What changed in this filing

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Item 1. Business

2022-09-27 compared with 2021-09-24 · 240 added, 144 removed, 126 unchanged (75% of the section changed)

Cracker Barrel Old Country Store, Inc.

(“we,” “us,” “our” or the “Company,” which reference, unless the context requires otherwise, also includes our direct and indirect wholly owned subsidiaries), is principally engaged in the operation and development of the Cracker Barrel Old Country Store® concept (“Cracker Barrel”).

(“we,” “us,” “our” or the “Company,” which reference, unless the context requires otherwise, also includes our direct and indirect wholly owned subsidiaries),

is principally engaged in the operation and development of the Cracker Barrel Old Country Store® concept (“Cracker Barrel”).

We are headquartered in Lebanon, Tennessee and were originally founded in 1969.

We are organized under the laws of the State of Tennessee.

We are organized under the laws of the

State of Tennessee.

We maintain a website at crackerbarrel.com.

We make available free of charge through our website our periodic and other reports filed with or furnished to the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we file such material with, or furnish it to, the SEC.

Information on our website is not deemed to be incorporated by reference into this Annual Report on Form 10-K or any other filings that we make from time to time with the SEC.

We make available free of charge through our website our periodic and other reports filed with or furnished to the SEC pursuant to the Securities

Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we file such material with, or furnish it to, the SEC.

Information on our website is not deemed to be incorporated by reference into this Annual Report

on Form 10-K or any other filings that we make from time to time with the SEC.

The following description of our business should be read in conjunction with the information in Part II of this report under the caption “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations” and “Item 8.

Financial Statements and Supplementary Data.”

COVID-19 Impact

Despite experiencing improvements in conditions during 2021 from the initial wave of infections and public health response during the second half of 2020, the COVID-19 pandemic continued to negatively impact our sales and traffic as a result of both changes in consumer behavior and federal, state and local governmental authorities’ continuation of various restrictions on travel and group gatherings and limitations on dine-in services.

During 2021, dining room service was operational to varying degrees in most markets where we operate, yet most locations were impacted at times during the year by capacity restrictions, social distancing guidelines and decreased consumer demand for in-person dining.

As of September 15, 2021, all of our stores were open for dine-in service.

However, it is possible that renewed outbreaks or increases in cases, either as part of a national trend or on a more localized basis, could result in additional capacity restrictions or limit our dine-in services.

In response to the COVID-19 pandemic, we instituted operational protocols to comply with applicable regulatory requirements to protect the health and safety of employees and guests, and we implemented a number of strategies to support the recovery of our business and navigate through the uncertain environment.

We continue to focus on growing our off-premise business and investing in our digital infrastructure to improve the guest experience in the face of these ongoing challenges.

Cracker Barrel Old Country Store Concept

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Our stores are not franchised.

Our stores are intended to appeal to both the traveler and the local customer, and we believe they have consistently been a consumer favorite.

Our stores are intended to appeal to both the traveler and the local customer, and we

believe they have consistently been a consumer favorite.

We pride ourselves on our consistent quality, value and friendly service.

Store Format :

The format of our stores consists of a trademarked rustic old country-store design offering a full-service restaurant menu that features home-style country food and a wide variety of decorative and functional items such as rocking chairs, holiday and seasonal gifts, toys, apparel, cookware and foods.

All stores are freestanding buildings and consist of approximately 20% of gift shop space with the remainder dedicated to our restaurant, training and storage space.

Our stores have stone fireplaces and are decorated with antique‑style furnishings and other authentic and nostalgic items, reminiscent of and similar to those found and sold in the past in traditional old country stores.

The front porch of each store features rows of the signature Cracker Barrel rocking chairs that we invite guests to use while waiting for a table in our dining room or after enjoying a meal and they are a popular item sold by the gift shops.

Our restaurants, which generated approximately 79% of our total revenue in 2021, offer home-style country cooking featuring many of our own recipes that emphasize authenticity and quality.

The format of our stores consists of a trademarked rustic old country-store design offering a full-service restaurant menu that features home-style country food and a wide

variety of decorative and functional items such as rocking chairs, holiday and seasonal gifts, toys, apparel, cookware and foods.

All stores are freestanding buildings and consist of approximately 20% of gift shop space with the remainder

dedicated to our restaurant, training and storage space.

Our stores have stone fireplaces and are decorated with antique‑style furnishings and other authentic and nostalgic items, reminiscent of and similar to those found and sold in the past in

traditional old country stores.

item sold by the gift shops.

Our restaurants, which generated approximately 78% of our total revenue in 2022, offer home-style country cooking featuring many of our own recipes that emphasize authenticity and

Our restaurants serve breakfast, lunch and dinner daily and offer dine-in, pick-up and delivery services.

Menu items are moderately priced.

Beginning in 2020, certain of our Cracker Barrel restaurants began serving a limited assortment of beer and wine, and the subsequent ongoing expansion of this program throughout our system has resulted in beer and wine service in 480, or approximately 72%, of our restaurants as of the end of 2021.

Breakfast items can be ordered at any time throughout the day and include juices, eggs, pancakes, fruit and yogurt parfaits, meats, grits, and a variety of biscuit specialties, such as gravy and biscuits and country ham and biscuits.

