Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Jan. 01, 2023 | Mar. 01, 2023 | Jul. 03, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Jan. 01, 2023 | ||
Current Fiscal Year End Date | --01-01 | ||
Entity File Number | 001-33174 | ||
Entity Registrant Name | CARROLS RESTAURANT GROUP, INC. | ||
Entity Address, Address Line One | 968 James Street | ||
Entity Address, Postal Zip Code | 13203 | ||
Entity Address, City or Town | Syracuse, | ||
Entity Address, State or Province | NY | ||
City Area Code | 315 | ||
Local Phone Number | 424-0513 | ||
Title of 12(b) Security | Common Stock, par value $.01 per share | ||
Trading Symbol | TAST | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 56,314,947 | ||
Entity Public Float | $ 74,884,305 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive Proxy Statement for Carrols Restaurant Group, Inc's 2023 Annual Meeting of Stockholders, which is expected to be filed pursuant to Regulation 14A no later than 120 days after the conclusion of Carrols Restaurant Group, Inc.'s fiscal year ended January 1, 2023, are incorporated by reference into Part III of this annual report. | ||
Entity Central Index Key | 0000809248 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-3804854 | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Small Business | true | ||
Auditor Location | Rochester, New York | ||
Auditor Firm ID | 34 |
Audit Information
Audit Information | 12 Months Ended |
Jan. 01, 2023 | |
Audit Information [Abstract] | |
Auditor Location | Rochester, New York |
Auditor Name | Deloitte & Touche LLP |
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
ASSETS | ||
Cash | $ 18,364 | $ 29,151 |
Receivables, Net, Current | 19,933 | 16,644 |
Inventory, Net | 14,417 | 14,023 |
Prepaid expenses and other current assets | 15,562 | 8,530 |
Total current assets | 68,276 | 68,348 |
Property and equipment, net | 312,346 | 337,702 |
Franchise rights, net | 312,804 | 326,769 |
Goodwill | 107,751 | 124,451 |
Franchise agreements, net | 28,256 | 30,788 |
Operating right-of-use assets, net | 763,935 | 791,763 |
Other assets | 14,350 | 7,243 |
Total assets | 1,607,718 | 1,687,064 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current portion of long-term debt | 7,341 | 5,794 |
Less: current portion | 47,408 | 44,688 |
Accounts payable | 30,491 | 31,164 |
Accrued interest | 9,643 | 9,433 |
Accrued payroll, related taxes and benefits | 49,934 | 50,855 |
Accrued real estate taxes | 8,896 | 8,256 |
Other liabilities | 25,687 | 18,433 |
Total current liabilities | 179,400 | 168,623 |
Total Long-term Debt | 479,756 | 465,317 |
Operating Lease, Liability, Noncurrent | 776,465 | 802,959 |
Deferred Income Tax Liabilities, Net | 7,665 | 7,617 |
Accrued postretirement benefits | 1,347 | 1,552 |
Other liabilities | 12,243 | 26,772 |
Total liabilities | 1,456,876 | 1,472,840 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Preferred stock, par value $.01 | 0 | 0 |
Voting common stock, par value $.01 | 530 | 520 |
Additional paid-in capital | 292,708 | 287,816 |
Retained Earnings | (136,968) | (61,396) |
Accumulated other comprehensive income | 8,702 | 1,411 |
Treasury stock, at cost | (14,130) | (14,127) |
Total stockholders' equity | 150,842 | 214,224 |
Total liabilities and stockholders' equity | $ 1,607,718 | $ 1,687,064 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Franchise rights, accumulated amortization | $ 16,975 | $ 14,608 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares issued | 100 | 100 |
Preferred stock, shares outstanding | 100 | 100 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 54,928,225 | 50,903,111 |
Common stock, shares outstanding | 53,374,341 | 49,932,558 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Costs and expenses: | |||
Cost of sales | $ 534,238 | $ 499,685 | $ 452,738 |
Restaurant wages and related expenses | 585,204 | 549,933 | 498,127 |
Lessee, Operating Leases, Rent Expense, Net | 125,481 | 122,662 | 118,444 |
Other restaurant operating expenses | 274,557 | 257,774 | 236,059 |
Advertising expense | 69,389 | 65,433 | 60,735 |
General and administrative | 88,072 | 83,660 | 84,051 |
Depreciation and amortization | 78,068 | 80,798 | 81,727 |
Impairment and other lease charges | 21,877 | 4,470 | 12,778 |
Other expense (income) | (926) | (1,186) | (1,271) |
