What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-07 compared with 2026-05-08 · 157 added, 115 removed, 462 unchanged (37% of the section changed)

31 unchanged sentences

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

30,455,298 and 29,957,385 shares issued and outstanding as of April 1, 2026 and December 31, 2025, respectively

30,440,266 and 29,957,385 shares issued and outstanding as of July 1, 2026 and December 31, 2025, respectively

Additional paid-in-capital

7 unchanged sentences

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

Company-operated restaurant revenue

23 unchanged sentences

(Amounts in thousands, except share data)

Thirteen Weeks Ended April 1, 2026

Comprehensive

Thirteen Weeks Ended July 1, 2026

Stockholders’

(Loss) Income

Balance, April 1, 2026

Stock-based compensation expense

Issuance of common stock upon exercise of stock options, net

Shares repurchased for employee tax withholdings

Forfeiture of common stock related to restricted shares

Balance, July 1, 2026

Thirteen Weeks Ended June 25, 2025

Stockholders’

Balance, March 26, 2025

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

Repurchase of common stock - excise tax

Forfeiture of common stock related to restricted shares

Balance, June 25, 2025

EL POLLO LOCO HOLDINGS, INC.

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

(Amounts in thousands, except share data)

Twenty-Six Weeks Ended July 1, 2026

Stockholders’

Balance, December 31, 2025

4 unchanged sentences

Forfeiture of common stock related to restricted shares

Balance, April 1, 2026

Thirteen Weeks Ended March 26, 2025

Comprehensive

Balance, July 1, 2026

Twenty-Six Weeks Ended June 25, 2025

Stockholders’

(Loss) Income

Balance, December 25, 2024

4 unchanged sentences

Repurchase of common stock

Repurchase of common stock - excise tax

Forfeiture of common stock related to restricted shares

Balance, March 26, 2025

Balance, June 25, 2025

See notes to condensed consolidated financial statements (unaudited).

2 unchanged sentences

(Amounts in thousands)

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

Cash flows from operating activities:

3 unchanged sentences

Loss on disposal of assets

Impairment of property and equipment and ROU assets

Closed store reserves

Amortization of deferred financing costs

19 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

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

Supplemental cash flow information

2 unchanged sentences

Unpaid purchases of property and equipment

Unpaid repurchases of common stock and excise tax

See notes to condensed consolidated financial statements (unaudited).

4 unchanged sentences

(“Holdings” or the Company) is a Delaware corporation headquartered in Costa Mesa, California.

Holdings and its direct and indirect subsidiaries are collectively referred to herein as the “Company.” The Company’s activities are conducted principally through its indirect wholly-owned subsidiary, El Pollo Loco, Inc.

Holdings and its direct and indirect subsidiaries are collectively referred to herein as the “Company.” The Company’s activities are conducted principally through Holdings’ indirect wholly-owned subsidiary, El Pollo Loco, Inc.

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

The Company’s restaurants, which are located principally in California but also in Arizona, Colorado, Louisiana, Nevada, New Mexico, Texas, Utah, and Washington, specialize in fire-grilling citrus-marinated chicken in a wide variety of contemporary Mexican and LA-inspired entrees, including specialty chicken burritos, chicken quesadillas, chicken tostada salads, chicken tortilla soup, variations on the Company’s Pollo Bowl®, Pollo Salads, and Pollo Fit entrees.

As of April 1, 2026, the Company operated 176 and franchised 329 El Pollo Loco restaurants in the United States.

In addition, as of April 1, 2026, the Company licensed eight restaurants in the Philippines.

The Company’s restaurants, which are located principally in California but also in Arizona, Colorado, Idaho, Louisiana, Nevada, New Mexico, Texas, Utah, and Washington, specialize in fire-grilling citrus-marinated chicken served in individual and family meals and also in a wide variety of contemporary entrees, including specialty chicken burritos, chicken quesadillas, chicken tostada salads, chicken tortilla soup, and variations of the Company’s Pollo Bowl ® and Pollo Salads.

As of July 1, 2026, the Company operated 175 and franchised 336 El Pollo Loco restaurants in the United States.

