Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 25, 2020 | Apr. 24, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 25, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | El Pollo Loco Holdings, Inc. | |
Entity Central Index Key | 0001606366 | |
Current Fiscal Year End Date | --12-30 | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Emerging Growth Company | false | |
Small Business Entity | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 35,103,583 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 25, 2020 | Dec. 25, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 43,404 | $ 8,070 |
Accounts and other receivables, net | 12,075 | 8,505 |
Inventories | 2,092 | 2,009 |
Prepaid expenses and other current assets | 4,607 | 5,718 |
Income Taxes Receivable, Current | 338 | 376 |
Total current assets | 62,516 | 24,678 |
Property and equipment owned, net | 87,902 | 91,778 |
Property held under operating leases, net (ROU asset) | 187,610 | 192,395 |
Goodwill | 248,674 | 248,674 |
Trademarks | 61,888 | 61,888 |
Deferred tax assets | 3,543 | 3,709 |
Other assets | 1,366 | 1,630 |
Total assets | 653,499 | 624,752 |
Current liabilities: | ||
Current portion of obligations under finance leases | 36 | 34 |
Current portion of obligations under operating leases | 17,585 | 16,406 |
Accounts payable | 6,456 | 5,627 |
Accrued salaries and vacation | 7,619 | 8,618 |
Accrued insurance | 9,881 | 9,440 |
Accrued interest | 78 | 302 |
Current portion of income tax receivable agreement payable | 4,987 | 4,935 |
Other accrued expenses and current liabilities | 12,216 | 28,597 |
Total current liabilities | 58,858 | 73,959 |
Revolver loan | 141,500 | 97,000 |
Obligations under finance leases, net of current portion | 73 | 83 |
Operating Lease, Liability, Noncurrent | 192,422 | 197,492 |
Deferred Income Tax Liabilities, Net | 2,366 | 1,672 |
Income tax receivable agreement payable, net of current portion | 3,128 | 3,301 |
Other noncurrent liabilities | 6,547 | 5,679 |
Total liabilities | 404,894 | 379,186 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 200,000,000 shares authorized; 35,089,983 and 35,126,582 shares issued and outstanding | 351 | 351 |
Additional paid-in-capital | 331,484 | 330,950 |
Accumulated deficit | (82,388) | (85,988) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (842) | 253 |
Total stockholders' equity | 248,605 | 245,566 |
Total liabilities and stockholders' equity | $ 653,499 | $ 624,752 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 25, 2020 | Dec. 25, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 35,089,983 | 35,126,582 |
Common stock, shares outstanding (shares) | 35,089,983 | 35,126,582 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Revenue | ||
Total revenue | $ 105,163 | $ 108,977 |
Cost of operations | ||
Food and paper cost | 25,562 | 27,152 |
Labor and related expenses | 28,693 | 29,576 |
Occupancy and other operating expenses | 22,109 | 23,227 |
Company restaurant expenses | 76,364 | 79,955 |
General and administrative expenses | 9,331 | 11,348 |
Franchise expenses | 6,911 | 6,144 |
Depreciation and amortization | 4,369 | 4,761 |
Loss on disposal of assets | 100 | 44 |
Impairment and closed-store reserves | 2,402 | 309 |
Impairment of Long-Lived Assets to be Disposed of | 0 | 4,124 |
Total expenses | 99,477 | 106,685 |
Income from operations | 5,686 | 2,292 |
Interest expense, net | 905 | 859 |
Income tax receivable agreement (income) expense | (120) | 171 |
Income before provision for income taxes | 4,901 | 1,262 |
Provision for income taxes | 1,301 | 349 |
Net income | $ 3,600 | $ 913 |
Net income per share | ||
Basic (usd per share) | $ 0.10 | $ 0.02 |
Diluted (usd per share) | $ 0.10 | $ 0.02 |
Weighted-average shares used in computing net income per share | ||
Basic (shares) | 34,659,160 | 38,653,702 |
Diluted (shares) | 35,347,456 | 39,496,436 |
Company-operated restaurant revenue | ||
Revenue | ||
Total revenue | $ 92,634 | $ 97,150 |
Franchise revenue | ||
Revenue | ||
Total revenue | 7,062 | 6,444 |
Franchise advertising fee revenue | ||
Revenue | ||
Total revenue | $ 5,467 | $ 5,383 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Other Comprehensive Income (Loss) [Member] | Accumulated Deficit |
Shares, Outstanding | 35,126,582 | ||||
Stockholders' Equity Attributable to Parent | $ 245,566 | $ 351 | $ 330,950 | $ (85,988) | |
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 534 | ||||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Forfeited And Expirations In Period | 49,010 | (36,599) | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | $ 1,095 | $ (1,095) | |||
Net income | 3,600 | 3,600 | |||
Shares, Outstanding | 35,089,983 | ||||
Stockholders' Equity Attributable to Parent | $ 248,605 | $ 351 | $ 331,484 | $ (842) | $ (82,388) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 3,600 | $ 913 |
Adjustments to reconcile net income to net cash flows (used in) provided by operating activities: | ||
Depreciation and amortization | 4,369 | 4,761 |
Stock-based compensation expense | 534 | 488 |
Income tax receivable agreement (income) expense | (120) | 171 |
Impairment of Long-Lived Assets to be Disposed of | 0 | 4,124 |
Loss on disposal of assets | 100 | 44 |
Impairment of property and equipment | 1,920 | 0 |
Amortization of deferred financing costs | 63 | 63 |
Amortization of favorable and unfavorable leases, net | 0 | (10) |
Deferred income taxes, net | 916 | 273 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables, net | (3,569) | (1,150) |
Inventories | (83) | 260 |
Prepaid expenses and other current assets | 1,111 | (843) |
Other assets | 201 | 0 |
Accounts payable | 490 | (783) |
Accrued salaries and vacation | (999) | 1,347 |
Accrued insurance | 442 | 764 |
Income taxes payable | 38 | 76 |
Other accrued expenses and liabilities | (16,539) | (521) |
Net cash flows (used in) provided by operating activities | (7,526) | 9,977 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,632) | (4,183) |
Net cash flows used in investing activities | (1,632) | (4,183) |
Cash flows from financing activities: | ||
Payments on revolver and swingline loan | (8,000) | (3,000) |
Proceeds from Long-term Lines of Credit | 52,500 | 0 |
Payment of obligations under finance leases | (8) | (35) |
Payments for Repurchase of Common Stock | 0 | (3,029) |
Net cash flows provided by (used in) financing activities | 44,492 | (6,064) |
Increase (decrease) in cash and cash equivalents | 35,334 | (270) |
Cash and cash equivalents, beginning of period | 8,070 | 6,969 |
Cash and cash equivalents, end of period | 43,404 | 6,699 |
Supplemental cash flow information | ||
Cash paid during the period for interest | 1,112 | 838 |
Unpaid purchases of property and equipment | 1,085 | 948 |
Stock Repurchase Accrued not Paid | $ 0 | $ (354) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Other Comprehensive Income Statement - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Statement of Other Comprehensive Income [Abstract] | ||
Net income | $ 3,600 | $ 913 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 1,459 | |
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | 39 | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | (403) | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | 1,095 | |
Other Comprehensive Income (Loss), Net of Tax | $ 2,505 | $ 913 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 25, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware corporation headquartered in Costa Mesa, California. Holdings and its direct and indirect subsidiaries are collectively referred to herein as “we,” “us” or the “Company.” The Company’s activities are conducted principally through its indirect wholly-owned subsidiary, El Pollo Loco, Inc. (“EPL”), which develops, franchises, licenses, and operates quick-service restaurants under the name El Pollo Loco® and operates under one operating segment. At March 25, 2020 , the Company operated 195 and franchised 284 El Pollo Loco restaurants. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the Company’s consolidated financial position and results of operations and cash flows for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 25, 2019 . The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of the calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations. Every six or seven years, a 53-week fiscal year occurs. Fiscal 2020 is a 53-week year ending on December 30, 2020 , and fiscal 2019 was a 52-week year ending on December 25, 2019 . Revenues, expenses, and other financial and operational figures may be elevated in a 53-week year. Holdings has no material assets or operations. Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc. (“Intermediate”), guarantee EPL’s 2018 Revolver (as defined below) on a full and unconditional basis (see Note 4), 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. EPL and Intermediate may pay dividends to Intermediate and to Holdings, respectively, subject to the terms of the 2018 Revolver. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenue and expenses during the periods reported. Actual results could materially differ from those estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, insurance reserves, lease accounting matters, stock-based compensation, income tax receivable agreement liability, contingent liabilities and income tax valuation allowances. COVID-19 On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China ("COVID-19") and the risks to the international community as the virus spreads globally beyond its point of origin. On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. Following the pandemic declaration in March 2020, federal, state and local governments began to respond to the public health crisis by requiring social distancing, "stay at home" directives, and restaurant restrictions - including government-mandated dining room closures - that limited business to off-premise services only (take-out, drive-thru and delivery). Historically, approximately 20% of the Company’s sales are associated with dine-in service. As such, the COVID-19 pandemic has significantly disrupted consumer demand, as well as the Company's restaurant operations. All of the Company's restaurants are operating on a take-away, mobile pick-up and delivery basis only, as well as maintaining drive-thru operations where available, in order to protect its employees and customers from the spread of the COVID-19 pandemic and to comply with the government mandates. As of March 25, 2020, the Company had not closed any restaurants due to the COVID-19 pandemic. Please refer to Subsequent Events, below, for discussion of stores that have temporarily closed. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management has taken precautionary actions, such as drawing on its 2018 Revolver (see Note 4), temporarily suspending all but essential capital spending and share repurchase activity, reevaluating essential support center general and administrative expenses and fine-tuning its restaurant labor model based on dining room closures and lower sales volumes. Additionally, Management has delayed making April rent payments on the majority of its leased properties and is currently negotiating rent abatement and/or deferment with its landlords for those properties. For the Company's franchisees, the Company is deferring 50% of their April royalties as well as 100% of their 2020 remodel and new restaurant build requirements until 2021. Management is continually evaluating the impact of the global crisis on its financial condition, liquidity, operations, suppliers, industry, and workforce and will take additional actions as necessary. The disruption in operations has led to the Company to consider the impact of the COVID-19 pandemic on its liquidity, debt covenant compliance, and recoverability of long-lived and ROU assets, goodwill and intangible assets, among others. If these disruptions continue, the Company expects a continued material negative impact on its consolidated financial condition, future results of operations and liquidity. The extent of such negative impact will be determined, in part, by the longevity and severity of the pandemic. Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate impact that the COVID-19 pandemic will have on the Company’s consolidated financial condition, liquidity, and future results of operations, and therefore any prediction as to the ultimate material adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain. Subsequent Events Due to the impact of the COVID-19 pandemic, subsequent to March 25, 2020 , the Company has temporarily closed 18 restaurants, 15 of which have reopened and 3 remain closed at this time. Similarly, franchisees have temporarily closed 12 restaurants, 8 of which have reopened and 4 remain closed at this time. On March 27, 2020 President Trump signed into a law a stimulus package, the Coronavirus Aid, Relief and Economic Security ("CARES") Act, which contains several tax provisions and deferral of employer Social Security taxes that are otherwise owed for wage payments. The tax provisions include a correction of previous drafting error related to quality improvement property ("QIP") and immediate refundability of all remaining alternative minimum tax ("AMT") credits. The Company is in the process of assessing the impact of these new tax provisions and will recognize the impact during its second quarter of 2020. On March 19, 2020, the Surety from who the Company procured the appeal bond to secure the judgment against the Company in a legal matter, issued a collateral demand to the Company. On April 17, 2020, the Company issued a letter of credit in the amount of $2.7 million to satisfy the Surety’s collateral demand. Refer to Note 7 "Commitments and Contingencies" for further details. In order to provide the aforementioned letter of credit, on April 15, 2020 the Company made a $2.7 million pre-payment on the 2018 Revolver. Additionally, subsequent to March 25, 2020 one franchised location in Texas has been permanently closed. The Company has evaluated subsequent events that have occurred after March 25, 2020 , and determined that there were no other events or transactions occurring during this reporting period that require recognition or disclosure in the condensed consolidated financial statements. Cash and Cash Equivalents The Company considers all highly-liquid instruments with an original maturity of three months or less at the date of purchase to be cash equivalents. Liquidity The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodels and maintenance), interest payments on our debt, lease obligations and working capital and general corporate needs. At March 25, 2020 , the Company’s total debt was $141.5 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 and available cash of $43.4 million at March 25, 2020 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. However, depending on the severity and longevity of the COVID-19 pandemic, the Company's financial performance and liquidity could be further impacted and could impact the Company's ability to meet certain covenants required in its 2018 Credit Agreement (as defined below), specifically the lease-adjusted coverage ratio and fixed-charge coverage ratio. Assets Held For Sale During the thirteen weeks ended March 27, 2019 , the Company agreed in principle to sell four restaurants within the San Francisco area to an existing franchisee. Additionally, during the thirteen weeks ended March 27, 2019 , the Company agreed in principle to sell seven restaurants in the Phoenix area to another existing franchisee. Assets are classified as held for sale if they meet the criteria outlined in Accounting Standards Codification ("ASC") 360, Property, Plant and Equipment . In accordance with applicable accounting guidance, the net assets were recorded at the lower of carrying value or fair value less costs to sell. The Company classified $4.5 million of assets as held for sale, consisting of leasehold improvements and other property equipment, as of March 27, 2019 , and recognized a loss on held for sale assets of $4.1 million for the thirteen weeks ended March 27, 2019 . These transactions were completed during the second quarter of 2019. As of March 25, 2020, there were no assets held for sale. Recently Adopted Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. ASU 2020-04 is effective for a limited time, from March 12, 2020, through December 31, 2022. The Company adopted this ASU on March 12, 2020. The adoption of ASU 2020-04 did not have a significant impact on the Company’s consolidated financial position or results of operations. In February 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement," which finalizes proposed ASU No. 2015-350, and of the same name as part of its disclosure framework project, which focuses on improving the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by U.S. GAAP that is most important to users of each entity’s financial statements. The Company adopted ASU No. 2018-13 during the first quarter of 2020. The adoption of ASU 2018-13 did not have a significant impact on the Company’s consolidated financial position or results of operations. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which finalizes proposed ASU No. 2012-260 "Financial Instruments—Credit Losses (Subtopic 825-15)" and adds Topic 326 "Financial Instruments—Credit Losses", to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted ASU No. 2016-13 during the first quarter of 2020. The adoption of ASU 2016-03 did not have a significant impact on the Company’s consolidated financial position or results of operations. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", which modifies Topic 740 to simplify the accounting for income taxes. ASU 2019-12 is effective for financial statements issued for annual periods beginning after December 15, 2020, and for the interim periods therein. The adoption of ASU 2019-12 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations. Concentration of Risk Cash and cash equivalents are maintained at financial institutions and, at times, these balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances. The Company had one supplier for which amounts due totaled 12.2% and 11.7% of the Company’s accounts payable at March 25, 2020 and December 25, 2019 , respectively. Purchases from the Company’s largest supplier totaled 27.4% of total expenses for the thirteen weeks ended March 25, 2020 , and 26.6% of total expenses for the thirteen weeks ended March 27, 2019 . Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 72.4% of total revenue for the thirteen weeks ended March 25, 2020 , and 69.2% for the thirteen weeks ended March 27, 2019 . Goodwill and Indefinite Lived Intangible Assets The Company’s indefinite-lived intangible assets consist of trademarks. Goodwill represents the excess of cost over fair value of net identified assets acquired in business combinations accounted for under the purchase method. The Company does not amortize its goodwill and indefinite-lived intangible assets. Goodwill resulted from the acquisition of certain franchise locations. Upon the sale or closure of a restaurant, the Company evaluates whether there is a decrement of goodwill. The amount of goodwill included in the cost basis of the asset sold is determined based on the relative fair value of the portion of the reporting unit disposed of compared to the fair value of the reporting unit retained. The Company determined there was no decrement of goodwill related to the disposition of restaurants during the thirteen weeks ended March 25, 2020 . The Company performs an annual impairment test for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of a reporting unit with its carrying amount. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs the fair value test, the Company will compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company performs an annual impairment test for indefinite-lived intangible assets during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. An impairment test consists of either a qualitative assessment or a comparison of the fair value of an intangible asset with its carrying amount. The excess of the carrying amount of an intangible asset over its fair value is recognized as an impairment loss. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company’s reporting segment and are also consistent with the projections and assumptions that are used in current operating plans. These assumptions are subject to change as a result of changing economic and competitive conditions. Due to the recent impact of the COVID-19 pandemic to the global economy, including but not limited to, the volatility of the Company's stock price as well as that of its competitors, declining sales at the Company's restaurants and the challenging environment for the restaurant industry generally, the Company determined that there were indicators of potential impairment of its goodwill and indefinite-lived intangible assets during the thirteen weeks ended March 25, 2020 . As such, the Company performed an impairment assessment for both goodwill and indefinite lived intangible assets and concluded that the fair value of these assets substantially exceeded their carrying values. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the thirteen weeks ended March 25, 2020 . T he ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: • Level 1: Quoted prices for identical instruments in active markets. • Level 2: Observable prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. • Level 3: Unobservable inputs used when little or no market data is available. During fiscal 2019, the Company entered into an interest rate swap, which is required to be measured at fair value on a recurring basis. The fair value was determined based on Level 2 inputs, which include valuation models, as reported by the Company's counterparty. These valuation models use a discounted cash flow analysis on the cash flows of the derivative based on the terms of the contract and the forward yield curves adjusted for the Company's credit risk. The key inputs for the valuation models are observable market prices, discount rates, and forward yield curves. See "Note 4. Long-Term Debt" for further discussion regarding our interest rate swaps. The following table presents fair value for the interest rate swap at March 25, 2020 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ 1,142 $ — $ 1,142 $ — The following table presents fair value for the interest rate swap at December 25, 2019 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other assets - Interest rate swap $ 360 $ — $ 360 $ — Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances (e.g. when there is evidence of impairment). The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen weeks ended March 25, 2020 (in thousands): Fair Value Measurements at March 25, 2020 Using Thirteen Weeks Ended March 25, 2020 Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment owned, net $ 39 $ — $ — $ 39 $ 1,377 Certain ROU assets, net $ 926 $ — $ — $ 926 $ 543 The following non-financial instruments were measured at fair value on a nonrecurring basis as of and for the thirteen weeks ended March 27, 2019 (in thousands): Fair Value Measurements at March 27, 2019 Using Thirteen Weeks Ended March 27, 2019 Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment - Held for sale $ 4,494 $ — $ — $ 4,494 $ 4,124 Impairment of Long-Lived Assets and ROU Assets The Company reviews its long-lived and right-of-use assets ("ROU assets") for impairment on a restaurant-by-restaurant basis whenever events or changes in circumstances indicate that the carrying value of certain long-lived and ROU assets may not be recoverable. The Company considers a triggering event related to long-lived assets or ROU assets in a net asset position to have occurred related to a specific restaurant if the restaurant’s cash flows for the last twelve months are less than a minimum threshold or if consistent levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets. Additionally, the Company considers a triggering event related to ROU assets to have occurred related to a specific lease if the location has been subleased and future estimated sublease income is less than current lease payments. If the Company concludes that the carrying value of certain long-lived and ROU assets will not be recovered based on expected undiscounted future cash flows, an impairment loss is recorded to reduce the long-lived or ROU assets to their estimated fair value. The fair value is measured on a nonrecurring basis using unobservable (Level 3) inputs. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis, which requires the use of estimates and assumptions. If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material. Based on the results of the analysis, the Company recorded a non-cash impairment charge of $1.9 million for the thirteen weeks ended March 25, 2020 , primarily related to the carrying value of the ROU assets of one restaurant in Texas and the long-lived assets of three restaurants in California. The Company did not recognize any impairment charges for the thirteen weeks ended March 27, 2019 , other than the loss on assets held for sale, discussed above. Given the inherent uncertainty in projecting results for newer restaurants in newer markets, as well as the impact of the COVID-19 pandemic, the Company is monitoring the recoverability of the carrying value of the assets of several restaurants on an ongoing basis. For these restaurants, if expected performance is not realized, an impairment charge may be recognized in future periods, and such charge could be material. Closed-Store Reserves When a restaurant is closed, the Company will evaluate the ROU asset for impairment, based on anticipated sublease recoveries. The remaining value of the ROU asset is amortized on a straight-line basis, with the expense recognized in closed-store reserve expense. Additionally, any property tax and common area maintenance ("CAM") payments relating to closed restaurants are included within closed-store expense. During the thirteen weeks ended March 25, 2020 , the Company recognized $0.5 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. During the thirteen weeks ended March 27, 2019 , the Company closed one restaurant in California and one restaurant in Texas and recognized $0.3 million primarily related to the amortization of ROU assets for the two closed stores. Derivative Financial Instruments The Company uses an interest rate swap, a derivative instrument, to hedge interest rate risk and are not used for trading purposes. The derivative contract is entered into with financial institutions. The Company records the derivative instrument on its condensed consolidated balance sheet at fair value. The derivative instrument qualifies as a hedging instrument in a qualifying cash flow hedge relationship, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive (loss) income ("AOCI") and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For any derivative instruments not designated as hedging instruments, the gain or loss will be recognized in earnings immediately. If a derivative previously designated as a hedge is terminated, or no longer meets the qualifications for hedge accounting, any balances in AOCI will be reclassified to earnings immediately. As a result of the use of an interest rate swap, the Company is exposed to risk that the counterparty will fail to meet their contractual obligations. To mitigate the counterparty credit risk, the Company will only enter into contracts with major financial institutions, based upon their credit ratings and other factors, and will continue to assess the creditworthiness of the counterparty. As of March 25, 2020 , the counterparty to the Company's interest rate swap has performed in accordance with their contractual obligation. Income Taxes The provision for income taxes, income taxes payable and deferred income taxes is determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If, after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by charging to tax expense to reserve the portion of deferred tax assets which are not expected to be realized. The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where the Company is required to file. When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position the Company takes has to have at least a “more likely than not” chance of being sustained (based on the position’s technical merits) upon challenge by the respective authorities. The term “more likely than not” means a likelihood of more than 50 percent. Otherwise, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the “more likely than not” criterion at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon its effective resolution. Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect the Company’s consolidated financial position, results of operations, and cash flows. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at March 25, 2020 or at December 25, 2019 , and did not recognize interest or penalties during the thirteen weeks ended March 25, 2020 or March 27, 2019 , since there were no material unrecognized tax benefits. Management believes no material changes to the amount of unrecognized tax benefits will occur within the next twelve months. For the thirteen weeks ended March 25, 2020 the Company received a Notice of Proposed Adjustment ("NOPA"), for the years ended December 27, 2017 and December 28, 2016, related to the Company's methodology regarding its ordering of utilization of AMT net operating losses ("NOL). This resulted in payment of $0.4 million and the audit is closed. As a result of the CARES Act, discussed above, this amount is immediately refundable upon filing of a Form 1139. See "Subsequent Event" disclosure above for further discussion of the tax impact of the CARES Act. On July 30, 2014, the Company entered into the income tax receivable agreement (the "TRA"), which calls for the Company to pay to its pre-IPO stockholders 85% of the savings in cash that the Company realizes in its income taxes as a result of utilizing its net operating losses and other tax attributes attributable to preceding periods. For the thirteen weeks ended March 25, 2020 , the Company recorded income tax receivable agreement income of $0.1 million , and for the thirteen weeks ended March 27, 2019 , the Company recorded income tax receivable agreement expense of $0.2 million , related to the amortization of interest expense related to our total expected TRA payments and changes in estimates for actual tax returns filed and future forecasted taxable income. Changes in Accounting Policies Except for the changes below, the Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements. The Company adopted Topic 842 with a date of initial application of December 27, 2018. As a result, the Company has changed its accounting policy for leases as detailed below. The Company’s operations utilize property, facilities, equipment and vehicles owned by the Company or leased from others, the majority of which are operating leases. Additionally, the Company has various contracts with vendors that have been determined to contain an embedded lease in accordance with Topic 842. As of the date of adoption, the Company recognized a ROU asset and lease liability equal to the present value of these leases within its consolidated balance sheet for any leases with terms longer than 12 months. The Company also has three finance leases, subleases facilities to certain franchises and is the lessor for certain property, facilities and equipment owned by the Company. The adoption of Topic 842 did not have an impact on the Company's current accounting policies for these items. Furthermore, the adoption of this standard did not have any impact on the Company’s consolidated statement of operations or the consolidated statement of cash flows. The Company applied Topic 842 using the effective date method, which allowed the Company to apply the standard as of the adoption date, and to recognize the cumulative effect of initially applying Topic 84 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 25, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT The costs and related accumulated depreciation and amortization of major classes of property and equipment are as follows (in thousands): March 25, 2020 December 25, 2019 Land $ 12,323 $ 12,323 Buildings and improvements 145,406 144,794 Other property and equipment 75,344 75,234 Construction in progress 3,448 4,213 236,521 236,564 Less: accumulated depreciation and amortization (148,619 ) (144,786 ) $ 87,902 $ 91,778 Depreciation expense was $4.4 million and $4.8 million for the thirteen weeks ended March 25, 2020 and March 27, 2019 , respectively. Based on the Company's review of its long-lived assets for impairment, the Company recorded non-cash impairment charges of $1.4 million for the thirteen weeks ended March 25, 2020 , primarily related to the carrying value of the assets of three restaurants in California. D epending on the severity and longevity of the COVID-19 pandemic, the Company's financial performance could be further impacted and it is possible that material impairments could be identified in future periods. Assets are classified as held for sale if they meet the criteria outlined in ASC 360, Property, Plant and Equipment . In accordance with applicable accounting guidance, the net assets were recorded at the lower of carrying value or fair value less costs to sell. The Company classified $4.5 million of assets as held for sale as of March 27, 2019 , and recognized a loss on held for sale assets of $4.1 million for the thirteen weeks ended March 27, 2019 . |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 25, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION At March 25, 2020 , options to purchase 2,034,834 shares of common stock were outstanding, including 1,518,145 vested and 516,689 unvested. Unvested options vest over time; however, upon a change in control, the board may accelerate vesting. At March 25, 2020 , 1,159,366 premium options, options granted above the stock price at date of grant, remained outstanding. A summary of stock option activity as of March 25, 2020 and changes during the thirteen weeks ended March 25, 2020 is as follows: Shares Weighted-Average Exercise Price Outstanding - December 25, 2019 2,077,570 $ 8.14 Forfeited, cancelled or expired (42,736 ) $ 11.47 Outstanding - March 25, 2020 2,034,834 $ 8.07 Vested and expected to vest at March 25, 2020 2,026,518 $ 8.05 Exercisable at March 25, 2020 1,518,145 $ 6.93 At March 25, 2020 , the Company had total unrecognized compensation expense of $1.5 million related to unvested stock options, which it expects to recognize over a weighted-average period of 2.68 years. A summary of restricted share activity as of March 25, 2020 and changes during the thirteen weeks ended March 25, 2020 is as follows: Shares Weighted-Average Fair Value Unvested shares at December 25, 2019 588,008 $ 11.23 Forfeited, cancelled, or expired (49,010 ) $ 12.42 Unvested shares at March 25, 2020 538,998 $ 11.12 Unvested shares at March 25, 2020 , included 430,823 unvested restricted shares, 36,058 unvested performance stock units and 72,117 unvested restricted units. At March 25, 2020 , the Company had unrecognized compensation expense of $3.7 million related to unvested restricted shares, which it expects to recognize over a weighted-average period of 2.57 years, unrecognized compensation expense of $0.1 million related to performance stock units, which it expects to recognize over a weighted-average period of 3.12 years and unrecognized compensation expense of $0.5 million related to unvested restricted units, which it expects to recognize over a weighted-average period of 2.12 years. Total stock-based compensation expense was $0.5 million for both the thirteen weeks ended March 25, 2020 and March 27, 2019 . |