Total operating expenses | 1,775,960 | 1,663,229 | 1,543,388 |
Income (loss) from operations | (45,520) | (10,859) | 4,114 |
Interest Expense | 30,841 | 28,791 | 27,283 |
Loss on extinguishment of debt | 8,538 | 0 | |
Income (loss) before income taxes | (76,361) | (48,188) | (23,169) |
Provision (benefit) for income taxes | (789) | (5,159) | 6,294 |
Net income (loss) | $ (75,572) | $ (43,029) | $ (29,463) |
Basic net income (loss) per share (dollars per share) | $ (1.49) | $ (0.86) | $ (0.58) |
Diluted net income (loss) per share (dollars per share) | $ (1.49) | $ (0.86) | $ (0.58) |
Basic weighted average common shares outstanding | 50,718,387 | 49,899,274 | 50,751,185 |
Diluted weighted average common shares outstanding | 50,718,387 | 49,899,274 | 50,751,185 |
Other comprehensive income (loss), net of tax: | |||
Net income (loss) | $ (75,572) | $ (43,029) | $ (29,463) |
Change in postretirement benefit obligations, net of tax | 7,291 | 4,426 | (5,284) |
Comprehensive income (loss) | (68,281) | (38,603) | (34,747) |
Restaurant sales | |||
Revenue | $ 1,730,440 | $ 1,652,370 | $ 1,547,502 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income (Loss) Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Income Statement [Abstract] | |||
Stock-based compensation | $ 4,902 | $ 6,234 | $ 5,223 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] |
Common stock, shares outstanding at Dec. 29, 2019 | 51,049,377 | 100 | 553,112 | ||||
Balance at Dec. 29, 2019 | $ 309,462 | $ 510 | $ 301,251 | $ 11,096 | $ 622 | $ (4,017) | |
Balance (Accounting Standards Update 2016-02 [Member]) at Dec. 29, 2019 | (4,221) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 5,223 | 5,223 | |||||
Vesting of non-vested shares, shares | 436,739 | ||||||
Vesting of non-vested shares | 0 | $ 5 | (5) | ||||
Treasury Stock, Shares, Acquired | 1,543,622 | ||||||
Repurchase of treasury stock | (10,053) | $ (10,053) | |||||
Net income (loss) | (29,463) | (29,463) | |||||
Change in postretirement benefit obligations | 584 | 584 | |||||
Common stock, shares outstanding at Jan. 03, 2021 | 51,486,116 | 100 | 2,096,734 | ||||
Balance at Jan. 03, 2021 | 271,532 | $ 515 | 306,469 | (18,367) | (3,015) | $ (14,070) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 6,234 | 6,234 | |||||
Vesting of non-vested shares, shares | 551,395 | ||||||
Vesting of non-vested shares | 0 | $ 5 | (5) | ||||
Treasury Stock, Shares, Acquired | 8,219 | ||||||
Repurchase of treasury stock | (57) | $ (57) | |||||
Net income (loss) | (43,029) | (43,029) | |||||
Change in Valuation of Interest Rate Swap | 4,710 | 4,710 | |||||
Change in Valuation of Interest Rate Swap | Accounting Standards Update 2016-02 [Member] | (4,221) | ||||||
Change in postretirement benefit obligations | $ (284) | (284) | |||||
Common stock, shares outstanding at Jan. 02, 2022 | 49,932,558 | 52,037,511 | 100 | 2,104,953 | |||
Balance at Jan. 02, 2022 | $ 214,224 | $ 520 | 287,816 | (61,396) | 1,411 | $ (14,127) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 4,902 | 4,902 | |||||
Vesting of non-vested shares, shares | 972,903 | ||||||
Vesting of non-vested shares | 0 | $ 10 | (10) | ||||
Treasury Stock, Shares, Acquired | 2,350 | ||||||
Repurchase of treasury stock | (3) | $ (3) | |||||
Special cash dividend | (24,882) | (24,882) | |||||
Net income (loss) | (75,572) | (75,572) | |||||
Change in Valuation of Interest Rate Swap | 7,273 | 7,273 | |||||
Change in postretirement benefit obligations | $ 18 | 18 | |||||
Common stock, shares outstanding at Jan. 01, 2023 | 53,374,341 | 53,010,414 | 100 | 2,107,303 | |||
Balance at Jan. 01, 2023 | $ 150,842 | $ 530 | $ 292,708 | $ (136,968) | $ 8,702 | $ (14,130) |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity Parentheticals - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Common stock, shares outstanding | 53,374,341 | 49,932,558 | |
Change in Valuation of Interest Rate Swap | $ 7,273 | $ 4,710 | |
Special cash dividend | (24,882) | ||
Accumulated Defined Benefit Plans Adjustment [Member] | |||
Other Comprehensive Income (Loss), Tax | 6 | 94 | $ 194 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |||
Other Comprehensive Income (Loss), Tax | $ 800 | $ 2,002 | $ 1,841 |
Preferred Stock [Member] | |||
Common stock, shares outstanding | 100 | 100 | 100 |
Treasury Stock [Member] | |||