In addition, as of July 1, 2026, the Company licensed eight restaurants in the Philippines.

Holdings has no material assets or operations.

Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc.

(“Intermediate”), guarantee EPL’s 2022 Revolver (See Note 5, Long-Term Debt, below) on a full and unconditional basis and Intermediate has no subsidiaries other than EPL.

(“Intermediate”), guarantee EPL’s 2022 Revolver (as defined below, see Note 5, “ Long-Term Debt,” below) on a full and unconditional basis and Intermediate has no subsidiaries other than EPL.

EPL is a separate and distinct legal entity and has no obligation to make funds available to Intermediate.

26 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.

As of April 1, 2026, the Company’s total outstanding balance on its Revolver was $ 44.0 million.

As of July 1, 2026, the Company’s total outstanding balance on its Revolver was $ 30.0 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 $ 3.9 million at April 1, 2026, 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 $ 5.0 million and paid down $ 3.0 million on its 2022 Revolver, resulting in outstanding borrowings of $ 46.0 million as of May 7, 2026 .

Based on current operations, the Company believes that its cash flow from operations, available cash of $ 13.3 million at July 1, 2026, and the outstanding borrowing availability under the 2022 Revolver (as defined below) will be adequate to meet the Company’s liquidity needs for at least the next twelve months and beyond from the issuance of the 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 suppliers for which amounts due totaled more than 10% of the Company’s accounts payable as of April 1, 2026.

The Company had one supplier for which amounts due totaled more than 10.0% of the Company’s accounts payable as of July 1, 2026.

The Company had one supplier to whom amounts due totaled 10.9 % of the Company’s accounts payable as of December 31, 2025.

Purchases from the Company’s largest supplier totaled 29.7 % of total expenses for the thirteen weeks ended April 1, 2026, and 15.1 % of total expenses for the thirteen weeks ended March 26, 2025.

Company-operated and franchise-operated restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.9 % of total revenue for the thirteen weeks ended April 1, 2026, and 71.6 % of total revenue for the thirteen weeks ended March 26, 2025.

Purchases from the Company’s largest supplier totaled 38.7 % and 40.5 % of total expenses for the thirteen and twenty-six weeks ended July 1, 2026, respectively, and 23.8 % and 16.0 % of total expenses for the thirteen and twenty-six weeks ended June 25, 2025, respectively.

Company-operated and franchise-operated restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.4 % and 71.6 % of total revenue for the thirteen and twenty-six weeks ended July 1, 2026, respectively, and 71.7 % of total revenue for both the thirteen and twenty-six weeks ended June 25, 2025.

Non-financial instruments

2 unchanged sentences

If applicable, the carrying values are written down to fair value.

The Company determined that there were no indicators of potential impairment for its non-financial assets during the thirteen weeks ended April 2, 2026 or during the thirteen weeks ended March 13, 2025.

For the thirteen weeks ended April 1, 2026, the Company recorded an income tax provision of $ 3.3 million, reflecting an estimated effective tax rate of 29.0 %.

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

The difference between the 21.0 % statutory rate and the effective tax rate of 29.0 % for the thirteen weeks ended April 1, 2026 is primarily a result of state tax rates based on apportioned income and the impact of non-tax deductible executive compensation, partially offset by the impact of higher stock compensation expense deductible for tax related to vesting of restricted stock awards as compared to the cumulative amount recorded as stock-based compensation expense, and federal targeted job credits.

During the thirteen and twenty-six weeks ended July 1, 2026, the Company recorded a non-cash impairment charge of $ 0.2 million related to the non-financial assets of one restaurant in Nevada.

The Company determined that there were no indicators of potential impairment for its non-financial assets during the thirteen and twenty-six weeks ended June 25, 2025.

For the thirteen weeks ended July 1, 2026, the Company recorded an income tax provision of $ 5.2 million, reflecting an estimated effective tax rate of 28.8 %.

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 twenty-six weeks ended July 1, 2026, the Company recorded an income tax provision of $ 8.5 million, reflecting an estimated effective tax rate of 28.8 %.