Lunch and dinner items include southern fried chicken, chicken and dumplings, chicken pot pie, chicken fried chicken, meatloaf, country fried steak, pork chops, fish, country fried shrimp, steak, roast beef, ham, vegetable plates, sandwiches and a variety of salads.

Beginning in 2020, certain of our Cracker Barrel restaurants began serving an assortment of beer

and wine, and the subsequent ongoing expansion of this program throughout our system has resulted in beer and wine service in 574, or approximately 86%, of our restaurants as of the end of 2022.

Breakfast items can be ordered at any time throughout the day and include juices, eggs, pancakes, meats, grits, and a variety of biscuit specialties, such as gravy and biscuits and country ham and

Lunch and dinner items include fried and grilled chicken, chicken and dumplings, chicken pot pie, meatloaf, country fried steak, pork chops, fish, country fried shrimp, steak, roast beef, ham, vegetable plates, sandwiches and a variety

We also offer multi-serving takeout family meal baskets.

Additionally, from time to time, we feature new items as off-menu specials or on test menus at certain locations to evaluate possible ways to enhance customer interest and identify potential future additions to the menu.

Additionally, from time to time, we feature new items as off-menu specials or on test menus at certain locations to evaluate possible ways to enhance customer interest and

identify potential future additions to the menu.

We offer weekday lunch specials, which include some of our favorite entrées in lunch-sized portions.

Our menu also features weekday and weekend dinner specials that showcase a popular dinner entrée.

Our menu also features weekday and weekend dinner specials that showcase a popular dinner

There is some variation in menu pricing and content in different regions of the country.

The average check per guest during 2022 was $12.13, which represents a 6.4% increase over the prior year.

We served an average of approximately 5,500 restaurant guests per week in a typical store in 2021.

We served an average of approximately 5,900

restaurant guests per week in a typical store in 2022.

The following table highlights the price ranges for our meals in 2022:

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We also offer items for sale in our gift shops that are featured on, or related to, the restaurant menu, such as pies, cornbread mix, coffee, syrups and pancake mixes.

Our gift shops offer a wide variety of decorative and functional items such as rocking chairs, seasonal gifts, apparel, toys, cookware and various other gift items, as well as various candies, preserves and other food items.

Our gift shops offer a wide

variety of decorative and functional items such as rocking chairs, seasonal gifts, apparel, toys, cookware and various other gift items, as well as various candies, preserves and other food items.

The following table highlights the five categories which accounted for the largest shares of our retail sales in 2022:

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Our typical gift shop features approximately 4,100 stock keeping units.

A selection of the food items are sold under the “Cracker Barrel Old Country Store” brand name.

We believe that we achieve high retail sales per square foot of retail selling space (approximately $426 per square foot in 2021) as compared to mall stores both by offering appealing merchandise and by having a significant source of customers who are typically our restaurant guests.

Certain food items are sold under the “Cracker Barrel Old Country Store” brand name.

We believe that we achieve high retail

sales per square foot of retail selling space (approximately $503 per square foot in 2022) as compared to mall stores both by offering appealing merchandise and by having a significant source of customers who are typically our restaurant guests.

Product Development and Merchandising :

We maintain a product development department, which develops new and improved menu items either in response to shifts in customer preferences or to create customer interest.

We maintain a product development department, which develops new and improved menu items either in response to shifts in customer preferences or to

create customer interest.

We use a formal development and testing process, which includes guest research and in-store market tests to ensure products brought to market have a greater likelihood of meeting our goals.

Menu-driven growth is built through three areas:

Menu-driven growth is built

through three areas:

enhancements to our current core menu offerings, the addition of new core menu offerings and limited time offer promotions we call seasonal events.

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We are focused on driving retail sales by converting those customers who come to us for a restaurant visit.

Our assortment includes core and seasonal themes.

assortment includes core and seasonal themes.

Our seasonal themes are designed to create interest and excitement in our stores by providing our guests with additional choices.

Store Management :

The management structures below describe our store operations during the normal and fully operational conditions that were in place at the end of 2021.

As the COVID-19 pandemic impacted our business during 2021, the staffing levels of each of our stores changed frequently, as our dining rooms operated under a range of capacity limitations that also varied from time to time, state to state and city to city.

As our store operations continued to evolve in response to the pandemic, we have adjusted our operational structure where appropriate.

As a result, the descriptions below may not reflect the current or future structure of our store operations as conditions from the COVID-19 pandemic continue to change.

At each store, our store management typically consists of one general manager, four associate managers and one retail manager.

The relative complexity of operating one of our stores requires an effective management team at the individual store level.

To motivate managers to improve sales and operational performance, we maintain bonus plans designed to provide managers with incentives to meet and exceed the operational targets of their store.

The relative complexity of operating one of

our stores requires an effective management team at the individual store level.

To motivate managers to improve sales and operational performance, we maintain bonus plans designed to provide managers with incentives to meet and exceed the

operational targets of their store.

Each store is assigned to both a restaurant and a retail district manager who each report to a regional vice president.

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We negotiate directly with food vendors as to specification, price and other material terms of most food purchases.

