PAPA JOHNS INTERNATIONAL INC 10-Q

Item 1. Financial Statements Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except per share amounts) March 29, 2026 December 28, 2025 (Unaudited) Assets Current assets: Cash, cash equivalents, and restricted cash $ 39,036 $ 36,950 Accounts receivable, net 100,656 103,068 Notes receivable, current portion 2,331 3,387 Income tax receivable 3,881 6,189 Inventories 36,204 34,336 Prepaid expenses and other current assets 58,299 48,895 Assets held for sale — 4,607 Total current assets 240,407 237,432 Property and equipment, net 252,287 251,312 Finance lease right-of-use assets, net 37,957 39,039 Operating lease right-of-use assets, net 159,622 161,606 Notes receivable, less current portion, net 3,906 3,262 Goodwill 67,247 67,576 Other assets 70,501 77,281 Total assets $ 831,927 $ 837,508 Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit Current liabilities: Accounts payable $ 67,370 $ 61,218 Income and other taxes payable 8,987 8,941 Accrued expenses and other current liabilities 155,751 169,015 Current deferred revenue 10,789 13,096 Current finance lease liabilities 10,196 9,999 Current operating lease liabilities 23,766 23,725 Current portion of long-term debt 7,847 4,997 Total current liabilities 284,706 290,991 Deferred revenue 18,409 19,294 Long-term finance lease liabilities 29,638 30,804 Long-term operating lease liabilities 153,849 156,405 Long-term debt, less current portion, net 727,342 710,436 Other long-term liabilities 55,429 62,264 Total liabilities 1,269,373 1,270,194 Redeemable noncontrolling interests 989 980 Stockholders’ deficit: Common stock ($ 0.01 par value per share; issued 49,303 at March 29, 2026 and 49,303 at December 28, 2025) 493 493 Additional paid-in capital 453,945 457,112 Accumulated other comprehensive loss ( 5,953 ) ( 6,452 ) Retained earnings 202,601 210,763 Treasury stock ( 16,405 shares at March 29, 2026 and 16,502 shares at December 28, 2025, at cost) ( 1,100,206 ) ( 1,106,666 ) Total stockholders’ deficit ( 449,120 ) ( 444,750 ) Noncontrolling interests in subsidiaries 10,685 11,084 Total Stockholders’ deficit ( 438,435 ) ( 433,666 ) Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit $ 831,927 $ 837,508 See accompanying notes. 1 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended (In thousands, except per share amounts) March 29, 2026 March 30, 2025 Revenues: Company-owned restaurant sales $ 143,134 $ 173,881 Franchise royalties and fees 47,578 48,056 Commissary revenues 222,641 228,941 Other revenues 21,788 23,757 Advertising funds revenue 43,468 43,674 Total revenues 478,609 518,309 Costs and expenses: Cost of sales 340,892 366,496 General and administrative expenses 55,996 65,167 Depreciation and amortization 17,729 18,343 Advertising funds expense 43,234 44,338 Total costs and expenses 457,851 494,344 Operating income 20,758 23,965 Net interest expense ( 9,683 ) ( 10,079 ) Income before income taxes 11,075 13,886 Income tax expense ( 4,137 ) ( 4,543 ) Net income 6,938 9,343 Net (income) loss attributable to noncontrolling interests 317 ( 121 ) Net income attributable to the Company $ 7,255 $ 9,222 Net income attributable to common shareholders $ 6,959 $ 9,028 Basic earnings per common share $ 0.21 $ 0.28 Diluted earnings per common share $ 0.21 $ 0.27 Basic weighted average common shares outstanding 32,939 32,778 Diluted weighted average common shares outstanding 33,046 32,920 See accompanying notes. 2 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended (In thousands) March 29, 2026 March 30, 2025 Net income $ 6,938 $ 9,343 Other comprehensive income (loss), before tax: Foreign currency translation adjustments ( 377 ) 1,098 Interest rate swaps (a) 893 92 Other comprehensive income (loss), before tax 516 1,190 Income tax effect: Foreign currency translation adjustments 190 ( 253 ) Interest rate swaps (b) ( 207 ) ( 21 ) Income tax effect ( 17 ) ( 274 ) Other comprehensive income (loss), net of tax 499 916 Comprehensive income before attribution to noncontrolling interests 7,437 10,259 Less: comprehensive (income) loss, redeemable noncontrolling interests ( 65 ) ( 30 ) Less: comprehensive (income) loss, nonredeemable noncontrolling interests 382 ( 91 ) Comprehensive income attributable to the Company $ 7,754 $ 10,138 ___________________________________ (a) Amounts reclassified out of accumulated other comprehensive loss into net interest expense include $ 22 and $( 56 ) for the three months ended March 29, 2026 and March 30, 2025, respectively. (b) The income tax benefit (expense) effects of amounts reclassified out of accumulated other comprehensive loss were $( 5 ) and $ 13 for the three months ended March 29, 2026 and March 30, 2025, respectively. See accompanying notes. 3 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited) Papa John’s International, Inc. (In thousands) Common Stock Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss (b) Retained Earnings Treasury Stock Noncontrolling Interests in Subsidiaries Total Stockholders’ Deficit For the three months ended March 29, 2026 Balance at December 28, 2025 32,801 $ 493 $ 457,112 $ ( 6,452 ) $ 210,763 $ ( 1,106,666 ) $ 11,084 $ ( 433,666 ) Net income (loss) (a) — — — — 7,255 — ( 382 ) 6,873 Other comprehensive income (loss), net of tax — — — 499 — — — 499 Dividends on common stock ($ 0.46 per share) — — 18 — ( 15,417 ) — — ( 15,399 ) Exercise of stock options — — — — — — — — Stock-based compensation expense — — 4,409 — — — — 4,409 Issuance of restricted stock 130 — ( 5,813 ) — — 5,813 — — Tax effect of restricted stock awards ( 43 ) — ( 1,379 ) — — — — ( 1,379 ) Distributions to noncontrolling interests — — — — — — ( 17 ) ( 17 ) Other 10 — ( 402 ) — — 647 — 245 Balance at March 29, 2026 32,898 $ 493 $ 453,945 $ ( 5,953 ) $ 202,601 $ ( 1,100,206 ) $ 10,685 $ ( 438,435 ) (a) Net income to the Company for the three months ended March 29, 2026 excludes $ 65 allocable to the redeemable noncontrolling interests for our joint venture arrangements. (b) At March 29, 2026, the accumulated other comprehensive loss of $ 5,953 was comprised of net unrealized foreign currency translation loss of $ 6,015 and net unrealized gain on the interest rate swap agreements of $ 62 . See accompanying notes. 4 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Deficit (continued) (Unaudited) Papa John’s International, Inc. (In thousands) Common Stock Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss (b) Retained Earnings Treasury Stock Noncontrolling Interests in Subsidiaries Total Stockholders’ Deficit For the three months ended March 30, 2025 Balance at December 29, 2024 32,646 $ 493 $ 452,449 $ ( 8,456 ) $ 241,717 $ ( 1,115,729 ) $ 15,310 $ ( 414,216 ) Net income (loss) (a) — — — — 9,222 — 91 9,313 Other comprehensive income (loss), net of tax — — — 916 — — — 916 Dividends on common stock ($ 0.46 per share) — — 29 — ( 15,145 ) — — ( 15,116 ) Exercise of stock options — — — — — — — — Stock-based compensation expense — — 3,669 — — — — 3,669 Issuance of restricted stock 103 — ( 5,215 ) — — 5,215 — — Tax effect of restricted stock awards ( 24 ) — ( 1,120 ) — — — — ( 1,120 ) Distributions to noncontrolling interests — — — — — — ( 276 ) ( 276 ) Other 3 — ( 187 ) — — 208 — 21 Balance at March 30, 2025 32,728 $ 493 $ 449,625 $ ( 7,540 ) $ 235,794 $ ( 1,110,306 ) $ 15,125 $ ( 416,809 ) (a) Net income to the Company for the three months ended March 30, 2025 excludes $ 30 allocable to the redeemable noncontrolling interests for our joint venture arrangements. (b) At March 30, 2025, the accumulated other comprehensive loss of $ 7,540 was comprised of net unrealized foreign currency translation loss of $ 7,486 and net unrealized loss on the interest rate swap agreements of $ 54 . See accompanying notes. 