What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-08-26 compared with 2020-08-24 · 161 added, 104 removed, 86 unchanged (75% of the section changed)

1 unchanged sentence

and its subsidiaries and any predecessor companies of Brinker International, Inc.

We own, develop, operate and franchise the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands.

We own, develop, operate and franchise the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands, as well as certain virtual brands including It’s Just Wings ® .

The Company was organized under the laws of the State of Delaware in September 1983 to succeed to the business operated by Chili’s, Inc., a Texas corporation, which was organized in August 1977.

We completed the acquisition of Maggiano’s in August 1995.

Impact of COVID-19

In March 2020, a novel strain of coronavirus (“COVID-19”) was declared a global pandemic and a National Public Health Emergency.

The spread of COVID-19 resulted in a significant reduction in sales at our restaurants due to changes in consumer behavior as well as social distancing practices, dining room closures and other restrictions that have been mandated or encouraged by federal, state and local governments.

At the end of the third quarter of fiscal 2020, we temporarily closed all Company-owned restaurant dining and banquet rooms as we transitioned to an off-premise business model and temporarily delayed our expansion plans.

Beginning on April 27, 2020, we began to reopen certain

dining room locations as permitted by governments.

At the end of fiscal 2020, as of June 24, 2020 , and more recently as of our first period of fiscal 2021 ended July 29, 2020 , 94.9% and 84.0% , respectively, of our Company-owned restaurant dining rooms or patios were open in a limited capacity.

We do not yet know the full extent of the effects of the COVID-19 pandemic on the economy, the markets we serve, our industry, our business or our operations.

Both Chili’s and Maggiano’s have been able to serve our guests during the COVID-19 pandemic as a result of our strategic decision to invest in technology, training and partnerships that enable online ordering, mobile app ordering, curbside service and third-party delivery.

As a result, our off-premise sales in the third and fourth quarters of fiscal 2020 grew significantly during the COVID-19 pandemic, although these increases did not fully off-set the lost dining room sales due to the dining room closures.

We are committed to strategies and a Company culture that we believe are centered on a guest experience.

This includes bringing guests back safely, growing long-term sales and profit, engaging team members and working to return our business to pre-pandemic levels.

Our strategies and culture are intended to differentiate our brands from the competition, effectively and efficiently manage our restaurants and establish a lasting presence for our brands in key markets around the world.

In the fourth quarter of fiscal 2020, the United States government passed a $2.0 trillion Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) designed primarily to help keep businesses running during and after the pandemic.

The CARES Act included provisions for certain deductions and tax credits, filing deadline extensions, filing payment deadlines and making available certain grant money to assist in this crisis.

As of June 24, 2020, this package allowed us to take advantage of credits, deferments, and deductions.

Additional information regarding the impact of the COVID-19 pandemic on our business and CARES Act is set forth within Part II Item 1A .

Risk Factors , Item 7 .

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

Financial Statements and Supplementary Data , Notes to the Consolidated Financial Statements , Note 2 - Novel Coronavirus Pandemic and Note 9 - Income Taxes of this Annual Report on Form 10-K.

References to “fiscal” or “fiscal year” are to the fiscal year ended of the applicable year.

For example, fiscal 2021 refers to the fiscal year ended June 30, 2021.

Restaurant Brands

Chili’s Grill & Bar

Chili’s, a recognized leader in the bar & grill category of casual dining, has been operating restaurants for over 45 years.

Chili’s enjoys a global presence with restaurants in the United States, 28 countries and two United States territories.

Whether domestic or international, Company-owned or franchised, Chili’s is dedicated to delivering fresh, high-quality food with a unique point of view, as well as dining experiences that make guests feel special.

Historically, Chili’s menu has featured bold, kicked-up American favorites.

Chili’s has built a reputation for gourmet burgers, sizzling fajitas, baby back ribs and hand-shaken margaritas.

We have refocused on and reinvested in these core equities, and we plan to continue to innovate our food offerings within these core menu platforms.

We believe our focused menu, our “Chilihead” culture, our focus on standards and our reputation for hospitality will allow Chili’s to differentiate our food and service from other restaurants.

We also believe that guests are evolving not only their standards of food quality but also their expectations of convenience.

Chili’s to-go menu is available on our www.chilis.com website, through our mobile app, our exclusive delivery partner DoorDash, or by calling the restaurant.