Common stock, shares outstanding | 2,107,303 | 2,104,953 | 2,096,734 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Change in Valuation of Interest Rate Swap | $ 7,273 | $ 4,710 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Cash flows provided from (used for) operating activities: | |||
Net income (loss) | $ (75,572) | $ (43,029) | $ (29,463) |
Adjustments to reconcile net income to net cash provided from operating activities: | |||
Loss (gain) on disposals of property and equipment | 1,572 | 8 | (994) |
Stock-based compensation | 4,902 | 6,234 | 5,223 |
Impairment and other lease charges | 21,877 | 4,470 | 12,778 |
Depreciation and amortization | 78,068 | 80,798 | 81,727 |
Amortization of deferred financing costs | 2,165 | 2,446 | 2,170 |
Amortization of bond premium and discount on debt | 128 | 487 | 539 |
Deferred income taxes | (752) | (5,123) | 6,026 |
Loss on extinguishment of debt - non-cash | 0 | 8,538 | 0 |
Trade and other receivables | (3,853) | 3,218 | (6,417) |
Accounts payable | 252 | 1,100 | (5,927) |
Accrued interest | 210 | 8,777 | (245) |
Accrued payroll, related taxes and benefits | (11,729) | 1,438 | 18,103 |
Increase (Decrease) in Other Operating Liabilities | 706 | 903 | 10,993 |
Change in operating right-of-use assets and operating lease liabilities, net | 3,978 | 8,147 | 10,906 |
Other | (1,148) | (7,541) | (1,474) |
Net cash provided from operating activities | 20,804 | 70,871 | 103,945 |
Cash flows used for investing activities: | |||
New restaurant development | (8,881) | (9,000) | (17,824) |
Restaurant remodeling | (9,139) | (16,712) | (15,317) |
Other restaurant capital expenditures | (16,639) | (17,045) | (13,064) |
Corporate and restaurant information systems | (3,560) | (9,006) | (10,685) |
Total capital expenditures | (38,219) | (51,763) | (56,890) |
Acquisition of restaurants, net of cash acquired | 0 | (30,819) | 0 |
Proceeds from Sale of Other Assets, Investing Activities | 864 | 229 | 0 |
Proceeds from insurance recoveries | 54 | 1,523 | 2,071 |
Properties purchased for sale-leaseback | (3,996) | 0 | (15,537) |
Proceeds from sale-leaseback transactions | 4,052 | 22,251 | 22,499 |
Net cash used for investing activities | (37,245) | (58,579) | (47,857) |
Cash flows provided from (used for) financing activities: | |||
Proceeds from issuance of senior secured second lien notes | 0 | 300,000 | 0 |
Repayments of Unsecured Debt | (4,250) | (321,375) | (4,625) |
Proceeds from Issuance of Unsecured Debt | 0 | 0 | 71,250 |
Borrowings under new revolving credit facility | 109,000 | 47,063 | 150,000 |
Repayments under new revolving credit facility | (96,500) | (47,063) | (195,750) |
Proceeds from lease financing obligations | 0 | 4,594 | 0 |
Payment of Special Cash Dividend, Financing Activities | 0 | (24,882) | 0 |
Payments on finance lease liabilities | (2,552) | (981) | (1,617) |
Costs associated with financing long-term debt | (41) | (5,404) | (3,303) |
Purchase of treasury shares | (3) | (57) | (10,053) |
Net cash provided from (used for) financing activities | 5,654 | (48,105) | 5,902 |
Net increase (decrease) in cash | (10,787) | (35,813) | 61,990 |
Cash and cash equivalents, beginning of period | 29,151 | 64,964 | 2,974 |
Cash and cash equivalents, end of period | 18,364 | 29,151 | 64,964 |
Supplemental disclosures: | |||
Interest paid on long-term debt | 27,952 | 16,976 | 24,714 |
Interest paid on lease financing obligations | 103 | 104 | 104 |
Interest paid on finance leases | 723 | 133 | 130 |
Accruals for capital expenditures | 1,912 | 2,858 | 1,241 |
Income taxes paid (refunded), net | 0 | (13) | 153 |
Finance lease obligations acquired or incurred | 9,085 | 6,383 | 754 |
Gain (loss) on sale-leaseback transactions | (425) | (22) | 189 |
Operating lease assets and liabilities resulting from lease modifications and new leases | 23,773 | 36,633 | 50,978 |
Operating cash flows related to operating leases | $ 102,529 | $ 100,660 | $ 98,561 |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 12 Months Ended |