5 Papa John’s International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended (In thousands) March 29, 2026 March 30, 2025 Operating activities Net income $ 6,938 $ 9,343 Adjustments to reconcile net income to net cash provided by operating activities: Provision for allowance for credit losses on accounts and notes receivable 1,169 1,712 Depreciation and amortization 17,729 18,343 Deferred income taxes 684 1,157 Stock-based compensation expense 4,409 3,669 Refranchising gain ( 1,035 ) — Loss on disposal of property and equipment 610 151 Other 1,092 ( 97 ) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable 2,588 7,652 Income tax receivable 2,309 ( 541 ) Inventories ( 1,925 ) ( 1,881 ) Prepaid expenses and other current assets ( 4,259 ) ( 4,854 ) Other assets and liabilities ( 4,503 ) ( 2,591 ) Accounts payable 6,396 5,242 Income and other taxes payable 58 3,144 Accrued expenses and other current liabilities ( 27,449 ) ( 11,911 ) Deferred revenue ( 3,185 ) ( 2,794 ) Advertising fund assets and liabilities 5,598 5,592 Net cash provided by operating activities 7,224 31,336 Investing activities Purchases of property and equipment ( 13,451 ) ( 12,231 ) Purchases of property and equipment related to damages from natural disasters ( 70 ) — Insurance proceeds related to damages from natural disasters 850 — Repayments of notes issued 748 978 Proceeds from the sale of property and equipment 3,529 — Proceeds from investments 3,232 4,739 Other — ( 569 ) Net cash used in investing activities ( 5,162 ) ( 7,083 ) Financing activities Net proceeds (repayments) of revolving credit facilities 19,381 ( 196,838 ) Proceeds from term loan — 200,000 Debt issuance costs — ( 2,991 ) Dividends paid to common stockholders ( 15,321 ) ( 15,174 ) Tax payments for equity award issuances ( 1,379 ) ( 1,120 ) Distributions to noncontrolling interests ( 73 ) ( 339 ) Principal payments on finance leases ( 2,552 ) ( 2,392 ) Other 125 287 Net cash provided by (used in) financing activities 181 ( 18,567 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 157 ) 371 Change in cash, cash equivalents, and restricted cash 2,086 6,057 Cash, cash equivalents, and restricted cash at beginning of period 36,950 37,955 Cash, cash equivalents, and restricted cash at end of period $ 39,036 $ 44,012 See accompanying notes. 6 Papa John’s International, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) March 29, 2026 1. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP” or “U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three months ended March 29, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 27, 2026. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Annual Report on Form 10-K for Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) for the year ended December 28, 2025. In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Domestic and Canada, and “International” includes the rest of the world other than North America. 2. Significant Accounting Policies Principles of Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of Papa John’s International, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. Certain prior year amounts herein have been reclassified to conform to the current year presentation. Variable Interest Entity Papa Johns Domestic restaurants, both Company-owned and franchised, participate in Papa John’s Marketing Fund, Inc. (“PJMF”), a nonstock corporation designed to operate at break-even as it spends all annual contributions received from the system. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs. PJMF is a variable interest entity (“VIE”) that funds its operations with ongoing financial support and contributions from the Domestic restaurants, of which approximately 87 percent are franchised, and does not have sufficient equity to fund its operations without these ongoing financial contributions. Based on an assessment of the governance structure and operating procedures of PJMF, the Company determined it has the power to control certain significant activities of PJMF, and therefore, is the primary beneficiary. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant items that are subject to such estimates and assumptions include the allowance for credit losses on accounts and notes receivable, property and equipment, net and impairment of long-lived assets, and insurance reserves. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. Noncontrolling Interests Papa Johns has joint venture arrangements in which there are noncontrolling interests held by third parties that includ ed 13 and 98 restaurants at March 29, 2026 and March 30, 2025, respectively. Consolidated net income is required to be reported separately at amounts attributable to both the Company and the noncontrolling interests held by third parties. 7 Net income (loss) attributable to these joint ventures for the three months ended March 29, 2026 and March 30, 2025 was as follows: Three Months Ended (In thousands) March 29, 2026 March 30, 2025 Papa John’s International, Inc. $ ( 735 ) $ 275 Redeemable noncontrolling interests 65 30 Nonredeemable noncontrolling interests ( 382 ) 91 Total net income (loss) $ ( 1,052 ) $ 396 The following summarizes the redemption feature, location and related accounting within the Condensed Consolidated Balance Sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Condensed Consolidated Balance Sheets Recorded Value Joint ventures with no redemption feature Permanent equity Carrying value Joint ventures with option to require the Company to purchase the noncontrolling interest - not currently redeemable or redemption not probable Temporary equity Carrying value Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Management judgment is required in determining the provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable and those deferred. We use an estimated annual effective rate based on expected annual income to determine our quarterly provision for income taxes. The effective income tax rate includes the estimated domestic state effective income tax rate and applicable foreign income tax rates. The effective income tax rate is also impacted by various permanent items and credits, net of any related valuation allowances, and can vary based on changes in estimated annual income. Discrete items are recorded in the quarter in which they occur. Our effective income tax rate was 37.4 % for the three months ended March 29, 2026 as compared to 32.7 % for the prior year comparable period. The higher effective tax rate during the three months ended March 29, 2026 was primarily due to a shift in income between jurisdictions and tax shortfall generated by vesting of restricted shares. