XML 31 R20.htm IDEA: XBRL DOCUMENT v3.22.2
Segment Information
 6 Months Ended
Jun. 26, 2022
Segment Reporting [Abstract]  
Segment Information Segment InformationWe have four reportable segments: domestic Company-owned restaurants, North America franchising, North America commissaries, and international operations. The domestic Company-owned restaurant segment consists of the operations of all domestic (“domestic” is defined as contiguous United States) Company-owned restaurants and derives its revenues principally from retail sales of pizza, Papadias, which are flatbread-style sandwiches, and side items, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages. The North America commissary
segment consists of the operations of our regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to domestic Company-owned and franchised restaurants in the United States and Canada. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and collection of royalties from our franchisees located in the United States and Canada. The international segment principally consists of distribution sales to franchised Papa John’s restaurants located in the United Kingdom and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our international franchisees. International franchisees are defined as all franchise operations outside of the United States and Canada. All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as “all other,” which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms.
Generally, we evaluate performance and allocate resources based on operating income and intercompany eliminations. Certain administrative and capital costs are allocated to segments based upon predetermined rates or estimated resource usage. We account for intercompany sales and transfers as if the sales or transfers were to third parties and eliminate the activity in consolidation.
Our reportable segments are business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. No single external customer accounted for 10% or more of our consolidated revenues.
Our segment information is as follows:
Three Months EndedSix Months Ended
(In thousands)June 26,
2022		June 27,
2021		June 26,
2022		June 27,
2021
Revenues:
Domestic Company-owned restaurants$171,411$196,124$370,176$393,358
North America franchising34,91732,47569,18565,190
North America commissaries219,383186,641429,062371,519
International39,28246,27781,98988,881
All others57,67253,491114,945107,806
Total revenues $522,665$515,008$1,065,357$1,026,754
Intersegment revenues:
North America franchising$1,048$1,041$2,101$2,101
North America commissaries52,75453,428111,261105,498
All others15,88918,94335,26838,091
Total intersegment revenues$69,691$73,412$148,630$145,690
Operating income:
Domestic Company-owned restaurants (1)$5,924$15,361$7,912$30,685
North America franchising32,62430,51864,76160,961
North America commissaries10,9579,77820,29219,491
International (2)7,3068,68311,76117,047
All others2,1874,8945,90611,012
Unallocated corporate expenses (3)(19,344)(24,617)(56,454)(47,779)
Elimination of intersegment (profits) losses(750)20(839)82
Total operating income$38,904$44,637$53,339$91,499
Property and equipment, net:
Domestic Company-owned restaurants$225,755
North America commissaries151,648
International15,157
All others118,496
Unallocated corporate assets240,431
Accumulated depreciation and amortization(526,105)
Total property and equipment, net$225,382
(1)
Includes a one-time, non-cash charge of $8.4 million associated with the refranchising of the Company’s ownership interest in a 90-restaurant joint venture, recorded as Refranchising and impairment loss for the six months ended June 26, 2022. See Note 10 for additional information.
(2)
Includes $3.5 million of one-time, non-cash reserves for certain accounts receivable and impairments of reacquired franchise rights for the six months ended June 26, 2022. See Notes 2 and 10 for additional information.
(3)
Unallocated corporate expenses include $13.9 million of one-time, non-cash reserves of certain notes receivable, $5.0 million for the Legal Settlement, and $1.5 million of advisory fees and severance costs associated with the transition of certain executives for the six months ended June 26, 2022. Unallocated corporate expense includes $3.3 million and $7.2 million of reorganization costs for the three and six months ended June 27, 2021. See Notes 2 and 9 for additional information.
Disaggregation of Revenue
In the following tables, revenues are disaggregated by major product/service line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands):
Reportable Segments
Three Months Ended June 26, 2022
Major Products/Services LinesDomestic Company-owned restaurantsNorth America franchisingNorth America commissariesInternationalAll othersTotal
Company-owned restaurant sales$171,411 $— $— $— $— $171,411 
Franchise royalties and fees— 35,965 — 12,043 — 48,008 
Commissary sales— — 272,137 19,915 — 292,052 
Other revenues— — — 7,324 73,561 80,885 
Eliminations— (1,048)(52,754)— (15,889)(69,691)
Total segment revenues$171,411 $34,917 $219,383 $39,282 $57,672 $522,665 
International other revenues (1)— — — (7,324)7,324 — 
Total revenues$171,411 $34,917 $219,383 $31,958 $64,996 $522,665 
Reportable Segments
Three Months Ended June 27, 2021
Major Products/Services LinesDomestic Company-owned restaurantsNorth America franchisingNorth America commissariesInternationalAll othersTotal
Company-owned restaurant sales$196,124 $— $— $— $— $196,124 
Franchise royalties and fees— 33,516 — 13,156 — 46,672 
Commissary sales— — 240,069 24,458 — 264,527 
Other revenues— — — 8,663 72,434 81,097 
Eliminations— (1,041)(53,428)— (18,943)(73,412)
Total segment revenues$196,124 $32,475 $186,641 $46,277 $53,491 $515,008 
International other revenues (1)— — — (8,663)8,663 — 
Total revenues$196,124 $32,475 $186,641 $37,614 $62,154 $515,008 
Reportable Segments
Six Months Ended June 26, 2022
Major Products/Services LinesDomestic Company-owned restaurantsNorth America franchisingNorth America commissariesInternationalAll othersTotal
Company-owned restaurant sales$370,176 $— $— $— $— $370,176 
Franchise royalties and fees— 71,286 — 25,478 — 96,764 
Commissary sales— — 540,323 41,097 — 581,420 
Other revenues— — — 15,414 150,213 165,627 
Eliminations— (2,101)(111,261)— (35,268)(148,630)
Total segment revenues$370,176 $69,185 $429,062 $81,989 $114,945 $1,065,357 
International other revenues (1)— — — (15,414)15,414 — 
Total revenues$370,176 $69,185 $429,062 $66,575 $130,359 $1,065,357 
Reportable Segments
Six Months Ended June 27, 2021
Major Products/Services LinesDomestic Company-owned restaurantsNorth America franchisingNorth America commissariesInternationalAll othersTotal
Company-owned restaurant sales$393,358 $— $— $— $— $393,358 
Franchise royalties and fees— 67,291 — 25,364 — 92,655 
Commissary sales— — 477,017 46,857 — 523,874 
Other revenues— — — 16,660 145,897 162,557 
Eliminations— (2,101)(105,498)— (38,091)(145,690)
Total segment revenues$393,358 $65,190 $371,519 $88,881 $107,806 $1,026,754 
International other revenues (1)— — — (16,660)16,660 — 
Total revenues$393,358 $65,190 $371,519 $72,221 $124,466 $1,026,754 
(1)
Other revenues as reported in the Condensed Consolidated Statements of Operations include $7.3 million and $15.4 million of revenue for the three and six months ended June 26, 2022, respectively, and $8.7 million and $16.7 million for the three and six months ended June 27, 2021, respectively, that are part of the international reporting segment. These amounts include marketing fund contributions and sublease rental income from international franchisees in the United Kingdom that provide no significant contribution to operating income but must be reported on a gross basis under accounting requirements. The related expenses for these Other revenues are reported in Other expenses in the Condensed Consolidated Statements of Operations.