v3.26.3
Fair Value Measurements
 9 Months Ended
Sep. 27, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is the price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants on the measurement date. Fair value is categorized into one of the following three levels based on the lowest level of significant input:
Level 1
Unadjusted quoted market prices in active markets for identical assets or liabilities
Level 2Observable inputs available at measurement date other than quoted prices included in Level 1
Level 3Unobservable inputs that cannot be corroborated by observable market data
Fair Value Measurements on a Recurring Basis - The following table summarizes the Company’s financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated:
CONSOLIDATED BALANCE SHEETS CLASSIFICATION
MEASUREMENT LEVELFAIR VALUE
(dollars in thousands)SEPTEMBER 27, 2026DECEMBER 28, 2025
Assets:
Short-term investmentsCash and cash equivalentsLevel 1$5,566 $5,597 
Interest rate swapsOther current assets, netLevel 2$2,445 $208 
Interest rate swapsOther assets, netLevel 2$1,035 $— 
Liabilities:
Interest rate swapsAccrued and other current liabilitiesLevel 2$— $330 
Interest rate swapsOther long-term liabilitiesLevel 2$— $87 
Fair value of each class of financial instruments is determined based on the following:
FINANCIAL INSTRUMENTMETHODS AND ASSUMPTIONS
Short-term investments
Carrying value approximates fair value because maturities are less than three months.
Derivative instruments
Fair value measurements are based on the contractual terms of the derivatives and observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. The Company also considers its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. As of September 27, 2026 and December 28, 2025, the Company determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives.
Fair Value Measurements on a Nonrecurring Basis - Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to property, fixtures and equipment, operating lease right-of-use assets, goodwill and other intangible assets, which are remeasured when carrying value exceeds fair value. Carrying value after impairment approximates fair value. The following table summarizes the Company’s assets measured at fair value by hierarchy level on a nonrecurring basis for the periods indicated:
THIRTEEN WEEKS ENDEDTHIRTY-NINE WEEKS ENDED
SEPTEMBER 27, 2026SEPTEMBER 27, 2026
(dollars in thousands)REMAINING CARRYING VALUETOTAL IMPAIRMENTREMAINING CARRYING VALUETOTAL IMPAIRMENT
Assets held for sale (1)$— $— $216 $34 
Operating lease right-of-use assets (2)5,100 1,206 12,196 3,866 
Property, fixtures and equipment (3)3,050 2,235 9,907 5,703 
$8,150 $3,441 $22,319 $9,603 
THIRTEEN WEEKS ENDEDTHIRTY-NINE WEEKS ENDED
SEPTEMBER 28, 2025SEPTEMBER 28, 2025
(dollars in thousands)
REMAINING CARRYING VALUE
TOTAL IMPAIRMENT
REMAINING CARRYING VALUE
TOTAL IMPAIRMENT
Operating lease right-of-use assets (2)$14,237 $9,383 $20,651 $11,107 
Property, fixtures and equipment (3)16,885 23,072 23,445 27,614 
$31,122 $32,455 $44,096 $38,721 
________________
(1)Carrying values measured using Level 2 inputs to estimate fair value.
(2)Carrying values measured using discounted cash flow models (Level 3).
(3)Carrying values measured using Level 2 inputs to estimate fair value totaled $4.9 million and $5.2 million for the thirteen and thirty-nine weeks ended September 28, 2025, respectively. All other assets were valued using Level 3 inputs. Third-party market appraisals and executed sales contracts (Level 2) and discounted cash flow models (Level 3) were used to estimate the fair value.

See Note 4 - Impairments, Closures and Disposal of Assets for information regarding impairment charges during the thirteen and thirty-nine weeks ended September 28, 2025. Projected future cash flows, including discount rate and growth rate assumptions, are derived from current economic conditions, expectations of management and projected trends of current operating results. As a result, the Company has determined that the majority of the inputs used to value its long-lived assets held and used are unobservable inputs that fall within Level 3 of the fair value hierarchy.

In the assessment of impairment for operating locations, the Company determines the fair values of individual operating locations using an income approach, which requires discounting projected future cash flows. When determining the stream of projected future cash flows associated with an individual operating location, management makes assumptions, including highest and best use and inputs from restaurant operations, where necessary, and about key variables including the following unobservable inputs: revenue growth rates, controllable and uncontrollable expenses, and asset residual values. In order to calculate the present value of those future cash flows, the Company discounts its cash flow estimates at its weighted-average cost of capital, which ranged from approximately 11% to 12% during the periods presented.
Interim Disclosures about Fair Value of Financial Instruments - The Company’s non-derivative financial instruments consist of cash equivalents, accounts receivable, accounts payable and long-term debt. The fair values of cash equivalents, accounts receivable, and accounts payable approximate their carrying amounts reported on the Company’s Consolidated Balance Sheets due to their short duration.

Debt is carried at amortized cost; however, the Company estimates the fair value of debt for disclosure purposes. The following table includes the carrying value and fair value of the Company’s debt by hierarchy level as of the periods indicated:
SEPTEMBER 27, 2026DECEMBER 28, 2025
(dollars in thousands)CARRYING VALUEFAIR VALUE LEVEL 2CARRYING VALUEFAIR VALUE LEVEL 2
Senior secured credit facility - revolving credit facility$470,000 $470,000 $490,000 $490,000 
2029 Notes$300,000 $280,968 $300,000 $269,505