Jan. 01, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | Business DescriptionAt January 1, 2023 Carrols Restaurant Group, Inc. ("Carrols Restaurant Group") operated, as franchisee, 1,022 Burger King restaurants in 23 Northeastern, Midwestern, Southcentral and Southeastern states and 65 Popeyes restaurants in seven Southeastern states. Carrols Restaurant Group is a holding company and conducts all of its operations through its direct and indirect wholly-owned subsidiaries Carrols Corporation and New CFH, LLC and their wholly-owned subsidiaries. Carrols Corporation's material direct and indirect wholly-owned subsidiaries include its wholly-owned subsidiary Carrols LLC, a Delaware limited liability company. New CFH LLC's material direct and indirect wholly-owned subsidiaries include Frayser Quality, LLC and Nashville Quality, LLC (and together with New CFH, LLC's immaterial direct and indirect subsidiaries, collectively, "New CFH"). Unless the context otherwise requires, Carrols Restaurant Group and its direct and indirect wholly-owned subsidiaries are collectively referred to as the "Company". |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Jan. 01, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Consolidation. The accompanying consolidated financial statements include the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Fiscal Year. The Company uses a 52 -53 week fiscal year ending on the Sunday closest to December 31. The fiscal years ended January 1, 2023 and January 2, 2022 each contained 52 weeks and the fiscal year ended January 3, 2021 contained 53 weeks. Use of Estimates. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include accrued occupancy costs, insurance liabilities, lease accounting matters, the valuation of acquired assets and liabilities, interest rate swap valuation, the valuation of deferred income tax assets and liabilities, and the evaluation for impairment of goodwill, long-lived assets and franchise rights. Actual results could differ from those estimates. Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At both January 1, 2023 and January 2, 2022, the Company did not have any cash invested in money market funds which are classified as cash equivalents on the consolidated balance sheets. Inventories. Inventories, consisting primarily of food, beverage, and paper supplies, are stated at the lower of cost (determined on the first-in, first-out method) or net realizable value. Net realizable value is determined as the estimated selling price in the normal course of business minus the cost of disposal and transportation. Property and Equipment. Property and equipment is recorded at cost. The Company capitalizes all direct costs incurred to develop, construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives: Owned buildings 9 to 30 years Equipment 3 to 7 years Computer hardware and software 3 to 7 years Assets subject to finance leases Shorter of useful life or lease term Building costs incurred for new restaurants on leased land are amortized over the lease term, which is generally a period of twenty years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the underlying expected lease term. The Company includes renewal option periods when determining the expected lease term in circumstances where the non-exercise of one or more renewal options under the lease would result in an economic penalty. Franchise Agreements. Fees for initial franchises and renewals are amortized using the straight-line method over the term of each individual agreement, which is generally twenty years. Business Combinations. In accordance with ASC 805, the Company allocates the purchase price of an acquired business to its identifiable assets and liabilities based on the estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The excess value of the net identifiable assets and liabilities acquired over the purchase price, if any, is recorded as a bargain purchase gain. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third party valuation specialist to assist with the valuation of certain leasehold improvements, franchise rights and favorable and unfavorable leases. The Company estimates that the seller's carrying value of acquired restaurant equipment, subject to certain adjustments, is equivalent to the fair value of this equipment at the date of the acquisition. The fair values of assumed franchise agreements are valued as if the remaining term of the agreement is at the market rate. The fair values of acquired land, buildings, certain leasehold improvements, and restaurant equipment subject to finance leases are determined using both the cost approach and market approach