What changed in this filing

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Item 1. Financial Statements

2025-08-01 compared with 2025-05-02 · 242 added, 190 removed, 483 unchanged (47% of the section changed)

36 unchanged sentences

Common stock, $ 0.01 par value, 200,000,000 shares authorized;

30,059,485 and 29,839,721 shares issued and outstanding as of March 26, 2025 and December 25, 2024, respectively

30,008,692 and 29,839,721 shares issued and outstanding as of June 25, 2025 and December 25, 2024, respectively

Additional paid-in-capital

7 unchanged sentences

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

June 25, 2025

June 26, 2024

Company-operated restaurant revenue

11 unchanged sentences

Loss on disposal of assets

Gain on recovery of insurance proceeds, property, equipment and expenses

Gain on recovery of insurance proceeds, net

Loss on disposition of restaurants

Impairment and closed-store reserves

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

Thirteen Weeks Ended March 26, 2025

(Amounts in thousands, except share data)

Thirteen Weeks Ended June 25, 2025

Stockholders’

Balance, December 25, 2024

Balance, March 26, 2025

Stock-based compensation

5 unchanged sentences

Forfeiture of common stock related to restricted shares

Balance, June 25, 2025

Thirteen Weeks Ended June 26, 2024

Stockholders’

Balance, March 27, 2024

Thirteen Weeks Ended March 27, 2024

Stock-based compensation

Issuance of common stock related to restricted shares

Issuance of common stock upon exercise of stock options, net

Shares repurchased for employee tax withholdings

Repurchase of common stock

( 1,737,786 )

Repurchase of common stock - excise tax

Forfeiture of common stock related to restricted shares

Balance, June 26, 2024

Twenty-Six Weeks Ended June 25, 2025

Stockholders’

1 unchanged sentence

Stock-based compensation

Issuance of common stock related to restricted shares

Issuance of common stock upon exercise of stock options, net

Shares repurchased for employee tax withholdings

Repurchase of common stock

1 unchanged sentence

Forfeiture of common stock related to restricted shares

Balance, March 27, 2024

Balance, June 25, 2025

Twenty-Six Weeks Ended June 26, 2024

Stockholders’

Balance, December 27, 2023

Stock-based compensation

Issuance of common stock related to restricted shares

Issuance of common stock upon exercise of stock options, net

Shares repurchased for employee tax withholdings

Repurchase of common stock

( 1,874,186 )

Repurchase of common stock - excise tax

Forfeiture of common stock related to restricted shares

Balance, June 26, 2024

See notes to condensed consolidated financial statements (unaudited).

2 unchanged sentences

(Amounts in thousands)

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

Cash flows from operating activities:

2 unchanged sentences

Stock-based compensation expense

Loss on disposition of restaurants

Loss on disposal of assets

Gain on recovery of insurance proceeds, net

Amortization of deferred financing costs

8 unchanged sentences

Accrued insurance

Payment related to tax receivable agreement

Operating lease liabilities

2 unchanged sentences

Cash flows from investing activities:

Proceeds from disposition of restaurants

Proceeds from fire insurance for property and equipment

8 unchanged sentences

Repurchases of common stock

Net cash flows provided by (used in) financing activities

Net cash flows used in financing activities

Increase in cash and cash equivalents

1 unchanged sentence

Cash and cash equivalents, end of period

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

Supplemental cash flow information

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(“EPL”), which develops, franchises, licenses, and operates quick-service restaurants under the name El Pollo Loco® and operates under one operating segment.

At March 26, 2025, the Company operated 174 and franchised 325 El Pollo Loco restaurants in the United States.

The Company also licenses eight restaurants in the Philippines.

Two licensed restaurants in the Philippines were closed during the thirteen weeks ended March 26, 2025.

At June 25, 2025, the Company operated 174 and franchised 325 El Pollo Loco restaurants in the United States.

As of June 25, 2025, the Company licenses eight restaurants in the Philippines.

This total reflects the closure of two licensed restaurants during the twenty-six weeks ended June 25, 2025.

Basis of Presentation

29 unchanged sentences

The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodels and maintenance), interest payments on its debt, lease obligations and working capital and general corporate needs.

At March 26, 2025, the Company’s total debt was $ 73.0 million.

At June 25, 2025, the Company’s total debt was $ 69.0 million.

The Company’s ability to make payments on its indebtedness and to fund planned capital expenditures depends on available cash and its ability to generate adequate cash flows in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond the Company’s control.

Based on current operations, the Company believes that its cash flow from operations, available cash of $ 4.3 million at March 26, 2025, and the outstanding borrowing availability under the 2022 Revolver will be adequate to meet the Company’s liquidity needs for the next twelve months from the date of filing of these condensed consolidated financial statements.

Based on current operations, the Company believes that its cash flow from operations, available cash of $ 9.0 million at June 25, 2025, and the outstanding borrowing availability under the 2022 Revolver will be adequate to meet the Company’s liquidity needs for the next twelve months from the date of filing of these condensed consolidated financial statements.

Subsequent Events

Subsequent to the quarter-end, the Company borrowed $ 2.0 million on its 2022 Revolver resulting in outstanding borrowings of $ 75.0 million as of May 1, 2025.

Subsequent to the quarter-end, the Company paid down an additional $ 1.0 million net of borrowings on its 2022 Revolver resulting in outstanding borrowings of $ 68.0 million as of July 31, 2025.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted into law in the United States, which contains a broad range of tax reform provisions.

The Company is currently evaluating the provisions of the OBBB Act on its financial position, but does not expect the OBBB Act to have a significant impact to the estimated effective tax rate for fiscal 2025, or the Company’s condensed consolidated financial statements .

Concentration of Risk

1 unchanged sentence

The Company has never experienced any losses related to these balances.

The Company had no supplier for which amounts due totaled more than 10.0% of the Company’s accounts payable at March 26, 2025.

The Company had one supplier for which amounts due totaled 17.5 % of the Company’s accounts payable at June 25, 2025.

The Company had one supplier to whom amounts due totaled 19.7 % of the Company’s accounts payable at December 25, 2024.

Purchases from the Company’s largest supplier totaled 15.1 % of total expenses for the thirteen weeks ended March 26, 2025, and 24.7 % of total expenses for the thirteen weeks ended March 27, 2024, respectively.

Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.6 % of total revenue for the thirteen weeks ended March 26, 2025, and 71.5 % for the thirteen weeks ended March 27, 2024, respectively.

Purchases from the Company’s largest supplier totaled 23.8 % and 16.0 % of total expenses for the thirteen and twenty-six weeks ended June 25, 2025, respectively, and 24.2 % and 24.4 % of total expenses for the thirteen and twenty-six weeks ended June 26, 2024, respectively.

Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.7 % of total revenue for both the thirteen and twenty-six weeks ended June 25, 2025, and 71.8 % and 71.7 % of total revenue for the thirteen and twenty-six weeks ended June 26, 2024, respectively.

Goodwill and Indefinite Lived Intangible Assets

6 unchanged sentences

The Company reports as one reporting unit.

The fair value of the portion of the reporting unit disposed of in a refranchising is determined by reference to the discounted value of the future cash flows expected to be generated by the restaurant and retained by the franchisee, which includes a deduction for the anticipated, future royalties the franchisee will pay the Company associated with the franchise agreement entered into simultaneously with the refranchising transition.

franchisee, which includes a deduction for the anticipated, future royalties the franchisee will pay the Company associated with the franchise agreement entered into simultaneously with the refranchising transition.

The fair value of the reporting unit retained is based on the price a willing buyer would pay for the reporting unit and includes the value of franchise agreements.

As such, the fair value of the reporting unit retained can include expected cash flows from future royalties from those restaurants currently being refranchised, future royalties from existing franchise businesses and

company restaurant operations.

The Company did no t record any decrement to goodwill related to the disposition of restaurants in fiscal 2024 or the thirteen weeks ended March 26, 2025.

The Company did no t record any decrement to goodwill related to the disposition of restaurants in fiscal 2024 or the twenty-six weeks ended June 25, 2025.

The Company performs an annual impairment test for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise.

10 unchanged sentences

These assumptions are subject to change as a result of changing economic and competitive conditions.

The Company determined that there were no indicators of potential impairment of its goodwill and indefinite-lived intangible assets during the thirteen weeks ended March 26, 2025.

Accordingly, the Company did no t record any impairment to its goodwill or indefinite-lived intangible assets during the thirteen weeks ended March 26, 2025.

The Company determined that there were no indicators of potential impairment of its goodwill and indefinite-lived intangible assets during the thirteen and twenty-six weeks ended June 25, 2025.

Accordingly, the Company did no t record any impairment to its goodwill or indefinite-lived intangible assets during the thirteen and twenty-six weeks ended June 25, 2025.

Fair Value Measurements

8 unchanged sentences

In other words, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances (e.g., when there is evidence of impairment).

There were no non-financial instruments measured at fair value on a nonrecurring basis as of and for the thirteen weeks ended March 26, 2025 and March 27, 2024.

There were no non-financial instruments measured at fair value on a nonrecurring basis as of and for the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024.

Impairment of Property and Equipment and ROU Assets

The Company reviews its property and equipment and right-of-use assets (“ROU assets”) for impairment on a restaurant-by-restaurant basis whenever events or changes in circumstances indicate that the carrying value of certain property and equipment and ROU assets may not be recoverable.

The Company considers a triggering event, related to property and equipment assets or ROU assets in a net asset position to have occurred related to a specific restaurant if the restaurant’s average unit volume (“AUV”) for the last twelve months are less than a minimum threshold or if consistent

levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets.

Additionally, the Company considers a triggering event related to ROU assets to have occurred related to a specific lease if the location has been closed or subleased and future estimated sublease income is less than current lease payments.

3 unchanged sentences

If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material.

The Company determined that triggering events occurred for certain stores during the thirteen weeks ended March 26, 2025 that required an impairment review of certain of the Company’s property and equipment and ROU assets.

Based on the results of this analysis, the Company did no t record any non-cash impairment charges for the thirteen weeks ended March 26, 2025 and March 27, 2024.

The Company determined that triggering events occurred for certain stores during the twenty-six weeks ended June 25, 2025 that required an impairment review of certain of the Company’s property and equipment and ROU assets.

Based on the results of this analysis, the Company did no t record any non-cash impairment charges for the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024.

Closed-Store Reserves

2 unchanged sentences

Additionally, any property tax and common area maintenance (“CAM”) payments relating to closed restaurants are included within closed-store expense.

During both the thirteen weeks ended March 26, 2025 and March 27, 2024, the Company recognized less than $ 0.1 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed location.

Gain on Recovery of Insurance Proceeds, Lost Profits

During the thirteen weeks ended March 27, 2024, the Company recognized gains of less than $ 0.1 million related to the reimbursement of property and equipment and expenses.

The gain on recovery of insurance proceeds and reimbursement of lost profits, net of the related costs, is included in the accompanying condensed consolidated statements of income, for the thirteen weeks ended March 27, 2024, as a reduction of company restaurant expenses.

During both the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024, the Company recognized less than $ 0.1 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed location.

Gain on Recovery of Insurance Proceeds and Lost Profits

During the twenty-six weeks ended June 26, 2024, the Company recognized gains of less than $ 0.1 million related to the reimbursement of property and equipment and expenses.

The gain on recovery of insurance proceeds and lost profits, net of the related costs, is included in the accompanying condensed consolidated statements of income, for the twenty-six weeks ended June 26, 2024, as a reduction of company restaurant expenses.

The provision for income taxes, income taxes payable and deferred income taxes is determined using the asset and liability method.

9 unchanged sentences

Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained.

The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect the Company’s condensed consolidated financial position, results of operations, and cash flows.

The final resolution of uncertain

tax positions could result in adjustments to recorded amounts and may affect the Company’s condensed consolidated financial position, results of operations, and cash flows.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.

The Company had no accrual for interest or penalties at March 26, 2025 or at December 25, 2024.

The Company did no t recognize interest or penalties during the thirteen weeks ended March 26, 2025 and March 27, 2024, since there were no

material unrecognized tax benefits.

The Company had no accrual for interest or penalties at June 25, 2025 or at December 25, 2024.

