Segment Information (Tables)

9 Months Ended

Sep. 24, 2023

The following tables present our segment information.


	Three Months Ended				Nine Months Ended
(In thousands)	September 24, 2023		September 25, 2022		September 24, 2023		September 25, 2022
Revenues:
Domestic Company-owned restaurants	$	177,195	$	166,050	$	532,841	$	536,226
North America franchising	35,041		33,712		105,824		102,897
North America commissaries	204,887		216,115		624,433		645,177
International	48,481		37,707		128,539		119,696
All others	57,208		56,928		172,754		171,873
Total revenues	$	522,812	$	510,512	$	1,564,391	$	1,575,869

Intersegment revenues:
North America franchising	$	1,040	$	996	$	3,117	$	3,097
North America commissaries	51,237		51,330		154,640		162,591

All others	16,180		15,562		49,363		50,830
Total intersegment revenues	$	68,457	$	67,888	$	207,120	$	216,518

Operating income:
Domestic Company-owned restaurants (a)	$	6,147	$	3,667	$	19,438	$	11,579
North America franchising	32,234		31,464		97,745		96,225
North America commissaries	10,691		8,425		31,818		28,717
International (b)	2,270		1,136		13,265		12,897
All others	2,379		2,037		6,879		7,943
Unallocated corporate expenses (c)	(20,792)		(27,684)		(63,859)		(84,138)
Elimination of intersegment (profits) losses	(1,061)		416		(710)		(423)
Total operating income	$	31,868	$	19,461	$	104,576	$	72,800


Property and equipment, net:
Domestic Company-owned restaurants	$	249,211
North America commissaries	157,056
International	29,403
All others	142,905
Unallocated corporate assets	251,104
Accumulated depreciation and amortization	(561,592)
Total property and equipment, net	$	268,087

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(a) The nine months ended September 25, 2022 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. See “Note 10. Divestitures” for additional information.

(b) The three and nine months ended September 24, 2023 includes $1.2 million and $2.5 million of costs associated with repositioning the UK portfolio as well as transaction costs related to the acquisition of stores from franchisees. The three and nine months ended September 25, 2022 includes a charge of $4.1 million related to the reserve of certain accounts and notes receivable and operating lease right-of-use assets impairment associated with the termination of a significant franchise in the United Kingdom. The three and nine months ended September 25, 2022 also includes $3.5 million of one-time, non-cash reserves for certain accounts receivable and impairments of reacquired franchise rights. See “Notes 2. Significant Accounting Policies”, “10. Divestitures” and “12. Acquisitions” for additional information.

(c) The nine months ended September 24, 2023 includes $2.0 million of severance and related costs associated with the transition of certain executives. The three and nine months ended September 24, 2023 includes $0.6 million for certain legal settlements. Unallocated corporate expenses includes $10.0 million for certain legal settlements for the three months ended September 25, 2022. The nine months ended September 25, 2022 includes $13.9 million of one-time, non-cash reserves of certain notes receivable, $15.0 million for certain legal settlements, and $1.5 million of advisory fees and severance costs associated with the transition of certain

executives. See “Notes 2. Significant Accounting Policies” and “9. Litigation, Commitments and Contingencies” for additional information.

Schedule of revenue disaggregated by major product line

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 September 24, 2023
Major Products/Services Lines	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		All others		Total
Company-owned restaurant sales	$	177,195	$	—	$	—	$	14,013	$	—	$	191,208
Franchise royalties and fees	—		36,081		—		12,219		—		48,300
Commissary sales	—		—		256,124		16,695		—		272,819
Other revenues	—		—		—		5,554		73,388		78,942
Eliminations	—		(1,040)		(51,237)		—		(16,180)		(68,457)
Total segment revenues	177,195		35,041		204,887		48,481		57,208		522,812
International other revenues (a)	—		—		—		(5,554)		5,554		—
Total revenues	$	177,195	$	35,041	$	204,887	$	42,927	$	62,762	$	522,812

	Reportable Segments
	Three Months Ended September 25, 2022
Major Products/Services Lines	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		All others		Total
Company-owned restaurant sales	$	166,050	$	—	$	—	$	—	$	—	$	166,050
Franchise royalties and fees	—		34,708		—		11,619		—		46,327
Commissary sales	—		—		267,445		19,116		—		286,561
Other revenues	—		—		—		6,972		72,490		79,462
Eliminations	—		(996)		(51,330)		—		(15,562)		(67,888)
Total segment revenues	166,050		33,712		216,115		37,707		56,928		510,512
International other revenues (a)	—		—		—		(6,972)		6,972		—
Total revenues	$	166,050	$	33,712	$	216,115	$	30,735	$	63,900	$	510,512

	Reportable Segments
	Nine Months Ended September 24, 2023
Major Products/Services Lines	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		All others		Total
Company-owned restaurant sales	$	532,841	$	—	$	—	$	17,031	$	—	$	549,872
Franchise royalties and fees	—		108,941		—		36,906		—		145,847
Commissary sales	—		—		779,073		55,061		—		834,134
Other revenues	—		—		—		19,541		222,117		241,658
Eliminations	—		(3,117)		(154,640)		—		(49,363)		(207,120)
Total segment revenues	532,841		105,824		624,433		128,539		172,754		1,564,391
International other revenues (a)	—		—		—		(19,541)		19,541		—
Total revenues	$	532,841	$	105,824	$	624,433	$	108,998	$	192,295	$	1,564,391


	Reportable Segments
	Nine Months Ended September 25, 2022
Major Products/Services Lines	Domestic Company-owned restaurants		North America franchising		North America commissaries		International		All others		Total
Company-owned restaurant sales	$	536,226	$	—	$	—	$	—	$	—	$	536,226
Franchise royalties and fees	—		105,994		—		37,097		—		143,091
Commissary sales	—		—		807,768		60,213		—		867,981
Other revenues	—		—		—		22,386		222,703		245,089
Eliminations	—		(3,097)		(162,591)		—		(50,830)		(216,518)
Total segment revenues	536,226		102,897		645,177		119,696		171,873		1,575,869
International other revenues (a)	—		—		—		(22,386)		22,386		—
Total revenues	$	536,226	$	102,897	$	645,177	$	97,310	$	194,259	$	1,575,869

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(a) Other revenues as reported in the Condensed Consolidated Statements of Operations include $5.6 million and $19.5 million of revenues for the three and nine months ended September 24, 2023, respectively, and $7.0 million and $22.4 million for the three and nine months ended September 25, 2022, 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.