Credit Agreements
Credit Agreements | 3 Months Ended |
Mar. 25, 2020 | |
Debt Disclosure [Abstract] | |
Credit Agreements | On July 13, 2018, the Company refinanced a credit agreement with Bank of America, N.A., initially entered into on December 11, 2014 (the “2014 Revolver”), pursuant to a credit agreement (the “2018 Credit Agreement”) among EPL, as borrower, and the Company and Intermediate, as guarantors, Bank of America, N.A., as administrative agent, swingline lender, and letter of credit issuer, the lenders party thereto, and the other parties thereto, which provides for a $150.0 million five -year senior secured revolving credit facility (the “2018 Revolver”). The 2018 Revolver includes a sub limit of $15.0 million for letters of credit and a sub limit of $15.0 million for swingline loans. The 2018 Revolver and 2018 Credit Agreement will mature on July 13, 2023 . The obligations under the 2018 Credit Agreement and related loan documents are guaranteed by the Company and Intermediate. The obligations of the Company, EPL and Intermediate under the 2018 Credit Agreement and related loan documents are secured by a first priority lien on substantially all of their respective assets. Under the 2018 Revolver, Holdings may not make certain payments such as cash dividends, except that it may, inter alia, (i) pay up to $1.0 million per year to repurchase or redeem qualified equity interests of Holdings held by past or present officers, directors, or employees (or their estates) of the Company upon death, disability, or termination of employment, (ii) pay under its TRA, and, (iii) so long as no default or event of default has occurred and is continuing, (a) make non-cash repurchases of equity interests in connection with the exercise of stock options by directors, officers and management, provided that those equity interests represent a portion of the consideration of the exercise price of those stock options, (b) pay up to $0.5 million in any 12 month consecutive period to redeem, repurchase or otherwise acquire equity interests of any subsidiary that is not a wholly-owned subsidiary from any holder of equity interest in such subsidiary, (c) pay up to $2.5 million per year pursuant to stock option plans, employment agreements, or incentive plans, (d) make up to $5.0 million in other restricted payments per year, and (e) make other restricted payments, subject to its compliance, on a pro forma basis, with (x) a lease-adjusted consolidated leverage ratio not to exceed 4.25 times and (y) the financial covenants applicable to the 2018 Revolver. Borrowings under the 2018 Credit Agreement (other than any swingline loans) bear interest, at the borrower’s option, at rates based upon either LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a lease-adjusted consolidated leverage ratio-based pricing grid. The base rate is calculated as the highest of (a) the federal funds rate plus 0.50% , (b) the published Bank of America prime rate, or (c) LIBOR plus 1.00% . For LIBOR loans, the margin is in the range of 1.25% to 2.25% , and for base rate loans the margin is in a range of 0.25% to 1.25% . Borrowings under the 2018 Revolver may be repaid and reborrowed. The interest rate range was 3.11% to 3.29% for the thirteen weeks ended March 25, 2020 and 3.96% to 4.01% for the thirteen weeks ended March 27, 2019 . The 2018 Credit Agreement contains certain financial covenants. The Company was in compliance with the financial covenants as of March 25, 2020 . However, depending on the severity and longevity of the COVID-19 pandemic, the Company's financial performance and liquidity could be further impacted and could impact the Company's ability to comply with certain financial covenants required in the 2018 Credit Agreement, specifically the lease-adjusted coverage ratio and fixed-charge coverage ratio. At March 25, 2020 , $8.4 million of letters of credit and $141.5 million in borrowings under the 2018 Revolver were outstanding. The Company had $0.1 million amounts available under the 2018 Revolver at March 25, 2020 . Maturities During the thirteen weeks ended March 25, 2020 , the Company borrowed $44.5 million , net of pay downs of $8.0 million , on the Company’s 2018 Revolver, primarily as a precautionary measure to bolster its existing cash position, related to the uncertainty regarding the current COVID-19 pandemic, as well as to fund litigation settlement payments. See Note 1 under "Subsequent Events" for further details regarding the Company's actions related to the COVID-19 pandemic and Note 7 for further details regarding the litigation settlement payments. During the thirteen weeks ended March 27, 2019 , the Company elected to pay down $3.0 million of outstanding borrowings on the Company’s 2018 Revolver. There are no required principal payments prior to maturity for the 2018 Revolver. Interest Rate Swap During the year ended December 25, 2019 , the Company entered into a variable-to-fixed interest rate swap agreement with a notional amount of $40.0 million that matures in June 2023. The objective of the interest rate swap was to reduce the Company's exposure to interest rate risk for a portion of its variable-rate interest payments on its borrowings under the 2018 Revolver. Under the terms of the swap agreement, the variable LIBOR-based component of interest payments were converted to a fixed rate of 1.31% , plus applicable margin, which is currently 1.5% . The interest rate swap was designated as a cash flow hedge, as the changes in the future cash flows of the swap were expected to offset changes in expected future interest payments on the related variable-rate debt, in accordance with ASC 815, Derivatives and Hedging . The changes in the fair value of the interest rate swap are not included in earnings, but are included in other comprehensive (loss) income (“OCI”). These changes in fair value are subsequently reclassified into net earnings as a component of interest expense as the hedged interest payments are made on the variable rate borrowings. For the thirteen weeks ended March 25, 2020 , the swap was a highly effective cash flow hedge. As of March 25, 2020 , the estimated net loss included in AOCI related to the Company's cash flow hedge that will be reclassified into earnings in the next 12 months is $0.1 million , based on current LIBOR interest rates. The following table shows the financial statement line item and amount of the Company's cash flow hedge accounting on the condensed consolidated balance sheet (in thousands): March 25, 2020 December 25, 2019 Notional Fair value Notional Fair value Other assets - Interest rate swap — — $ 40,000 $ 360 Other liabilities - Interest rate swap $ 40,000 $ 1,142 — — The following table summarizes the effect of the Company's cash flow hedge accounting on the condensed consolidated statements of income (in thousands): Thirteen Weeks Ended March 25, 2020 March 27, 2019 Interest expense on hedged portion of debt $ 429 — Interest income on interest rate swap (39 ) — Interest expense on debt and derivatives, net $ 390 $ — The following table summarizes the effect of the Company's cash flow hedge accounting on AOCI for the thirteen weeks ended March 25, 2020 and March 27, 2019 (in thousands): Thirteen Weeks Ended Net Loss Recognized in OCI (Gain) Reclassified from AOCI into Interest expense March 25, 2020 March 27, 2019 March 25, 2020 March 27, 2019 Interest rate swap $ 1,459 — $ (39 ) — See Note 1 for the fair value of our derivative asset. |
Other Accrued Expenses and Curr
Other Accrued Expenses and Current Liabilities | 3 Months Ended |
Mar. 25, 2020 | |
Payables and Accruals [Abstract] | |
Other Accrued Expenses and Current Liabilities | OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES Other accrued expenses and current liabilities consist of the following (in thousands): March 25, 2020 December 25, 2019 Accrued sales and property taxes $ 4,648 $ 4,665 Gift card liability 2,676 3,006 Accrued legal settlements and professional fees 1,037 16,901 Deferred franchise and development fees 670 705 Other 3,185 3,320 Total other accrued expenses and current liabilities $ 12,216 $ 28,597 |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | 3 Months Ended |
Mar. 25, 2020 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Noncurrent Liabilities | OTHER NONCURRENT LIABILITIES Other noncurrent liabilities consist of the following (in thousands): March 25, 2020 December 25, 2019 Deferred franchise and development fees $ 5,329 $ 5,612 Derivative liability 1,151 — Other 67 67 Total other noncurrent liabilities $ 6,547 $ 5,679 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 25, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Matters On or about February 24, 2014 , a former employee filed a class action in the Superior Court of the State of California, County of Orange, under the caption Elliott Olvera, et al v. El Pollo Loco, Inc., et al (Case No. 30-2014-00707367-CU-OE-CXC) on behalf of all putative class members (all hourly employees from 2010 to the present) alleging certain violations of California labor laws, including failure to pay overtime compensation, failure to provide meal periods and rest breaks, and failure to provide itemized wage statements. The putative lead plaintiff’s requested remedies include compensatory and punitive damages, injunctive relief, disgorgement of profits, and reasonable attorneys’ fees and costs. No specific amount of damages sought was specified in the complaint. The court recently certified two classes of plaintiffs - one class encompasses restaurant employees who were not provided proper rest breaks because they were not allowed to leave the premises during their breaks and the other class encompasses restaurant employees who were required to wait at the restaurant after they finished working for the night until the manager set the alarm for safety purposes. The parties reached a settlement in principle on January 24, 2019 of all claims brought on behalf of the 32,000+ putative class members in the Olvera , as well as all claims for failure to pay overtime compensation, failure to provide meal periods and rest breaks, and failure to provide itemized wage statements brought in the class actions captioned Martha Perez v. El Pollo Loco, Inc. (Los Angeles Superior Court Case No. BC624001), Maria Vega, et al. v. El Pollo Loco, Inc. (Los Angeles Superior Court Case No. BC649719), and Gonzalez v. El Pollo Loco, Inc. (Los Angeles Superior Court Case No. BC712867). The settlement reached in principle in the Olvera , Perez , Vega , and Gonzalez actions resolves all potential claims from April 12, 2010 through April 1, 2019 that El Pollo Loco restaurant employees may have against El Pollo Loco for failure to pay for all compensation owed, failure to pay overtime compensation, failure to provide meal periods and rest breaks and failure to provide itemized wage statements, among other wage and hour related claims. A $16.3 million accrual of an expected settlement amount related to this matter was recorded as of December 26, 2018, and the court formally approved the settlement on January 31, 2020. The settlement payment was made on February 28, 2020. Purported class actions alleging wage and hour violations are commonly filed against California employers. The Company fully expects to have to defend against similar lawsuits in the future. Daniel Turocy, et al. v. El Pollo Loco Holdings, Inc., et al. (Case No. 8:15-cv-01343) was filed in the United States District Court for the Central District of California on August 24, 2015, and Ron Huston, et al. v. El Pollo Loco Holdings, Inc., et al. (Case No. 8:15-cv-01710) was filed in the United States District Court for the Central District of California on October 22, 2015. The two lawsuits have been consolidated, with co-lead plaintiffs and class counsel. A consolidated complaint was filed on January 29, 2016, on behalf of co-lead plaintiffs and others similarly situated, alleging violations of federal securities laws in connection with Holdings common stock purchased or otherwise acquired and the purchase of call options or the sale of put options, between May 1, 2015 and August 13, 2015 (the “Class Period”). The named defendants are Holdings; Stephen J. Sather, Laurance Roberts, and Edward J. Valle (collectively, the “Individual Defendants”); and Trimaran Pollo Partners, LLC, Trimaran Capital Partners, and Freeman Spogli & Co. (collectively, the “Controlling Shareholder Defendants”). Among other things, Plaintiffs allege that, in 2014 and early 2015, Holdings suffered losses due to rising labor costs in California and, in an attempt to mitigate the effects of such rising costs, removed a $5 value option from the Company’s menu, which resulted in a decrease in traffic from value-conscious consumers. Plaintiffs further allege that during the Class Period, Holdings and the Individual Defendants made a series of materially false and misleading statements that concealed the effect that these factors were having on store sales growth, resulting in Holdings stock continuing to be traded at artificially inflated prices. As a result, Plaintiffs and other members of the putative class allegedly suffered damages in connection with their purchase of Holdings’ stock during the Class Period. In addition, Plaintiffs allege that the Individual Defendants and Controlling Shareholder Defendants had direct involvement in, and responsibility over, the operations of Holdings, and are presumed to have had, among other things, the power to control or influence the transactions giving rise to the alleged securities law violations. In both cases, Plaintiffs seek an unspecified amount of damages, as well as costs and expenses (including attorneys’ fees). On July 25, 2016, the Court issued an order granting, without prejudice, Defendants’ Motion to Dismiss plaintiff’s complaint for failure to state a claim. Plaintiffs were granted leave to amend their complaint, and filed an amended complaint on August 22, 2016. Defendants moved to dismiss the amended complaint, and on March 20, 2017, the Court dismissed the amended complaint and granted Plaintiffs leave to file another amended complaint. Plaintiffs filed another amended complaint on April 17, 2017. Defendants filed a motion to dismiss the amended complaint on or about May 17, 2017. The Court denied Defendants' motion to dismiss the third amended complaint on August 4, 2017. On December 8, 2017, Plaintiffs filed a motion for class certification, and on July 3, 2018, the Court granted Plaintiffs’ motion and certified a class as to all of Plaintiffs’ claims. Defendants filed a petition for appellate review of a portion of the Court’s July 3, 2018 class certification order. On October 19, 2018 the Ninth Circuit Court of Appeals denied the petition. On January 23, 2019, the parties filed a Notice of Settlement and Joint Request for Order to Stay Proceedings, stating the parties have reached an agreement in principle to settle the claims and allegations in the action and are negotiating the terms of a Stipulation of Settlement. On January 24, 2019, the Court ordered that all proceedings in the action be stayed until April 3, 2019, on or before which the parties were to file and did so file a Stipulation of Settlement and a motion for preliminary approval of the settlement. The court granted preliminary approval of the settlement on May 13, 2019. Defendants maintain that the Plaintiffs' claims are without merit, and entered into the settlement with Plaintiffs to eliminate the uncertainties, burden and expense of further protracted litigation. A $20.0 million accrual of an expected settlement amount related to this matter was recorded as of December 26, 2018 and all settlement payments were made during the year ended December 25, 2019. On or about November 5, 2015, a purported Holdings shareholder filed a derivative complaint on behalf of Holdings in the Court of Chancery of the State of Delaware against certain Holdings officers, directors and Trimaran Pollo Partners, L.L.C., under the caption Armen Galustyan v. Sather, et al. (Case No. 11676-VCL). The derivative complaint alleges that these defendants breached their fiduciary duties to Holdings and were unjustly enriched when they sold shares of Holdings at artificially inflated prices due to alleged misrepresentations and omissions regarding EPL’s comparable store sales in the second quarter of 2015. The Holdings shareholder’s requested remedies include an award of compensatory damages to Holdings, as well as a court order to improve corporate governance by putting forward for stockholder vote certain resolutions for amendments to Holdings’ Bylaws or Certificate of Incorporation. The parties have stipulated to, which the court has ordered, a stay of these proceedings pending the outcome of Turocy v. El Pollo Loco Holdings, Inc ., discussed above. A second purported Holdings shareholder filed a derivative complaint on or about September 23, 2016, under the caption Diep v. Sather , CA 12760-VCL in the Delaware Court of Chancery. The Diep action is also purportedly brought on behalf of Holdings, names the same defendants and asserts substantially the same claims on substantially the same alleged facts as does Galustyan . Defendants moved to stay or dismiss the Diep action. On March 17, 2017, the Delaware court granted in part, and denied in part, the motion to stay the Diep action. The court denied defendants' motion to dismiss the complaint for failure to state a claim. On January 17, 2018, the court entered an order granting the parties’ stipulation staying all proceedings in the Diep action for five months or until the completion of an investigation of the allegations in the action by a special litigation committee of the Holdings board of directors (the "SLC"). On February 13, 2019, after concluding its investigation, the SLC filed a motion to dismiss the Diep action. The SLC filed its investigative report under seal as an exhibit to the motion to dismiss. Discovery related to the SLC's