Leases (Tables)

3 Months Ended

Apr. 02, 2023

Leases [Abstract]

Lease, Cost

The components of lease cost are as follows:

	Three Months Ended
	April 2, 2023		April 3, 2022
Finance lease cost:
Amortization of finance lease assets	$	4,063	$	4,064
Interest on finance lease liabilities	10,750		10,645
	14,813		14,709
Operating lease cost	21,449		20,661
Variable lease cost (a)	16,081		14,803
Short-term lease cost	1,506		1,433
Total operating lease cost (b)	39,036		36,897
Total lease cost	$	53,849	$	51,606

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(a)Includes expenses for executory costs of $9,848 and $9,608 for the three months ended April 2, 2023 and April 3, 2022, respectively, for which the Company is reimbursed by sublessees.

(b)Includes $30,598 and $28,925 for the three months ended April 2, 2023 and April 3, 2022, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $7,865 and $7,294 for the three months ended April 2, 2023 and April 3, 2022, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.

Lease, Income

The components of lease income are as follows:

	Three Months Ended
	April 2, 2023		April 3, 2022
Sales-type and direct-financing leases:
Selling profit	$	129	$	480
Interest income (a)	7,862		7,740
Operating lease income	42,156		43,314
Variable lease income	15,651		14,557
Franchise rental income (b)	$	57,807	$	57,871

_______________

(a)Included in “Interest expense, net.”

(b)Includes sublease income of $42,951 and $43,165 recognized during the three months ended April 2, 2023 and April 3, 2022, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $9,778 and $9,535 for the three months ended April 2, 2023 and April 3, 2022, respectively.