and include significant inputs observable in the open market. The Company categorizes these inputs as Level 2 inputs under ASC 820. The fair value of acquired franchise rights and favorable or unfavorable lease positions are determined using the income approach and includes unobservable inputs. The Company categorizes these inputs as Level 3 inputs under ASC 820. Franchise Rights. To determine the fair value attributable to franchise rights of restaurant acquisitions, the Company estimates the acquired restaurants' future earnings, discounts those earnings using an appropriate market discount rate and subtracts a contributory charge for net working capital, property and equipment and assembled workforce. Amounts allocated to franchise rights for each acquisition are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. The Company assesses the potential impairment of franchise rights whenever events or changes in circumstances indicate that the carrying value may not be recoverable, which includes consideration of the impact of a decline in the Company's market value. If an indicator of impairment exists, an estimate of the aggregate undiscounted cash flows from the acquired restaurants is compared to the respective carrying value of franchise rights for each acquisition. If an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. Goodwill. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of the businesses acquired. Goodwill is not amortized, but is tested for impairment annually, or more frequently when events and circumstances indicate that the carrying amount may be impaired. The Company conducts its annual goodwill impairment as of the end of the eighth month of its fiscal year. The Company's measurement of the fair value of reporting units is a Level 3 measurement under the fair value hierarchy. Refer to Note 5 herein for further discussion. Impairment of Long-Lived Assets. The Company assesses the potential impairment of long-lived assets, principally property and equipment, by determining whether the carrying value of these assets can be recovered over their respective remaining useful lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Impairment indicators at the restaurant level include sustained low or negative restaurant-level operating cash flows, sustained declining restaurant-level sales and if the ratio of trailing twelve months cash flows extended over the remaining lease term does not exceed the net book value of the asset group. Deferred Financing Costs. Financing costs incurred in obtaining long-term debt and lease financing obligations are capitalized and amortized over the life of the related obligation as interest expense using the effective interest method. Long-term debt on the consolidated balance sheets is presented net of the unamortized amount of the financing costs related to long-term borrowings. Leases. The Company utilizes land and buildings in its operations under various lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for twenty years and provide for renewal options with rent escalations. The exercise of such renewal options are generally at the Company's sole discretion. The Company evaluates renewal options at lease commencement (and any subsequent amendment or modification) to determine if such options are reasonably certain to be exercised based on economic factors. Certain leases also require variable rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Right-of-use ("ROU") lease assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make payments in exchange for that right of use. As the rate implicit within our leases is not readily determinable, the Company uses market and term specific incremental borrowing rates which consider the rate of interest it expects to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. ROU assets are reduced by lease incentives, increased for initial direct costs and adjusted by favorable lease assets and unfavorable lease liabilities. Variable lease components represent amounts that are contractually fixed as a percentage of sales and are recognized in expense as incurred. Leases with a term of 12 months or less are not recorded on the consolidated balance sheets and are recognized as lease expense on a straight-line basis over the lease term. The Company does not account for