motion is ongoing. Janice P. Handlers-Bryman and Michael D. Bryman v. El Pollo Loco, Inc. , Los Angeles Superior Court (Case No. MC026045) (the “Lancaster Lawsuit”) was filed on February 9, 2016. Existing El Pollo Loco franchisees, Janice P. Handlers-Bryman and Michael D. Bryman, as individuals and in their capacities as trustees of the Handlers Bryman Trust (collectively, “Plaintiffs”), filed suit against us alleging, among other things, that we “imposed unreasonable time limitations” on their development of additional restaurant locations in Lancaster, California, and that we thereafter developed company-operated El Pollo Loco restaurants in the “market area” of Plaintiffs’ existing El Pollo Loco restaurant in Lancaster. Plaintiffs asserted claims against us for, among other things, (i) breach of the implied covenant of good faith and fair dealing, (ii) intentional interference with prospective business, and (iii) unfair business practices. In addition to an unspecified amount of damages and costs of the lawsuit, Plaintiffs sought reformation of the contract, declaratory relief, disgorgement of alleged revenues and profits, injunctive relief, and a judicial mandate requiring us to either transfer the company-operated locations to Plaintiffs or to continuously disgorge to Plaintiffs the unjust enrichment allegedly obtained by us through the operation of the company-operated restaurants in Lancaster. We denied Plaintiffs’ allegations as the franchise agreement did not grant Plaintiffs any exclusive territorial rights and, instead, expressly reserved for us the right to open and operate - and the right to grant others the right to open and operate - El Pollo Loco restaurants “in the immediate vicinity of or adjacent to” Plaintiffs’ restaurant in Lancaster. On April 24, 2017, four days before the commencement of trial, Plaintiffs filed a voluntary dismissal, without prejudice, of the Lancaster Lawsuit without any payment or other concession by us. The corresponding dismissal was entered by the court on April 25, 2017. On May 22, 2017, Plaintiffs filed a motion for relief from the dismissal which was granted by the court on June 29, 2017. The trial in the case was bifurcated between the liability and damages phases. The liability phase commenced on November 16, 2017. The only cause of action that the court allowed to go to the jury was the cause of action for breach of the covenant of good faith and fair dealing. The court elected not to present the cause of action for intentional interference with prospective business to the jury. (The causes of action for reformation due to mistake and unconscionability, unfair business practices under California Business & Professions Code §17200 et seq., and declaratory relief were not presented to the jury as these types of equitable claims are to be decided by the court as a matter of law.) On December 11, 2017, the jury returned a verdict in favor of Plaintiffs finding that the Company breached the implied covenant of good faith and fair dealing by (1) constructing the two new company-operated El Pollo Loco restaurants in Lancaster, and (2) not offering the two new company-operated El Pollo Loco restaurants in Lancaster to Plaintiffs. Because the trial was bifurcated, the December 11, 2017 verdict did not include a determination of damages. The damages phase of the trial commenced on April 20, 2018. On May 1, 2018, the jury returned a verdict on damages in favor of Plaintiffs in the following amounts: (1) $4,356,600 in “impact damages” arising out of our construction of the two new company-owned El Pollo Loco restaurants in Lancaster, and (2) $4,481,206 in “lost opportunity damages” arising out of our failure to offer the two new company-operated El Pollo Loco restaurants in Lancaster to Plaintiffs. On August 1, 2018, the court issued a final judgment and decision on the unfair business practices claim under California Business & Professions Code § 17200 et seq. As part of the final judgment, the court found El Pollo Loco liable and issued injunctive relief requiring El Pollo Loco to revise its franchise disclosure document and franchise agreement. The court also awarded Plaintiffs restitution of $4,356,600 for “impact damages” arising out of our construction of the two new company-operated El Pollo Loco restaurants in Lancaster. The court, reversing its previous position, held that these damages could be awarded in addition to the "lost opportunity damages" awarded by the jury. Thus, the court entered a total monetary judgment of $8,837,806 . There was no ruling on the causes of action for reformation due to mistake and declaratory relief, and on January 27, 2020, the court entered an amended judgment dismissing these claims. The trial court subsequently awarded the Plaintiffs $249,728 in costs and $1,391,703 in attorney fees. Post judgment interest is running at 10% simple interest per year on the total amount of the monetary judgment, costs, and attorney fees. On August 27, 2018, the Company filed a notice of appeal as to the entire judgment. As required by California law, on or about August 16, 2018, the Company obtained an appeal bond through a Surety company to secure the trial court’s judgment during the pendency of the appeal. The appeal on the merits is currently pending. Briefing on the merits has not yet occurred in the appellate court. The record was delivered by the trial court to the court of appeal on August 20, 2019. Due to the COVID-19 pandemic, the appellate court has extended the deadline for the Company' to file its opening brief until June 1, 2020. Based on the assessment by management of the numerous legal arguments that can be raised on appeal, together with independent assessments from its trial and appellate counsel, the Company believes that a loss is currently not probable or estimable under ASC 450, "Contingencies," and as of March 25, 2020 , no accrual has been made with regard to the verdict. On March 19, 2020, the Surety from who the Company procured the appeal bond to secure the judgment against the Company in the matter of Janice P. Handlers-Bryman and Michael D. Bryman v. El Pollo Loco, Inc., issued a collateral demand to the Company. On April 17, 2020, the Company provided to One Beacon a Letter of Credit in the amount of $2,651,342 to satisfy the Surety’s collateral demand. The Company is also involved in various other claims and legal actions that arise in the ordinary course of business. The Company does not believe that the ultimate resolution of these other actions will have a material adverse effect on its financial position, results of operations, liquidity, or capital resources. A significant increase in the number of claims, or an increase in amounts owing under successful claims, could materially and adversely affect its business, consolidated financial condition, results of operations, and cash flows. Purchasing Commitments The Company has long-term beverage supply agreements with certain major beverage vendors. Pursuant to the terms of these arrangements, 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. These contracts have terms extending through the end of 2024. At March 25, 2020 , the Company’s total estimated commitment to purchase chicken was $19.5 million . Contingent Lease Obligations As a result of assigning the Company’s interest in obligations under real estate leases in connection with the sale of company-operated restaurants to some of the Company’s franchisees, the Company is contingently liable on four lease agreements. These leases have various terms, the latest of which expires in 2036 . As of March 25, 2020 , the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessee was $2.9 million . The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at March 25, 2020 was $2.5 million . The Company’s franchisees are primarily liable on the leases. The Company has cross-default provisions with these franchisees that would put them in default of their franchise agreements in the event of non-payment under the leases. The Company believes that these cross-default provisions reduce the risk that payments will be required to be made under these leases. Due to the current uncertainty related to the COVID-19 pandemic and impact it has had on the ability of the Company's franchisees to make their lease payments, the Company has recorded a $0.1 million liability in the Company’s condensed consolidated financial statements related to these contingent liabilities. Employment Agreements Effective March 18, 2020, Hector Munoz, the Company’s Chief Marketing Officer, left the Company to pursue other opportunities. In connection with his departure, the Company and Mr. Munoz entered into a Separation Agreement and General Release. For more information, please see Item 6, Exhibits. The Company has 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. Indemnification Agreements The Company has entered into indemnification agreements with each of its current directors and officers. These agreements require the Company to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the Company and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. The Company also intends to enter into indemnification agreements with future directors and officers. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 25, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NET INCOME PER SHARE Basic earnings per share (“EPS”) is calculated using the weighted-average number of shares of common stock outstanding during the thirteen weeks ended March 25, 2020 and March 27, 2019 . 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. On August 2, 2018, the Company announced that the Board of Directors had authorized a stock repurchase program. The Company entered into a stock repurchase plan on August 28, 2018 (the “2018 Stock Repurchase Plan”), which allowed for the repurchase of up to $20.0 million of the Company’s common stock. The 2018 Stock Repurchase Plan commenced on November 6, 2018 and terminated on June 26, 2019. On April 30, 2019, as part of the Company’s focus on stockholder returns, the Board of Directors approved a new stock repurchase program. The Company entered into a stock repurchase plan May 17, 2019 (the “2019 Stock Repurchase Plan”), which allowed for the repurchase up to $30.0 million of the Company's common stock. The 2019 Stock Repurchase Plan commenced on June 27, 2019, and was exhausted on September 26, 2019. Under the 2019 Stock Repurchase Plan, the Company was permitted to repurchase its common stock from time to time, in amounts and at prices that the Company deemed appropriate, subject to market conditions and other considerations. The Company’s repurchases were executed using open market purchases, including pursuant to Rule 10b5-1 trading plans, and/or through privately negotiated transactions. For the thirteen weeks ended March 27, 2019 , the Company repurchased 255,554 shares of common stock under the 2018 Stock Repurchase Plan, using open market purchases, for total consideration of approximately $3.4 million . The common stock repurchased under both the 2018 Stock Repurchase Plan and the 2019 Stock Repurchase Plan was retired upon repurchase. Below are basic and diluted EPS data for the periods indicated, which are in thousands except for per share data: Thirteen Weeks Ended March 25, 2020 March 27, 2019 Numerator: Net income $ 3,600 $ 913 Denominator: Weighted-average shares outstanding—basic 34,659,160 38,653,702 Weighted-average shares outstanding—diluted 35,347,456 39,496,436 Net income per share—basic $ 0.10 $ 0.02 Net income per share—diluted $ 0.10 $ 0.02 Anti-dilutive securities not considered in diluted EPS calculation 474,373 56,016 Below is a reconciliation of basic and diluted share counts: Thirteen Weeks Ended March 25, 2020 March 27, 2019 Weighted-average shares outstanding—basic 34,659,160 38,653,702 Dilutive effect of stock options and restricted shares 688,296 842,734 Weighted-average shares outstanding—diluted 35,347,456 39,496,436 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 25, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Trimaran Pollo Partners, L.L.C. (“LLC”) owns approximately 47.7% of the Company’s outstanding common stock. This large position means that LLC and its majority owners—predecessors and affiliates of, and certain funds managed by, Trimaran Capital Partners and Freeman Spogli & Co. (collectively, “Trimaran” and “Freeman Spogli,” respectively)—possess significant influence when stockholders vote on matters such as election of directors, mergers, consolidations and acquisitions, the sale of all or substantially all of the Company’s assets, decisions affecting the Company’s capital structure, amendments to the Company’s amended and restated certificate of incorporation or amended and restated by-laws, and the Company’s winding up and dissolution. The Company’s amended and restated certificate of incorporation provides that (i) so long as LLC beneficially owns, directly or indirectly, more than 40% of the Company's common stock any member of the board of directors or the entire board of directors may be removed from office at any time with or without cause by the affirmative vote of a majority of the Company’s common stock, and (ii) prior to the date the LLC ceases to beneficially own, directly or indirectly, 40% or more of the Company’s common stock, stockholders representing at least 40% of the Company's common stock may call a special meeting of the Company's stockholders. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 25, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition Nature of products and services The Company has two revenue streams, company-operated restaurant revenue and franchise related revenue. Company-operated restaurant revenue Revenues from the operation of company-operated restaurants are recognized as food and beverage products are delivered to customers and payment is tendered at the time of sale. The Company presents sales, net of sales-related taxes and promotional allowances. The Company offers a loyalty rewards program, which awards a customer one point for every $1 spent. When 100 points are accumulated a $10 reward to be used on future purchases is earned. If a customer does not earn or use points within a one-year period, their account is deactivated and all points expire. Additionally, if a $10 reward is not used within six months it expires. When a customer is part of the rewards program, the obligation to provide future discounts related to points earned is considered a separate performance obligation, to which a portion of the transaction price is allocated. The performance obligation related to loyalty points is deemed to have been satisfied, and the amount deferred in the balance sheet is recognized as revenue, when the points are transferred to a $10 reward and redeemed, the reward or points have expired, or the likelihood of redemption is remote. A portion of the transaction price is allocated to loyalty points, if necessary, on a pro-rata basis, based on stand-alone selling price, as determined by menu pricing and loyalty point's terms. As of March 25, 2020 and December 25, 2019 , the revenue allocated to loyalty points that have not been redeemed are $1.0 million and $1.1 million , respectively, which are reflected in the Company’s accompanying condensed consolidated balance sheets within other accrued expenses and current liabilities. The Company expects the loyalty points to be redeemed and recognized over a one -year period. The Company sells gift cards to its customers in the restaurants and through selected third parties. The gift cards sold to customers have no stated expiration dates and are subject to actual and/or potential escheatment rights in several of the jurisdictions in which the Company operates. Furthermore, due to these escheatment rights, the Company does not recognize breakage related to the sale of gift cards due to the immateriality of the amount remaining after escheatment. The Company recognizes income from gift cards when redeemed by the customer. Unredeemed gift card balances are deferred and recorded as other accrued expenses on the accompanying condensed consolidated balance sheets. Franchise and franchise advertising 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 advertising revenue consists of advertising contributions received from franchisees. These revenue streams are made up of the following performance obligations: • Franchise license - inclusive of advertising services, development agreements, training, access to plans and help desk services. • Discounted renewal option. • Hardware services. The Company satisfies the performance obligation related to the franchise license over the term of the franchise agreement, which is typically 20 years. Payment for the franchise license consists of three components, a fixed-fee related to the franchise/development agreement, a sales-based royalty fee and a sales-based advertising fee. The fixed fee, as determined by the signed development and/or franchise agreement, is due at the time the development agreement is entered into, and/or when the franchise agreement is signed, and does not include a finance component. The sales-based royalty fee and sales-based advertising fee are considered variable consideration and will continue to be recognized as revenue as such sales are earned by the franchisees. Both sales-based fees qualify under the royalty constraint exception, and do not require an estimate of future transaction price. Additionally, the Company is utilizing the practical expedient available under Topic 606 regarding disclosure of the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied for sales-based royalties. In certain franchise agreements, the Company offers a discounted renewal to incentivize future renewals after the end of the initial franchise term. As this is considered a separate performance obligation, the Company allocates a portion of the initial franchise fee to this discounted