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 29.7 %.

The difference between the 21.0 % statutory rate and the effective tax rate of 28.8 % for the twenty-six weeks ended July 1, 2026 is primarily a result of state tax rates based on apportioned income, the impact of non-tax deductible executive compensation, and tax deficiencies related to stock option exercises, for which the associated tax deductions were lower than the cumulative stock-based compensation expense, partially offset by the impact of higher stock compensation expense deductible for tax related to the vesting of restricted stock awards as compared to the cumulative amount recorded as stock-based compensation expense, and federal targeted job credits.

Summary of Significant Accounting Policies

There have been no changes to our significant accounting policies described in the 2025 Form 10-K filed with the SEC on March 13, 2026 that have had a material impact on our consolidated financial statements and related notes.

There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2025 that have had a material impact on our consolidated financial statements and related notes.

Recently Adopted Accounting Pronouncements

25 unchanged sentences

The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

In April 2026, the FASB issued ASU No.

2026-01, Equity (Topic 505):

Initial measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock .

This amendment improves generally accepted accounting principles by providing authoritative guidance on how an issuer should initially measure paid-in-kind dividends on equity-classified preferred stock.

The amendments are effective for interim reporting periods beginning after December 15, 2026, with early adoption permitted.

The Company is evaluating the potential impact of this guidance on its condensed consolidated financial statements.

In May 2026, the FASB issued ASU No.

2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818) .

The amendments in this update improve generally accepted accounting principles by providing specific authoritative guidance for environmental credits and environmental credit obligations.

The amendments are effective for interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is evaluating the potential impact of this guidance on its condensed consolidated financial statements.

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):

April 1, 2026

December 31, 2025

5 unchanged sentences

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

April 1, 2026

December 31, 2025

4 unchanged sentences

Total property and equipment, net

Depreciation and amortization expense was $ 4.3 million for the thirteen weeks ended April 1, 2026 and $ 3.9 million for the thirteen weeks ended March 26, 2025.

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 April 1, 2026 and March 26, 2025.

Depreciation and amortization expense was $ 4.2 million and $ 3.9 million for the thirteen weeks ended July 1, 2026 and June 25, 2025, respectively, and $ 8.5 million and $ 7.8 million for the twenty-six weeks ended July 1, 2026 and June 25, 2025, respectively.

Based on the Company’s review of its property and equipment assets for impairment, the Company recorded an immaterial non-cash impairment charge for the thirteen and twenty-six weeks ended July 1, 2026 related to one restaurant in Nevada.

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.

STOCK-BASED COMPENSATION

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

As of April 1, 2026, 2,061,677 shares of common stock remained available for issuance under the Incentive Plan.

Total stock-based compensation expense was $ 1.3 million and $ 1.0 million for the thirteen weeks ended April 1, 2026 and March 26, 2025, respectively.

As of July 1, 2026, 2,213,185 shares of common stock remained available for issuance under the Incentive Plan.

Total stock-based compensation expense was $ 1.6 million and $ 1.7 million for the thirteen weeks ended July 1, 2026 and June 25, 2025, respectively, and $ 2.9 million and $ 2.7 million for the twenty-six weeks ended July 1, 2026 and June 25, 2025, respectively.

Stock Options

As of April 1, 2026, options to purchase 1,411,481 shares of common stock were outstanding, including 374,653 vested and 1,036,828 unvested options.

As of July 1, 2026, options to purchase 1,289,129 shares of common stock were outstanding, including 452,000 vested and 837,129 unvested options.

Unvested options vest over time;

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 April 1, 2026 and changes during the thirteen weeks ended April 1, 2026 is as follows:

A summary of stock option activity at July 1, 2026 and changes during the twenty-six weeks ended July 1, 2026 is as follows:

Weighted-Average

6 unchanged sentences

Forfeited, cancelled or expired

Outstanding – April 1, 2026

Vested and expected to vest at April 1, 2026

Exercisable at April 1, 2026

Outstanding – July 1, 2026

Vested and expected to vest at July 1, 2026

Exercisable at July 1, 2026

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:

April 1, 2026

March 26, 2025

June 25, 2025

Expected volatility

2 unchanged sentences

Expected dividends

At April 1, 2026, 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 2.45 years.