Chili’s is a recognized leader in the casual dining industry and the flagship brand of Dallas-based Brinker International, Inc.

Chili’s has been operating restaurants for over 46 years and enjoys a global presence with restaurants in the United States, 27 countries and two United States territories.

Whether domestic or international, Company-owned or franchised, Chili’s is dedicated to delivering fresh and high-quality food with a unique point of view, as well as dining experiences that make guests feel special.

Historically, Chili’s menu featured bold, kicked-up American favorites and Chili’s has built a reputation for big mouth burgers, full-on sizzling fajitas, baby back ribs and hand-shaken margaritas.

In recent years, we have focused on these core food offerings with our culinary innovations.

We believe our shift in focusing on a few core equities on our menu, our fun laid-back Chilihead culture, and hospitality standards have allowed Chili’s to differentiate its food and service from other casual dining restaurants.

In addition, Chili’s has focused on a seamless digital experience as our guests’ preferences and expectations around dining convenience have evolved in recent years.

Investments in our technology and off-premise options have enabled us to provide a faster, more convenient dine-in experience and to offer more To-Go and delivery options for our guests.

Our To-Go menu is now available through the Chili’s mobile app, chilis.com, our delivery partner DoorDash, Google Food Ordering, or by calling the restaurant directly.

Since 2013, we have leveraged tabletop devices in our restaurants to enhance the overall guest experience by giving them more control of their dining experience and allowing them to pay at the table.

In fiscal 2018, we relaunched our My Chili’s Rewards program and began offering free chips and salsa or a non-alcoholic beverage to members based on their visit frequency.

1 unchanged sentence

We expect this strategy to continue to give us a sustained competitive advantage over independent restaurants and the majority of our competitors.

In the fiscal year ended June 24, 2020 , at our Company-owned restaurants, entrée selections ranged in menu price from $8.00 to $19.49 .

For the full fiscal year, including the impact of the COVID-19 pandemic, our average annual net sales per Company-owned Chili’s restaurant during fiscal 2020 was $2.6 million , and the average revenue per meal, including alcoholic beverages, was approximately $15.80 per person.

Before the COVID-19 pandemic, in the first eight months of fiscal 2020, average net sales on an annualized basis per Company-owned Chili’s was $2.8 million , and the average revenue per meal, including alcoholic beverages, was approximately $16.04 per person.

The COVID-19 pandemic shifted consumer behavior to higher off-premise orders in the last four months of fiscal 2020, such that our

average net sales on an annualized basis per Company-owned Chili’s restaurant was $2.1 million , and the average revenue per meal during this COVID-19 impacted period, including alcoholic beverages, was approximately $15.20 per person.

The ability to sell alcoholic beverages off-premise varied by jurisdiction.

The sales mix of Chili’s total revenues for fiscal 2020 , and before and during the COVID-19 pandemic months was as follows:

In fiscal 2021, entrée selections at our Company-owned restaurants ranged in menu price from $8.00 to $19.69.

Our average annual net sales per Company-owned Chili’s restaurant during fiscal 2021 was $2.9 million, and the average revenue per meal, including alcoholic beverages, was approximately $15.50 per guest.

Food and non-alcoholic beverage sales accounted for 90.7% and 88.6% of Chili’s Company sales in fiscal 2021 and 2020, respectively, with alcoholic beverage sales accounting for the remainder.

Maggiano’s Little Italy

7 unchanged sentences

We offer a full range of lunch and dinner options, complimented by a premium wine list and handcrafted cocktails.

On Saturdays and Sundays, all Maggiano’s restaurants offer a brunch menu alongside our lunch menu.

In the fiscal year ended June 24, 2020 , entrée selections ranged in menu price from $10.50 to $41.99 .

For the full fiscal year, including the impact of the COVID-19 pandemic, our average annual sales per Maggiano’s restaurant was $6.4 million , and the average revenue per meal, including alcoholic beverages, was approximately $27.85 per person.

Before the COVID-19 pandemic, in the first eight months of fiscal 2020, average net sales on an annualized basis per Company-owned Maggiano’s was $7.9 million and the average revenue per meal, including alcoholic beverages, was approximately $29.18 per person.