renewal, on a pro-rata basis, assuming a 20 -year renewal. This performance obligation is satisfied over the renewal term, typically 10 or 20 years, while payment is fixed and due at the time the renewal is signed. The Company purchases hardware, such as scanners, printers, cash registers and tablets, from third party vendors, which it then sells to franchisees. As the Company is considered the principal in this relationship, payment for the hardware is considered revenue, and is received upon transfer of the goods from the Company to the franchisee. As of March 25, 2020 , there were no performance obligations related to hardware services that were unsatisfied or partially satisfied. Disaggregated revenue The following table presents our revenues disaggregated by revenue source and market (in thousands): Thirteen Weeks Ended March 25, 2020 March 27, 2019 Core Market (1) : Company-operated restaurant revenue $ 85,915 $ 85,306 Franchise revenue 3,508 3,499 Franchise advertising fee revenue 2,642 2,717 Total core market $ 92,065 $ 91,522 Non-Core Market (2) : Company-operated restaurant revenue $ 6,719 $ 11,844 Franchise revenue 3,554 2,945 Franchise advertising fee revenue 2,825 2,666 Total non-core market $ 13,098 $ 17,455 Total revenue $ 105,163 $ 108,977 (1) Core Market includes markets with existing company-operated restaurants at the time of the Company's Initial Public Offering ("IPO") on July 28, 2014. (2) Non-Core Market includes markets entered into by the Company subsequent to the IPO date. The following table presents our revenues disaggregated by geographic market: Thirteen Weeks Ended March 25, 2020 March 27, 2019 Greater Los Angeles area market 72.4 % 69.2 % Other markets 27.6 % 30.8 % Total 100 % 100 % Contract balances The following table provides information about the change in the franchise contract liability balances during the thirteen weeks ended March 25, 2020 and March 27, 2019 (in thousands) : December 25, 2019 $ 6,317 Revenue recognized - beginning balance (318 ) March 25, 2020 $ 5,999 December 26, 2018 $ 5,593 Revenue recognized - beginning balance (104 ) Additional contract liability 140 Revenue recognized - additional contract liability (6 ) March 27, 2019 $ 5,623 The Company’s franchise contract liability includes development fees, initial franchise and license fees, franchise renewal fees, lease subsidies and royalty discounts and is included within other accrued expenses and current liabilities and other noncurrent liabilities within the accompanying condensed consolidated balance sheets. The Company receives area development fees from franchisees when they execute multi-unit area development agreements. Initial franchise and license fees, or franchise renewal fees, are received from franchisees upon the execution of, or renewal of, a franchise agreement. Revenue is recognized from these agreements as the underlying performance obligation is satisfied, which is over the term of the agreement. The following table illustrates the estimated revenue to be recognized in future periods related to performance obligations under the applicable contracts that are unsatisfied as of March 25, 2020 (in thousands): Franchise revenues: 2020 $ 524 2021 491 2022 410 2023 391 2024 357 Thereafter 3,826 Total $ 5,999 Contract Costs The Company does not currently incur costs to obtain or fulfill a contract that would be considered contract assets under Topic 606. |
Leases Leases
Leases Leases | 3 Months Ended |
Mar. 25, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | LEASES Adoption of Topic 842 "Leases" On December 27, 2018, the Company adopted Topic 842, using the effective date method, recognizing and measuring all leases that existed as of December 27, 2018. The Company recorded a cumulative-effect adjustment as of December 27, 2018. Comparative periods are presented in accordance with ASC Topic 840 and do not include any retrospective adjustments to comparative periods to reflect the adoption of Topic 842. All leases that either (1) commenced, or (2) were modified or re-measured after December 27, 2018 are accounted for under Topic 842. As a result of Topic 842, the Company recognized a ROU asset of $205.2 million and a lease liability of $222.3 million on its consolidated balance sheet as of December 27, 2018. However, the adoption of Topic 842 did not result in a material impact on the Company’s consolidated statement of operations or consolidated statement of cash flows. Nature of leases The Company’s operations utilize property, facilities, equipment and vehicles leased from others. Additionally, the Company has various contracts with vendors that have been determined to contain an embedded lease in accordance with Topic 842. As of March 25, 2020 , the Company had one lease that it had entered into, but had not yet commenced. The Company does not have control of the property until lease commencement. Building and facility leases The majority of the Company’s building and facilities leases are classified as operating leases; however, the Company currently has one facility lease that is classified as a finance lease. Restaurants are operated under lease arrangements that generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues in excess of a defined amount. Additionally, a number of the Company’s leases have payments, which increase at pre-determined dates based on the change in the consumer price index. 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 excluding 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. These leases typically have four 5-year renewal options, which have generally been excluded in the calculation of the ROU asset and lease liability, as they are not considered reasonably certain to be exercised, unless (1) the renewal had already occurred as of the time of adoption of Topic 842, or (2) there have been significant leasehold improvements that have a useful life that extend past the original lease term. Furthermore, there are no residual value guarantees and no restrictions imposed by the lease. During the thirteen weeks ended March 25, 2020 , the Company reassessed the lease terms on three restaurants due to certain triggering events, such as, the addition of significant leasehold improvements, the decision to terminate a lease, or the decision to renew. As a result of the reassessment, an additional $0.3 million of ROU asset and lease liabilities for the thirteen weeks ended March 25, 2020 were recognized and will be amortized over the new lease term. The reassessment did not have any impact on the original lease classification. Additionally, as the Company adopted all practical expedients available under Topic 842, no reallocation between lease and non-lease components was necessary. The Company also subleases facilities to certain franchisees and other non-related parties which are also considered operating leases. Sublease income also includes contingent rental income based on net revenues. The vast majority of these leases have rights to extend terms via fixed rental increases. However, none of these leases have early termination rights, the right to purchase the premises or any residual value guarantees. The Company does not have any related party leases. During the first quarter of 2020, the Company determined that the carrying value of ROU assets at certain restaurants was not recoverable. As a result, the Company recorded a $0.5 million impairment expense for the thirteen weeks ended March 25, 2020 . The impairment primarily related to one restaurant in Texas, sold to franchisees in the prior year. Equipment Leases of equipment primarily consist of restaurant equipment, copiers and vehicles. These leases are fixed payments with no variable component. Additionally, no optional renewal periods have been included in the calculation of the ROU asset, there are no residual value guarantees and no restrictions imposed. Significant Assumptions and Judgments In applying the requirements of Topic 842 the Company made significant assumptions and judgments related to determination of whether a contract contains a lease and the discount rate used for the lease. In determining if any of the Company’s contracts contain a lease the Company made assumptions and judgments related to its ability to direct the use of any assets stated in the contract and the likelihood of renewing any short-term contracts for a period extending past twelve months. The Company also made significant assumptions and judgments in determining an appropriate discount rate for property leases. These included using a consistent discount rate for a portfolio of leases entered into at varying dates, using the full 20-year term of the lease, excluding any options, and using the total minimum lease payments. The Company utilizes a third-party valuation firm in determining the discount rate, based on the above assumptions. For all other leases, the Company uses the discount rate implicit in the lease, or the Company’s incremental borrowing rate. As the Company has adopted the practical expedient not to separate lease and non-lease components, no significant assumptions or judgments were necessary in allocating consideration between these components, for all classes of underlying assets. The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands): Thirteen Weeks Ended March 25, 2020 Property Leases Equipment Leases Total Finance lease cost: Interest on lease liabilities 6 — 6 Operating lease cost 6,530 324 6,854 Short-term lease cost — 2 2 Variable lease cost 104 14 118 Sublease income (778 ) — (778 ) Total lease cost $ 5,862 $ 340 $ 6,202 The following table presents the Company’s total lease cost on the condensed consolidated statement of income (in thousands): Thirteen Weeks Ended March 25, 2020 Lease cost – Occupancy and other operating expenses $ 5,879 Lease cost – General & administrative 111 Lease cost – Interest expense 6 Lease cost - Closed-store reserve 206 Total lease cost $ 6,202 During the thirteen weeks ended March 25, 2020 , the Company had the following cash and non-cash activities associated with its leases (in thousands): Thirteen Weeks Ended March 25, 2020 Property Leases Equipment Leases Total Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 6,260 $ 309 $ 6,569 Financing cash flows used for finance leases $ 8 $ — $ 8 Non-cash investing and financing activities: Operating lease ROU assets obtained in exchange for lease liabilities: Operating lease ROU assets $ 307 $ 12 $ 319 Derecognition of ROU assets due to terminations, impairment or modifications $ (543 ) $ — $ (543 ) Operating lease ROU assets obtained and liabilities incurred as a result of adoption of ASC 842: Operating lease ROU assets $ 200,555 $ 4,668 $ 205,223 Operating lease liabilities $ 217,615 $ 4,668 $ 222,283 Other Information Weighted-average remaining lease term—finance leases 2.58 — Weighted-average remaining lease term—operating leases 11.94 2.97 Weighted-average discount rate—finance leases 11.10 % — Weighted-average discount rate—operating leases 4.35 % 3.95 % Information regarding the Company’s minimum future lease obligations as of March 25, 2020 is as follows (in thousands): Finance Operating Leases For the Years Ending Minimum Minimum Minimum December 30, 2020 $ 41 $ 20,080 $ 2,103 December 29, 2021 54 26,702 2,887 December 28, 2022 45 25,694 3,284 December 27, 2023 — 23,289 3,318 December 25, 2024 — 21,018 3,203 Thereafter — 141,124 27,265 Total $ 140 $ 257,907 $ 42,060 Less: imputed interest (2.38% - 11.10%) (31 ) (47,900 ) Present value of lease obligations 109 210,007 Less: current maturities (36 ) (17,585 ) Noncurrent portion $ 73 $ 192,422 Information regarding the Company’s minimum future lease obligations as of December 25, 2019 is as follows (in thousands): Finance Leases Operating Leases For the Years Ending Minimum Minimum Minimum December 30, 2020 $ 54 $ 26,808 $ 2,754 December 29, 2021 54 25,978 2,887 December 28, 2022 45 24,871 3,284 December 27, 2023 — 22,309 3,318 December 25, 2024 — 19,751 3,203 Thereafter — 139,454 27,265 Total $ 153 $ 259,171 $ 42,711 Less: imputed interest (3.96% to 11.10%) (36 ) (45,273 ) Present value of capital lease obligations 117 213,898 Less: current maturities (34 ) (16,406 ) Noncurrent portion $ 83 197,492 Short-Term Leases The Company has multiple short-term leases, which have terms of less than 12 months, and thus were excluded from the recognition requirements of Topic 842. The Company has recognized these lease payments in its consolidated statement of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. Lessor The Company is a lessor for certain property, facilities and equipment owned by the Company and leased to others, principally franchisees, under non-cancelable leases with initial terms ranging from three to 20 years. These lease agreements generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues. All leases are considered operating leases. For the leases in which the Company is the lessor, there are options to extend the lease. However, there are no terms and conditions to terminate the lease, no right to purchase premises and no residual value guarantees. Additionally, there are no related party leases. For both thirteen weeks ended March 25, 2020 and March 27, 2019 , the Company received $0.1 million of lease income from company-owned locations . |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 25, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the Company’s consolidated financial position and results of operations and cash flows for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. This quarterly report should be read in conjunction with the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 25, 2019 . The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of the calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations. Every six or seven years, a 53-week fiscal year occurs. Fiscal 2020 is a 53-week year ending on December 30, 2020 , and fiscal 2019 was a 52-week year ending on December 25, 2019 . Revenues, expenses, and other financial and operational figures may be elevated in a 53-week year. Holdings has no material assets or operations. Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc. (“Intermediate”), guarantee EPL’s 2018 Revolver (as defined below) on a full and unconditional basis (see Note 4), 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. EPL and Intermediate may pay dividends to Intermediate and to Holdings, respectively, subject to the terms of the 2018 Revolver. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenue and expenses during the periods reported. Actual results could materially differ from those estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, insurance reserves, lease accounting matters, stock-based compensation, income tax receivable agreement liability, contingent liabilities and income tax valuation allowances. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly-liquid instruments with an original maturity of three months or less at the date of purchase to be cash equivalents. |
Liquidity | Liquidity The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodels and maintenance), interest payments on our debt, lease obligations and working capital and general corporate needs. At March 25, 2020 , the Company’s total debt was $141.5 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 and available cash of $43.4 million at March 25, 2020 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. However, depending on the severity and longevity of the COVID-19 pandemic, the Company's financial performance and liquidity could be further impacted and could impact the Company's ability to meet certain covenants required in its 2018 Credit Agreement (as defined below), specifically the lease-adjusted coverage ratio and fixed-charge coverage ratio. |
Concentration of Risk | Concentration of Risk Cash and cash equivalents are maintained at financial institutions and, at times, these balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances. The Company had one supplier for which amounts due totaled 12.2% and 11.7% of the Company’s accounts payable at March 25, 2020 and December 25, 2019 , respectively. Purchases from the Company’s largest supplier totaled 27.4% of total expenses for the thirteen weeks ended March 25, 2020 , and 26.6% of total expenses for the thirteen weeks ended March 27, 2019 . Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 72.4% of total revenue for the thirteen weeks ended March 25, 2020 , and 69.2% for the thirteen weeks ended March 27, 2019 . |
Goodwill and Indefinite Lived Intangible Assets | Goodwill and Indefinite Lived Intangible Assets The Company’s indefinite-lived intangible assets consist of trademarks. Goodwill represents the excess of cost over fair value of net identified assets acquired in business combinations accounted for under the purchase method. The Company does not amortize its goodwill and indefinite-lived intangible assets. Goodwill resulted from the acquisition of certain franchise locations. Upon the sale or closure of a restaurant, the Company evaluates whether there is a decrement of goodwill. The amount of goodwill included in the cost basis of the asset sold is determined based on the relative fair value of the portion of the reporting unit disposed of compared to the fair value of the reporting unit retained. The Company determined there was no decrement of goodwill related to the disposition of restaurants during the thirteen weeks ended March 25, 2020 . The Company performs an annual impairment test for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of a reporting unit with its carrying amount. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs the fair value test, the Company will compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company performs an annual impairment test for indefinite-lived intangible assets during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. An impairment test consists of either a qualitative assessment or a comparison of the fair value of an intangible asset with its carrying amount. The excess of the carrying amount of an intangible asset over its fair value is recognized as an impairment loss. The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company’s reporting segment and are also consistent with the projections and assumptions that are used in current operating plans. These assumptions are subject to change as a result of changing economic and competitive conditions. Due to the recent impact of the COVID-19 pandemic to the global economy, including but not limited to, the volatility of the Company's stock price as well as that of its competitors, declining sales at the Company's restaurants and the challenging environment for the restaurant industry generally, the Company determined that there were indicators of potential impairment of its goodwill and indefinite-lived intangible assets during the thirteen weeks ended March 25, 2020 . As such, the Company performed an impairment assessment for both goodwill and indefinite lived intangible assets and concluded that the fair value of these assets substantially exceeded their carrying values. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the thirteen weeks ended March 25, 2020 . T he ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. |