We have a contract with an unaffiliated distributor with custom distribution centers in Lebanon, Tennessee;

We have a contract with an unaffiliated

distributor with custom distribution centers in Lebanon, Tennessee;

McKinney, Texas;

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and Shafter, California.

We purchase the majority of our food products and restaurant supplies on a cost‑plus basis through this unaffiliated distributor.

We purchase the majority of our food products

and restaurant supplies on a cost‑plus basis through this unaffiliated distributor.

The distributor is responsible for placing food orders, warehousing and delivering food products to our stores.

Deliveries are generally made once per week to individual stores.

Produce is purchased through a national program and is delivered three times a week through a network of approximately fifty independent produce suppliers.

Fluid dairy is delivered three times a week through approximately fifty regional dairies, the majority of which are under the ownership of two separate companies.

Beer and Wine, currently in approximately 480 stores, are purchased and distributed through approximately 415 distributors with deliveries ranging from weekly to monthly.

Deliveries are generally made once per week to

individual stores.

Produce is purchased through a national program and is delivered two to three times a week through a network of approximately fifty independent produce suppliers.

Fluid dairy is delivered two to three times a week through

approximately fifty regional dairies, the majority of which are under the ownership of two separate companies.

Beer and wine, currently in approximately 574 stores, are purchased and distributed through approximately 314 distributors with

deliveries ranging from weekly to monthly.

The following table highlights the five food categories which accounted for the largest shares of our food purchasing expense in 2022:

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Each of these categories includes several individual items.

The single food item within these categories that accounted for the largest share of our food purchasing expense in 2021 was bacon at approximately 5% of total food purchases.

The single food item within these categories that accounted for the largest share of our food purchasing expense in 2022 was bacon at

approximately 6% of total food purchases.

Dairy, fruits and vegetables are purchased through numerous vendors, including local vendors.

Eggs are purchased through five vendors.

We purchase our pork through six vendors, poultry through ten vendors and beef through seven vendors.

Should any food items from a particular vendor become unavailable, we generally believe that these food items could be obtained, or alternative products substituted, in sufficient quantities from other sources at competitive prices to allow us to avoid any material adverse effects that could be caused by such unavailability.

We purchase the majority of our retail items (approximately 80% in 2021) directly from domestic and international vendors and warehouse, or crossdock, such items at our retail distribution center in Lebanon, Tennessee, which we lease.

The distribution center fulfills retail item orders generated by our automated replenishment system and generally ships the retail orders once a week to the individual stores by a third-party dedicated freight line.

We purchase our pork through six vendors, poultry through twelve

vendors and beef through seven vendors.

sources at competitive prices to allow us to avoid any material adverse effects that could be caused by such unavailability.

We purchase the majority of our retail items (approximately 80% in 2022) directly from domestic and international vendors and warehouse, or crossdock, such items at our retail distribution center

in Lebanon, Tennessee, which we lease.

freight lines.

Certain retail items, not centrally purchased and warehoused at the distribution center, are drop-shipped directly by our vendors to individual stores.

Approximately one-third of our 2022 retail items were purchased directly from vendors in the People’s Republic of China.

We have relationships with several foreign buying agencies to source product, monitor quality control and supplement product development.

Operational and Inventory Controls :

Our information technology and telecommunications systems and various analytical tools are used to evaluate store operating information and provide management with reports to support prompt detection of unusual variances in food costs, labor costs or operating expenses.

Management also monitors individual store restaurant and retail sales on a daily basis and closely monitors sales mix, sales trends, operational costs and inventory levels.

The information generated by the information technology and telecommunication systems, analysis tools and monitoring processes is used to manage the operations of each store, replenish retail inventory levels and facilitate retail purchasing decisions.

These systems and processes also are used in the development of forecasts, budget analyses and planning.

We have relationships with several foreign buying agencies to source

product, monitor quality control and supplement product development.

Information Technology :

We believe that an essential part of pleasing people is established through our ability to leverage technology.

We use technology to enhance the experiences of our

guests and our employees, and to assist management in all aspect of operating the business.

Examples include a digital experience that effectively enables our off-premise business, allows for mobile payments in store, and provides guests with a

digital waitlist.

Our store employees use our recently upgraded point of sale system, our new food management and labor management systems, and our retail systems to manage inventory, labor, forecasting, and orders for retail and restaurants.

our distribution center, we manage retail merchandise planning, purchasing, warehousing, and distribution using various retail management solutions.

We have recently migrated from an on-premise data storage and computing platform to a modern

cloud-based data as a service platform providing advanced security and reliability features.

Our data solutions provide management with daily reports used to operate stores in a cost-effective manner.

Our service desk leverages technology

solutions that enable an efficient and effective way to resolve technology concerns.

We believe our technology is highly effective in supporting Cracker Barrel’s daily operations, and we continue to enhance this technology in line with our

Company’s strategic vision.

We continue to make investments in our cybersecurity program to protect and fortify our brands.

From protecting guest information to ensuring systems are reliably available, data privacy and

cybersecurity are organization-wide efforts that are incorporated into every technology and business decision at all our brands.

Led by our Chief Information Officer and Director of Security, cybersecurity is a top priority that is reviewed by our

Audit Committee on a quarterly basis.

Our program is designed to monitor, assess, and manage cyber-risk with a continuous improvement mindset.

