flows from finance leases |
|
$ |
155 |
|
$ |
157 |
Financing cash flows from finance leases |
|
$ |
252 |
|
$ |
199 |
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
Operating leases |
|
$ |
4,608 |
|
$ |
3,081 |
The Company has entered into ten operating leases for future restaurants that have not commenced as of September 28, 2025. The present value of the aggregate future commitment related to these leases, net of tenant improvement allowances received from the landlord, is estimated to be $34.9 million. The Company expects these leases, which have initial lease terms of 10 to 20 years, to commence within the next twelve months.
As of September 28, 2025, maturities of the Company’s operating lease liabilities are as follows (in thousands):
|
|
|
|
2025, three periods remaining |
|
$ |
7,567 |
2026 |
|
|
40,365 |
2027 |
|
|
44,309 |
2028 |
|
|
44,442 |
2029 |
|
|
45,126 |
Thereafter |
|
|
395,884 |
Total lease payments |
|
|
577,693 |
Less: imputed interest |
|
|
(278,822) |
Present value of operating lease liabilities |
|
$ |
298,871 |
As of September 28, 2025, maturities of the Company’s finance lease liabilities are as follows (in thousands):
|
|
|
|
2025, three periods remaining |
|
$ |
94 |
2026 |
|
|
240 |
2027 |
|
|
240 |
2028 |
|
|
220 |
Total lease payments |
|
|
794 |
Less: imputed interest |
|
|
(122) |
Present value of finance lease liabilities |
|
$ |
672 |
|