At July 1, 2026, the Company had total unrecognized compensation expense of $ 4.0 million related to unvested stock options, which it expects to recognize over a weighted-average period of 2.23 years.

Restricted Shares

A summary of restricted share activity as of April 1, 2026 and changes during the thirteen weeks ended April 1, 2026 is as follows:

A summary of restricted share activity as of July 1, 2026 and changes during the twenty-six weeks ended July 1, 2026 is as follows:

Weighted-Average

1 unchanged sentence

Forfeited and cancelled

Unvested shares at April 1, 2026

At April 1, 2026, the Company had unrecognized compensation expense of $ 7.8 million related to unvested restricted shares, which it expects to recognize over a weighted-average period of 2.29 years.

Unvested shares at July 1, 2026

At July 1, 2026, the Company had unrecognized compensation expense of $ 6.5 million related to unvested restricted shares, which it expects to recognize over a weighted-average period of 2.10 years.

Performance-Based Restricted Stock Units

A summary of performance share activity as of April 1, 2026 and changes during the thirteen weeks ended April 1, 2026 is as follows:

A summary of performance share activity as of July 1, 2026 and changes during the twenty-six weeks ended July 1, 2026 is as follows:

Weighted-Average

1 unchanged sentence

Forfeited and cancelled

Unvested shares at April 1, 2026

Unvested shares at July 1, 2026

LONG-TERM DEBT

3 unchanged sentences

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.

death, disability, or termination of employment, and (ii) 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 or share repurchases, 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, and (ii) 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 5.01 % to 7.00 % for the thirteen weeks ended April 1, 2026 , and 5.65 % to 7.75 % for the thirteen weeks ended March 26, 2025 .

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

The Company was in compliance with the financial covenants as of April 1, 2026.

At April 1, 2026, the Company had $ 44.0 million in outstanding borrowing under the 2022 Revolver and one letter of credit in the amount of $ 10.3 million outstanding, and as a result, the Company had $ 95.7 million in borrowing availability.

During the thirteen weeks ended April 1, 2026, the Company had no borrowings, and paid down $ 7.0 million, on the 2022 Revolver.

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

The interest rate range under the 2022 Revolver was 4.97 % to 5.02 % and 4.97 % to 7.00 % for the thirteen and twenty-six weeks ended July 1, 2026, and 5.67 % to 5.93 % and 5.65 % to 7.75 % for the thirteen and twenty-six weeks ended June 25, 2025, respectively.

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

The Company was in compliance with all financial covenants as of July 1, 2026.

At July 1, 2026, the Company had $ 30.0 million in outstanding borrowing under the 2022 Revolver and one letter of credit in the amount of $ 10.3 million outstanding, and as a result, the Company had $ 109.7 million in borrowing availability.

During the thirteen and twenty-six weeks ended July 1, 2026, the Company had $ 5.0 million of borrowings, and paid down $ 19.0 million and $ 26.0 million, on the 2022 Revolver.

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.

OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES

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

April 1, 2026

December 31, 2025

12 unchanged sentences

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

April 1, 2026

December 31, 2025

3 unchanged sentences

Legal Matters

From time to time, the Company is involved in various claims such as wage and hour and other legal actions that arise in the ordinary course of business.

From time to time, the Company is involved in various claims such as wage and hour, consumer, and other legal actions that arise in the ordinary course of business.

The outcomes of these actions are not predictable but the Company does not believe that the ultimate resolution of these actions will have a material adverse effect on its financial position, results of operations, liquidity, or capital resources.

2 unchanged sentences

The Company has long-term beverage supply agreements with certain major beverage vendors.

Pursuant to the terms of these arrangements, volume and marketing rebates are provided to the Company and its franchisees from the beverage vendors based upon the dollar volume of purchases for system-wide restaurants which will vary according to their demand for beverage syrup and fluctuations in the market rates for beverage syrup.