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets and liabilities are netted by tax jurisdiction. Deferred tax assets are also recognized for the estimated future effects of tax attribute carryforwards (e.g., net operating losses, capital losses, and foreign tax credits). The effect on deferred taxes due to changes in tax rates is recognized in the period in which the new tax rate is enacted. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize. Deferred tax assets and liabilities are recorded within Other assets and Other long-term liabilities on the Condensed Consolidated Balance Sheets. Tax authorities periodically audit the Company. We record reserves and related interest and penalties for identified exposures as income tax expense. We evaluate these issues on a quarterly basis to adjust for events, such as statute of limitations expirations, court rulings or audit settlements, which may impact our ultimate payment for such exposures. Fair Value Measurements and Disclosures The Company determines the fair value of financial assets and liabilities based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. Certain assets and liabilities are measured at fair value on a recurring basis and are required to be classified and disclosed in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data. 8 Fair value is a market-based measurement, not an entity-specific measurement. Considerable judgment is required to interpret market data to estimate fair value; accordingly, the fair values presented do not necessarily indicate what the Company or its debtholders could realize in a current market exchange. Our financial assets and liabilities that were measured at fair value on a recurring basis as of March 29, 2026 and December 28, 2025 are as follows: Fair Value Measurements (In thousands) Carrying Value Level 1 Level 2 Level 3 March 29, 2026 Financial assets: Cash surrender value of life insurance policies (a) $ 25,731 $ 25,731 $ — $ — Interest rate swaps (b) $ 166 $ — $ 166 $ — Financial liabilities: Interest rate swaps (b) $ 80 $ — $ 80 $ — December 28, 2025 Financial assets: Cash surrender value of life insurance policies (a) $ 29,432 $ 29,432 $ — $ — Financial liabilities: Interest rate swaps (b) $ 807 $ — $ 807 $ — ___________________________________ (a) Represents life insurance policies held in our non-qualified deferred compensation plan, which are classified as Other assets on the Condensed Consolidated Balance Sheets (b) The fair value of our interest rate swaps is based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected Secured Overnight Financing Rates (“SOFR”). See “Note 8. Debt” for further discussion. There were no transfers among levels within the fair value hierarchy during the three months ended March 29, 2026 or fiscal year 2025. The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash and cash equivalents, accounts receivable, net of allowances, and accounts payable. The carrying value of notes receivable, net of allowances, also approximates fair value. The Company’s revolving credit facilities and term loan borrowings under the Company’s credit agreement approximate carrying value due to their variable market-based interest rate. The Company’s 3.875 % senior notes are classified as a Level 2 fair value measurement since the Company estimates the fair value by using recent trading transactions, and have the following estimated fair values and carrying values (excluding the impact of unamortized debt issuance costs) as of March 29, 2026 and December 28, 2025: March 29, 2026 December 28, 2025 (In thousands) Carrying Value Fair Value Carrying Value Fair Value 3.875 % Senior Notes $ 400,000 $ 376,000 $ 400,000 $ 380,000 Allowance for Credit Losses Estimates of expected credit losses, even if remote, are based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics, and macroeconomic factors. Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer. Account and note balances are charged against the allowance after recovery efforts have ceased. 9 The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable: (In thousands) Accounts Receivable Notes Receivable Balance at December 28, 2025 $ 12,129 $ 17,777 Current period provision for expected credit losses, net 1,248 ( 79 ) Write-offs charged against the allowance ( 1,205 ) ( 575 ) Balance at March 29, 2026 $ 12,172 $ 17,123 Impairment of Long-lived Assets The Company evaluates its property and equipment and other long-lived assets for potential indicators of impairment at least annually, or as facts and circumstances arise that indicate the carrying value of the asset group may not be recoverable. For Domestic Company-owned restaurants, the evaluation is performed at the operating market level while International Company-owned restaurants are evaluated at the restaurant level as these respective levels represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the carrying amount of the long-lived asset group exceeds the amount of estimated future undiscounted cash flows, the fair value of the asset group is estimated and an impairment loss is recorded if the carrying value exceeds the estimated fair value. The assumptions used in the undiscounted cash flow calculation related to future growth are subjective and may be negatively impacted by future changes in operating performance or economic conditions. In situations in which no impairment indicators are identified at the applicable asset‑group level, but certain assets within the asset group are expected to be used for a shorter period than previously estimated, the Company revises the remaining useful lives of those assets and prospectively records accelerated depreciation over the shortened period. Tornado Impact During the first quarter of 2025, a tornado caused real and personal property damage to the Company’s leased Quality Control Center (“QC Center”) in Grand Prairie, Texas. The Company recorded pre-tax expenses of $ 0.9 million during the three months ended March 30, 2025, related to these damages, which primarily reflect operating lease right-of-use asset impairment charges related to the leased property offset by expected property-related insurance proceeds. Additionally, during the second quarter of 2025, a tornado caused real and personal property damage to the Company’s restaurant support center and QC Center in Louisville, Kentucky. The Company recorded asset impairment charges of $ 2.7 million and incurred additional operating expenses of $ 1.7 million during the year ended December 28, 2025, for which we recorded an anticipated insurance recovery as we believe such losses are probable of recovery under our insurance policy. Expenses incurred and the related anticipated insurance proceeds were recorded within General and administrative expenses in the Condensed Consolidated Statements of Operations. The Company received $ 1.0 million of insurance proceeds related to the two incidents during the three months ended March 29, 2026, of which $ 0.9 million were classified as cash inflows from investing activities and $ 0.1 million were classified as cash inflows from operating activities within the Condensed Consolidated Statements of Cash Flows based on the nature of the underlying losses and expected usage of the proceeds. To the extent that proceeds received from our insurer in future periods exceed losses recognized in the financial statements, we may record income within our Condensed Consolidated Statements of Operations once such insurance proceeds are realized or realizable. Neither of the tornadoes had a significant impact on our operations, as our other QC Centers were able to ensure that restaurants were adequately supplied. Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, “ Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The ASU includes required disclosures in the notes to the consolidated financial statements of specific information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the standard may be applied either 10 prospectively or retrospectively. The Company is in the process of assessing the impact of the new standard, including an evaluation of the Company’s financial systems and availability of data to meet the requirements. In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU modernizes the accounting guidance for costs incurred to develop software for internal use by removing references to project stages of a software development project, which better aligns with current software development methods. Under the new standard, entities will commence capitalizing eligible costs when management has authorized and committed to funding the software project, and when it is probable that the project will be completed and the software will be used to perform the function intended. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. The guidance can be applied using a prospective, retrospective, or modified transition approach. The Company is currently evaluating the impact of this accounting standard to its consolidated financial statements. 3. Leases Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At March 29, 2026, we leased and subleased approximately 335 Papa Johns restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five to ten years . Rental income, primarily derived from properties leased and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. The Company recognized total sublease income of $ 2.8 million and $ 2.6 million for the three months ended March 29, 2026 and March 30, 2025, respectively, within Other revenues in the Condensed Consolidated Statements of Operations. Lease Guarantees As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of approximately 80 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of March 29, 2026, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $ 11.4 million. This contingent liability is not included in the Condensed Consolidated Balance Sheets as it is not probable to occur. The fair value of the guarantee is not material. Supplemental Cash Flow & Other Information Supplemental cash flow information related to leases for the periods reported is as follows: Three Months Ended (In thousands) March 29, 2026 March 30, 2025 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 545 $ 550 Financing cash flows from finance leases 2,552 2,392 Operating cash flows from operating leases (a) 9,378 10,488 Right-of-use assets obtained in exchange for new finance lease liabilities 1,736 15,664 Right-of-use assets obtained in exchange for new operating lease liabilities 6,224 5,458 Cash received from sublease income 2,755 2,539 ___________________________________ (a) Included within the change in Other assets and liabilities within the Condensed Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. 4. Papa John’s Marketing Fund, Inc. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Contributions and expenditures are reported on a gross basis in the Condensed Consolidated Statements of Operations 11 within Advertising funds revenue and Advertising funds expense, respectively. PJMF also has a wholly-owned subsidiary, Papa Card, Inc., which administers the Company’s gift card programs. The assets and liabilities of PJMF, which are utilized solely for the Company’s advertising and promotional programs, were as follows in the Condensed Consolidated Balance Sheets: (In thousands) March 29, 2026 December 28, 2025 Assets Current assets: Cash and cash equivalents $ 18,361 $ 7,759 Accounts receivable, net 16,594 15,077 Income tax receivable 296 275 Prepaid expenses and other current assets 9,686 3,278 Total current assets 44,937 26,389 Deferred income taxes 570 570 Other assets 93 106 Total assets $ 45,600 $ 27,065 Liabilities Current liabilities: Accrued expenses and other current liabilities 44,415 31,082 Current portion of long-term debt 347 — Current deferred revenue 4,507 5,000 Total current liabilities 49,269 36,082 Deferred revenue 2,344 2,742 Total liabilities $ 51,613 $ 38,824 5. Revenue Recognition Contract Balances Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify within Current deferred revenue and Deferred revenue on the Condensed Consolidated Balance Sheets. During the three months ended March 29, 2026 and March 30, 2025, the Company recognized $ 9.5 million and $ 9.7 million in revenue, respectively, related to deferred revenue. The following table includes a breakout of contract liability balances: (In thousands) March 29, 2026 December 28, 2025 Change Unearned franchise fees and royalties $ 19,170 $ 19,678 $ ( 508 ) Unredeemed gift card liabilities 6,851 7,742 ( 891 ) Customer loyalty program obligations 3,177 4,970 ( 1,793 ) Total contract liabilities $ 29,198 $ 32,390 $ ( 3,192 ) Our contract assets consist primarily of equipment incentives provided to franchisees. Equipment incentives are related to the future value of commissary revenue the Company will receive over the term of the incentive agreement. Contract assets were approximately $ 16.7 million and $ 19.1 million, respectively, at March 29, 2026 and December 28, 2025. Revenue was reduced by approximately $ 1.8 million and $ 1.5 million for the three months ended March 29, 2026 and March 30, 2025, respectively, for the amortization of contract assets over the applicable contract terms. Contract assets are included in Prepaid expenses and other current assets and Other assets on the Condensed Consolidated Balance Sheets. 12 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period: Performance Obligations by Period (In thousands) Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Unearned franchise fees and royalties $ 3,105 $ 2,783 $ 2,551 $ 2,339 $ 2,131 $ 3,555 $ 16,464 At March 29, 2026, approximately $ 2.7 million of area development fees related to unopened restaurants and International unearned franchise fees are included in Deferred revenue. Timing of revenue recognition is dependent upon the timing of restaurant openings and franchisees’ revenues. Unredeemed gift card liabilities, which are included in Deferred revenue, will be recognized in Company-owned restaurant sales when gift cards are redeemed. The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations. 