Revenues

9 Months Ended

Sep. 23, 2020

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Our revenues are derived primarily from two sales channels, which we operate as one segment: company restaurants and franchised and licensed restaurants. The following table disaggregates our revenue by sales channel and type of good or service:

	Quarter Ended				Three Quarters Ended
	September 23, 2020		September 25, 2019		September 23, 2020		September 25, 2019
	(In thousands)
Company restaurant sales	$	27,849	$	63,582	$	85,268	$	257,574
Franchise and license revenue:
Royalties	17,896		27,830		48,462		79,742
Advertising revenue	13,927		20,756		38,685		59,582
Initial and other fees	1,890		1,356		4,933		4,250
Occupancy revenue	10,082		10,734		31,152		26,405
Franchise and license revenue	43,795		60,676		123,232		169,979
Total operating revenue	$	71,644	$	124,258	$	208,500	$	427,553

Franchise occupancy revenue consisted of the following:

	Quarter Ended				Three Quarters Ended
	September 23, 2020		September 25, 2019		September 23, 2020		September 25, 2019
	(In thousands)
Operating lease revenue	$	8,277	$	7,964	$	24,959	$	19,235
Variable lease revenue	1,805		2,770		6,193		7,170
Total occupancy revenue	$	10,082	$	10,734	$	31,152	$	26,405

Balances related to contracts with customers consist of receivables, deferred franchise revenue and deferred gift card revenue. See Note 3 for details on our receivables.

Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that we will begin amortizing into revenue when the related restaurants are opened. Initial franchise fees are amortized over the term of the related franchise agreement, generally 10-20 years. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising. The components of the change in deferred franchise revenue are as follows:

	(In thousands)
Balance, December 25, 2019	$	23,256
Fees received from franchisees	535
Revenue recognized (1)	(2,474)
Balance, September 23, 2020	21,317
Less current portion included in other current liabilities	2,112
Deferred franchise revenue included in other noncurrent liabilities	$	19,205

(1) Of this amount $2.4 million was included in the deferred franchise revenue balance as of December 25, 2019.

Gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of gift card liabilities represents our remaining performance obligations to our customers. The balance of gift card liabilities as of September 23, 2020 and December 25, 2019 was $4.8 million and $6.5 million, respectively. During the three quarters ended September 23, 2020, we recognized revenue of $0.3 million from gift card redemptions at company restaurants.