The COVID-19 pandemic caused closed and reduced capacity dining and banquet rooms, and shifted consumer behavior to higher off-premise orders in the last four months of fiscal 2020, such that average net sales on an annualized basis per Company-owned Maggiano’s was $3.2 million , and the average revenue per meal during this COVID-19 period, including alcoholic beverages, was approximately $22.66 per person.

For the full fiscal year, sales from events at our banquet facilities made up 15.7% of Maggiano’s total revenues.

Before the COVID-19 pandemic, sales from events at our banquet facilities made up 17.7% of Maggiano’s total restaurant revenues in the first eight months of fiscal 2020.

Banquet sales during the four month pandemic period of fiscal 2020 made up 0.5% of total restaurant revenues.

Additionally, the ability to sell alcoholic beverages off-premise varied by jurisdiction.

The sales mix of Maggiano’s total revenues for fiscal 2020 , and before and during the COVID-19 pandemic months was as follows:

In fiscal 2021, entrée selections ranged in menu price from $8.50 to $41.99.

Our average annual sales per Maggiano’s restaurant in fiscal 2021 was $5.3 million, and the average revenue per meal, including alcoholic beverages, was approximately $25.78 per guest.

Sales from events at our banquet facilities made up 4.8% and 15.7% of Maggiano’s Company sales in fiscal 2021 and 2020, respectively.

Food and non-alcoholic beverage sales accounted for 89.2% and 86.3% of Maggiano’s Company sales for fiscal 2021 and fiscal 2020, respectively, with alcoholic beverage sales accounting for the remainder.

Virtual Brands

We are investing in virtual brands, restaurant-like menu offerings that are only available for purchase digitally, to drive restaurant traffic and sales growth.

We expect that our virtual brands will enable us to capitalize on the growth in off-premise dining and to leverage excess kitchen capacity in our existing restaurant infrastructure, while adding minimal complexity in our restaurants’ kitchens.

Our first virtual brand, It’s Just Wings, launched on June 23, 2020 and is a no-frills offering that consists of chicken wings available in 11 different sauces and rubs, curly fries, ranch dressing and fried Oreos for a value price.

It is available for purchase through DoorDash, Google Food Ordering and itsjustwings.com.

The operating results for It’s Just Wings are included in the results of our Chili’s and Maggiano’s brands, based on the restaurants that prepared and processed the food orders.

We plan to continue to test and strategically launch additional virtual brands in the future to further drive our growth.

Business Strategy

This information is set forth within Part II , Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview section of this Annual Report on Form 10-K.

We are committed to strategies and a Company culture that we believe will improve guest traffic, grow sales and profits, and engage team members.

Our strategies and culture are intended to differentiate our brands from the competition and to focus on the guest experience.

We are effectively and efficiently managing our restaurants to establish a lasting presence for our brands in key markets around the world.

Our primary strategy is to make our guests feel special through great food and quality service so that they return to our restaurants.

We differentiate Chili’s from our competitors with a flexible platform of value offerings at both lunch and dinner and are committed to offering consistent, quality products at a price point that is compelling to our guests.

Our “3 for $10” platform allows guests to combine a starter, a non-alcoholic beverage and an entrée for just $10.00 as part of the every-day base menu and is available for guests to enjoy in our dining rooms or off-premise.

Additionally, we have continued our Margarita of the Month promotion that features a premium-liquor margarita every month at an every-day value price of $5.00.

We have also invested in our technology and off-premise options as more guests are opting for To-Go and delivery.

Since fiscal 2019, as of the end of fiscal 2021, Chili’s off-premise business has grown by 273%.

Chili’s partnership with DoorDash has proven instrumental in offering our guests continued service during the COVID-19 pandemic.

We leveraged technology so that DoorDash orders are sent directly into our point of sale system, creating efficiencies and a system that allows us to better serve our guests.

We believe that guests will continue to prefer more convenience and off-premise options.

We plan to continue investments in our technology systems to support our To-Go and delivery capabilities.

Company Development

During fiscal 2020 , we continued the expansion of our restaurant brands domestically through a select number of new Company-owned restaurants in strategically desirable markets pre-pandemic.

Although we are focused on continued expansion, the COVID-19 pandemic has caused various government restrictions and, as of the fourth quarter of fiscal 2020 we temporarily delayed construction of new restaurants and the other expansion activities described below until we believe we will be able to safely resume.