6. Common Stock Shares Authorized and Outstanding The Company has authorized 100.0 million shares of common stock as of March 29, 2026 and December 28, 2025. The Company’s outstanding shares of common stock, net of repurchased shares of common stock held as treasury stock, were 32.9 million shares at March 29, 2026, compared to 32.8 million shares at December 28, 2025. Share Repurchase Program On October 28, 2021, our Board of Directors approved a share repurchase program with an indefinite duration for up to $ 425.0 million of the Company’s common stock. There was no share repurchase activity during the three months ended March 29, 2026 or March 30, 2025. Approximately $ 90.2 million remained available under the Company’s share repurchase program as of March 29, 2026. The timing and volume of share repurchases under the Company’s share repurchase program may be executed at the discretion of management on an opportunistic basis, subject to market and business conditions, regulatory requirements and other factors, or pursuant to trading plans or other arrangements. Repurchases under the program may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, at times and in such amounts as management deems appropriate. Repurchases under the Company’s share repurchase program may be commenced or suspended from time to time at the Company’s discretion without prior notice. Funding for the share repurchase program will be provided through our credit facility, operating cash flow and cash and cash equivalents. Dividends The Company paid aggregate cash dividends of approximately $ 15.3 million ($ 0.46 per share) for the three months ended March 29, 2026. On May 5, 2026, our Board of Directors declared a second quarter dividend of $ 0.46 per common share (approximately $ 15.6 million in the aggregate), which will be paid on May 29, 2026 to stockholders of record as of the close of business on May 18, 2026. The declaration and payment of any future dividends will be at the discretion of our Board of Directors. 7. Earnings per Share We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. Time-based restricted stock awards are participating securities because holders of such unvested shares have rights to receive non-forfeitable dividends. Under the two-class method, total dividends provided to the holders of participating securities are subtracted from net income attributable to the Company to determine net income attributable to common shareholders. The Company may, at its sole discretion, require any dividends 13 paid on the unvested restricted stock awards to be paid in shares rather than in cash, which could then be forfeited if the employee forfeits the underlying awards. Basic earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding. Diluted earnings per common share are computed by dividing the net income attributable to common shareholders by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding consist of basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities. The calculations of basic and diluted earnings per common share are as follows (in thousands, except per share data): Three Months Ended March 29, 2026 March 30, 2025 Calculation of net income attributable to common shareholders Net income attributable to the Company $ 7,255 $ 9,222 Dividends paid to participating securities ( 296 ) ( 194 ) Net income attributable to common shareholders $ 6,959 $ 9,028 Basic earnings per common share Basic weighted average common shares outstanding 32,939 32,778 Basic earnings per common share $ 0.21 $ 0.28 Diluted earnings per common share Weighted average common shares outstanding 32,939 32,778 Dilutive effect of outstanding equity awards (a) 107 142 Diluted weighted average common shares outstanding 33,046 32,920 Diluted earnings per common share $ 0.21 $ 0.27 ___________________________________ (a) Excludes 282,493 and 219,417 shares underlying equity awards for the three months ended March 29, 2026 and March 30, 2025, respectively, as the effect of including such awards would have been anti-dilutive. 8. Debt Long-term debt, net, consists of the following (in thousands): March 29, 2026 December 28, 2025 Senior notes $ 400,000 $ 400,000 Term loan 200,000 200,000 Revolving facilities 141,609 122,257 Outstanding debt $ 741,609 $ 722,257 Unamortized debt issuance costs ( 6,420 ) ( 6,824 ) Current portion of long-term debt ( 7,847 ) ( 4,997 ) Total long-term debt, net $ 727,342 $ 710,436 Senior Notes On September 14, 2021, the Company issued $ 400.0 million of 3.875 % Senior Notes (the “Notes”) which mature on September 15, 2029. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year at a fixed interest rate of 3.875 % per annum. Refer to Note 12 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2025 for further description of the provisions and covenant requirements under the Senior Notes. 14 Term Loan and Revolving Facilities On March 26, 2025, the Company amended and restated the Amended and Restated Credit Agreement, dated as of September 14, 2021 and amended May 30, 2023 (together, the “Previous Credit Agreement”) pursuant to the Second Amended and Restated Credit Agreement dated as of March 26, 2025 (the “Second Amended and Restated Credit Agreement”). The Second Amended and Restated Credit Agreement provides for a senior secured term loan in a principal amount of $ 200.0 million (the “Term Loan”) and a senior secured revolving credit facility in an aggregate available principal amount of $ 600.0 million (the “PJI Revolving Facility” together with the Term Loan, the “PJI Credit Facilities”), of which up to $ 40.0 million is available as swingline loans and up to $ 80.0 million is available as letters of credit. The PJI Credit Facilities will mature on March 26, 2030 (the “Maturity Date”) with term loans amortizing in quarterly installments commencing on June 30, 2026 in amounts as set forth in the Second Amended and Restated Credit Agreement and the unpaid balance maturing on the Maturity Date. The remaining availability under the PJI Revolving Facility was approximately $ 458.7 million as of March 29, 2026. PJMF Revolving Facility PJMF has a $ 30.0 million revolving line of credit (the “PJMF Revolving Facility”) pursuant to a Revolving Loan Agreement, dated September 30, 2015, and most recently amended on September 30, 2025. The PJMF Revolving Facility is secured by substantially all assets of PJMF. The PJMF Revolving F acility matures on September 30, 2026, but is subject to annual renewals. The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of a one month SOFR plus 1.975 %. As of March 29, 2026, the principal amount of debt outstanding under the PJMF Revolving Facility was approximately $ 0.3 million and was classified as Current portion of long-term debt in the Condensed Consolidated Balance Sheets. The PJMF operating results and the related debt outstanding do not impact the financial covenants under the Company’s Second Amended and Restated Credit Agreement. Derivative Financial Instruments The Company has historically entered into interest rate swaps with the objective of mitigating the Company’s exposure to the impact of interest rate changes associated with our variable rate debt under the PJI Credit Facilities. As of March 29, 2026, we had the following interest rate swap agreements: Effective Dates Floating Rate Debt Fixed Rates April 29, 2025 through April 25, 2028 $ 50 million 3.49 % June 30, 2025 through June 30, 2028 $ 50 million 3.72 % We have designated the interest rate swaps as cash flow hedges and assess hedge effectiveness on a quarterly basis. The interest rate swaps are recorded