RELATED-PARTY TRANSACTIONS |
9 Months Ended |
|---|---|
Sep. 27, 2026 | |
| Related Party Transactions [Abstract] | |
| RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS In the ordinary course of business, the Company enters into transactions with related parties. These transactions are described below. The Company has relationships with certain franchise owners that may be considered variable interest entities (“VIEs”). These franchise owners are independently owned and operated, and the Company does not have an equity ownership interest in these entities. The Company’s involvement with these franchise owners arises primarily from franchise agreements, as well as, in certain instances, limited guarantees or other forms of financial support. The Company is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact their economic performance. Such activities are primarily controlled by the franchise owners, including day-to-day operations, staffing, and local business decisions. Accordingly, the Company does not consolidate these entities. The Company’s maximum exposure to loss related to these franchise owners is limited to the carrying value of any related receivables and any amounts subject to guarantee arrangements. Contingent Consideration As part of the Reorganization Transactions, the contingent consideration liability related to the sponsor acquisition was assigned to Jersey Mike’s Holdings. Jersey Mike’s Holdings is now subject to an earn-out arrangement providing for a payment of $250 million to the founder after Jersey Mike's stores operational worldwide reach 4,000 locations or upon a change in control event. The earn-out is expected to be paid by Jersey Mike’s Holdings upon the opening of the 4,000th store. The liability is carried at $227 million as of September 27, 2026 within Other non-current liabilities and is accreted to its expected settlement amount, with changes recognized in Revaluation of contingent liability. IPO-Related Legal Fees Paid on Behalf of Related Parties In connection with the IPO, the Company paid $1 million of legal fees incurred by certain Continuing Unitholders and Pre-IPO Stockholders, including entities affiliated with the Company's founder in connection with the IPO and the related Reorganization Transactions. The Company paid these fees, and the related parties are not required to reimburse the Company. For the thirteen and thirty-nine weeks ended September 27, 2026, the Company recorded $1 million of legal fees within General and administrative expenses in the Condensed Consolidated Statements of Operations in connection with this arrangement. As of September 27, 2026, no amounts remained unpaid or included in accrued expenses. Tax Receivable Agreement In connection with the Reorganization Transactions and the IPO, the Corporation entered into the TRA with certain of its pre-IPO owners, including entities affiliated with the sponsor and the founder, which are related parties of the Company. As a result, transactions under the TRA are related party transactions. See Note 8 — Income Taxes. Due from Unconsolidated Affiliates and Notes Receivable Amounts due from unconsolidated related party affiliates and notes receivable from related parties were zero and less than $1 million as of September 27, 2026 and December 28, 2025, respectively, and are recorded within Prepaid expenses and other current assets and Other assets. These balances represent advances and loans made by the Company to entities owned by a minority equity holder, and members of his immediate family. These advances and notes to franchise owners are unsecured, bear varying interest rates, and are expected to be repaid to the Company in the normal course of business. Operating Leases The Company leased corporate office space from an entity owned by the family of the minority equity holder. During June of 2026 the Company vacated this space in connection with the relocation of its headquarters. Management determined that the associated operating lease right-of-use assets were impaired and recorded a non-cash impairment charge of $6 million, inclusive of estimated unavoidable lease and facility costs associated with the vacated facilities. The Company remains obligated under the underlying lease agreements through the expiration of the respective lease terms. These amounts are included within General and administrative expenses in the Condensed Consolidated Statements of Operations. Franchise Owner Ownership Royalty revenues earned from related party franchise owners represented less than 1% of total revenues for the thirteen and thirty-nine weeks ended September 27, 2026 and approximately 1% of total revenues for the periods from January 16 to September 28, 2025 and January 1 to January 15, 2025. These amounts are included within Royalties and other revenues in the Condensed Consolidated Statements of Operations. On December 31, 2025, the Company entered into a Master Franchise and Operation Agreement with an entity controlled by the Company's founder providing for the development of a minimum of 300 stores to be opened in the United Kingdom and Ireland. No amounts related to this agreement have been recorded in the accompanying financial statements. Transition Agreement In connection with the sponsor acquisition, the Company entered into a transition agreement with its former Chief Executive Officer, pursuant to which he served as Chair of the Board of Directors of Jersey Mike’s Holdings through January 16, 2026. During this period, he continued to receive payment of his base salary and reimbursement for business expenses in accordance with the Company’s expense policy. Total payments under this agreement were less than $1 million for the thirty-nine weeks ended September 27, 2026 and approximately $5 million for the annual period ended December 28, 2025 and were recorded within General and administrative expense on the Condensed Consolidated Statements of Operations. Reimbursement Liability to Sponsor In connection with the sponsor acquisition, the Company entered into an administrative service agreement with the Sponsor, pursuant to which the Company is required to pay or reimburse the Sponsor for certain expenses incurred in connection with the monitoring and evaluation of the Company’s operations. For the thirty-nine weeks ended September 27, 2026, approximately $2 million in payments have been made under this agreement. Additionally, the Company has recorded less than $1 million within Accrued expenses and other current liabilities as of September 27, 2026, related to this agreement.
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