During fiscal 2021, we continued the expansion of our restaurant brands domestically through new Company-owned restaurants in strategically desirable markets.

We concentrate on the development of certain identified markets that are most likely to improve our competitive position and achieve the desired level of marketing potential, profitability and return on invested capital.

2 unchanged sentences

The restaurant site selection process is critical and we devote significant effort to the investigation of new locations utilizing a variety of sophisticated analytical techniques.

Members of each brand’s executive team inspect, review and approve each restaurant site prior to its lease or acquisition for that brand.

Members of each brand’s executive team inspect, review and approve each restaurant site prior to its leasing or acquisition for that brand.

Our process evaluates a variety of factors, including:

4 unchanged sentences

The specific rate at which we are able to open new restaurants is determined, in part, by our success in locating satisfactory sites, negotiating acceptable lease or purchase terms, securing appropriate local governmental permits and approvals, and by our capacity to supervise construction and recruit and train management and hourly team members.

The temporary shutdown of development activities during the COVID-19 pandemic negatively impacted the fiscal 2022 pipeline.

The following table illustrates the Company-owned restaurants opened in fiscal 2021 and the projected openings in fiscal 2022:

The fiscal 2021 projected openings, which reflect our response to the COVID-19 pandemic, are still however subject to change based on the extent and duration of the COVID-19 pandemic:

Fiscal Year Openings

Full Year Projected Openings

Fiscal 2021 Fiscal 2022

Fiscal Year Openings Projected Openings

Company-owned restaurants

2 unchanged sentences

Maggiano’s domestic — —

Total Company-owned

Total Company-owned new openings 8 7

Relocation Openings

3 unchanged sentences

In some cases the brand considers relocation to a proximate, more desirable site, or evaluates closing the restaurant if the brand’s measurement criteria, such as cash flow and area demographic trends, do not support relocation.

During fiscal 2020 , and due to the COVID-19 pandemic restrictions, there were no relocations of any Company-owned restaurants.

In fiscal 2021 , we plan to relocate up to two Company-owned Chili’s restaurants provided conditions improve surrounding the pandemic.

Also during fiscal 2020 , excluding temporary closures due to the pandemic, we permanently closed seven Company-owned Chili’s restaurants that were generally performing below our standards or were near or at the expiration of their lease terms.

During fiscal 2021, we relocated two Company-owned restaurants.

Also during fiscal 2021, excluding temporary closures, we permanently closed three Company-owned Chili’s restaurants that were performing below our standards and were near or at the expiration of their lease terms.

Our strategic plan is targeted to support our long-term growth objectives, with a focus on continued development of those restaurant locations that have the greatest return potential for the Company and our shareholders.

Franchise Development

In addition to development of our Company-owned restaurants, we pursue expansion through our franchisees.

The following table illustrates the franchise restaurants opened in fiscal 2020 and the projected openings in fiscal 2021 .

The fiscal 2021 projected openings, which reflect the response to the COVID-19 pandemic, are still however subject to change based on the extent and duration of the COVID-19 pandemic:

Fiscal Year Openings

Full Year Projected Openings

Franchise restaurants

We also pursue expansion through the development of our franchisees.

The following table illustrates the franchise-operated restaurants opened during fiscal 2021 and the projected openings for fiscal 2022.

The fiscal 2022 projected openings remain subject to change based on the extent and duration of the COVID-19 pandemic:

Fiscal 2021 Fiscal 2022

Fiscal Year Openings Projected Openings

Franchise-operated restaurants

Chili’s domestic 3 1-3

1 unchanged sentence

Maggiano’s domestic 1 0

Total franchise

The following table illustrates the percentages of franchise operations out of the total Company-owned and franchise operations as of June 24, 2020 by restaurant brand:

Total openings 10 8-14

The following table illustrates the percentages of franchise-operated restaurants out of the total Company-owned and franchise-operated restaurants as of June 30, 2021 by restaurant brand:

Percentage of Franchise-Operated Restaurants

International (2)

Domestic - the percentages in this column are based on number of domestic franchised restaurants versus total domestic restaurants.

International - the percentages in this column are based on number of international franchised restaurants versus total international restaurants.

Overall - the percentages in this column are based on the total number of franchised restaurants (domestic and international) versus total system-wide number of restaurants.

