v3.26.1
DISCONTINUED OPERATIONS
 6 Months Ended
Apr. 12, 2026
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS
Del Taco - On October 15, 2025, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the Buyer and Buyer Guarantor to sell to Buyer all of the issued and outstanding equity interests of Del Taco, which owns and operates the Company’s Del Taco restaurant operations, for an aggregate purchase price of $115.0 million in cash, subject to certain closing cash, working capital, debt and transaction expense adjustments. The transaction closed on December 22, 2025 (the “Del Taco Sale”). The transaction documents include an indemnification provision pursuant to which the Company may be required to indemnify Del Taco for certain losses incurred within one-year following the transaction closing on December 22, 2025, but only with respect to specifically identified matters, and subject to an aggregate cap of $10.0 million.
As the Del Taco Sale represents a strategic shift that will have a major effect on our operations and financial results, the Del Taco results are classified as discontinued operations in our condensed consolidated statements of earnings (loss) and our condensed consolidated statements of cash flows for all periods presented. Prior year results have been recast to conform with the current year presentation.
We had entered into a Transition Services Agreement (“TSA”) with the Buyer pursuant to which the Buyer is receiving certain services to enable it to operate the Del Taco business after the closing of the Del Taco Sale. The services include information technology, finance and accounting, human resources, supply chain and other corporate support services. The Company recorded $0.6 million and $1.5 million in the second quarter and year-to-date periods of fiscal 2026, respectively, related to the TSA as a reduction of selling, general and administrative expenses in the condensed consolidated statements of earnings (loss). The TSA period has since concluded as of the end of the second quarter.
The following table summarizes the Del Taco results for each period prior to the sale (in thousands, except per share data):
Quarter
Year-to-date(1)
April 12,
2026		April 13,
2025		April 12,
2026		April 13,
2025
Company restaurant sales$— $47,398 $48,713 $115,048 
Franchise revenues— 23,567 21,509 54,291 
Company restaurant costs— (41,332)(43,199)(99,641)
Franchise costs— (17,834)(12,944)(40,647)
Selling, general, and administrative expenses (2)
— (7,264)(7,018)(16,787)
Depreciation and amortization (3)
— (4,149)(882)(9,961)
Pre-opening costs— (33)(50)(52)
Impairment of goodwill and intangible assets— (203,230)— (203,230)
Other operating expense, net— (2,456)(570)(3,428)
Transaction-related costs (4)
(1,776)— (9,593)— 
Gains on the sale of company-operated restaurants— (30)— 2,776 
Interest expense, net— (15)1 (61)
Operating loss from discontinued operations before income taxes(1,776)(205,378)(4,033)(201,692)
Loss on Del Taco sale— — (47,428)— 
Losses from discontinued operations and before income taxes(1,776)(205,378)(51,461)(201,692)
Income tax expense (benefit) (5)
520 (42,451)(32,318)(41,455)
Losses from discontinued operations, net of income taxes(2,296)(162,927)(19,143)(160,237)
Net loss per share from discontinued operations
Basic$(0.12)$(8.56)$(1.00)$(8.41)
Diluted$(0.12)$(8.56)$(0.99)$(8.41)
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(1)Del Taco operating results include only twelve weeks of activity through the sale date on December 22, 2025.
(2)Selling, general and administrative expenses presented in the table above include corporate costs directly in support of Del Taco operations. All other corporate costs were classified in results of continuing operations.
(3)Depreciation and amortization ceased upon classification of the Del Taco assets as held for sale during the quarter.
(4)Transaction-related costs are comprised primarily of professional fees for accounting and legal, which were not contingent fees included in loss on sale calculation.
(5)Income tax benefit in 2026 is primarily due to utilization of capital loss from the Del Taco sale, net of valuation allowance against excess capital loss carryforward to expire in fiscal year 2031.
The following is a reconciliation of the loss recorded for the Del Taco sale (in thousands):
Net proceeds received from the Del Taco Sale (1)
$119,086 
Del Taco assets:
Cash$421 
Accounts and other receivables, net14,048 
Inventories1,688 
Prepaid expenses848 
Other current assets1,508 
Property and equipment, net99,790 
Operating lease right-of-use assets369,349 
Intangible assets, net9,803 
Trademarks105,600 
Other assets, net14,014 
Total Del Taco assets$617,069 
Del Taco liabilities:
Current maturities of long-term debt$31 
Current operating lease liabilities21,551 
Accounts payable12,986 
Accrued liabilities21,281 
Long-term debt, net of current maturities245 
Long-term operating lease liabilities, net of current portion349,616 
Deferred tax liabilities23,405 
Other long-term liabilities, including note payable26,390 
Total Del Taco liabilities $455,505 
Other transaction costs incurred as part of the Del Taco sale (2)
$4,950 
Loss on sale of Del Taco before income taxes$(47,428)
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(1)The proceeds received from the Del Taco Sale include working capital adjustments outlined in the Purchase Agreement.
(2)Costs directly incurred as a result of the Del Taco Sale, including investment bank fees and employee transaction awards.
The assets being sold and liabilities being assumed by the Buyer were classified as held-for-sale during the first quarter of 2026. As such, prior year balances have been recast to conform with this presentation. Upon classification of the Del Taco assets as held for sale, the assets were no longer depreciated. Proceeds from the Del Taco Sale have been presented in the condensed consolidated statement of cash flows within cash provided by discontinued operations in investing activities.