The Company did no t recognize interest or penalties during the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024, since there were no material unrecognized tax benefits.

Management believes no significant changes to the amount of unrecognized tax benefits will occur within the next twelve months.

On July 30, 2014, the Company entered into the income tax receivable agreement (the “TRA”), which calls for the Company to pay to its pre-initial public offering (“IPO”) stockholders 85 % of the savings in cash that the Company realizes in its income taxes as a result of utilizing its net operating losses (“NOLs”) and other tax attributes attributable to preceding periods.

For the thirteen weeks ended March 26, 2025 and March 27, 2024, the Company did no t record any income tax receivable agreement income or expenses.

As of March 26, 2025 and December 25, 2024, there was no remaining obligations owed on the Company’s condensed consolidated balance sheets.

For the quarter ended March 26, 2025, the Company recorded an income tax provision of $ 2.3 million, reflecting an estimated effective tax rate of 29.7 %.

For the quarter ended March 27, 2024, the Company recorded an income tax provision of 2.2 million, reflecting an estimated effective tax rate of approximately 27.1 %.

The difference between the 21.0 % statutory rate and the effective tax rate of 29.7 % for the quarter ended March 26, 2025 is primarily a result of state taxes and the impact of non-tax deductible executive compensation, partially offset by a Work Opportunity Tax Credit benefit .

For the thirteen weeks ended June 25, 2025, the Company recorded an income tax provision of $ 3.0 million, reflecting an estimated effective tax rate of 29.6 %.

For the thirteen weeks ended June 26, 2024, the Company recorded an income tax provision of $ 3.2 million, reflecting an estimated effective tax rate of approximately 29.3 %.

For the twenty-six weeks ended June 25, 2025, the Company recorded an income tax provision of $ 5.3 million, reflecting an estimated effective tax rate of approximately 29.7 %.

For the twenty-six weeks ended June 26, 2024, the Company recorded an income tax provision of $ 5.4 million, reflecting an estimated effective tax rate of approximately 28.4 %.

The difference between the 21.0 % statutory rate and the effective tax rate of 29.7 % for the twenty-six weeks ended June 25, 2025 is primarily a result of state taxes, the impact of non-tax deductible executive compensation, and the impact of lower stock compensation expense related to vesting of restricted stock awards deductible for tax as compared to the cumulative amount recorded as stock-based compensation expense, partially offset by a federal Work Opportunity Tax Credit benefit .

Recently Issued Accounting Pronouncements

1 unchanged sentence

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied prospectively with the option of retrospective application.

The Company is currently evaluating the impact of adopting this ASU on its disclosures.

The Company is currently evaluating the impact of adopting ASU 2023-09 on its disclosures.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement Reporting Comprehensive Income/Expense Disaggregation Disclosures” (“ASU 2024-03”).

The ASU requires disaggregated disclosure of income statement expenses at interim and annual reporting periods.

ASU 2024-03 requires disaggregated disclosure of income statement expenses at interim and annual reporting periods.

In January 2025, the FASB issued ASU No.

1 unchanged sentence

Clarifying the Effective Date”, which clarifies that the ASU 2024-03 is effective for fiscal year beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

The ASU can be adopted prospectively or retrospectively at the option of the Company.

The Company is currently evaluating the impact of adopting this ASU on its disclosures.

ASU 2024-03 can be adopted prospectively or retrospectively at the option of the Company.

The Company is currently evaluating the impact of adopting ASU 2024-03 on its disclosures.

The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the condensed consolidated financial statements.

1 unchanged sentence

Prepaid expenses and other current assets consist of the following (in thousands):

March 26, 2025

June 25, 2025

December 25, 2024

5 unchanged sentences

The costs and related accumulated depreciation and amortization of major classes of property and equipment are as follows (in thousands):

March 26, 2025

June 25, 2025

December 25, 2024

4 unchanged sentences

Total property and equipment, net

Depreciation and amortization expense was $ 3.9 million for both the thirteen weeks ended March 26, 2025 and March 27, 2024, respectively.

Based on the Company’s review of its property and equipment assets for impairment, the Company did no t record any non-cash impairment charges for the thirteen weeks ended March 26, 2025 and March 27, 2024, respectively.

Depreciation and amortization expense was $ 3.9 million for both the thirteen weeks ended June 25, 2025 and June 26, 2024, and $ 7.8 million and $ 7.7 million for the twenty-six weeks ended June 25, 2025 and June 26, 2024, respectively.

Based on the Company’s review of its property and equipment assets for impairment, the Company did no t record any non-cash impairment charges for the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024.

See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies – Impairment of Property and Equipment and ROU Assets” for additional information.

1 unchanged sentence

Stock Options

At March 26, 2025, options to purchase 1,472,494 shares of common stock were outstanding, including 295,692 vested and 1,176,802 unvested options.

Pursuant to the Company’s 2018 Omnibus Equity Incentive Plan (as amended, the “Incentive Plan”), the Company grants stock options (“options”), restricted stock units, performance-based stock units (“PSUs”) and restricted stock to the Company’s employees, officers, directors, and other eligible participants.

On May 29, 2025, the Company’s stockholders approved an amendment to the Incentive Plan, under which the new aggregate share limit was increased by 1,250,000 shares for a total of 4,500,000 shares.

As of June 25, 2025, 1,397,957 shares of common stock remained available for issuance under the Incentive Plan.

At June 25, 2025, options to purchase 1,437,961 shares of common stock were outstanding, including 465,605 vested and 972,356 unvested options.

Unvested options vest over time;

however, upon a change in control, the Board of Directors (the “Board”) may accelerate vesting.

A summary of stock option activity at March 26, 2025 and changes during the thirteen weeks ended March 26, 2025 is as follows:

however, pursuant to the Incentive Plan, upon a change in control, the Company’s Board of Directors (the “Board”) may accelerate vesting.