International Franchise

We continue our international growth through development agreements with new and existing franchise partners, introducing Chili’s to new countries and expanding the brand within our existing markets.

As of June 24, 2020 , we have 18 total development arrangements.

During fiscal 2020, we opened 23 new locations, and entered into one new arrangement with an existing franchise partner.

Brinker 13 % 99 % 32 %

Chili’s 14 % 99 % 33 %

Maggiano’s 4 % — % 4 %

(1) Domestic franchise-operated restaurants as a percentage of total domestic restaurants.

(2) International franchise-operated restaurants as a percentage of total international restaurants.

(3) Franchise-operated restaurants (domestic and international) as a percentage of total system-wide restaurants.

International Franchises

Our international growth is driven by development agreements with new and existing franchise partners.

This growth introduces Chili’s to new countries and expands the brand within our existing markets.

As of June 30, 2021, we have 17 active development arrangements.

During fiscal 2021, we opened six new locations, and entered into two new arrangements, one with an existing franchise partner and one with a new franchise partner.

We plan to strategically pursue expansion of Chili’s internationally in areas where we see the most growth opportunities.

Our international agreements provide the vehicle for payment of development fees and initial franchise fees in addition to subsequent royalty fees based on the gross sales of each restaurant.

Our international agreements provide for development fees and initial franchise fees revenues in addition to subsequent royalty fees based on the gross sales of each restaurant.

We expect future agreements to remain limited to enterprises that demonstrate a proven track record as a restaurant operator and showcase financial strength that can support a multi-unit development agreement.

Domestic Franchise

Domestic Franchises

As of June 30, 2021, one domestic development arrangement existed.

Similar to our international agreements, a typical domestic agreement provides for payment of development and initial franchise fees in addition to subsequent royalty and advertising fees based on the gross sales of each restaurant.

Similar to our international agreements, a typical domestic agreement provides for development and initial franchise fees revenues in addition to subsequent royalty and advertising fees based on the gross sales of each restaurant.

We have from time to time purchased restaurants from our franchisees in order to support our growth objectives in certain markets.

In fiscal 2020 , we purchased 116 previously franchised Chili’s restaurants located in the Midwest United States.

This acquisition represented an opportunity to

create value for our shareholders and generate additional earnings and cash flow growth.

We remain committed to supporting the growth of our existing franchisees.

7 unchanged sentences

We believe there is a high correlation between the quality of restaurant management and the long-term success of a brand.

In that regard, we encourage increased experience at all management positions through various short and long-term incentive programs, which may include equity ownership.

In that regard, we encourage longer tenure at all management positions through various short and long-term incentive programs, which may include equity ownership.

These programs, coupled with a general management philosophy emphasizing quality of life, have enabled us to attract and retain key team members, and enjoy lower turnover of managers and team members that we believe is below industry averages.

1 unchanged sentence

Routine visitation to the restaurants by all levels of supervision enforces strict adherence to our overall brand standards and operating procedures.

Each brand is responsible for maintaining their operational training program.

Each brand is responsible for maintaining their operational

training program.

Depending on the brand, the training program typically includes a training period of two to three months for restaurant management trainees, as well as special training for high-potential team members and managers.

We also provide recurring management training for managers and supervisors to improve effectiveness or prepare them for more responsibility.

Supply Chain and Quality Assurance

Our ability to maintain consistent quality and continuity of supply throughout each restaurant brand depends upon acquiring products from reliable sources.

5 unchanged sentences

We have not experienced significant supply chain disruptions during the COVID-19 pandemic.

Additionally, as a purchaser of a variety of food products, we require our suppliers to adhere to our supplier code of conduct, which sets forth our expectation on business integrity, food safety and food ingredients, animal welfare and sustainability.

Additionally, as a purchaser of a variety of food products, we require our suppliers to adhere to our supplier code of conduct, which sets forth our expectation of business integrity, food safety and food ingredients, animal welfare and sustainability.

Due to the relatively rapid turnover of perishable food products and inventories in the restaurants, which consist primarily of food, beverages and supplies, our inventories have a modest aggregate dollar value in relation to revenues.

1 unchanged sentence

Advertising and Marketing

Our primary focus for developing menu innovation and targeting our digital advertising and loyalty program direct promotions are the Generation X and Millennial families who desire quality food, good value and a service experience that allows them to connect with family and friends.