Pursuant to the terms of these arrangements, volume and marketing rebates are provided to the Company and its franchisees from the beverage vendors based upon the dollar volume of purchases for system-wide restaurants, which purchases will vary according to their demand for beverage syrup and fluctuations in the market rates for beverage syrup.

These contracts have terms extending through the end of 2032.

As of April 1, 2026, the Company’s total estimated commitment to purchase chicken was $ 16.6 million.

As of July 1, 2026, the Company’s total estimated commitment to purchase chicken was $ 4.9 million.

Contingent Lease Obligations

1 unchanged sentence

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

As of April 1, 2026, the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessees was $ 10.4 million.

The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at April 1, 2026 was $ 8.1 million.

As of July 1, 2026, the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessees was $ 11.5 million.

The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at July 1, 2026 was $ 9.2 million.

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

2 unchanged sentences

Employment Agreements

As of April 1, 2026, the Company had employment agreements with three of the officers of the Company.

As of July 1, 2026, 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 April 1, 2026 and March 26, 2025.

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 July 1, 2026 and June 25, 2025.

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

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

Weighted-average shares outstanding—basic

5 unchanged sentences

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

Weighted-average shares outstanding—basic

6 unchanged sentences

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

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

The following table presents the Company-operated restaurant revenue with the Greater Los Angeles area geographic market disaggregated:

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

Greater Los Angeles area market

6 unchanged sentences

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 April 1, 2026 and December 31, 2025, the revenue allocated to loyalty points that have not been redeemed was $ 1.2 million and $ 1.1 million, respectively, which is reflected in the Company’s accompanying condensed consolidated balance sheets within other accrued expenses and current liabilities.

As of July 1, 2026 and December 31, 2025, the revenue allocated to loyalty points that have not been redeemed was $ 1.3 million and $ 1.1 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):

April 1, 2026

December 31, 2025

3 unchanged sentences

Loyalty rewards liability, ending balance

The Company expects all loyalty points revenue related to performance obligations that were unsatisfied as of April 1, 2026 to be recognized over a period exceeding six months but less than one year.

The Company expects all loyalty points revenue related to performance obligations that were unsatisfied as of July 1, 2026 to be recognized over a period exceeding six months but less than one year.

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

2 unchanged sentences

The Company recognizes income from gift cards when redeemed by the customer.

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

Unredeemed gift card balances are deferred and recorded within other accrued expenses and current liabilities 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):

April 1, 2026

December 31, 2025

2 unchanged sentences

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

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

Franchise Revenue and Franchise Advertising Fee Revenue

Franchise revenue consists of franchise royalties, initial franchise fees, license fees due from franchisees, IT support services, and rental income for subleases to franchisees.

Franchise revenue consists of franchise royalties, initial and renewal franchise fees, license fees due from franchisees, IT support services, and rental income for subleases to franchisees.

Franchise advertising fee revenue consists of advertising contributions received from franchisees.

9 unchanged sentences

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 revenue-based royalties.

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

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

As this is considered a separate performance obligation, the Company allocated a portion of the initial franchise fee to this discounted renewal, on a pro-rata basis, assuming a 20-year renewal.

2 unchanged sentences

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 April 1, 2026, there were no performance obligations related to hardware services that were unsatisfied or partially satisfied.

As of July 1, 2026, there were no performance obligations related to hardware services that were unsatisfied or partially satisfied.

Contract Balances

3 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 provides information about the change in the franchise contract liability balances during the thirteen weeks ended April 1, 2026 and March 26, 2025 (in thousands):

The following table provides information about the change in the franchise contract liability balances during the twenty-six weeks ended July 1, 2026 and June 25, 2025 (in thousands):

December 31, 2025

Revenue recognized

Additional contract liability

April 1, 2026

December 25, 2024

Revenue recognized

December 25, 2024

Additional contract liability

March 26, 2025

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 April 1, 2026 (in thousands):

Revenue recognized

June 25, 2025

Franchise revenues:

18 unchanged sentences

For all leases, the Company also reimburses the landlord for non-lease components, or items that are not considered components of a contract, such as common area maintenance, property tax and insurance costs.