Fair Value Measurement | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: • Level 1: Quoted prices for identical instruments in active markets. • Level 2: Observable prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. • Level 3: Unobservable inputs used when little or no market data is available. During fiscal 2019, the Company entered into an interest rate swap, which is required to be measured at fair value on a recurring basis. The fair value was determined based on Level 2 inputs, which include valuation models, as reported by the Company's counterparty. These valuation models use a discounted cash flow analysis on the cash flows of the derivative based on the terms of the contract and the forward yield curves adjusted for the Company's credit risk. The key inputs for the valuation models are observable market prices, discount rates, and forward yield curves. See "Note 4. Long-Term Debt" for further discussion regarding our interest rate swaps. The following table presents fair value for the interest rate swap at March 25, 2020 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ 1,142 $ — $ 1,142 $ — The following table presents fair value for the interest rate swap at December 25, 2019 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other assets - Interest rate swap $ 360 $ — $ 360 $ — Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances (e.g. when there is evidence of impairment). The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen weeks ended March 25, 2020 (in thousands): Fair Value Measurements at March 25, 2020 Using Thirteen Weeks Ended March 25, 2020 Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment owned, net $ 39 $ — $ — $ 39 $ 1,377 Certain ROU assets, net $ 926 $ — $ — $ 926 $ 543 The following non-financial instruments were measured at fair value on a nonrecurring basis as of and for the thirteen weeks ended March 27, 2019 (in thousands): Fair Value Measurements at March 27, 2019 Using Thirteen Weeks Ended March 27, 2019 Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment - Held for sale $ 4,494 $ — $ — $ 4,494 $ 4,124 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets and ROU Assets The Company reviews its long-lived and right-of-use assets ("ROU assets") for impairment on a restaurant-by-restaurant basis whenever events or changes in circumstances indicate that the carrying value of certain long-lived and ROU assets may not be recoverable. The Company considers a triggering event related to long-lived assets or ROU assets in a net asset position to have occurred related to a specific restaurant if the restaurant’s cash flows for the last twelve months are less than a minimum threshold or if consistent levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets. Additionally, the Company considers a triggering event related to ROU assets to have occurred related to a specific lease if the location has been subleased and future estimated sublease income is less than current lease payments. If the Company concludes that the carrying value of certain long-lived and ROU assets will not be recovered based on expected undiscounted future cash flows, an impairment loss is recorded to reduce the long-lived or ROU assets to their estimated fair value. The fair value is measured on a nonrecurring basis using unobservable (Level 3) inputs. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis, which requires the use of estimates and assumptions. If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material. Based on the results of the analysis, the Company recorded a non-cash impairment charge of $1.9 million for the thirteen weeks ended March 25, 2020 , primarily related to the carrying value of the ROU assets of one restaurant in Texas and the long-lived assets of three restaurants in California. The Company did not recognize any impairment charges for the thirteen weeks ended March 27, 2019 , other than the loss on assets held for sale, discussed above. Given the inherent uncertainty in projecting results for newer restaurants in newer markets, as well as the impact of the COVID-19 pandemic, the Company is monitoring the recoverability of the carrying value of the assets of several restaurants on an ongoing basis. For these restaurants, if expected performance is not realized, an impairment charge may be recognized in future periods, and such charge could be material. |
Closed-Store Reserves | Closed-Store Reserves When a restaurant is closed, the Company will evaluate the ROU asset for impairment, based on anticipated sublease recoveries. The remaining value of the ROU asset is amortized on a straight-line basis, with the expense recognized in closed-store reserve expense. Additionally, any property tax and common area maintenance ("CAM") payments relating to closed restaurants are included within closed-store expense. During the thirteen weeks ended March 25, 2020 , the Company recognized $0.5 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. During the thirteen weeks ended March 27, 2019 , the Company closed one restaurant in California and one restaurant in Texas and recognized $0.3 million primarily related to the amortization of ROU assets for the two closed stores. |
Income Taxes | Income Taxes The provision for income taxes, income taxes payable and deferred income taxes is determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If, after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by charging to tax expense to reserve the portion of deferred tax assets which are not expected to be realized. The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where the Company is required to file. When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position the Company takes has to have at least a “more likely than not” chance of being sustained (based on the position’s technical merits) upon challenge by the respective authorities. The term “more likely than not” means a likelihood of more than 50 percent. Otherwise, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the “more likely than not” criterion at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon its effective resolution. Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect the Company’s consolidated financial position, results of operations, and cash flows. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at March 25, 2020 or at December 25, 2019 , and did not recognize interest or penalties during the thirteen weeks ended March 25, 2020 or March 27, 2019 , since there were no material unrecognized tax benefits. Management believes no material changes to the amount of unrecognized tax benefits will occur within the next twelve months. For the thirteen weeks ended March 25, 2020 the Company received a Notice of Proposed Adjustment ("NOPA"), for the years ended December 27, 2017 and December 28, 2016, related to the Company's methodology regarding its ordering of utilization of AMT net operating losses ("NOL). This resulted in payment of $0.4 million and the audit is closed. As a result of the CARES Act, discussed above, this amount is immediately refundable upon filing of a Form 1139. See "Subsequent Event" disclosure above for further discussion of the tax impact of the CARES Act. On July 30, 2014, the Company entered into the income tax receivable agreement (the "TRA"), which calls for the Company to pay to its pre-IPO stockholders 85% of the savings in cash that the Company realizes in its income taxes as a result of utilizing its net operating losses and other tax attributes attributable to preceding periods. For the thirteen weeks ended March 25, 2020 , the Company recorded income tax receivable agreement income of $0.1 million , and for the thirteen weeks ended March 27, 2019 , the Company recorded income tax receivable agreement expense of $0.2 million , related to the amortization of interest expense related to our total expected TRA payments and changes in estimates for actual tax returns filed and future forecasted taxable income. |
Recent Accounting Pronouncements Adopted and Not Yet Adopted and Changes in Accounting Policies | Changes in Accounting Policies Except for the changes below, the Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements. The Company adopted Topic 842 with a date of initial application of December 27, 2018. As a result, the Company has changed its accounting policy for leases as detailed below. The Company’s operations utilize property, facilities, equipment and vehicles owned by the Company or leased from others, the majority of which are operating leases. Additionally, the Company has various contracts with vendors that have been determined to contain an embedded lease in accordance with Topic 842. As of the date of adoption, the Company recognized a ROU asset and lease liability equal to the present value of these leases within its consolidated balance sheet for any leases with terms longer than 12 months. The Company also has three finance leases, subleases facilities to certain franchises and is the lessor for certain property, facilities and equipment owned by the Company. The adoption of Topic 842 did not have an impact on the Company's current accounting policies for these items. Furthermore, the adoption of this standard did not have any impact on the Company’s consolidated statement of operations or the consolidated statement of cash flows. The Company applied Topic 842 using the effective date method, which allowed the Company to apply the standard as of the adoption date, and to recognize the cumulative effect of initially applying Topic 842 as an adjustment to retained earnings at December 27, 2018, if applicable. Therefore, the comparative information has not been adjusted and continues to be reported under Topic 840. However, the Company did not have any impact to its retained earnings. Additionally, the Company elected to apply the package of practical expedients, which allowed for carryforwards of 1) historical lease classifications, 2) determination of whether a contract contains a lease under the new definition of a lease and 3) whether previously capitalized initial direct costs qualify for capitalization. See Note 11, "Leases," for further details. Recently Adopted Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. ASU 2020-04 is effective for a limited time, from March 12, 2020, through December 31, 2022. The Company adopted this ASU on March 12, 2020. The adoption of ASU 2020-04 did not have a significant impact on the Company’s consolidated financial position or results of operations. In February 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement," which finalizes proposed ASU No. 2015-350, and of the same name as part of its disclosure framework project, which focuses on improving the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by U.S. GAAP that is most important to users of each entity’s financial statements. The Company adopted ASU No. 2018-13 during the first quarter of 2020. The adoption of ASU 2018-13 did not have a significant impact on the Company’s consolidated financial position or results of operations. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which finalizes proposed ASU No. 2012-260 "Financial Instruments—Credit Losses (Subtopic 825-15)" and adds Topic 326 "Financial Instruments—Credit Losses", to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted ASU No. 2016-13 during the first quarter of 2020. The adoption of ASU 2016-03 did not have a significant impact on the Company’s consolidated financial position or results of operations. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Accounting Policies [Abstract] | |
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | The following table presents fair value for the interest rate swap at March 25, 2020 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other non-current liabilities - Interest rate swap $ 1,142 $ — $ 1,142 $ — The following table presents fair value for the interest rate swap at December 25, 2019 (in thousands): Fair Value Measurements Using Fair Value Level 1 Level 2 Level 3 Other assets - Interest rate swap $ 360 $ — $ 360 $ — |
Non-Financial Instruments Measured at Fair Value on a Nonrecurring Basis | The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the thirteen weeks ended March 25, 2020 (in thousands): Fair Value Measurements at March 25, 2020 Using Thirteen Weeks Ended March 25, 2020 Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment owned, net $ 39 $ — $ — $ 39 $ 1,377 Certain ROU assets, net $ 926 $ — $ — $ 926 $ 543 The following non-financial instruments were measured at fair value on a nonrecurring basis as of and for the thirteen weeks ended March 27, 2019 (in thousands): Fair Value Measurements at March 27, 2019 Using Thirteen Weeks Ended March 27, 2019 Total Level 1 Level 2 Level 3 Impairment Losses Certain property and equipment - Held for sale $ 4,494 $ — $ — $ 4,494 $ 4,124 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Costs and Related Accumulated Depreciation and Amortization of Major Classes of Property and Equipment | The costs and related accumulated depreciation and amortization of major classes of property and equipment are as follows (in thousands): March 25, 2020 December 25, 2019 Land $ 12,323 $ 12,323 Buildings and improvements 145,406 144,794 Other property and equipment 75,344 75,234 Construction in progress 3,448 4,213 236,521 236,564 Less: accumulated depreciation and amortization (148,619 ) (144,786 ) $ 87,902 $ 91,778 |
Stock-Based Compensation Stock
Stock-Based Compensation Stock Compensation Table (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Stock-based compensation [Abstract] | |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | A summary of stock option activity as of March 25, 2020 and changes during the thirteen weeks ended March 25, 2020 is as follows: Shares Weighted-Average Exercise Price Outstanding - December 25, 2019 2,077,570 $ 8.14 Forfeited, cancelled or expired (42,736 ) $ 11.47 Outstanding - March 25, 2020 2,034,834 $ 8.07 Vested and expected to vest at March 25, 2020 2,026,518 $ 8.05 Exercisable at March 25, 2020 1,518,145 $ 6.93 |
Nonvested Restricted Stock Shares Activity [Table Text Block] | A summary of restricted share activity as of March 25, 2020 and changes during the thirteen weeks ended March 25, 2020 is as follows: Shares Weighted-Average Fair Value Unvested shares at December 25, 2019 588,008 $ 11.23 Forfeited, cancelled, or expired (49,010 ) $ 12.42 Unvested shares at March 25, 2020 538,998 $ 11.12 |
Long-Term Debt Interest Rate Sw
Long-Term Debt Interest Rate Swap (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table shows the financial statement line item and amount of the Company's cash flow hedge accounting on the condensed consolidated balance sheet (in thousands): March 25, 2020 December 25, 2019 Notional Fair value Notional Fair value Other assets - Interest rate swap — — $ 40,000 $ 360 Other liabilities - Interest rate swap $ 40,000 $ 1,142 — — |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location [Table Text Block] | The following table summarizes the effect of the Company's cash flow hedge accounting on the condensed consolidated statements of income (in thousands): Thirteen Weeks Ended March 25, 2020 March 27, 2019 Interest expense on hedged portion of debt $ 429 — Interest income on interest rate swap (39 ) — Interest expense on debt and derivatives, net $ 390 $ — |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block] | The following table summarizes the effect of the Company's cash flow hedge accounting on AOCI for the thirteen weeks ended March 25, 2020 and March 27, 2019 (in thousands): Thirteen Weeks Ended Net Loss Recognized in OCI (Gain) Reclassified from AOCI into Interest expense March 25, 2020 March 27, 2019 March 25, 2020 March 27, 2019 Interest rate swap $ 1,459 — $ (39 ) — |
Other Accrued Expenses and Cu_2
Other Accrued Expenses and Current Liabilities (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Expenses and Current Liabilities | Other accrued expenses and current liabilities consist of the following (in thousands): March 25, 2020 December 25, 2019 Accrued sales and property taxes $ 4,648 $ 4,665 Gift card liability 2,676 3,006 Accrued legal settlements and professional fees 1,037 16,901 Deferred franchise and development fees 670 705 Other 3,185 3,320 Total other accrued expenses and current liabilities $ 12,216 $ 28,597 |
Other Noncurrent Liabilities (T