Chili’s primary focus for developing menu innovation and targeting our digital advertising and loyalty program direct promotions are the Generation X and Millennial families who desire quality food, good value and a service experience that allows them to connect with family and friends.

These young families represent a significant percentage of our guest base today and, we believe, will only grow in importance in the years ahead.

During the COVID-19 pandemic, we have focused our advertising towards off-premise offerings and have reduced advertising spend in certain channels to conserve resources.

We rely on digital marketing, direct marketing, social media and word of mouth to advertise.

During the COVID-19 pandemic, our off-premise sales increased and we have shifted our advertising spend to focus on these sales channels accordingly.

Our domestic Chili’s franchise agreements generally require advertising contributions to us by the franchisees.

We use these contributions, in conjunction with Company funds, for the purpose of retaining advertising agencies, obtaining consumer insights, developing and producing brand-specific creative materials and purchasing national or regional media to meet the brand’s strategy.

Some franchisees also spend additional amounts on local advertising.

1 unchanged sentence

Maggiano’s, as a “polished casual” restaurant with 54 Company-owned and franchise-operated locations, primarily targets guests from affluent households who live and work around the higher-end malls where the majority of Maggiano’s restaurants are located.

Maggiano’s relies on digital marketing, direct marketing, social media and word of mouth to advertise to new guests.

Our employee base as of June 24, 2020 , consisted of approximately 62.2 thousand team members (which includes 14.7 thousand furloughed restaurant team members), of which 0.5 thousand were corporate personnel located in Dallas, Texas, 4.7 thousand were restaurant leaders such as regional and area directors, managers, or trainees, and 57.0 thousand were non-management restaurant positions.

Our executive officers have an average of 25 years of experience in the restaurant industry.

As a result of COVID-19 dining room closures, at the end of our third quarter of fiscal 2020, we had furloughed approximately 34.0 thousand hourly restaurant positions from both Chili’s and Maggiano’s brands, as we temporarily transitioned to a substantially smaller workforce to execute on the critical activities of the business.

We were able to bring back certain furloughed employees as dining rooms reopened and sales increased during the fourth quarter of fiscal 2020.

As of the end of our first period of fiscal 2021, ended July 29, 2020, 4.6 thousand employees remain on furlough that we anticipate bringing back as our business operations allow.

In addition to the restaurant furloughs, we also temporarily reduced the base salaries of our executive officers and corporate staff for approximately two months during the fourth quarter of fiscal 2020 by varying amounts ranging from 8% to 50%.

Additionally, effective May 10, 2020, employer matching contributions to the 401(k) defined contribution plan were stopped for all eligible employees.

As of the end of the fourth quarter of fiscal 2020, base salaries resumed to pre-COVID-19 pandemic amounts.

In a competitive labor market we have developed and maintain key recruitment and retention strategies.

We focus on helping our team members turn their restaurant jobs into lasting careers.

These career paths are made possible by a number of development programs, including Best You EDU, a no-cost education program providing foundational learning, ESL, GED, and associate’s degree programs, and the Certified Shift Leader program which is accredited as an apprenticeship through the National Restaurant Association Education Foundation and United States Department of Labor, and is intended to give hourly team members a clear path into management.

While developing these programs, we have simultaneously launched all-new digital training for team members at all levels of the Company that uses digital technology and innovative learning methodologies to set our team members up for success as part of our commitment to develop future leaders in the restaurant industry.

The majority of our team members, outside of restaurant management and restaurant support and corporate personnel, are paid on an hourly basis.

We stand firm in the belief that we provide competitive working conditions and wages favorable to other companies in our industry.

Maggiano’s relies on digital marketing, direct marketing, social media and word of mouth to advertise.

Our business has historically been seasonal and experienced fluctuation in sales volume during the fiscal year.

The highest sales are generally observed during the winter and the spring months, whereas the summer and the fall months are accompanied with lower sales.

Moreover, factors such as inclement weather conditions, natural disasters, and timing of holidays tend to impact this seasonality by region.

Human Capital Management

Our employee base, as of June 30, 2021, consisted of 59,491 team members.

These included 534 restaurant support center team members and 4,607 restaurant managers and above restaurant leaders, with the remainder being hourly team members.