Our cybersecurity program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework.

Every year we have a third-party organization assess and measure the

maturity of our program.

We also perform regular technical assessments, including annual penetration testing of our online systems and internal networks.

Feedback from our maturity and technical assessments is incorporated into our actions to

further improve our security posture.

Guest Satisfaction :

We are committed to providing our guests a home-style, country-cooked meal, and a variety of retail merchandise served and sold with genuine hospitality in a comfortable environment.

We are committed to providing our guests a home-style, country-cooked meal, and a variety of retail merchandise served and sold with genuine hospitality in a comfortable

Our commitment to offering guests a quality experience begins with our employees.

Our mission statement, “Pleasing People,” embraces guests and employees alike, and our employees are trained on the importance of that mission in a culture of mutual respect.

Our mission statement, “Pleasing People,” embraces guests and employees alike, and our employees are trained on the importance of that mission in a

culture of mutual respect.

We also are committed to staffing each store with an experienced management team to ensure attentive guest service and consistent food quality.

Through the regular use of guest surveys and store visits by district managers and operational vice presidents, management receives valuable feedback that is used in our ongoing efforts to improve the stores and to demonstrate our continuing commitment to pleasing our guests.

We have a guest-relations call center that takes comments and suggestions from guests and forwards them to operations or other management for information and follow up.

We use internet and interactive voice response systems to monitor operational performance and guest satisfaction at all stores on an ongoing basis.

We have public notices in our menus, on our website and posted in our stores informing customers and employees about how to contact us by internet or toll-free telephone number with questions, complaints or concerns regarding services or products.

Through the regular use of guest surveys and store visits by district

managers and operational vice presidents, management receives valuable feedback that is used in our ongoing efforts to improve the stores and to demonstrate our continuing commitment to pleasing our guests.

We have a guest-relations call center

that takes comments and suggestions from guests and forwards them to operations or other management for information and follow up.

We use internet and interactive voice response systems to monitor operational performance and guest satisfaction at

all stores on an ongoing basis.

regarding services or products.

We conduct training on how to gather information and investigate and resolve customer concerns.

This is accompanied by comprehensive training for all store employees on our public accommodations policy and commitment to “Pleasing People.”

This is accompanied by comprehensive training for all store employees on our public accommodations policy and

commitment to “Pleasing People.”

We employ multiple media to reach and engage our guests.

Outdoor advertising (i.e., billboards and state department of transportation signs) is the largest advertising vehicle we use to reach our traveling and local guests.

Outdoor advertising (i.e., billboards and state department of transportation signs) is the largest advertising vehicle we

use to reach our traveling and local guests.

In 2022, we had over 1,500 billboards and this expenditure accounted for approximately one-third of our total advertising spend for the year.

We continue to grow our non-billboard advertising mix which includes television (both traditional linear and connected), digital display and video, mobile, social media, and search marketing.

We continue to optimize our non-billboard advertising mix

which includes television (increasingly digital), digital display and video, mobile, social media, and search marketing.

Our digital marketing efforts have also expanded to focus on improving brand preference, guest engagement and sales.

We have a presence on multiple social media sites and several food delivery apps, an e-commerce platform that integrates restaurant and retail shopping, and a customer relationship management (CRM) program that employs email, text messages, push notifications and personalization.

Our exclusive music program drives awareness for the brand and builds cultural relevance and affinity with our guests.

presence on multiple social media sites and several food delivery apps, an e-commerce platform that integrates individual-to-go and catering shopping, and a customer relationship management (CRM) program that employs email, text messages, push

notifications and personalization.

Our exclusive holiday music program drives awareness for the brand and builds cultural relevance and affinity with our guests.

Store Development:

We opened two new stores in 2021.

We plan to open three new stores during 2022.

As of September 15, 2021, approximately 83% of our stores are located along interstate highways.

While we did not open any new Cracker Barrel stores in 2022, we plan to open three to four new stores during 2023.

As of September 14, 2022, approximately 83% of our

stores are located along interstate highways.

Our remaining stores are located off-interstate or near tourist destinations.

We pursue development of both interstate locations and off-interstate locations to capitalize on the strength of our brand with travelers on the interstate highway system and by locating in certain local markets where our guests live and work, including locations outside of our existing core markets and in states where we currently do not operate.

Of the 664 stores open as of September 14, 2022, we own the land and buildings for 360, while the other 304 properties are either ground leases or ground and building leases.

Building, site improvement, furniture, equipment and related development costs for stores opened during 2021 averaged approximately $4,900.

Pre-opening costs averaged $428 per store in 2021.

Building, site

improvement, furniture, equipment and related development costs for stores opened during 2021 averaged approximately $4,900 and pre-opening costs averaged $428 per store in 2021, the most recent period in which we opened new Cracker Barrel stores.

Our current store prototype is approximately 8,900 square feet, including approximately 1,900 square feet of retail selling space and dining room seating for approximately 170 guests.

Our capital investment in new stores may differ in the future due to changes in our store prototype, building design specifications, site location and site characteristics.

Maple Street Biscuit Company and Holler & Dash Concepts

Effective October 10, 2019, we acquired 100% ownership of MSBC, a breakfast and lunch fast casual concept.