A summary of stock option activity at June 25, 2025 and changes during the twenty-six weeks ended June 25, 2025 is as follows:

Weighted-Average

6 unchanged sentences

Forfeited, cancelled or expired

Outstanding – March 26, 2025

Vested and expected to vest at March 26, 2025

Exercisable at March 26, 2025

Outstanding – June 25, 2025

Vested and expected to vest at June 25, 2025

Exercisable at June 25, 2025

The fair value of each stock option was estimated on the grant date using an exercise price of the closing stock price on the day prior to date of grant and the Black-Scholes option-pricing model with the following weighted average assumptions:

March 26, 2025

March 27, 2024

June 25, 2025

June 26, 2024

Expected volatility

2 unchanged sentences

Expected dividends

At March 26, 2025, the Company had total unrecognized compensation expense of $ 5.0 million related to unvested stock options, which it expects to recognize over a weighted-average period of 2.96 years.

At June 25, 2025, the Company had total unrecognized compensation expense of $ 4.4 million related to unvested stock options, which it expects to recognize over a weighted-average period of 2.75 years.

Restricted Shares

A summary of restricted share activity as of March 26, 2025 and changes during the thirteen weeks ended March 26, 2025 is as follows:

A summary of restricted share activity as of June 25, 2025 and changes during the twenty-six weeks ended June 25, 2025 is as follows:

Weighted-Average

1 unchanged sentence

Forfeited and cancelled

Unvested shares at March 26, 2025

Unvested shares at March 26, 2025, included 998,109 unvested restricted shares and 30,254 shares subject to unvested but earned performance stock units.

At March 26, 2025, the Company had unrecognized compensation expense of $ 8.1 million related to unvested restricted shares, which it expects to recognize over a weighted-average period of 2.62 years.

During the thirteen weeks ended March 26, 2025, the Company granted 159,948 restricted stock units subject to performance-based vesting conditions based on revenue and restaurant contribution margin to certain officers.

Each performance-based restricted stock unit ("PSU") has a grant date fair value of $ 10.42 and a vesting period from the grant date through the date the audit of the Company's fiscal 2027 financial results is expected to be completed.

Unvested shares at June 25, 2025

Unvested shares at June 25, 2025, included 767,293 unvested restricted shares and 30,254 performance-based restricted stock units that have been earned based on performance targets but still unvested.

At June 25, 2025, the Company had unrecognized compensation expense of $ 6.9 million related to unvested restricted shares, which it expects to recognize over a weighted-average period of 2.47 years.

Performance-Based Restricted Stock Units

During the twenty-six weeks ended June 25, 2025, the Company granted 159,948 restricted stock units under the Incentive Plan subject to performance-based vesting conditions based on revenue and restaurant contribution margin to certain officers.

Each PSU has a grant date fair value of $ 10.42 and a vesting period from the grant date through the date the audit of the Company's fiscal 2027 financial results is expected to be completed.

During the twenty-six weeks ended June 25, 2025, 11,996 PSUs were forfeited.

The fair value of each PSU is expensed based on management's current estimate of the level that the performance goal will be achieved.

As of March 26, 2025, based on the target level of performance, the total unrecognized compensation expense related to unvested PSUs was $ 1.8 million, which is expected to be recognized over a weighted-average period of 2.80 years.

Total stock-based compensation expense was $ 1.0 million for the thirteen weeks ended March 26, 2025, and $ 0.9 million for the thirteen weeks ended March 27, 2024.

As of June 25, 2025, based on the target level of performance, the total unrecognized compensation expense related to unvested PSUs was $ 1.6 million, which is expected to be recognized over a weighted-average period of 2.55 years.

Total stock-based compensation expense was $ 1.7 million and $ 2.7 million for the thirteen and twenty-six weeks ended June 25, 2025, and $ 0.9 million and $ 1.8 million for the thirteen and twenty-six weeks ended June 26, 2024.

Share Repurchases

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Under the Share Repurchase Program, the Company was permitted to repurchase its common stock from time to time, in amounts and at prices that the Company deemed appropriate, subject to market conditions and other considerations.

Pursuant to the Share Repurchase Program, the Company is authorized to effect repurchases using open market purchases, including pursuant to Rule 10b5-1 trading plans, and/or through privately negotiated transactions.

Pursuant to the Share Repurchase Program, the Company was authorized to effect repurchases using open market purchases, including pursuant to Rule 10b5-1 trading plans, and/or through privately negotiated transactions.

The Share Repurchase Program did not obligate the Company to acquire any particular number of shares.

The Share Repurchase Program was terminated on March 31, 2025.

For the thirteen weeks ended March 26, 2025, the Company repurchased 159,750 shares of common stock under the Share Repurchase Program, using open market purchases, for total consideration of approximately $ 1.8 million.

Following completion of these repurchases, less than $ 0.1 million of the Company’s common stock remained available for repurchase under the Share Repurchase Program at March 26, 2025.

The Share Repurchase Program expired on March 31, 2025.

For the thirteen and twenty-six weeks ended June 25, 2025, the Company repurchased 3,479 and 163,229 shares of common stock, respectively, under the Share Repurchase Program, using open market purchases, for total consideration of less than approximately $ 0.1 million and $ 1.8 million, respectively.

LONG-TERM DEBT

1 unchanged sentence

The 2022 Revolver includes a sub limit of $ 15.0 million for letters of credit and a sub limit of $ 15.0 million for swingline loans.

The obligations under the 2022 Credit Agreement and related loan documents are guaranteed by

Holdings and Intermediate.

The obligations under the 2022 Credit Agreement and related loan documents are guaranteed by Holdings and Intermediate.

The obligations of Holdings, EPL and Intermediate under the 2022 Credit Agreement and related loan documents are secured by a first priority lien on substantially all of their respective assets subject to certain customary exceptions.

Under the 2022 Revolver, Holdings is restricted from making certain payments such as cash dividends, except that it may, inter alia, (i) pay up to $ 1.0 million per year to repurchase or redeem qualified equity interests of Holdings held by past or present officers, directors, or employees (or their estates) of the Company upon death, disability, or termination of employment, (ii) pay under its TRA, and (iii) so long as no default or event of default has occurred and is continuing, (a) make non-cash repurchases of equity interests in connection with the exercise of stock options by directors, officers and management, provided that those equity interests represent a portion of the consideration of the exercise price of those stock options, (b) pay up to $ 0.5 million in any 12 month consecutive period to redeem, repurchase or otherwise acquire equity interests of any subsidiary that is not a wholly-owned subsidiary from any holder of equity interest in such subsidiary, (c) pay up to $ 2.5 million per year pursuant to stock option plans, employment agreements, or incentive plans, (d) make up to $ 5.0 million in other restricted payments per year, and (e) make other restricted payments, subject to its compliance, on a pro forma basis, with (x) a lease-adjusted consolidated leverage ratio not to exceed 4.25 times and (y) the financial covenants applicable to the 2022 Revolver.