at fair value at each reporting date, and any unrealized gains or losses are included in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and reclassified to Net interest expense in the Condensed Consolidated Statements of Operations in the same period or periods during which the hedged transaction affect earnings. The following table provides information on the location and amounts of our current swaps in the accompanying Condensed Consolidated Balance Sheets (in thousands): Interest Rate Swap Derivatives Balance Sheet Location Fair Value March 29, 2026 Fair Value December 28, 2025 Prepaid expenses and other current assets $ 112 $ — Other assets $ 54 $ — Accrued expenses and other current liabilities $ — $ 193 Other long-term liabilities $ 80 $ 614 15 The effect of derivative instruments on the accompanying Condensed Consolidated Financial Statements is as follows (in thousands): Derivatives - Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in AOCL on Derivative Location of (Loss) or Gain Reclassified from AOCL into Income Amount of (Loss) or Gain Reclassified from AOCL into Income Net Interest Expense on Condensed Consolidated Statements of Operations Interest rate swaps for the three months ended: March 29, 2026 $ 686 Interest expense $ 22 $ ( 9,683 ) March 30, 2025 $ 71 Interest expense $ ( 56 ) $ ( 10,079 ) Net interest paid, including payments made or received under the swaps, was $ 12.7 million and $ 17.6 million for the three months ended March 29, 2026 and March 30, 2025, respectively. 9. Restructuring Enterprise Transformation Plan In December 2025, the Company’s Board of Directors approved, and the Company commenced, the first phase of a new business transformation program (the “Enterprise Transformation Plan”) designed to improve organizational effectiveness, reduce overhead duplication and non-consumer-facing spending, and improve Domestic market and franchisee health. In February 2026, the Company’s Board of Directors approved the second phase of the Enterprise Transformation Plan, which focuses on optimizing our restaurant portfolio and improving restaurant-level profitability in the Domestic market. During the quarter ended March 29, 2026, the Company closed 44 restaurants across North America as part of the ongoing assessment of our restaurant portfolio, of which five were Company-owned. We are continuing to evaluate our Domestic restaurant portfolio, which we anticipate will result in additional strategic restaurant closures. In connection with the foregoing approved initiatives, the Company incurred restructuring related costs of $ 4.3 million during the three months ended March 29, 2026 primarily related to professional services, a loss on sale related to the completed sale of the building occupied by our former print and promotions business in Louisville, Kentucky which did not support our core operations, as well as losses on disposal of equipment associated with the closed Company-owned restaurants mentioned above. These costs were included in General and administrative expenses in the Condensed Consolidated Statements of Operations primarily within Unallocated corporate expenses. The following table summarizes restructuring costs related to the Enterprise Transformation Plan recorded for the quarter ended March 29, 2026: (In thousands) March 29, 2026 Professional services and other related costs $ 3,533 Loss on disposal of property and equipment 631 Total enterprise transformation plan costs $ 4,164 Stock-based compensation expense 126 Total enterprise transformation plan costs, including stock-based award expense $ 4,290 16 The following table presents changes in the liabilities relating to approved initiatives, which are recorded in Accrued expenses and other current liabilities and Accounts payable in the Condensed Consolidated Balance Sheets: (In thousands) Employee termination costs Professional services and other related costs Total Balance as of December 28, 2025 $ 5,389 $ 1,380 $ 6,769 Charges — 3,533 3,533 Payments ( 1,752 ) ( 2,787 ) ( 4,539 ) Balance as of March 29, 2026 $ 3,637 $ 2,126 $ 5,763 The Company has incurred total restructuring related costs of $ 12.0 million since commencement of the Enterprise Transformation Plan. The Company expects to incur total restructuring related charges of approximately $ 24 million to $ 31 million (inclusive of the $ 12.0 million incurred since commencement) related to all currently approved actions under the Enterprise Transformation Plan, which we estimate will be recognized during 2026 and 2027 primarily within Unallocated corporate expenses. Actual charges incurred may differ from this estimate due to various factors. International Transformation Plan In December 2023, the Company announced international transformation initiatives (the “International Transformation Plan”) designed to evolve our business structure to deliver an enhanced value proposition to our International customers and franchisees, ensure targeted investments and efficient resource management, and better position our largest markets, including the UK, for long-term profitable growth and brand strength. The Company completed its international transformation initiatives as of December 28, 2025. Since inception of the International Transformation Plan, the Company incurred total restructuring related costs of $ 34.4 million, all of which was recognized within General and administrative expenses in the Condensed Consolidated Statements of Operations within our International segment. During the three months ended March 30, 2025, the Company recorded total costs of $ 2.1 million related to the International Transformation Plan. These costs consisted primarily of $ 1.4 million related to professional services and other related costs and $ 1.1 million related to losses on franchisee notes receivable, partially offset by a $ 0.4 million reduction related to lease terminations and other lease related costs. No expenses were recorded during the three months ended March 29, 2026. 10. Litigation, Commitments and Contingencies Litigation The Company is involved in a number of lawsuits, claims, investigations and proceedings, including those specifically identified below, consisting of intellectual property, employment, consumer, commercial and other matters arising in the ordinary course of business. The Company has made accruals with respect to those matters for which a loss is determined to be probable and reasonably estimable. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. In re Papa John’s Employee & Franchise Employee Antitrust Litigation is a putative class action filed in December 2018 in the United States District Court for the Western District of Kentucky. The suit alleges that the “no-poaching” provision previously contained in the Company’s franchise agreement constituted an unlawful agreement or conspiracy in restraint of trade and commerce in violation of Section 1 of the Sherman Antitrust Act. On April 14, 2022, the parties reached a settlement in principle to resolve the case. Pursuant to the terms of the proposed settlement, in exchange for the Company’s payment of a total aggregate settlement amount of $ 5.0 million and other non-monetary consideration, all claims in the action will be dismissed, the litigation will be terminated, and the Company will receive a release. The settlement amount was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations in 2022. The District Court granted preliminary approval of the proposed settlement on August 2, 2025, and the Company made an initial payment of $ 2.5 million on September 5, 2025 towards the settlement with $ 2.5 million remaining accrued within Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets as of March 29, 2026. The proposed settlement contains certain customary contingencies and is subject to final approval by the District Court. The Company continues to deny any liability or wrongdoing in this matter. 