Of our hourly team members, approximately 25% are full-time and 75% are part-time employees.

As of June 30, 2021, approximately 53% of our employees are women and approximately 53% of our employees

(who self-identified as a race or ethnicity) are racially or ethnically diverse.

Our team members are not covered by any collective bargaining agreements.

We have registered or have pending, among other marks, “Brinker International”, “Chili’s”, “Chili’s Too”, “Maggiano’s”, and “Maggiano’s Little Italy”, as trademarks with the United States Patent and Trademark Office.

Our executive officers have an average of more than 23 years of experience in the restaurant industry.

Culture and Wellbeing

For decades, our culture has been built on our passion for making people feel special, and that starts with our team members.

We affectionately call them Brinkerheads, Chiliheads or Maggiano’s Teammates, and we know that when they feel their best they provide great food and service to our guests.

Our motto is “Life is Short, Work Happy” and we promote and nurture a corporate culture that promotes wellbeing, inclusion and growth.

We believe that hiring, training, mentoring and supporting team members is the key to retention and living our culture.

We strive to help on helping our team members turn their restaurant jobs into lasting careers.

These career paths are made possible by a number of development programs, including the Certified Shift Leader (“CSL”) program at Chili’s, which is accredited as an apprenticeship through the National Restaurant Association Education Foundation and United States Department of Labor.

Our CSL program gives hourly team members a clear path into management by providing knowledge, training and skills to become successful restaurant managers.

In fiscal 2021, approximately 600 team members from the CSL program were promoted into management.

We also provide separate development programs for new managers, managers preparing to become general managers and general managers preparing to become directors of operations.

Approximately 90% of our new general managers are promoted from our existing team members.

Our no-cost education program, Best You EDU, provides foundational learning, ESL, citizenship preparation courses, GED, associate’s degree programs and other educational benefits, such as tutoring.

This program is available for all team members with a minimum of 90 days of tenure and at least 24 hours of work per week.

These tenure and minimum hourly requirements will be lowered in fiscal 2022.

Brinker cares about the health and wellbeing of all team members and provides resources and opportunities to help team members be their best, while at work and at home with their family, with our Be Well program.

This program focuses on five areas of wellbeing:

career, social, financial, physical/emotional and community.

In addition to our career development programs discussed above, we provide resources and opportunities to raise millions of dollars annually for charitable causes, and we provide annual fitness reimbursements for salaried team members and free mental health counselling for those enrolled in our benefit plans.

We believe that every team member should feel valued and respected and know that their work is meaningful and makes a difference in our brands and our communities.

We ask all of our team members to take a survey semi-annually, which includes meaningful feedback on how our team members feel about their overall work experience, their manager and our culture.

Our executive management team reviews the results of these surveys with our Board of Directors and strives to incorporate this feedback into future strategies.

Diversity, Equity and Inclusion (“DE&I”)

Our restaurants are built on the foundation of a culture of inclusion.

Our team members are diverse in gender, race, ethnicity, sexual orientation, disability, religion, age, cultural background and life experiences.

We celebrate the differences that make us stronger.

We are committed to a workplace environment where every team member feels that they belong and where every team member can succeed.

Our Board of Directors through its committees provides oversight for aspects of our culture equity and inclusion.

We are working to strengthen the foundation of our culture of inclusion and to build greater diverse leadership at Brinker through the following programs and initiatives:

• Leadership Listens Series – Opportunities for team members to share their personal stories, experiences and feedback with Brinker leadership

• Leadership Inclusion Council – An executive leadership group that guides DE&I initiatives and incorporates them into day-to-day management practices

• Women Taking the Lead – Development, mentoring and resources to help professionally develop female leaders

• Leaders Leading Through Diversity – A development program to increase diverse representation among restaurant operations leadership

• DE&I Training – Online learning paths on topics such as conscious and unconscious bias, as well as additional mandatory training programs for certain operations leaders

• Communities of Interest – Five resource groups providing safe spaces for underrepresented groups to develop connections, share ideas and encourage diversity of thought in the organization

• Culture of Inclusion Series – Events to help educate team members about inclusion and different cultures

COVID-19 Team Member Support

When faced with an unprecedented pandemic, our team members stepped up to the challenge and demonstrated strength, resilience and commitment.