MSBC offers biscuit-inspired entrées as well as freshly roasted coffee with a proprietary blend and a limited selection of beer and wine in certain locations.

investment in new stores may differ in the future due to changes in our store prototype, building design specifications, site location and site characteristics.

Maple Street Biscuit Company

Effective October 10, 2019, we acquired 100% ownership of Maple Street Biscuit Company (“MSBC”), a breakfast and lunch fast casual concept as we believe this to be an attractive category within the

restaurant space.

Like Cracker Barrel, MSBC values genuine hospitality and made-from-scratch cooking including biscuit-inspired entrées as well as freshly roasted coffee with a proprietary blend and a limited selection of beer and wine in certain

MSBC operates in a smaller footprint than our Cracker Barrel Old Country Store concept and has operating hours limited to the breakfast and lunch day parts.

In 2016, we launched our own breakfast and lunch fast casual concept, Holler & Dash Biscuit House TM .

During 2020, we converted our six Holler & Dash locations into MSBC locations.

As of September 15, 2021, 37 company-owned MSBC locations were open -— all leased properties in Alabama, Florida, Georgia, Kentucky, North Carolina, South Carolina, Tennessee and Texas — and seven franchises were open.

Punch Bowl Social

Effective July 18, 2019, we entered into a strategic relationship with Punch Bowl Social (“PBS”), a food, beverage and entertainment concept, by purchasing a non-controlling equity interest in the concept.

The PBS concept was developed to focus on made-from-scratch food, a craft beverage program and social gaming.

We believed the investment in PBS provided a growth vehicle to deliver additional shareholder value and extend our footprint into a complementary market segment.

During the onset of the COVID-19 pandemic, PBS Holdco’s wholly-owned subsidiary, PBS BrandCo, LLC (“Brandco”) suffered unsustainable disruption to its business across the chain and suspended all operations.

On March 20, 2020, the primary lender under Brandco’s secured credit facility (“Lender”) provided notice of the Lender’s intention to foreclose on its collateral interest in Brandco unless Cracker Barrel repaid or unconditionally guaranteed the indebtedness.

For reasons previously disclosed in our public filings, we decided not to invest further resources to prevent foreclosure or otherwise provide additional capital to PBS and recorded a non-cash impairment charge on our investment of $132,878.

During the course of the pandemic, the Lender unsuccessfully sought a buyer for Brandco and its assets, culminating in Brandco filing a petition for reorganization under Chapter 11 of the United States Bankruptcy Code in December 2020.

In April 2021, the United States Bankruptcy Court for the District of Delaware approved a plan of liquidation of Brandco, pursuant to which the Lender purchased Brandco and certain of its assets and liabilities for a purchase price of approximately $32,000, none of which proceeds were attributable to the Company’s interest in PBS.

Following the completion of this sale transaction, the Company’s remaining interest in PBS was determined to have no remaining value.

As of September 14, 2022, 53 MSBC locations were open, an increase from 44 at

the same time last year (seven of which were franchised at that time) -— all are currently leased properties in Alabama, Florida, Georgia, Kentucky, North Carolina, South Carolina, Tennessee, Texas and Virginia.

As of September 14, 2022, no

locations were franchised.

MSBC will serve as a long-term growth vehicle that complements Cracker Barrel while providing increased exposure to urban and suburban markets.

We anticipate accelerating unit growth in the coming

COVID-19 Impact

During 2022, the Company continued to recover from the COVID-19 pandemic (notwithstanding new variant outbreaks), and all dining rooms were open to some extent during 2022.

While all of our dining

rooms are currently operating without COVID-19-related restrictions, it is possible that renewed outbreaks or increases in cases and/or further new variants of the disease, either as part of a national trend or on a more localized basis, could

result in COVID-19-related restrictions including capacity restrictions or otherwise limit our dine-in services, or negatively affect consumer demand.

In response to the COVID-19 pandemic, we instituted operational protocols to comply with applicable regulatory requirements to protect the health and safety of employees and guests, and we

implemented and continually adapted a number of strategies to support the recovery of our business and navigate through the uncertain environment.

We continue to focus on growing our off-premise business and investing in our digital infrastructure

to improve the guest experience in the face of these ongoing challenges.

HUMAN CAPITAL

As of July 30, 2021, we employed approximately 70,000 people (as compared to approximately 55,000 people as of July 31, 2020), of whom approximately 384 were in advisory and supervisory capacities, approximately 3,300 were in-store management positions and 46 were officers.

As of July 29, 2022, we employed approximately 73,000 people (as compared to approximately 70,000 people as of July 30, 2021), of whom approximately 361 were in advisory and supervisory capacities,

approximately 3,215 were in-store management positions and 47 were officers.

Many store personnel are employed on a part-time basis.

Our employees are not represented by any union, and management considers its employee relations to be good.

People are at the core of our business and an essential part of our Company.

are at the core of our business and an essential part of our Company.

Diversity, Equity & Inclusion

Since 1969, our corporate mission has been Pleasing People.

As an organization, we have a responsibility to live up to our mission of Pleasing People each day, ensuring that every member of our team and every guest feels at home, feels cared for like family, and feels like they belong.

Our teams work hard to create a culture of hospitality that’s welcoming, respectful and inclusive to everyone who walks through our doors – whether as an employee or as a guest.