17 Commitments In the first quarter of 2026, the Company entered into a multi-year agreement for point‑of‑sale and restaurant operations software services which will expire on December 23, 2034, with a one year extension option. The agreement includes deployment requirements that specify a minimum number of Company‑owned and franchised restaurants to be installed and activated on the software platform by November 30, 2026 and by November 30, 2027. The total estimated contractual commitment for software services is approximately $ 125 million to $ 140 million over the term of the agreement, contingent upon variable components such as the timing of the deployment schedule and associated contractual credits. These amounts are expected to be largely recovered through technology fees charged to our franchisees over the term of the agreement. As of March 29, 2026, the Company had not incurred any amounts related to these provisions. Refer to Note 18 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2025 for additional information on our commitments and contingencies. 11. Divestitures 2025 Refranchising Transaction On November 24, 2025, the Company completed the refranchising of 85 Domestic Company-owned restaurants previously owned and operated by Colonel’s Limited, LLC, a consolidated joint venture, to Pie Investments, an existing third-party franchisee (“Buyer”), for total proceeds of $ 35.7 million. Colonel’s Limited, LLC also entered into a Master Service Agreement effective November 24, 2025 with the Buyer for the performance by the Buyer of certain management, supervisory, and administrative services with respect to any identified remaining restaurants for which the parties have not yet obtained landlord consent to transfer the leases pursuant to the Purchase Agreement (the “Retained Restaurants”). During the three months ended March 29, 2026, the parties obtained landlord consent to transfer three leases related to the Retained Restaurants, resulting in a gain of $ 1.0 million which was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations. We expect to receive the remaining $ 1.2 million of proceeds from the sale upon the satisfactory assignment of leases to the Buyer for the remaining Retained Restaurants and final settlement of certain post-closing adjustments. Refer to Note 21 of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 28, 2025 for further description of the transaction. Sale of Print and Promotions Building On February 18, 2026, we finalized the sale of a building occupied by our former print and promotions business in Louisville, Kentucky and received net proceeds of $ 3.5 million, which were classified as investing activities within the Condensed Consolidated Statements of Cash Flows. We recognized a loss on sale of approximately $ 0.3 million, which was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations. 18 12. Segment Information We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International operations. The Domestic Company-owned restaurants segment consists of the operations of all Domestic Company-owned restaurants and principally generates revenues from retail sales of pizza and other food and beverage products. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and the collection of royalties from our franchisees located in the United States and Canada. The North America commissaries segment consists of the operations of our regional dough production and product distribution centers in the United States and Canada and derives its revenues principally from the sale and distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada. The International segment consists of distribution sales to franchised Papa Johns restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees, as well as the operations of all Company-owned restaurants located in the UK. International franchisees are defined as all franchise operations outside of the United States and Canada. Our reportable segments are distinct business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. Certain administrative and capital costs are allocated to each of our segments based upon predetermined rates or estimated resource usage. All other business units that do not meet the quantitative or qualitative thresholds for determining reportable segments, which are not operating segments, we refer to as “All Other”. These consist of operations that derive revenues from franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM evaluates performance of and allocates resources to our segments based on segment adjusted EBITDA. Segment adjusted EBITDA represents Net income before Net interest expense, Income tax expense, Depreciation and amortization, Stock-based compensation expense, and other adjustments that vary from period to period, including certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. During the annual budget and forecasting process, the CODM uses segment adjusted EBITDA to allocate resources (including employees, property, and financial or capital resources) to the segments. The CODM regularly reviews trends in segment adjusted EBITDA on at least a quarterly basis to evaluate the profitability of the segments and to make resource allocation decisions. When our CODM reviews balance sheet information, it is at a consolidated level. Segment Results The tables below present our operating results by segment (in thousands). The significant expense categories and amounts presented in the tables below align with the segment-level information that is regularly provided to the CODM. A reconciliation to Company results is included in the following section. Three Months Ended March 29, 2026 Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 139,671 $ 34,453 $ 204,600 $ 43,227 $ 421,951 Intersegment revenues — 234 42,154 — 42,388 Segment revenue $ 139,671 $ 34,687 $ 246,754 $ 43,227 $ 464,339 Less segment expenses (a) : COS - Product Costs $ 41,977 $ — $ 173,773 $ 11,525 $ 227,275 COS - Salaries & Benefits 46,430 — 32,892 2,195 81,517 COS - Other (b,c) 34,689 — 19,102 8,232 62,023 General & Administrative 8,690 9,334 8,540 7,991 34,555 Other Segment Expenses (d) — — — 5,141 5,141 Segment adjusted EBITDA $ 7,885 $ 25,353 $ 12,447 $ 8,143 $ 53,828 19 Three Months Ended March 30, 2025 Domestic Company-Owned Restaurants North America Franchising North America Commissaries International Total Revenues from external customers $ 170,795 $ 35,552 $ 212,918 $ 39,111 $ 458,376 Intersegment revenues — 1,259 51,458 — 52,717 Segment revenue $ 170,795 $ 36,811 $ 264,376 $ 39,111 $ 511,093 Less segment expenses (a) : COS - Product Costs $ 52,137 $ — $ 189,469 $ 11,146 $ 252,752 COS - Salaries & Benefits 57,976 — 29,982 1,568 89,526 COS - Other (b,c) 44,900 — 16,280 7,071 68,251 General & Administrative 10,750 9,563 9,292 8,844 38,449 Other Segment Expenses (d) — — — 5,101 5,101 Segment adjusted EBITDA $ 5,032 $ 27,248 $ 19,353 $ 5,381 $ 57,014 ___________________________________ (a) Segment expenses exclude Depreciation and amortization, Stock-based compensation expense, and certain General and Administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). (b) During the current year, the Company updated its internal cost allocation methodology for certain centrally incurred costs. As a result, a portion of costs previously allocated to the Domestic Company‑owned restaurants segment is now reflected within Unallocated corporate expenses and the North America commissaries segment. The change is prospective and does not affect total reported expenses. Prior period segment information has not been recast. This allocation methodology update resulted in a $ 2.1 million decrease in COS - Other for our Domestic Company-Owned restaurants, a $ 0.6 million increase in COS - Other for our North America commissaries segment, and a $ 1.5 million increase in Unallocated corporate expenses for th e three months ended March 29, 2026 as compared to the prior year comparable period. (c) The segment expense category “COS - Other” includes delivery expenses, Company-owned restaurant advertising costs, occupancy costs, technology costs, aggregator fees, insurance, and other costs of sales. (d) Other Segment Expenses represent all operating expenses that are not included in the significant segment expense categories. The components of Other Segment Expenses are advertising fund expenses and other operating expenses. Reconciliation of Segment Results to Company Results The following table reconciles total revenue from our segments to total revenues and total adjusted EBITDA from our segments to Income before income taxes (in thousands): Three Months Ended March 29, 2026 March 30, 2025 Total Segment revenue $ 464,339 $ 511,093 All Other Revenue (a) 70,384 74,331 Elimination of intersegment revenue ( 56,114 ) ( 67,115 ) Total revenues $ 478,609 $ 518,309 20 Three Months Ended March 29, 2026 March 30, 2025 Total Segment adjusted EBITDA $ 53,828 $ 57,014 All Other adjusted EBITDA (a) 4,033 10,164 Unallocated corporate expenses, adjusted (b) ( 10,098 ) ( 17,554 ) Other income/(expense) adjustments to reconcile to income before income before income taxes (c) ( 27,005 ) ( 25,659 ) Net interest expense ( 9,683 ) ( 10,079 ) Income before income taxes $ 11,075 $ 13,886 ___________________________________ (a) As noted in the commentary above, All Other revenue and All Other adjusted EBITDA is derived from business units that do not meet the quantitative or qualitative thresholds for determining reportable segments. These consist of operations that derive revenues from franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Our largest marketing fund is PJMF, which is designed to operate at break-even for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Technology-based franchisee fees are meant to offset the costs of building, operating, and depreciating technology that supports franchisee operations. As such, these fees may vary from period to period, as they are designed to operate near break-even over time including the impact of depreciation. (b) Unallocated corporate expenses represent administrative fees incurred by the restaurant support centers, including information systems and related services, corporate salaries and bonuses, and other corporate costs. These expenses are adjusted for depreciation and amortization, stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business (see reconciliation that follows). The decrease in Unallocated corporate expenses for the three months ended March 29, 2026 was primarily due to $ 4.5 million of expenses resulting from our bi-annual franchise operating conference incurred during 2025 as well as a $ 2.7 million year-over-year reduction in supplemental advertising costs. (c) Other income/(expense) adjustments represent Depreciation and amortization, Stock-based compensation expense, and certain general and administrative expenses and other items that do not reflect normal, recurring expenses necessary to operate our business. As such, management excludes these items from the evaluation of segment adjusted EBITDA. For the periods above, the adjustments include: Three Months Ended (In thousands) March 29, 2026 March 30, 2025 Depreciation and amortization $ 17,729 $ 18,343 Stock-based compensation expense 4,409 3,669 Gain on refranchising transaction, net ( 853 ) — Restructuring costs 4,110 2,180 Other costs (a) 1,610 1,467 Other (income)/expense adjustments $ 27,005 $ 25,659 ___________________________________ (a) For the three months ended March 29, 2026, represents costs associated with project-based strategic initiatives that are not related to our ongoing operations. For the three months ended March 30, 2025 other costs is comprised of costs incurred, net of anticipated insurance recoveries, arising from a tornado that damaged the Texas QC Center; and costs associated with project-based strategic initiatives that are not related to our ongoing operations. 21 Disaggregation of Revenue Our segments earn revenue from both external and internal customers. No single external customer accounted for 10% or more of our total revenues. Our intersegment revenues primarily represent revenue earned by our QC Centers from the sale of food and paper products to our Company-owned restaurants and collection of technology fees and marketing fees from our Company-owned restaurants. We account for intercompany sales and transfers as if the sales or transfers were to third parties and subsequently eliminate the activity. The accounting policies of our segments are the same as those described in Note 2. Significant Accounting Policies. In the following tables, revenues are disaggregated by major product line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment (in thousands): Three Months Ended March 29, 2026 Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 139,671 $ — $ — $ 3,463 $ — $ — $ 143,134 Franchise royalties and fees — 34,687 — 13,125 — ( 234 ) 47,578 Commissary sales — — 246,754 18,041 — ( 42,154 ) 222,641 Other revenues — — — 3,490 21,962 ( 3,664 ) 21,788 Advertising funds revenue — — — 5,108 48,422 ( 10,062 ) 43,468 Total revenues $ 139,671 $ 34,687 $ 246,754 $ 43,227 $ 70,384 $ ( 56,114 ) $ 478,609 Three Months Ended March 30, 2025 Domestic Company-owned Restaurants North America Franchising North America Commissaries International All Other Elimination of Intersegment Revenue Total Company-owned restaurant sales $ 170,795 $ — $ — $ 3,086 $ — $ — $ 173,881 Franchise royalties and fees — 36,811 — 12,504 — ( 1,259 ) 48,056 Commissary sales — — 264,376 16,022 — ( 51,457 ) 228,941 Other revenues — — — 3,284 25,078 ( 4,605 ) 23,757 Advertising funds revenue — — — 4,215 49,253 ( 9,794 ) 43,674 Total revenues $ 170,795 $ 36,811 $ 264,376 $ 39,111 $ 74,331 $ ( 67,115 ) $ 518,309 22