Other Noncurrent Liabilities (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Noncurrent Liabilities | Other noncurrent liabilities consist of the following (in thousands): March 25, 2020 December 25, 2019 Deferred franchise and development fees $ 5,329 $ 5,612 Derivative liability 1,151 — Other 67 67 Total other noncurrent liabilities $ 6,547 $ 5,679 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) per Share | Below are basic and diluted EPS data for the periods indicated, which are in thousands except for per share data: Thirteen Weeks Ended March 25, 2020 March 27, 2019 Numerator: Net income $ 3,600 $ 913 Denominator: Weighted-average shares outstanding—basic 34,659,160 38,653,702 Weighted-average shares outstanding—diluted 35,347,456 39,496,436 Net income per share—basic $ 0.10 $ 0.02 Net income per share—diluted $ 0.10 $ 0.02 Anti-dilutive securities not considered in diluted EPS calculation 474,373 56,016 |
Schedule of Reconciliation of Basic and Diluted Share Counts | Below is a reconciliation of basic and diluted share counts: Thirteen Weeks Ended March 25, 2020 March 27, 2019 Weighted-average shares outstanding—basic 34,659,160 38,653,702 Dilutive effect of stock options and restricted shares 688,296 842,734 Weighted-average shares outstanding—diluted 35,347,456 39,496,436 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our revenues disaggregated by revenue source and market (in thousands): Thirteen Weeks Ended March 25, 2020 March 27, 2019 Core Market (1) : Company-operated restaurant revenue $ 85,915 $ 85,306 Franchise revenue 3,508 3,499 Franchise advertising fee revenue 2,642 2,717 Total core market $ 92,065 $ 91,522 Non-Core Market (2) : Company-operated restaurant revenue $ 6,719 $ 11,844 Franchise revenue 3,554 2,945 Franchise advertising fee revenue 2,825 2,666 Total non-core market $ 13,098 $ 17,455 Total revenue $ 105,163 $ 108,977 (1) Core Market includes markets with existing company-operated restaurants at the time of the Company's Initial Public Offering ("IPO") on July 28, 2014. (2) Non-Core Market includes markets entered into by the Company subsequent to the IPO date. The following table presents our revenues disaggregated by geographic market: Thirteen Weeks Ended March 25, 2020 March 27, 2019 Greater Los Angeles area market 72.4 % 69.2 % Other markets 27.6 % 30.8 % Total 100 % 100 % |
Schedule of Change in Franchise Contract Liability Balances | The following table provides information about the change in the franchise contract liability balances during the thirteen weeks ended March 25, 2020 and March 27, 2019 (in thousands) : December 25, 2019 $ 6,317 Revenue recognized - beginning balance (318 ) March 25, 2020 $ 5,999 December 26, 2018 $ 5,593 Revenue recognized - beginning balance (104 ) Additional contract liability 140 Revenue recognized - additional contract liability (6 ) March 27, 2019 $ 5,623 |
Schedule of Estimated Revenue to be Recognized Related to Performance Obligations | The following table illustrates the estimated revenue to be recognized in future periods related to performance obligations under the applicable contracts that are unsatisfied as of March 25, 2020 (in thousands): Franchise revenues: 2020 $ 524 2021 491 2022 410 2023 391 2024 357 Thereafter 3,826 Total $ 5,999 |
Leases Leases (Tables)
Leases Leases (Tables) | 3 Months Ended |
Mar. 25, 2020 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands): Thirteen Weeks Ended March 25, 2020 Property Leases Equipment Leases Total Finance lease cost: Interest on lease liabilities 6 — 6 Operating lease cost 6,530 324 6,854 Short-term lease cost — 2 2 Variable lease cost 104 14 118 Sublease income (778 ) — (778 ) Total lease cost $ 5,862 $ 340 $ 6,202 The following table presents the Company’s total lease cost on the condensed consolidated statement of income (in thousands): Thirteen Weeks Ended March 25, 2020 Lease cost – Occupancy and other operating expenses $ 5,879 Lease cost – General & administrative 111 Lease cost – Interest expense 6 Lease cost - Closed-store reserve 206 Total lease cost $ 6,202 During the thirteen weeks ended March 25, 2020 , the Company had the following cash and non-cash activities associated with its leases (in thousands): Thirteen Weeks Ended March 25, 2020 Property Leases Equipment Leases Total Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 6,260 $ 309 $ 6,569 Financing cash flows used for finance leases $ 8 $ — $ 8 Non-cash investing and financing activities: Operating lease ROU assets obtained in exchange for lease liabilities: Operating lease ROU assets $ 307 $ 12 $ 319 Derecognition of ROU assets due to terminations, impairment or modifications $ (543 ) $ — $ (543 ) Operating lease ROU assets obtained and liabilities incurred as a result of adoption of ASC 842: Operating lease ROU assets $ 200,555 $ 4,668 $ 205,223 Operating lease liabilities $ 217,615 $ 4,668 $ 222,283 Other Information Weighted-average remaining lease term—finance leases 2.58 — Weighted-average remaining lease term—operating leases 11.94 2.97 Weighted-average discount rate—finance leases 11.10 % — Weighted-average discount rate—operating leases 4.35 % 3.95 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Information regarding the Company’s minimum future lease obligations as of March 25, 2020 is as follows (in thousands): Finance Operating Leases For the Years Ending Minimum Minimum Minimum December 30, 2020 $ 41 $ 20,080 $ 2,103 December 29, 2021 54 26,702 2,887 December 28, 2022 45 25,694 3,284 December 27, 2023 — 23,289 3,318 December 25, 2024 — 21,018 3,203 Thereafter — 141,124 27,265 Total $ 140 $ 257,907 $ 42,060 Less: imputed interest (2.38% - 11.10%) (31 ) (47,900 ) Present value of lease obligations 109 210,007 Less: current maturities (36 ) (17,585 ) Noncurrent portion $ 73 $ 192,422 Information regarding the Company’s minimum future lease obligations as of December 25, 2019 is as follows (in thousands): Finance Leases Operating Leases For the Years Ending Minimum Minimum Minimum December 30, 2020 $ 54 $ 26,808 $ 2,754 December 29, 2021 54 25,978 2,887 December 28, 2022 45 24,871 3,284 December 27, 2023 — 22,309 3,318 December 25, 2024 — 19,751 3,203 Thereafter — 139,454 27,265 Total $ 153 $ 259,171 $ 42,711 Less: imputed interest (3.96% to 11.10%) (36 ) (45,273 ) Present value of capital lease obligations 117 213,898 Less: current maturities (34 ) (16,406 ) Noncurrent portion $ 83 197,492 |
Finance Lease, Liability, Fiscal Year Maturity [Table Text Block] | Information regarding the Company’s minimum future lease obligations as of March 25, 2020 is as follows (in thousands): Finance Operating Leases For the Years Ending Minimum Minimum Minimum December 30, 2020 $ 41 $ 20,080 $ 2,103 December 29, 2021 54 26,702 2,887 December 28, 2022 45 25,694 3,284 December 27, 2023 — 23,289 3,318 December 25, 2024 — 21,018 3,203 Thereafter — 141,124 27,265 Total $ 140 $ 257,907 $ 42,060 Less: imputed interest (2.38% - 11.10%) (31 ) (47,900 ) Present value of lease obligations 109 210,007 Less: current maturities (36 ) (17,585 ) Noncurrent portion $ 73 $ 192,422 Information regarding the Company’s minimum future lease obligations as of December 25, 2019 is as follows (in thousands): Finance Leases Operating Leases For the Years Ending Minimum Minimum Minimum December 30, 2020 $ 54 $ 26,808 $ 2,754 December 29, 2021 54 25,978 2,887 December 28, 2022 45 24,871 3,284 December 27, 2023 — 22,309 3,318 December 25, 2024 — 19,751 3,203 Thereafter — 139,454 27,265 Total $ 153 $ 259,171 $ 42,711 Less: imputed interest (3.96% to 11.10%) (36 ) (45,273 ) Present value of capital lease obligations 117 213,898 Less: current maturities (34 ) (16,406 ) Noncurrent portion $ 83 197,492 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | Apr. 15, 2020USD ($) | Jul. 30, 2014 | Mar. 25, 2020USD ($)restaurantsuppliersegment | Mar. 27, 2019USD ($)restaurant | Dec. 27, 2017 | Apr. 17, 2020USD ($)restaurant | Dec. 25, 2019USD ($) | Dec. 26, 2018USD ($) |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Repayments of Lines of Credit | $ 8,000,000 | $ 3,000,000 | ||||||
Property and equipment owned, net | $ 87,902,000 | $ 91,778,000 | ||||||
Depreciation | 4,800,000 | |||||||
Number of operating segments | segment | 1 | |||||||
Total amount of outstanding debt | $ 141,500,000 | |||||||
Cash available | 43,404,000 | 6,699,000 | 8,070,000 | $ 6,969,000 | ||||
Assets Held-for-sale, Not Part of Disposal Group, Current | 4,500,000 | |||||||
Proceeds from Long-term Lines of Credit | 52,500,000 | 0 | ||||||
Asset Impairment Charges | 1,900,000 | 4,124,000 | ||||||
Unrecognized tax benefits, accrual of interest or penalties | 0 | 0 | ||||||
Unrecognized tax benefits, interest or penalties expenses | 0 | 0 | ||||||
Percentage of cash savings in taxes realized as a result of utilizing net operating losses payable to pre-IPO stockholders | 85.00% | |||||||
Income tax receivable agreement (income) expense | (120,000) | 171,000 | ||||||
Impairment of Long-Lived Assets to be Disposed of | 1,920,000 | $ 0 | ||||||
Impairment of Right-of-Use Assets | 543,000 | |||||||
Indefinite-lived Intangible Assets | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Asset Impairment Charges | $ 0 | |||||||
Supplier Concentration Risk | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of suppliers | supplier | 1 | |||||||
Supplier Concentration Risk | Supplier One | Accounts Payable | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 12.20% | 11.70% | ||||||
Supplier Concentration Risk | Largest Supplier One | Purchased | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 27.40% | 26.60% | ||||||
Geographic Concentration Risk | Revenue | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 100.00% | 100.00% | ||||||
Subsequent Event | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Letters of Credit Outstanding, Amount | $ 2,700,000 | |||||||
Repayments of Lines of Credit | $ 2,700,000 | |||||||
Fair Value, Measurements, Nonrecurring | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Property and equipment owned, net | $ 39,000 | $ 4,494,000 | ||||||
Right-of-Use Assets, Net | 926,000 | |||||||
Fair Value, Recurring [Member] | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Derivative Liability, Fair Value, Gross Liability | 1,142,000 | |||||||
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Nonrecurring | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Property and equipment owned, net | 0 | 0 | ||||||
Right-of-Use Assets, Net | 0 | |||||||
Fair Value, Inputs, Level 1 | Fair Value, Recurring [Member] | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Derivative Liability, Fair Value, Gross Liability | 0 | |||||||
Derivative Asset, Fair Value, Gross Asset | 0 | |||||||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Nonrecurring | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Property and equipment owned, net | 0 | 0 | ||||||
Right-of-Use Assets, Net | 0 | |||||||
Fair Value, Inputs, Level 2 | Fair Value, Recurring [Member] | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Derivative Asset, Fair Value, Gross Asset | 360,000 | |||||||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Property and equipment owned, net | 39,000 | $ 4,494,000 | ||||||
Right-of-Use Assets, Net | 926,000 | |||||||
Fair Value, Inputs, Level 3 | Fair Value, Recurring [Member] | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Derivative Liability, Fair Value, Gross Liability | $ 0 | |||||||
Derivative Asset, Fair Value, Gross Asset | $ 0 | |||||||
Los Angeles | Geographic Concentration Risk | Revenue | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of concentration | 72.40% | 69.20% | ||||||
TEXAS | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Restaurants | restaurant | 1 | |||||||
Number of restaurants closed | 1 | 1 | ||||||
ARIZONA | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Restaurants | restaurant | 7 | |||||||
CALIFORNIA | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Restaurants | restaurant | 3 | 4 | ||||||
Number of restaurants closed | 1 | |||||||
closed store [Member] | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Operating Lease, Expense | $ 500,000 | $ 300,000 | ||||||
Common Stock [Member] | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Treasury Stock, Value, Acquired, Cost Method | (2,000) | |||||||
Additional Paid-in Capital [Member] | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Treasury Stock, Value, Acquired, Cost Method | $ (3,381,000) | |||||||
Entity Operated Units | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Restaurants | restaurant | 195 | |||||||
Entity Operated Units | Subsequent Event | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Restaurants Remain Closed | restaurant | 3 | |||||||
Number of Restaurants Temporary Closed | restaurant | 18 | |||||||
Number of Restaurants Reopened | restaurant | 15 | |||||||
Franchised Units | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Restaurants | restaurant | 284 | |||||||
Franchised Units | Subsequent Event | ||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Number of Restaurants Remain Closed | restaurant | 4 | |||||||
Number of Restaurants Temporary Closed | restaurant | 12 | |||||||
Number of Restaurants Reopened | restaurant | 8 |
Property and Equipment - Sched
Property and Equipment - Schedule of Costs and Related Accumulated Depreciation and Amortization of Major Classes of Property (Details) - USD ($) $ in Thousands | Mar. 25, 2020 | Dec. 25, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 236,521 | $ 236,564 |
Less: accumulated depreciation and amortization | (148,619) | (144,786) |
Property and equipment, net | 87,902 | 91,778 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 12,323 | 12,323 |
Buildings and improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 145,406 | 144,794 |
Other property and equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 75,344 | 75,234 |
Construction in progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 3,448 | $ 4,213 |
Property and Equipment - Addit
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 4,800 | |
Asset Impairment Charges | $ 1,900 | 4,124 |
Assets Held-for-sale, Not Part of Disposal Group, Current | 4,500 | |
Impairment of Long-Lived Assets to be Disposed of | 0 | $ 4,124 |
Impaired Long-Lived Assets Held and Used, Asset Name [Domain] | ||
Property, Plant and Equipment [Line Items] | ||
Asset Impairment Charges | $ 1,377 |
Stock-Based Compensation - Add
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 25, 2020 | Mar. 27, 2019 | Dec. 25, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock, options outstanding (shares) | 2,034,834 | 2,077,570 | |
Common stock, options vested (shares) | 1,518,145 | ||
Common stock, options unvested (shares) | 516,689 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 8.07 | $ 8.14 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (42,736) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ 11.47 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 2,026,518 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price | $ 8.05 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 1,518,145 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 6.93 | ||
Unvested restricted shares outstanding (shares) | 538,998 | 588,008 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 11.12 | $ 11.23 | |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Forfeited And Expirations In Period | (49,010) | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Forfeitures And Expired Weighted Average Grant Date Fair Value | $ 12.42 | ||
Stock-based compensation | $ 534 | $ 488 | |
Premium Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock, options outstanding (shares) | 1,159,366 | ||
Employee Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 1,500 | ||
Unrecognized compensation expense, period for recognition | 2 years 8 months 5 days | ||
Restricted Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation expense, period for recognition | 2 years 6 months 25 days | ||
Unvested restricted shares outstanding (shares) | 430,823 | ||
Unrecognized compensation expense | $ 3,700 | ||
Performance Shares | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation expense, period for recognition | 3 years 1 month 12 days | ||
Unvested restricted shares outstanding (shares) | 36,058 | ||
Unrecognized compensation expense | $ 100 | ||
Restricted Stock Units (RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation expense, period for recognition | 2 years 1 month 12 days | ||
Unvested restricted shares outstanding (shares) | 72,117 | ||
Unrecognized compensation expense | $ 500 |
Long-Term Debt - Additional In
Long-Term Debt - Additional Information (Details) - USD ($) | Jul. 13, 2018 | Mar. 25, 2020 | Mar. 27, 2019 | Dec. 25, 2019 |
Debt Instrument [Line Items] | ||||
Derivative, Fixed Interest Rate | 1.31% | |||
Derivative, Variable Interest Rate | 1.50% | |||
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | $ (39,000) | |||
Revolver loan | 141,500,000 | $ 97,000,000 | ||
Proceeds from (Repayments of) Lines of Credit | 44,500,000 | $ 3,000,000 | ||
Repayments of Lines of Credit | 8,000,000 | $ 3,000,000 | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 0 | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ 1,459,000 | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | ||||
Debt Instrument [Line Items] | ||||
Senior secured revolving facility | $ 150,000,000 | |||
Senior secured revolving facility term | 5 years | |||
Revolving credit facility maturity period | Jul. 13, 2023 | |||
Debt instrument basis percentage | 1.00% | |||
Letters of credit outstanding | $ 8,400,000 | |||
Revolver loan | 141,500,000 | |||
Amount of borrowings available | 100,000 | |||
Principal payments prior to maturity | $ 0 | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 3.11% | 3.96% | ||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 3.29% | 4.01% | ||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | Federal Funds Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis percentage | 0.50% | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis percentage | 1.25% | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis percentage | 2.25% | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis percentage | 0.25% | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis percentage | 1.25% | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Sub limit of revolving facility | $ 15,000,000 | |||
