Income Taxes (Tables)

12 Months Ended

Jan. 02, 2024

Schedule of the Components of the Provision for Income Taxes

The components of the provision (benefit) for income taxes are as follows for 2023, 2022 and 2021 (in thousands):


	2023		2022		2021
Current tax provision:
Federal	$	—	$	—	$	—
State	(2)		77		41
	(2)		77		41
Deferred tax (benefit) provision:
Federal	21		(27)		23
State	5		(13)		6
	26		(40)		29
Total provision for income taxes	$	24	$	37	$	70

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of income tax provision (benefit) that would result from applying the federal statutory rate to pre-tax income as shown in the accompanying Consolidated Statements of Operations is as follows for 2023, 2022 and 2021 (in thousands):


	2023			2022			2021
Federal income tax (benefit) provision at federal rate	$	(2,065)		$	(688)		$	784
State income tax (benefit) provision, net of federal tax	(420)			(112)			162
Other permanent differences	629			368			(17)
Tax credits	(1,513)			(1,608)			(1,297)
Change in valuation allowance	3,352			1,558			244
Tax rate change	—			—			6
Deferred tax asset write-off	78			320			207
Other items, net	(37)			199			(19)
Provision for income taxes	$	24		$	37		$	70
Effective income tax rate	(0.2)		%	(1.1)		%	1.9		%

Schedule of Deferred Tax Assets and Liabilities

The Company’s total deferred tax assets and liabilities are as follows (in thousands):


	2023		2022
Deferred tax assets	$	121,801	$	113,054
Deferred tax liabilities	(71,383)		(65,961)
Total deferred tax assets	50,418		47,093
Valuation allowance	(50,673)		(47,322)
Net deferred tax liabilities	$	(255)	$	(229)

Deferred income taxes arise because of the differences in the book and tax bases of certain assets and liabilities. Deferred income tax liabilities and assets consist of the following (in thousands):


	2023		2022
Deferred tax assets (liabilities):
Loss carry forwards	$	45,547	$	39,339
Deferred franchise revenue	1,968		2,411
Property, equipment and intangible assets	(20,473)		(14,802)
Stock-based compensation	1,872		1,970
Tax credit carry forwards	8,744		7,231
Interest expense	1,935		617
Inventory smallwares	(1,772)		(1,700)
Other accrued expenses	518		391
Operating lease assets	(49,138)		(49,459)
Operating lease liabilities	59,611		59,747
Other	1,606		1,348
Total net deferred tax assets	50,418		47,093
Valuation allowance	(50,673)		(47,322)
Net deferred tax liabilities	$	(255)	$	(229)