As an organization, we have a responsibility to live up to our mission of Pleasing People each day, ensuring that every member of our

team and every guest feels at home, feels cared for like family, and feels like they belong.

Also guiding our way is the sense of belonging we strive to deliver as part of our People Promise.

Our teams work hard to create a culture of hospitality

that’s welcoming, respectful and inclusive to everyone who walks through our doors – whether as an employee or as a guest.

This includes embracing openness for all people, ideas, and perspectives.

Our food and décor celebrate warm memories of the past, and we believe our inclusive culture and beliefs are vital to reinforcing these positive feelings in our employees and guests, and are thus critical to the strength of our brand and our corporate strategy.

Our food and décor celebrate warm memories of the

past, and we believe our inclusive culture and beliefs are vital to reinforcing these positive feelings in our employees and guests, and are thus critical to the strength of our brand and our corporate strategy.

Our firmly held organization-wide

policy is that discrimination, overt or through unconscious bias, has no place at Cracker Barrel Old Country Store.

As of July 29, 2022, more than 33% of our employee population is comprised of racial and ethnic minorities and approximately 67% of our employee population is female.

We provide opportunities for our employees to drive our Diversity & Inclusion strategy by creating programs that raise awareness and allow for a more inclusive culture.

We created a number of Employee Resource Groups (ERGs) within our organization to allow employees to feel valued, respected, included and connected through a wide range of programs, events, and community outreach projects based on shared interests of aspects of diversity – while helping Cracker Barrel advance our business.

Currently, there are six ERGs in Cracker Barrel:

LGBT Alliance:

Promoting LGBT Awareness and Building Workplace Inclusion;

United Cultural Awareness Network (UCAN):

Embracing Our Cultures to Enhance the Employee Experience;

We provide opportunities for our employees to drive our Diversity, Equity & Inclusion strategy by creating programs that raise awareness and allow for a more inclusive culture.

Resource Groups allow employees to come together with common interests, perspectives, and experiences around topics such as race, ethnicity, gender identity, and other special interests.

These employee-led organizations provide opportunities to

network, to obtain and develop leadership skills, and to inform and influence on all aspects of the Cracker Barrel brand.

Currently, there are seven Business Resource Groups in Cracker Barrel:

AMPT (“Advancing Modern Professionals for Tomorrow”):

Aims to connect and empower modern professionals by promoting a community of inclusive, ambitious, and diverse members that unify through Cracker Barrel to equip our community and

leaders for the future;

Cultivates and develops Black Leaders within the Cracker Barrel organization utilizing allyship, mentorship, and education to create a path to continued excellence as well as a vibrant and diverse community;

Improving the employee experience by sponsoring health and wellness activities that nurture employees’ physical, emotional, financial and intellectual wellbeing;

Promoting Hispanic and Latino culture through hiring, developing and retaining talent within Cracker Barrel;

LGBTQ+ Alliance:

Promoting LGBTQ+ Awareness and Building Workplace Inclusion;

Advocating for leadership and development opportunities for Veterans, fostering an environment of networking and volunteerism and focusing on recruitment, retention and advancement;

Women’s Connect :

Inspiring Women Leaders.

Veteran & Military Volunteers (VERG):

Supporting employees and brand initiatives by providing Veteran-centric consultation and support to recruiting, retention and marketing programs;

Improving the employee experience by sponsoring health and wellness activities that nurture employees’ physical, emotional, financial and intellectual wellbeing;

Millennial ERG (MERGE):

Growing Millennial Talent and Strengthening the Cracker Barrel Brand.

Employee Development / Training

Because of the importance of our employees to our ability to deliver the service levels that are a vital part of the hospitality that drives our brand appeal to guests, we emphasize employee development and training.

Because of the importance of our employees to our ability to deliver the service levels that are a vital part of the hospitality that drives our brand appeal to guests, we emphasize employee

development and training.

To ensure that individual stores operate at a high level of quality, we focus significant attention on the training of store managers.

We believe that our training programs are key in developing our managers’ leadership skills and commitment to operational excellence, which we believe is important to delivering a positive employee and guest experience.

We provide our managers and hourly employees with ongoing training through various development courses taught through a blended learning approach, including a mix of hands-on, traditional classroom, written and cloud-based training.

We believe that our training programs are key in developing our managers’ leadership

skills and commitment to operational excellence, which we believe is important to delivering a positive employee and guest experience.

We provide our managers and hourly employees with ongoing training through various development courses taught

through a blended learning approach, including a mix of hands-on, traditional classroom, written and cloud-based training.

Each store is equipped with dedicated training computers and cloud-based proprietary eLearning instruction programs.

Additionally, each store typically has an employee training coordinator who oversees the training of the store’s hourly employees.

We are increasing our focus on leadership development and mentorship programs to better secure strong, diverse talents across all facets of our organization.

This commitment is exemplified by

our D.E.L.T.A program (“Diverse Employee Leadership Talent Advancement”).

This leadership program identifies diverse managers who have exhibited all the skills we value in our top-performing managers, brings them together to learn from each other,

positions them to advance to their next role, while continuing to advance our business and strategic goals in the process.

