BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
|---|---|
Apr. 01, 2026 | |
| BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
| Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position and results of operations and cash flows for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by U.S. GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of each calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations. Approximately every five or six years, a 53-week fiscal year occurs. Fiscal 2026 is a 52-week year ending on December 30, 2026. Fiscal 2025 was a 53-week year that ended on December 31, 2025. 53-week years may cause revenues, expenses, and other results of operations to be higher due to the additional week of operations. |
| Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
| Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenue and expenses during the periods reported. Actual results could materially differ from those estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, insurance reserves, lease accounting matters, contingent liabilities, and income tax valuation allowances. |
| Liquidity | Liquidity The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodels and maintenance), interest payments on its debt, lease obligations and working capital and general corporate needs. As of April 1, 2026, the Company’s total outstanding balance on its Revolver was $44.0 million. The Company’s ability to make payments on its indebtedness and to fund planned capital expenditures depends on available cash and its ability to generate adequate cash flows in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond the Company’s control. Based on current operations, the Company believes that its cash flow from operations, available cash of $3.9 million at April 1, 2026, and the outstanding borrowing availability under the 2022 Revolver will be adequate to meet the Company’s liquidity needs for the next twelve months from the date of filing of these condensed consolidated financial statements. |
| Subsequent Events | Subsequent Events Subsequent to the quarter-end, the Company borrowed $5.0 million and paid down $3.0 million on its 2022 Revolver, resulting in outstanding borrowings of $46.0 million as of May 7, 2026. |
| Concentration of Risk | Concentration of Risk Cash and cash equivalents are maintained at financial institutions and, at times, these balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances. The Company had no suppliers for which amounts due totaled more than 10% of the Company’s accounts payable as of April 1, 2026. The Company had one supplier to whom amounts due totaled 10.9% of the Company’s accounts payable as of December 31, 2025. Purchases from the Company’s largest supplier totaled 29.7% of total expenses for the thirteen weeks ended April 1, 2026, and 15.1% of total expenses for the thirteen weeks ended March 26, 2025. Company-operated and franchise-operated restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.9% of total revenue for the thirteen weeks ended April 1, 2026, and 71.6% of total revenue for the thirteen weeks ended March 26, 2025. |
| Non-financial instruments | Non-financial instruments The Company’s non-financial instruments, which primarily consist of property and equipment, operating lease right-of-use assets, goodwill and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on an annual basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial instruments are assessed for impairment. If applicable, the carrying values are written down to fair value. The Company determined that there were no indicators of potential impairment for its non-financial assets during the thirteen weeks ended April 2, 2026 or during the thirteen weeks ended March 13, 2025. |
| Income Taxes | Income Taxes For the thirteen weeks ended April 1, 2026, the Company recorded an income tax provision of $3.3 million, reflecting an estimated effective tax rate of 29.0%. For the thirteen weeks ended March 26, 2025, the Company recorded an income tax provision of $2.3 million, reflecting an estimated effective tax rate of approximately 29.7%. The difference between the 21.0% statutory rate and the effective tax rate of 29.0% for the thirteen weeks ended April 1, 2026 is primarily a result of state tax rates based on apportioned income and the impact of non-tax deductible executive compensation, partially offset by the impact of higher stock compensation expense deductible for tax related to vesting of restricted stock awards as compared to the cumulative amount recorded as stock-based compensation expense, and federal targeted job credits.Summary of Significant Accounting Policies |