Brinker stepped up to focus on the health and safety of our team members and guests and to provide significant financial support.

Our efforts included the following, some of which includes efforts from fiscal 2020 when the pandemic began:

• Safety – We immediately implemented enhanced cleaning and disinfecting procedures

• Team Member Relief Fund – We paid approximately $15.7 million to help 41,920 hourly team members who had reduced or no working hours as a result of government mandated dining room closures

• Health Screening and PPE – At shift check-in, all team members completed health screens, and we provided all our team members with face coverings which they were required to wear

• Training – Team members completed COVID-19 specific training and at shift check-in managers regularly gave reviews of policies and practices

• Additional Funds – We paid hourly team members in certain circumstances for missed shifts due to a COVID-19 diagnosis, being in quarantine or living with someone diagnosed with COVID-19, and reimbursed for some out-of-pocket medical expenses incurred as a result of COVID-19

• Benefits – We provided free mental health services for all team members and their families, and all team members enrolled in benefits were able to keep their benefits at the same discounted premium even if they were furloughed or no longer worked full-time

Information Technology and Cybersecurity

We pride ourselves on being innovators in our field, striving to create and procure cutting edge technology to improve the guest experience and create operational efficiencies.

We have created and implemented technologies to facilitate a contactless guest experience through apps, digital menus, tabletop and hand held devices and QR code payment.

Our restaurant operators utilize our back office systems for inventory control, curbside management, forecasting, demand preparation and productivity.

Our service desk supports the needs of both our restaurant support center and each of our restaurants.

Our data centers are geographically dispersed, which helps support continuity of our operations and systems.

Our systems operate in multiple cloud environments, which gives us ability to scale up infrastructure and provides flexibility for expansion.

They are comprised of a combination of internally developed and third-party developed software;

our team builds foundational frameworks to integrate and bridge technologies.

We believe our information systems are sufficient to support our business and we continually seek to improve our processes based on the strategic and financial priorities of the business.

Information and data security is a priority for us and we are consistently reviewing and evaluating risks and requirements to keep the data we have secure.

Our existing cyber security policy includes continuous monitoring and detection programs, network security precautions, encryption of critical data, in depth security assessment of vendors and incident response guidelines.

We continue to invest and innovate around the areas of protection of systems, sensitive data, technology and processes using third-party and in-house tools and resources.

We remain vigilant in staying ahead of new and emerging risks utilizing our tools and security teams and continue to review

and make strategic continued investments in our systems to keep the Company, our guests and our team members data secure.

We subscribe to multiple feeds and associations that discuss and monitor risks of any technology compromise or risks at our business partners where relevant.

Relevant restaurant level personnel and employees at the restaurant support center receive annual training on information security best practices.

Additionally, we provide annual credit card handling training following Payment Card Industry guidelines to team members that handle guest payment information.

We maintain a disaster recovery plan and protect against business interruption by backing up our major systems.

In addition, we periodically scan our environment for any vulnerability, perform penetration testing and engage third parties to assess effectiveness of our data security practices.

A third-party conducts regular network security reviews, scans and audits.

The Audit Committee of the Board of Directors has oversight responsibility for our data security practices and we believe the committee has the requisite skills and visibility into the design and operation of our data security practices to fulfill this responsibility effectively.

Management reporting on the effectiveness of these practices is provided to the Board of Directors, including the Audit Committee, on a quarterly basis or as needed.

We have registered or have pending, among other marks, “Brinker International”, “Chili’s”, “Maggiano’s”, “Maggiano’s Little Italy” and “It’s Just Wings”, as trademarks with the United States Patent and Trademark Office.

Available Information

We maintain an internet website with the address of http://www.brinker.com.

We maintain a website with the address of http://www.brinker.com.

You may obtain at our website, free of charge, copies of our reports filed with, or furnished to, the Securities and Exchange Commission (the “SEC”) on Forms 10-K, 10-Q and 8-K.

The SEC also maintains an internet website, with the address of www.sec.gov, which

contains reports, proxy and information statements, and other information filed electronically or furnished with the SEC.

The SEC also maintains a website, with the address of www.sec.gov, which contains reports, proxy and information statements, and other information filed electronically or furnished with the SEC.

In addition, you may view and obtain, free of charge, at our website, copies of our corporate governance materials, including:

2 unchanged sentences

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