While the Company determined not to separate lease and non-lease components, these payments are based on actual costs, making them variable consideration and therefore excludes them from the calculations of the ROU asset and lease liability.

The initial terms of land and restaurant building leases are generally 20 years , exclusive of options to renew.

1 unchanged sentence

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

During the thirteen weeks ended April 1, 2026 and March 26, 2025, the Company reassessed the lease terms on six restaurants and two 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.

As a result of the reassessment, an additional $ 4.6 million and $ 1.4 million, respectively, of ROU asset and lease liabilities were recognized for the thirteen weeks ended April 1, 2026 and March 26, 2025, respectively.

During the thirteen weeks ended April 1, 2026, the Company had one lease commencement resulting in $ 0.8 million of ROU asset and lease liabilities recognized.

For the thirteen weeks ended March 26, 2025, the Company had no lease commencements.

During the thirteen and twenty-six weeks ended July 1, 2026, the Company reassessed the lease terms on seven restaurants and 14 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 $ 3.8 million and $ 9.1 million of ROU asset and lease liabilities for the thirteen and twenty-six weeks ended July 1, 2026, respectively.

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.

The Company also subleases facilities to certain franchisees and other non-related parties which are also considered operating leases.

3 unchanged sentences

The Company does not have any related party leases.

The Company did no t record any non-cash impairment charges during either the thirteen weeks ended April 1, 2026 or March 26, 2025.

During the thirteen and twenty-six weeks ended July 1, 2026, the Company recorded a $ 0.2 million non-cash impairment charge related to one restaurant in Nevada.

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

Leases of equipment primarily consist of restaurant equipment and vehicles.

4 unchanged sentences

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

June 25, 2025

Finance lease cost:

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Total lease cost

Twenty-Six Weeks Ended

June 25, 2025

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):

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

Lease cost – Occupancy and other operating expenses

3 unchanged sentences

Total lease cost

During the thirteen weeks ended April 1, 2026 and March 26, 2025, the Company had the following cash and non-cash activities associated with its leases (dollars in thousands):

Thirteen Weeks Ended April 1, 2026

Thirteen Weeks Ended March 26, 2025

During the twenty-six weeks ended July 1, 2026 and June 25, 2025, the Company had the following cash and non-cash activities associated with its leases (dollars in thousands):

Twenty-Six Weeks Ended July 1, 2026

Twenty-Six Weeks Ended June 25, 2025

Cash paid for amounts included in the measurement of lease liabilities

12 unchanged sentences

Weighted-average discount rate—operating leases

Information regarding the Company’s minimum future lease obligations as of April 1, 2026 is as follows (in thousands):

Information regarding the Company’s minimum future lease obligations as of July 1, 2026 is as follows (in thousands):

Finance Leases

19 unchanged sentences

Additionally, there are no related party leases.

The Company received $ 0.3 million and $ 0.1 million of lease income from company-owned locations for the thirteen weeks ended April 1, 2026 and March 26, 2025.

The Company received $ 0.1 million and $ 0.1 million of lease income from company-owned locations for the thirteen weeks ended July 1, 2026 and June 25, 2025, respectively.

The Company received $ 0.1 million and $ 0.2 million of lease income from company-owned locations for the twenty-six weeks ended July 1, 2026 and June 25, 2025, respectively.

SEGMENT REPORTING

9 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 April 1, 2026 and March 26, 2025 (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 July 1, 2026 and June 25, 2025 (in thousands):

Thirteen Weeks Ended

April 1, 2026

March 26, 2025

Twenty-Six Weeks Ended

June 25, 2025

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, and impairment and closed-store reserves.

(2) Other segment expenses include loss on disposal of assets, and impairment and closed-store reserve .

SUBSEQUENT EVENTS

Subsequent to the quarter-end, the Company paid down $ 4.0 million on its 2022 Revolver, resulting in outstanding borrowings of $ 26.0 million as of July 29, 2026.

Subsequent to the quarter end, on August 4, 2026 the company amended its $ 150.0 million credit facility, extending the term to August 4, 2031.

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