Under the 2022 Revolver, Holdings is restricted from making certain payments such as cash dividends, except that it may, inter alia, (i) pay up to $ 1.0 million per year to repurchase or redeem qualified equity interests of Holdings held by past or present officers, directors, or employees (or their estates) of the Company upon death, disability, or termination of employment, (ii) pay under its Tax Receivable Agreement, and (iii) so long as no default or event of default has occurred and is continuing, (a) make non-cash repurchases of equity interests in connection with the exercise of stock options by directors, officers and management, provided that those equity interests represent a portion of the consideration of the exercise price of those stock options, (b) pay up to $ 0.5 million in any 12-month consecutive period to redeem, repurchase or otherwise acquire equity interests of any subsidiary that is not a wholly-owned subsidiary from any holder of equity interest in such subsidiary, (c) pay up to $ 2.5 million per year pursuant to stock option plans, employment agreements, or incentive plans, (d) make up to $ 5.0 million in other restricted payments per year, and (e) make other restricted payments, subject to its compliance, on a pro forma basis, with (x) a lease-adjusted consolidated leverage ratio not to exceed 4.25 times and (y) the financial covenants applicable to the 2022 Revolver.

Borrowings under the 2022 Credit Agreement (other than any swingline loans) bear interest, at the borrower’s option, at rates based upon either the secured overnight financing rate (“SOFR”) or a base rate, plus, for each rate, a margin determined in accordance with a lease-adjusted consolidated leverage ratio-based pricing grid.

2 unchanged sentences

Borrowings under the 2022 Revolver may be repaid and reborrowed.

The interest rate range under the 2022 Revolver was 5.65 % to 7.75 % for the thirteen weeks ended March 26, 2025, and 6.92 % to 6.96 % for the thirteen weeks ended March 27, 2024 .

The interest rate range under the 2022 Revolver was 5.67 % to 5.93 % and 5.65 % to 7.75 % for the thirteen and twenty-six weeks ended June 25, 2025, respectively, and 6.67 % to 6.94 % and 6.67 % to 6.96 % for the thirteen and twenty-six weeks ended June 26, 2024 , respectively.

The 2022 Credit Agreement contains certain customary financial covenants, subject to certain exceptions.

The Company was in compliance with the financial covenants as of March 26, 2025.

At March 26, 2025, the Company had $ 73.0 million in outstanding borrowings under the 2022 Revolver and one letter of credit in the amount of $ 10.3 million outstanding, and as a result, the Company had $ 66.7 million in borrowing availability.

During the thirteen weeks ended March 26, 2025, the Company borrowed $ 6.0 million and paid down $ 4.0 million on the 2022 Revolver.

During the thirteen weeks ended March 27, 2024, the Company paid down $ 4.0 million on the 2022 Revolver.

The Company was in compliance with the financial covenants as of June 25, 2025.

At June 25, 2025, the Company had $ 69.0 million in outstanding borrowings under the 2022 Revolver and one letter of credit in the amount of $ 10.3 million outstanding, and as a result, the Company had $ 70.7 million in borrowing availability.

During the thirteen and twenty-six weeks ended June 25, 2025, the Company borrowed $ 2.0 million and $ 8.0 million, respectively, and paid down $ 6.0 million and $ 10.0 million, respectively, on the 2022 Revolver.

During the thirteen and twenty-six weeks ended June 26, 2024, the Company borrowed $ 14.0 million and paid down $ 7.0 million and $ 11.0 million, respectively, on the 2022 Revolver.

There are no required principal payments prior to maturity of the 2022 Revolver on July 27, 2027.

1 unchanged sentence

Other accrued expenses and current liabilities consist of the following (in thousands):

March 26, 2025

June 25, 2025

December 25, 2024

8 unchanged sentences

Other noncurrent liabilities consist of the following (in thousands):

March 26, 2025

June 25, 2025

December 25, 2024

10 unchanged sentences

These contracts have terms extending through the end of 2032.

At March 26, 2025, the Company’s total estimated commitment to purchase chicken was $ 19.1 million.

At June 25, 2025, the Company’s total estimated commitment to purchase chicken was $ 11.8 million.

Contingent Lease Obligations

1 unchanged sentence

These leases have various terms, the latest of which expires in 2038 .

As of March 26, 2025, the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessee was $ 3.4 million.

The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at March 26, 2025 was $ 2.3 million.

As of June 25, 2025, the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessee was $ 3.7 million.

The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at June 25, 2025 was $ 2.5 million.

The Company’s franchisees are primarily liable on the leases.

2 unchanged sentences

Employment Agreements

As of March 26, 2025, the Company had employment agreements with three of the officers of the Company.

As of June 25, 2025, the Company had employment agreements with three of the officers of the Company.

These agreements provide for minimum salary levels, possible annual adjustments for cost-of-living changes, and incentive bonuses that are payable under certain business conditions.

4 unchanged sentences

EARNINGS PER SHARE

Basic earnings per share (“EPS”) is calculated using the weighted-average number of shares of common stock outstanding during the thirteen weeks ended March 26, 2025 and March 27, 2024.

Basic earnings per share (“EPS”) is calculated using the weighted-average number of shares of common stock outstanding during the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024.

Diluted EPS is calculated using the weighted-average number of shares of common stock outstanding and potentially dilutive during the period, using the treasury stock method.

1 unchanged sentence

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

June 25, 2025

June 26, 2024

Weighted-average shares outstanding—basic

5 unchanged sentences

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

June 25, 2025

June 26, 2024

Weighted-average shares outstanding—basic

8 unchanged sentences

Revenues from the operation of company-operated restaurants are recognized as food and beverage products are delivered to customers and payment is tendered at the time of sale.

The Company presents sales, net of sales-related taxes and promotional allowances.

The Company presents revenue, net of sales-related taxes and promotional allowances.

