Leases

6 Months Ended

Jun. 28, 2026

Leases

Nature of Leases

The Company operates restaurants that are located on sites owned by us and sites leased by us from third parties. In addition, the Company owns sites and leases sites from third parties, which it leases and/or subleases to franchisees. The Company also leases restaurant, office and transportation equipment. As of June 28, 2026, the nature of restaurants operated by the Company and its franchisees was as follows:


			June 28, 2026
Company-operated restaurants:
Owned land and building			154
Owned building and held long-term land leases			141
Leased land and building			135
Total Company-operated restaurants			430

Franchisee-operated restaurants:
Company-owned properties leased to franchisees			443
Company-leased properties subleased to franchisees			1,088
Other franchisee-operated restaurants			5,219
Total franchisee-operated restaurants			6,750
Total Company-operated and franchisee-operated restaurants			7,180

Company as Lessee

The components of lease cost are as follows:


	Three Months Ended				Six Months Ended
	June 28, 2026		June 29, 2025		June 28, 2026		June 29, 2025
Finance lease cost:
Amortization of finance lease assets	$	5,358	$	4,885	$	11,126	$	10,030
Interest on finance lease liabilities	11,615		10,865		23,257		21,742
	16,973		15,750		34,383		31,772
Operating lease cost	17,381		21,322		37,391		41,839
Variable lease cost (a)	16,570		17,269		32,479		33,482
Short-term lease cost	1,390		1,304		2,766		2,570
Total operating lease cost (b)	35,341		39,895		72,636		77,891
Total lease cost	$	52,314	$	55,645	$	107,019	$	109,663

_______________

(a)Includes expenses for executory costs of $10,297 and $10,578 for the three months ended June 28, 2026 and June 29, 2025, respectively, and $20,836 and $20,972 for the six months ended June 28, 2026 and June 29, 2025, respectively, for which the Company is reimbursed by sublessees.

(b)Includes $27,953 and $32,569 for the three months ended June 28, 2026 and June 29, 2025, respectively, and $57,993 and $63,221 for the six months ended June 28, 2026 and June 29, 2025, respectively, recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees. Also includes $6,917 and $6,946 for the three months ended June 28, 2026 and June 29, 2025, respectively, and $13,804 and $13,887 for the six months ended June 28, 2026 and June 29, 2025, respectively, recorded to “Cost of sales” for leases for Company-operated restaurants.

Leases, Company as Lessor

Company as Lessor

The components of lease income are as follows:


	Three Months Ended				Six Months Ended
	June 28, 2026		June 29, 2025		June 28, 2026		June 29, 2025
Sales-type and direct-financing leases:
Selling profit	$	276	$	34	$	2,129	$	23
Interest income (a)	6,563		6,943		13,263		13,858

Operating lease income	36,038		42,467		78,689		84,888
Variable lease income	17,325		17,944		33,578		33,977
Franchise rental income (b)	$	53,363	$	60,411	$	112,267	$	118,865

_______________

(a)Included in “Interest expense, net.”

(b)Includes sublease income of $37,941 and $44,667 recognized during the three months ended June 28, 2026 and June 29, 2025, respectively, and $80,141 and $87,451 for the six months ended June 28, 2026 and June 29, 2025, respectively. Sublease income includes lessees’ variable payments to the Company for executory costs of $10,356 and $10,512 for the three months ended June 28, 2026 and June 29, 2025, respectively, and $20,767 and $20,709 for the six months ended June 28, 2026 and June 29, 2025, respectively.