Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Commodity Price Risk. We are exposed to market risks from changes in commodity prices. Many of the food products purchased by us are affected by weather, production, availability, and other factors outside our control. Although we enter into arrangements in an effort to mitigate the price volatility of food costs, there are no established fixed price markets for fresh bone-in chicken wings, so we may be subject to prevailing market conditions. Bone-in chicken wings accounted for approximately 20.5% and 19.8% of our company-owned restaurant costs of sales in fiscal years 2025 and 2024, respectively. A hypothetical 10.0% increase in the bone-in chicken wing costs in fiscal year 2025 would have increased company-owned restaurant costs of sales by approximately $2.0 million during the year. We do not engage in speculative financial transactions nor do we hold or issue financial instruments for trading purposes.
Interest Rate Risk. Our long-term debt consisted entirely of the $1,209.1 million incurred under the 2024 Notes, 2022 Notes and 2020 Notes as of December 27, 2025 (excluding unamortized debt issuance costs). The Company’s predominantly fixed-rate debt structure has reduced its exposure to interest rate increases that could adversely affect its earnings and cash flows, but the Company remains exposed to changes in market interest rates reflected in the fair value of the debt and to the risk that the Company may need to refinance maturing debt with new debt at a higher rate. The Company is exposed to interest rate increases under the Variable Funding Notes; however, the Company had no outstanding borrowings under its Variable Funding Notes as of December 27, 2025.
Item 8. Financial Statements and Supplementary Data
Information with respect to this Item is set forth beginning on page F-1. See “Item 15. Exhibits and Financial Statement Schedules” below.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
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