Our new, robust diversity training includes education throughout all levels of the Company about unconscious and implicit bias and focuses on creating an inclusive culture.

Employee Benefits / Compensation

Cracker Barrel is committed to providing comprehensive and competitive benefits to meet our employees’ needs.

We offer a robust set of benefits to help our employees and their families stay healthy and effectively manage spend related to health and financial well-being.

We offer a robust set of benefits to help our employees and their families stay healthy

and effectively manage spend related to health and financial well-being.

These benefits include programs such as medical, dental, vision, prescription drug, and life insurance coverage, as well as short and long term disability insurance coverage.

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This confidential program is available 24/7 for personal or professional consultations.

In addition, we provide all of our employees with access to paid parental leave and adoption benefits, a 401(k) savings plan, an employee discount policy at our Cracker Barrel stores, an employee stock purchase plan, and a competitive vacation policy.

Our compensation and performance evaluation systems are carefully designed to maintain pay equity by focusing pay decisions on experience and performance to ensure the Company retains a highly productive workforce to operate our business while providing a high level of service to our guests.

In addition, we provide all of our employees with access to paid parental leave and adoption benefits, a 401(k) savings plan, an employee discount policy at our Cracker Barrel stores, an employee

stock purchase plan, and a competitive vacation policy.

Our compensation and performance evaluation systems are carefully designed to maintain pay equity by focusing pay decisions on experience and performance to ensure the Company retains a highly

productive workforce to operate our business while providing a high level of service to our guests.

Health & Safety

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Food and Drug Administration to state and local regulatory agencies and health authorities, to ensure we are following the latest recommended practices and procedures to protect the health of employees and guests.

We instituted operational changes and enhancements to safety protocols to ensure that both our guests and employees experience a clean and safe environment.

These enhanced processes were added to the already rigorous food safety and sanitation standards that we continuously follow and are verified by a third-party firm.

These operational changes include, among others, the following:

Our current policy calls for face masks to be worn by any non-vaccinated employee.

Face masks are worn by all employees in state and local jurisdictions where mandated.

Every employee goes through a wellness screening prior to starting a shift.

Wellness screenings occur twice per day for all employees and are required for all vendors entering the premises.

We have implemented enhanced cleaning processes at all of our restaurants.

Enhanced cleaning processes include:

the use of a peroxide disinfectant to clean and disinfect all dining tables and chairs between guest seating;

cleaning and disinfecting throughout open hours in all points of the restaurant (including restrooms, door handles and other common surfaces).

We adhere to all state and local guidelines for dining capacity, guest mask requirements and social distancing.

We have installed plexiglass shields at all cash stands.

We have robust processes for monitoring our employees’ well-being and ensuring that any known positive COVID-19 cases in our locations are addressed swiftly, with both the infected employee and any close contact employees being excluded from our restaurants under recommended quarantine procedures per CDC and Health Department guidelines.

For our off-premise business, we utilize tamper-evident packaging seals for online orders and offer curbside pick-up.

The restaurant and retail industries are intensely competitive with respect to the type and quality of food, retail merchandise, price, service, location, personnel, concept, attractiveness of facilities, availability of carryout and home delivery, internet and mobile ordering capabilities and effectiveness of advertising and marketing.

We compete with a significant number of national and regional restaurant and retail chains, some of which have greater resources than us, as well as locally owned restaurants and retail stores.

We also face growing competition from the supermarket industry, which offers “convenient meals” in the form of improved entrées and side dishes from the deli section;

We instituted operational changes

and enhancements to safety protocols to ensure that both our guests and employees experience a clean and safe environment.

These enhanced processes were added to the already rigorous food safety and sanitation standards that we continuously follow

and are verified by a third-party firm.

Cracker Barrel incorporates robust quality assurance and food safety processes to ensure the safety of all our food and retail products delivered to our guests including the following:

Extensive requirements for food supplier approval:

Ongoing third-party food safety audits of food production and distribution centers:

Periodic food product audits conducted by Cracker Barrel quality assurance team:

Rigid processes to ensure new or alternative source suppliers deliver food products to exact specifications:

Third-party testing of retail non-food products to ensure compliance with all specifications and Federal regulations:

Food safety audits conducted on all Cracker Barrel locations three times per year:

Ensuring a pest free environment in our locations though a stringent pest control process:

Monitoring of all national and local food safety regulations pertaining both food products and store operations:

Monitoring of all health department inspections of all Cracker Barrel locations:

Monitoring and responding to:

Food borne illness outbreaks,

Food and product recalls, and

Pandemic situations, e.g., COVID-19.

The restaurant and retail industries are intensely competitive with respect to the type and quality of food, retail merchandise, price, service, location, personnel, concept, attractiveness of

facilities, availability of carryout and home delivery, internet and mobile ordering capabilities and effectiveness of advertising and marketing.

We compete with a significant number of national and regional restaurant and retail chains, some of

which have greater resources than us, as well as locally owned restaurants and retail stores.

We also face growing competition from the supermarket industry, which offers “convenient meals” in the form of improved entrées and side dishes from the

deli section;

fast casual restaurants;

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and highly promotional casual and family dining restaurants.

In addition, improving product offerings at fast casual restaurants and quick-service restaurants and expansion of home delivery services, together with negative economic conditions, could cause consumers to choose less expensive alternatives.