Senior Secured Revolving Credit Facility | Credit Agreement Two Thousand Eighteen | Swing Line Loans | ||||
Debt Instrument [Line Items] | ||||
Sub limit of revolving facility | $ 15,000,000 | |||
Interest Rate Swap [Member] | ||||
Debt Instrument [Line Items] | ||||
Derivative Asset, Notional Amount | $ 40,000,000 | $ 40,000,000 | ||
Interest Expense, Debt | 429,000 | $ 0 | ||
Interest Income, Other | (39,000) | 0 | ||
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | (39,000) | 0 | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 1,459,000 | 0 | ||
Interest Income (Expense), Net | $ 390,000 | $ 0 |
Other Accrued Expenses and Cu_3
Other Accrued Expenses and Current Liabilities - Schedule of Other Accrued Expenses and Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 25, 2020 | Dec. 25, 2019 |
Payables and Accruals [Abstract] | ||
Accrued sales and property taxes | $ 4,648 | $ 4,665 |
Contract with Customer, Liability, Current | 2,676 | 3,006 |
Accrued legal settlements and professional fees | 1,037 | 16,901 |
Deferred Franchise and Development Fees, Current | 670 | 705 |
Other | 3,185 | 3,320 |
Total other accrued expenses and current liabilities | $ 12,216 | $ 28,597 |
Other Noncurrent Liabilities -
Other Noncurrent Liabilities - Schedule of Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Mar. 25, 2020 | Dec. 25, 2019 |
Other Liabilities, Noncurrent [Abstract] | ||
Deferred franchise and development fees | $ 5,329 | $ 5,612 |
Derivative Liability | 1,151 | 0 |
Other | 67 | 67 |
Total other noncurrent liabilities | $ 6,547 | $ 5,679 |
Commitments and Contingencies
Commitments and Contingencies - Additional Information (Details) | 3 Months Ended | ||
Mar. 25, 2020USD ($)lawsuitagreementlease | Dec. 25, 2019USD ($) | Dec. 26, 2018USD ($) | |
Other Commitments [Line Items] | |||
Date of class action filed in court | On or about February 24, 2014 | ||
Number of lawsuits consolidated | lawsuit | 2 | ||
Accrual associated with loss contingencies | $ 0 | ||
Officers | |||
Other Commitments [Line Items] | |||
Number of at-will employment agreements | agreement | 3 | ||
Property Lease Guarantee | |||
Other Commitments [Line Items] | |||
Accrual associated with loss contingencies | $ 100,000 | ||
Number of leases assigned to franchisees | lease | 4 | ||
Latest lease expiration year | 2036 | ||
Contingent lease obligations, maximum exposure | $ 2,900,000 | ||
Contingent lease obligations, maximum exposure, if discounted at estimated pre-tax cost of debt | 2,500,000 | ||
Chicken | |||
Other Commitments [Line Items] | |||
Purchase commitments, estimated obligations | 19,500,000 | ||
Impact Damages | |||
Other Commitments [Line Items] | |||
Value of damages awarded | 4,356,600 | ||
Lost Opportunity Damages | |||
Other Commitments [Line Items] | |||
Value of damages awarded | 4,481,206 | ||
Total Damages | |||
Other Commitments [Line Items] | |||
Value of damages awarded | $ 8,837,806 | ||
Eliott Olvera, et al v. El Pollo Loco, Inc., et al [Member] | |||
Other Commitments [Line Items] | |||
Accrual associated with loss contingencies | $ 16,300,000 | ||
Daniel Turocy, et al. and Ron Huston et al v. El Pollo Loco Holdings, Inc., et al [Member] | |||
Other Commitments [Line Items] | |||
Accrual associated with loss contingencies | $ 20,000,000 |
Net Income (Loss) Per Share -
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Numerator: | ||
Net income | $ 3,600 | $ 913 |
Denominator: | ||
Weighted-average shares outstanding—basic (shares) | 34,659,160 | 38,653,702 |
Weighted-average shares outstanding—diluted (shares) | 35,347,456 | 39,496,436 |
Net income (loss) per share—basic (usd per share) | $ 0.10 | $ 0.02 |
Net income (loss) per share—diluted (usd per share) | $ 0.10 | $ 0.02 |
Anti-dilutive securities not considered in diluted EPS calculation (shares) | 474,373 | 56,016 |
Net Income (Loss) Per Share _2
Net Income (Loss) Per Share - Schedule of Reconciliation of Basic and Diluted Share Counts (Details) - shares | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted-average shares outstanding—basic (shares) | 34,659,160 | 38,653,702 |
Dilutive effect of stock options and restricted shares (shares) | 688,296 | 842,734 |
Weighted-average shares outstanding— diluted (shares) | 35,347,456 | 39,496,436 |
Net Income (Loss) Per Share Net
Net Income (Loss) Per Share Net Income (Loss) Per Share (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 25, 2020 | May 19, 2019 | Aug. 02, 2018 | |
Equity, Class of Treasury Stock [Line Items] | |||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Forfeited And Expirations In Period | 49,010 | ||
2018 Stock Repurchase Plan [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 20 | ||
2019 Stock Repurchase Plan [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 30 |
Related Party Transactions - A
Related Party Transactions - Additional Information (Details) - Trimaran Pollo Partners, LLC | 3 Months Ended |
Mar. 25, 2020 | |
Related Party Transaction [Line Items] | |
Company's outstanding common stock owned by Trimaran Pollo Partners, L.L.C. | 47.70% |
Minimum | |
Related Party Transaction [Line Items] | |
Outstanding membership interest percentage, at least | 40.00% |
Noncontrolling Interest [Member] | Minimum | |
Related Party Transaction [Line Items] | |
Ownership percentage by stockholders | 40.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 25, 2020 | Dec. 25, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Loyalty Rewards Program, Points Needed For One Reward | $ 100 | |
Loyalty Rewards Program, Award Earned | $ 10 | |
Loyalty Rewards Program, Expiration Period For Inactivity | 6 years | |
Revenue allocated to loyalty points not redeemed | $ 1,000,000 | $ 1,100,000 |
Loyalty rewards program, expected loyalty points redemption period (in years) | 1 year | |
Unsatisfied performance obligations | $ 5,999,000 | |
Franchise license | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Franchise agreement term (in years) | 20 years | |
Franchise agreement renewal term (in years) | 20 years | |
Hardware Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Unsatisfied performance obligations | $ 0 | |
Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Satisfied over renewal term (in years) | 10 years | |
Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Satisfied over renewal term (in years) | 20 years |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Revenues Disaggregated by Revenue Source and Market (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 105,163 | $ 108,977 |
Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 92,065 | 91,522 |
Non-Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 13,098 | 17,455 |
Company-operated restaurant revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 92,634 | 97,150 |
Company-operated restaurant revenue | Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 85,915 | 85,306 |
Company-operated restaurant revenue | Non-Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 6,719 | 11,844 |
Franchise revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 7,062 | 6,444 |
Franchise revenue | Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,508 | 3,499 |
Franchise revenue | Non-Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,554 | 2,945 |
Franchise advertising fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,467 | 5,383 |
Franchise advertising fee revenue | Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,642 | 2,717 |
Franchise advertising fee revenue | Non-Core Market | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 2,825 | $ 2,666 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Revenues Disaggregated by Geographic Market (Details) - Revenue - Geographic Concentration Risk | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Percentage of concentration | 100.00% | 100.00% |
Los Angeles | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of concentration | 72.40% | 69.20% |
Other than Los Angeles | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of concentration | 27.60% | 30.80% |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Change in Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2020 | Mar. 27, 2019 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
December 25, 2019 | $ 6,317 | $ 5,593 |
Revenue recognized - beginning balance | (318) | (104) |
Additional contract liability | 140 | |
Revenue recognized - additional contract liability | (6) | |
43915 | $ 5,999 | $ 5,623 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Unsatisfied Performance Obligation (Details) $ in Thousands | Mar. 25, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 5,999 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-26 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-26 | Franchise Contract | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 524 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Franchise Contract | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 491 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Franchise Contract | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 410 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Franchise Contract | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 391 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Franchise Contract | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 357 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Franchise Contract | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations | $ 3,826 |
Leases Leases (Details)
Leases Leases (Details) $ in Thousands | 3 Months Ended | |||
Mar. 25, 2020USD ($) | Mar. 27, 2019USD ($) | Dec. 25, 2019USD ($) | Dec. 27, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Finance Lease, Liability, to be Paid, Remainder of Fiscal Year | $ 41 | |||
Capital Leases, Future Minimum Payments Due, Next Twelve Months | $ 54 | |||
Operating Lease, Payments | 6,569 | |||
Property held under operating leases, net (ROU asset) | 187,610 | 192,395 | $ 205,223 | |
Operating Lease, Cost | 6,854 | |||
Short-term Lease, Cost | 2 | |||
Variable Lease, Cost | 118 | |||
Sublease Income | (778) | |||
Lease, Cost | 6,202 | |||
Operating Lease, Liability | 210,007 | 213,898 | 222,283 | |
Finance Lease, Principal Payments | 8 | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 319 | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 20,080 | 26,808 | ||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, Next Twelve Months | 2,103 | 2,754 | ||
Finance Lease, Liability, to be Paid, Year Two | 54 | |||
Capital Leases, Future Minimum Payments Due in Two Years | 54 | |||
Operating Leases, Future Minimum Payments, Due in Two Years | 26,702 | 25,978 | ||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Two Years | 2,887 | 2,887 | ||
Finance Lease, Liability, to be Paid, Year Three | 45 | |||
Capital Leases, Future Minimum Payments Due in Three Years | 45 | |||
Operating Leases, Future Minimum Payments, Due in Three Years | 25,694 | 24,871 | ||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Three Years | 3,284 | 3,284 | ||
Finance Lease, Liability, to be Paid, Year Four | 0 | |||
Capital Leases, Future Minimum Payments Due in Four Years | 0 | |||
Operating Leases, Future Minimum Payments, Due in Four Years | 23,289 | 22,309 | ||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Four Years | 3,318 | 3,318 | ||
Finance Lease, Liability, to be Paid, Year Five | 0 | |||
Capital Leases, Future Minimum Payments Due in Five Years | 0 | |||
Operating Leases, Future Minimum Payments, Due in Five Years | 21,018 | 19,751 | ||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, within Five Years | 3,203 | 3,203 | ||
Finance Lease, Liability, to be Paid, after Year Five | 0 | |||
Capital Leases, Future Minimum Payments Due Thereafter | 0 | |||
Operating Leases, Future Minimum Payments, Due Thereafter | 141,124 | 139,454 | ||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals, Thereafter | 27,265 | 27,265 | ||
Finance Lease, Liability, Payment, Due | 140 | |||
Capital Leases, Future Minimum Payments Due | 153 | |||
Operating Leases, Future Minimum Payments Due | 257,907 | 259,171 | ||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals | 42,060 | 42,711 | ||
Finance Lease, Liability, Undiscounted Excess Amount | (31) | |||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (47,900) | (45,273) | ||
Finance Lease, Liability | 109 | |||
Capital Leases, Future Minimum Payments, Interest Included in Payments | (36) | |||
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments | 117 | |||
Capital Lease Obligations, Current | (36) | (34) | ||
Obligations under finance leases, net of current portion | 73 | 83 | ||
Finance Lease, Liability, Current | (36) | |||
Current portion of obligations under operating leases | (17,585) | (16,406) | ||
Finance Lease, Liability, Noncurrent | 73 | |||
Finance Lease, Interest Expense | 6 | |||
Operating Lease, Liability, Noncurrent | $ 192,422 | $ 197,492 | ||
Number Of Finance Leases | 1 | |||
Number of Restaurants with lease modification | 3 | |||
Operating Lease, Lease Income | $ 100 | $ 128 | ||
Operating Lease, Impairment Loss | (543) | |||
Impairment of Right-of-Use Assets | 543 | |||
Operating Expense [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, Cost | 5,879 | |||
General and Administrative Expense [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, Cost | 111 | |||
Interest Expense [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, Cost | 6 | |||
Restructuring Charges [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, Cost | $ 206 | |||
Minimum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessor, Operating Lease, Term of Contract | 3 years | |||
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 2.38% | 3.96% | ||
Maximum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessor, Operating Lease, Term of Contract | 20 years | |||
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 11.10% | 11.10% | ||
Property lease modification [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 300 | |||
Property Lease [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Payments | 6,260 | |||
Operating Lease, Cost | 6,530 | |||
Short-term Lease, Cost | 0 | |||
Variable Lease, Cost | 104 | |||
Sublease Income | (778) | |||
Lease, Cost | 5,862 | |||
Finance Lease, Principal Payments | 8 | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 307 | |||
Finance Lease, Weighted Average Remaining Lease Term | 2 years 7 months | |||
Operating Lease, Weighted Average Discount Rate, Percent | 4.35% | |||
Operating Lease, Weighted Average Remaining Lease Term | 11 years 11 months 10 days | |||
Finance Lease, Weighted Average Discount Rate, Percent | 11.10% | |||
Finance Lease, Interest Expense | $ 6 | |||
Operating Lease, Impairment Loss | (543) | |||
Property Lease [Member] | Accounting Standards Update 2016-02 [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Property held under operating leases, net (ROU asset) | 200,555 | |||
Operating Lease, Liability | 217,615 | |||
Equipment Lease [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Payments | 309 | |||
Operating Lease, Cost | 324 | |||
Short-term Lease, Cost | 2 | |||
Variable Lease, Cost | 14 | |||
Sublease Income | 0 | |||
Lease, Cost | 340 | |||
Finance Lease, Principal Payments | 0 | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 12 | |||
Operating Lease, Weighted Average Discount Rate, Percent | 3.95% | |||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 11 months 20 days | |||
Finance Lease, Weighted Average Discount Rate, Percent | 0.00% | |||
Operating Lease, Impairment Loss | $ 0 | |||
Equipment Lease [Member] | Accounting Standards Update 2016-02 [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Property held under operating leases, net (ROU asset) | 4,668 | |||
Operating Lease, Liability | $ 4,668 | |||
Lease Not Yet Commenced [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Number Of Leases | 1 |
Uncategorized Items - loco-2020
Label | Element | Value |
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | us-gaap_StockGrantedDuringPeriodValueSharebasedCompensation | $ 488,000 |
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | us-gaap_AdjustmentsRelatedToTaxWithholdingForShareBasedCompensation | 16,000 |
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodValueRestrictedStockAwardNetOfForfeitures | 0 |
Retained Earnings [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (110,888,000) |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (109,975,000) |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ 913,000 |
Common Stock [Member] | ||
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | us-gaap_SharesPaidForTaxWithholdingForShareBasedCompensation | (1,575) |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 390,000 |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 388,000 |
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodSharesRestrictedStockAwardNetOfForfeitures | (22,118) |
Shares, Outstanding | us-gaap_SharesOutstanding | 39,009,451 |
Shares, Outstanding | us-gaap_SharesOutstanding | 38,730,204 |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Forfeited And Expirations In Period | loco_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedAndExpirationsInPeriod | (255,554) |
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodValueRestrictedStockAwardNetOfForfeitures | $ 0 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 375,734,000 |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 372,825,000 |
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | us-gaap_AdjustmentsRelatedToTaxWithholdingForShareBasedCompensation | (16,000) |
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodValueRestrictedStockAwardNetOfForfeitures | $ 0 |