The Company offers a loyalty rewards program, which awards a customer points for dollars spent.

1 unchanged sentence

If a customer does not earn or use points within a one-year period, their account is deactivated and all points expire.

When a customer is part of the rewards program, the obligation to provide future discounts related to points earned is considered a separate performance obligation, to which a portion of the transaction price is allocated.

The performance obligation related to loyalty points is deemed to have been satisfied, and the amount deferred in the balance sheet is recognized as revenue, when the points are transferred to a reward and redeemed, the reward or points have expired, or the likelihood of redemption is remote.

A portion of the transaction price is allocated to loyalty points, if necessary, on a pro-rata basis, based on stand-alone selling price, as determined by menu pricing and loyalty points terms.

As of March 26, 2025 and December 25, 2024, the revenue allocated to loyalty points that have not been redeemed was $ 0.9 million and $ 0.8 million, respectively, which is

reflected in the Company’s accompanying condensed consolidated balance sheets within other accrued expenses and current liabilities.

The Company expects the loyalty points to be redeemed and recognized over a one-year period.

A portion of the transaction price is then allocated to loyalty points, if necessary, on a pro-rata basis, based on stand-alone selling price, as determined by menu pricing and loyalty points terms.

As of June 25, 2025 and December 25, 2024, the revenue allocated to loyalty points that have not been redeemed was $ 1.0 million and $ 0.8 million, respectively, which is reflected in the Company’s accompanying condensed consolidated balance sheets within other accrued expenses and current liabilities.

Changes in the loyalty rewards program liability included in deferred revenue within other accrued expenses and current liabilities on the condensed consolidated balance sheets were as follows (in thousands):

June 25, 2025

December 25, 2024

Loyalty rewards liability, beginning balance

Revenue deferred

Revenue recognized

Loyalty rewards liability, ending balance

The Company expects all loyalty points revenue related to performance obligations that were unsatisfied as of June 25, 2025 to be recognized within one year .

The Company sells gift cards to its customers in the restaurants and through selected third parties.

3 unchanged sentences

Unredeemed gift card balances are deferred and recorded as other accrued expenses on the accompanying condensed consolidated balance sheets.

The gift card liability included in other accrued expenses and current liabilities on the condensed consolidated balance sheets was as follows (in thousands):

June 25, 2025

December 25, 2024

Gift card liability

Revenue recognized from the redemption of gift cards that was included in other accrued expenses and current liabilities at the beginning of the year was as follows (in thousands):

Thirteen Weeks Ended

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

June 25, 2025

June 26, 2024

Revenue recognized from gift card liability balance at the beginning of the year

Franchise and franchise advertising fee revenue

6 unchanged sentences

The Company satisfies the performance obligation related to the franchise license over the term of the franchise agreement, which is typically 20 years .

Payment for the franchise license consists of three components, a fixed-fee related to the franchise/development agreement, a sales-based royalty fee and a sales-based advertising fee.

Payment for the franchise license consists of three components, a fixed-fee related to the franchise/development agreement, a revenue-based royalty fee and a revenue-based advertising fee.

The fixed fee, as determined by the signed development and/or franchise agreement, is due at the time the development agreement is entered into, and/or when the franchise agreement is signed, and does not include a finance component.

The sales-based royalty fee and sales-based advertising fee are considered variable consideration and are recognized as revenue as such sales are earned by the franchisees.

Both sales-based fees qualify under the royalty constraint exception, and do not require an estimate of future transaction price.

Additionally, the Company is utilizing the practical expedient available under ASC Topic 606, “Revenue from Contracts with Customers” (“Topic 606”) regarding disclosure of the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied for sales-based royalties.

The revenue-based royalty fee and revenue-based advertising fee are considered variable consideration and are recognized as revenue as such revenue are earned by the franchisees.

Both revenue-based fees qualify under the royalty constraint exception, and do not require an estimate of future transaction price.

In certain franchise agreements, the Company offers a discounted renewal to incentivize future renewals after the end of the initial franchise term.

1 unchanged sentence

This performance obligation is satisfied over the renewal term, which is typically 10 or 20 years , while payment is fixed and due at the time the renewal is signed.

The Company purchases hardware, such as scanners, printers, cash registers, kiosks, and tablets, from third party vendors, which it then sells to franchisees.

The Company purchases hardware, such as scanners, printers, point-of-sale systems, kiosks, and tablets, from third party vendors, which it then sells to franchisees.

As the Company is considered the principal in this relationship, payment received for the hardware is considered revenue, and is received upon transfer of the goods from the Company to the franchisee.

As of March 26, 2025, there were no performance obligations related to hardware services that were unsatisfied or partially satisfied.

The following table presents the Company’s revenues disaggregated by geographic market:

March 26, 2025

March 27, 2024

As of June 25, 2025, there were no performance obligations related to hardware services that were unsatisfied or partially satisfied.

The following table presents the Company-operated revenue disaggregated by geographic market:

Thirteen Weeks Ended

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

June 25, 2025

June 26, 2024

Greater Los Angeles area market

1 unchanged sentence

Contract balances

The following table provides information about the change in the franchise contract liability balances during the thirteen weeks ended March 26, 2025 and March 27, 2024 (in thousands):

December 25, 2024

Revenue recognized - beginning balance

Additional contract liability

March 26, 2025

December 27, 2023

Revenue recognized - beginning balance

Additional contract liability

March 27, 2024

The Company’s franchise contract liability includes development fees, initial franchise and license fees, franchise renewal fees, lease subsidies and royalty discounts and is included within other accrued expenses and current liabilities and other noncurrent liabilities within the accompanying condensed consolidated balance sheets.

2 unchanged sentences

Revenue is recognized from these agreements as the underlying performance obligation is satisfied, which is over the term of the agreement.

The following table illustrates the estimated revenue to be recognized in future periods related to performance obligations under the applicable contracts that are unsatisfied as of March 26, 2025 (in thousands):

Franchise revenues:

March 26, 2025

The following table provides information about the change in the franchise contract liability balances during the twenty-six weeks ended June 25, 2025 and June 26, 2024 (in thousands):

December 25, 2024

Loyalty rewards liability, beginning balance

Revenue deferred

Additional contract liability

Revenue recognized

Loyalty rewards liability, ending balance

The Company expects all loyalty points revenue related to performance obligations unsatisfied as of March 26, 2025 to be recognized within one year .