In addition, improving product offerings at fast casual restaurants and quick-service restaurants and expansion of home

delivery services, together with negative economic conditions, could cause consumers to choose less expensive alternatives.

We expect competition to continue in all of these areas.

The restaurant and retail businesses are also often affected by changes in consumer taste and preference;

The restaurant and retail businesses are also often affected by

changes in consumer taste and preference;

national, regional or local economic conditions;

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the type, number and location of competing restaurants and retailers;

and consumers’ discretionary purchasing power.

and consumers’ discretionary

purchasing power.

Factors such as inflation, increased food, labor and benefits costs and the lack of experienced management and hourly employees may adversely affect the restaurant and retail industries in general and our stores in particular.

We believe we compete effectively and have successfully differentiated ourselves from many of our competitors in the restaurant and retail industries through a unique brand and guest experience, which offers a diversified full service menu and a large variety of nostalgic and unique retail items.

large variety of nostalgic and unique retail items.

For further information regarding competition, see Item 1A.

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Generally, we are not dependent upon single sources of supplies or raw materials.

However, in our stores, certain branded items are single source products or product lines.

However, in our

stores, certain branded items are single source products or product lines.

Our ability to maintain consistent quality throughout our store system depends in part upon our ability to acquire food products and related items from reliable sources.

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Adequate alternative sources of supply, as well as the ability to adjust menus if needed, are believed to exist for substantially all of our restaurant products.

Our retail supply chain generally involves longer lead-times and, often, more remote sources of product, including the People’s Republic of China, and most of our retail product is distributed to our stores through a single distribution center.

Although disruption of our retail supply chain could be difficult to overcome, we continuously evaluate the potential for disruptions and ways to mitigate such disruptions should they occur.

ENVIRONMENTAL MATTERS

Our retail supply chain generally

involves longer lead-times and, often, more remote sources of product, including the People’s Republic of China, and most of our retail product is distributed to our stores through a single distribution center.

Although disruption of our retail

supply chain could be difficult to overcome, we continuously evaluate the potential for disruptions and ways to mitigate such disruptions should they occur.

GOVERNMENT REGULATION

We are subject to various federal, state and local laws affecting our business, including areas of food safety, minimum wage increases, health care, zoning requirements, preparation and sale, among

others, of food and alcoholic beverages, information security, and environmental matters.

Each of our stores must comply with licensing requirements and regulations by a number of governmental authorities and we have not been significantly

affected by any delay in obtaining these licenses.

Federal, state and local environmental laws and regulations have not historically had a significant impact on our operations;

however, we cannot predict the effect of possible future environmental legislation or regulations on our operations.

however, we cannot predict the effect of possible future environmental

legislation or regulations on our operations.

We deem the various Cracker Barrel and MSBC trademarks and service marks that we own to be of substantial value.

Our policy is to obtain federal registration of trademarks and other intellectual property whenever possible and to pursue vigorously any infringement of our trademarks and service marks.

Our policy is to obtain federal registration of trademarks and other intellectual

property whenever possible and to pursue vigorously any infringement of our trademarks and service marks.

RESEARCH AND DEVELOPMENT

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Historically, our revenue and profits have been lower in the first and third fiscal quarters and higher in the second and fourth fiscal quarters.

We attribute these variations primarily to the holiday shopping season and the summer vacation and travel season.

We attribute these variations primarily to the

holiday shopping season and the summer vacation and travel season.

Our gift shop sales, which are made substantially to our restaurant guests, historically have been highest in our second quarter, which includes the holiday shopping season.

Historically, interstate tourist traffic and the propensity to dine out have been much higher during the summer months, thereby generally contributing to higher profits in the Company’s fourth quarter.

We also generally open additional new stores throughout the year.

We also generally open additional new stores

throughout the year.

Therefore, the results of operations for any interim period cannot be considered indicative of the operating results for an entire year.

Furthermore, we are not able to predict at this time the impact that the COVID-19 pandemic may have on the seasonality of our business during the coming fiscal year.

WORKING CAPITAL

In the restaurant industry, substantially all sales are either for cash or third-party credit card.

Therefore, like many restaurant companies, we are able to, and often do operate with negative working capital.

Therefore, like many restaurant companies, we are able to, and often do operate with negative

working capital.

Restaurant inventories purchased through our principal food distributor are on terms of net zero days, while other restaurant inventories purchased locally generally are financed through trade credit at terms of 30 days or less.

Because of our gift shop, which have a lower product turnover than our restaurants, we carry larger inventories than many other companies in the restaurant industry.

Retail inventories are generally financed through trade credit at terms of 60 days or less.

Retail inventories are generally financed through trade credit at terms of 60

days or less.

These various trade terms are aided by rapid product turnover of the restaurant inventory.

Employees generally are paid on weekly or semi-monthly schedules in arrears of hours worked except for bonuses that are paid either quarterly or annually in arrears.

Employees generally are paid on weekly or semi-monthly schedules in arrears of hours worked except for bonuses that are paid either quarterly

or annually in arrears.

Many other operating expenses have normal trade terms and certain expenses, such as certain taxes and some benefits, are deferred for longer periods of time.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business