The gift card liability included in other accrued expenses and current liabilities on the condensed consolidated balance sheets was as follows (in thousands):

March 26, 2025

June 25, 2025

December 27, 2023

Gift card liability

Revenue recognized from the redemption of gift cards that was included in other accrued expenses and current liabilities at the beginning of the year was as follows (in thousands):

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

Revenue recognized from gift card liability balance at the beginning of the year

Additional contract liability

Revenue recognized

June 26, 2024

Franchise revenues:

Contract Costs

3 unchanged sentences

Additionally, the Company has various contracts with vendors that have been determined to contain an embedded lease in accordance with Topic 842.

As of March 26, 2025, the Company had one lease that it had entered into, but had not yet commenced.

As of June 25, 2025, the Company had two leases that it had entered into, but had not yet commenced.

Significant Assumptions and Judgments

In applying the requirements of Topic 842, the Company made significant assumptions and judgments related to determination of whether a contract contains a lease and the discount rate used for the lease.

In determining if any of the Company’s contracts contain a lease, the Company made assumptions and judgments related to its ability to direct the use of any assets stated in the contract and the likelihood of renewing any short-term contracts for a period extending past twelve months.

The Company also made significant assumptions and judgments in determining an appropriate discount rate for property leases.

These included using a consistent discount rate for a portfolio of leases entered into at varying dates, using the full 20-year term of the lease, excluding any options, and using the total minimum lease payments.

The Company utilizes a third-party valuation firm in determining the discount rate, based on the above assumptions.

For all other leases, the Company uses the discount rate implicit in the lease, or the Company’s incremental borrowing rate.

As the Company has adopted the practical expedient not to separate lease and non-lease components, no significant assumptions or judgments were necessary in allocating consideration between these components, for all classes of underlying assets.

Building and Facility Leases

8 unchanged sentences

Furthermore, there are no residual value guarantees and no restrictions imposed by the lease.

During the thirteen weeks ended March 26, 2025, the Company reassessed the lease terms on two restaurants, due to certain triggering events, such as the addition of significant leasehold improvements with useful lives that extend past the current lease expiration, the decision to terminate a lease, or the decision to renew.

This reassessment resulted in an additional $ 1.4 million of ROU asset and lease liabilities for the thirteen weeks ended March 26, 2025, which were recognized and will be amortized over the new lease term.

During the thirteen weeks ended March 27, 2024, the Company reassessed the lease terms on eight restaurants due to certain triggering events, such as the addition of significant leasehold improvements with useful lives that extend past the current lease expiration, the decision to terminate a lease, or the decision to renew.

This reassessment resulted in an additional $ 5.9 million of ROU asset and lease liabilities for the thirteen weeks ended March 27, 2024, which were recognized and will be amortized over the new lease term.

During the thirteen and twenty-six weeks ended June 25, 2025, the Company reassessed the lease terms on seven and nine restaurants, respectively, due to certain triggering events, such as the addition of significant leasehold improvements with useful lives that extend past the current lease expiration, the decision to terminate a lease, or the decision to renew or exercise an option.

This reassessment resulted in an additional $ 5.7 million and $ 7.1 million of ROU asset and lease liabilities for the thirteen and twenty-six weeks ended June 25, 2025, respectively, which were recognized and will be amortized over the new lease term.

During the thirteen and twenty-six weeks ended June 26, 2024, the Company reassessed the lease terms on four and 12 restaurants, respectively, due to certain triggering events, such as the addition of significant leasehold improvements with useful lives that extend past the current lease expiration, the decision to terminate a lease, or the decision to renew or exercise an option.

This reassessment resulted in an additional $ 1.8 million and $ 8.1 million of ROU asset and lease liabilities for the thirteen and twenty-six weeks ended June 26, 2024, respectively, which were recognized and will be amortized over the new lease term.

Additionally, as the Company adopted all practical expedients available under Topic 842, no reallocation between lease and non-lease components was necessary.

2 unchanged sentences

The vast majority of these leases have rights to extend terms via fixed rental increases.

However, none of these leases have early termination

rights, the right to purchase the premises or any residual value guarantees.

However, none of these leases have early termination rights, the right to purchase the premises or any residual value guarantees.

The Company does not have any related party leases.

During both the thirteen weeks ended March 26, 2025 and March 27, 2024, the Company did no t record any non-cash impairment charges.

During both the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024, the Company did no t record any non-cash impairment charges.

See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies – Impairment of Property and Equipment and ROU Assets” for additional information.

1 unchanged sentence

These leases are fixed payments with no variable component.

Additionally, no optional renewal periods have been included in the calculation of the ROU asset, there are no residual value guarantees and no restrictions imposed.

Significant Assumptions and Judgments

The Company also made significant assumptions and judgments in determining an appropriate discount rate for property leases.

The Company utilizes a third-party valuation firm in determining the discount rate, based on the above assumptions.

For all other leases, the Company uses the discount rate implicit in the lease, or the Company’s incremental borrowing rate.

Additionally, no optional renewal periods have been included in the calculation of the ROU asset, and there are no residual value guarantees and no restrictions imposed.

Lease Cost and Lease Activities

The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands):

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

June 25, 2025

June 26, 2024

Finance lease cost:

7 unchanged sentences

Total lease cost

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

Finance lease cost:

Amortization of right-of-use assets

Interest on lease liabilities

Operating lease cost:

Fixed rent cost

Short-term lease cost

Variable lease cost

Sublease income

Total lease cost

The following table presents the Company’s total lease cost on the condensed consolidated statements of income (in thousands):

March 26, 2025

March 27, 2024

Thirteen Weeks Ended

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

June 25, 2025

June 26, 2024

Lease cost – Occupancy and other operating expenses

3 unchanged sentences

Total lease cost

During the thirteen weeks ended March 26, 2025 and March 27, 2024, the Company had the following cash and non-cash activities associated with its leases (dollars in thousands):

March 26, 2025

March 27, 2024

During the twenty-six weeks ended June 25, 2025 and June 26, 2024, the Company had the following cash and non-cash activities associated with its leases (dollars in thousands):

Twenty-Six Weeks Ended June 25, 2025

Twenty-Six Weeks Ended June 26, 2024

Cash paid for amounts included in the measurement of lease liabilities

11 unchanged sentences

Weighted-average discount rate—operating leases

Information regarding the Company’s minimum future lease obligations as of March 26, 2025 is as follows (in thousands):

Information regarding the Company’s minimum future lease obligations as of June 25, 2025 is as follows (in thousands):

Finance Leases

19 unchanged sentences

Additionally, there are no related party leases.

The Company received $ 0.1 million of lease income from company-owned locations for both the thirteen weeks ended March 26, 2025 and March 27, 2024.

The Company received $ 0.1 million of lease income from company-owned locations for both the thirteen weeks ended June 25, 2025 and June 26, 2024.

The Company received $ 0.2 million of lease income from company-owned locations for both the twenty-six weeks ended June 25, 2025 and June 26, 2024.

SHAREHOLDER RIGHTS AGREEMENT

1 unchanged sentence

In connection with the distribution of the Rights, the Company entered into a Rights Agreement (the “Rights Agreement”), dated as of August 8, 2023, between the Company and Equiniti Trust Company, LLC, as rights agent.

Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Preferred Stock, par value $ 0.01 per share, of the Company (the “Preferred Shares”) at a price of $ 53.75 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment.

On August 4, 2024, the Board approved and entered into an Amendment (the “Amendment”) to the Rights Agreement (together with the Agreement, the “Amended Rights Agreement”).

Pursuant to the Amendment, the expiration date of the Rights has been extended until 11:59 p.m., Pacific Time, on the date that the votes of the stockholders of the Company with respect to the Company’s next annual meeting of stockholders are certified in 2025, unless stockholders approve the further extension of the Amended Rights Agreement beyond that date.

The Rights Agreement was initially adopted in August 2023 (as initially adopted, the “Rights Agreement”) in response to a rapid and significant accumulation of Company stock by Biglari Capital Corp.

(together with its affiliates, “Biglari Capital”).

In adopting the original Rights Agreement, the Board noted that Biglari Capital has a track record of acquiring substantial and sometimes controlling interests in public restaurant companies.

Since that time, members of the Board and leadership team met with Biglari Capital on multiple occasions.

In approving the Amendment to extend the Rights Agreement, the Board considered, among other things, that during a meeting, a representative of Biglari Capital stated a desire to make substantial additional share accumulations in the public market if the Board terminated the Rights Agreement or allowed it to expire at the end of its initial term in August 2024.

The Amendment also amended the Rights Agreement to increase the Beneficial Ownership (as defined in the Amended Rights Agreement) triggering threshold for being deemed an Acquiring Person (as defined below), unless one of the enumerated exceptions is applicable, from 12.5 % to 15.0 %.

In all other respects, the terms of the Rights Agreement remain unmodified and in full force and effect.

Under the Amended Rights Agreement, the Rights will generally be exercisable only in the event that a person or group of affiliated or associated persons (such person or group being an “Acquiring Person”), other than certain exempt persons, acquires (or commences a tender offer or exchange offer the consummation of which would result in) Beneficial Ownership of 15.0 % or more of the outstanding Common Shares.

In such case (with certain limited exceptions), each holder of a Right (other than the Acquiring Person, whose Rights shall become void) will have the right to receive, upon exercise at the then current exercise price of the Right, Common Shares (or, if the Board so elects, cash, securities, or other property) having a value equal to two times (2x) the exercise price of the Right.

Right to Exchange

At any time after any person or group becomes an Acquiring Person, the Board may exchange the Rights at an exchange ratio of one Common Share per Right (subject to adjustment).

Flip-over Event

If, at any time after a person or group becomes an Acquiring Person, (i) the Company engages in a consolidation or merger and, in connection there with all or part of the Common Shares are or will be changed into or exchanged for stock or other securities of any other person or cash or any other property;

or (ii) 50 % or more of the Company’s consolidated assets or earning power are sold, then each holder of a Right will thereafter have the right to receive, upon exercise at the then current exercise price of the Right, that number of shares of common stock of the acquiring company having a market value of two times the exercise price of the Right.

At any time prior to the time any person or group becomes an Acquiring Person, the Board may redeem the Rights at a price of $ 0.001 per Right (the “Redemption Price”).

Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

Rights of Holders

Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.

Each Right entitled the registered holder to purchase from the Company one one-thousandth of a share of Series A Preferred Stock, par value $ 0.01 per share, of the Company (the “Preferred Shares”) at a price of $ 53.75 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment.

On August 4, 2024, the Board approved and entered into an Amendment to the Rights Agreement (together, the “Amended Rights Agreement”).

Pursuant to the Amended Rights Agreement, the expiration date of the Rights was extended to May 30, 2025 11:59 p.m., Pacific Time, the date that the votes of the stockholders of the Company with respect to the Company’s 2025 annual meeting of stockholders were certified.

The Amended Rights Agreement expired and was terminated by its term on May 30, 2025.

SEGMENT REPORTING

10 unchanged sentences

Segment asset information is not used by the CODM to assess performance and allocate resources.

The table below is a summary of the segment net income, including significant segment expenses for the thirteen weeks ended March 26, 2025 and March 27, 2024 (in thousands):

The table below is a summary of the segment net income, including significant segment expenses for the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024 (in thousands):

Thirteen Weeks Ended

March 26, 2025

March 27, 2024

Twenty-Six Weeks Ended

June 25, 2025

June 26, 2024

June 25, 2025

June 26, 2024

Total revenue

13 unchanged sentences

(1) Other operating expenses are comprised of utilities, repairs and maintenance, advertising, credit card processing fees, delivery service provider fees, restaurant supplies and other restaurant operating costs.

(2) Other segment expenses include loss on disposal of assets, gain on recovery of insurance proceeds, property, equipment and expenses and impairment and closed-store reserves.

(2) Other segment expenses include loss on disposal of assets, gain on recovery of insurance proceeds, net, loss on disposition of restaurants, and impairment and closed-store reserves.

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-Q

Item 1. Financial Statements