lease components (e.g., fixed payments including rent) separately from the non-lease components (e.g., common area maintenance) except in instances where the lease components are considered variable in nature. For certain leases where rent escalates based upon a change in a financial index, such as the Consumer Price Index, the difference between the rate at lease inception and the subsequent fluctuations in that rate are included in variable lease costs. Additionally, because the Company has elected to not separate lease and non-lease components, in limited instances variable costs also include payments to the landlord for common area maintenance, real estate taxes, insurance and other operating expenses. Rent expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred. The Company also utilizes certain restaurant equipment under various finance lease agreements with initial terms of generally three Lease Financing Obligations. Lease financing obligations as of January 1, 2023 includes one sale-leaseback transaction accounted for under the financing method. As of January 2, 2022 lease financing obligations also included two sale-leaseback transactions because the Company controlled the underlying assets during construction which were subsequently reclassified as an operating lease from a finance lease in 2022 when construction was completed (See Note 7). For sale-leaseback transactions accounted for under the financing method, the land and building assets subject to this obligation remain on the Company's consolidated balance sheets at their historical costs and the building assets continue to be depreciated over their remaining useful lives. The proceeds received by the Company from this sale-leaseback transaction were recorded as lease financing obligations and the lease payments are applied as payments of principal and interest. The selection of the interest rate on this lease financing obligation was evaluated at inception of the lease based on the Company's incremental borrowing rate adjusted to the rate required to prevent recognition of a non-cash loss or negative amortization of the obligation through the end of the primary lease term. As of January 1, 2023, lease financing obligations included $1.2 million associated with this sale-leaseback transaction. To the extent the Company is involved with the construction of an asset it is leasing and receives proceeds associated with the sale of such asset prior to completing construction, costs incurred as of the consolidated balance sheet dates are recorded within property and equipment and a lease financing obligation representing sale proceeds from the lessor is recorded in other long-term liabilities. Once construction is complete, the accounting requirements for a sale-leaseback transaction are considered. If the arrangement does not qualify for sale-leaseback accounting treatment, it is accounted for as a financing transaction. If an arrangement meets the requirements for sale-leaseback treatment, the Company will record a gain or loss on the sale and derecognize the completed construction assets and lease financing obligation. As of January 1, 2023, there were no lease financing obligations remaining associated with this type of arrangement. Revenue Recognition . Revenues from Company restaurants are recognized net of sales discounts and refunds, when payment is tendered at the time of sale or upon fulfillment of delivery orders. Revenues are reported net of sales tax collected from customers and remitted to governmental taxing authorities. Gift cards. The Company sells gift cards in its restaurants that are issued under the gift card program of Restaurant Brands International, Inc. ("RBI"). Proceeds from the sale of Burger King and Popeyes gift cards at the Company's restaurants are remitted to RBI, and RBI reimburses the Company for any gift card redemptions at its restaurants. The Company recognizes revenue for restaurant sales upon redemption of gift cards by the customer. Food, beverage and packaging costs. The Company includes food, beverage and paper costs and delivery commissions, net of any vendor purchase discounts and rebates, in food, beverage and packaging costs. Other restaurant operating expenses. The Company includes restaurant-level operating costs other than food, beverage and packaging costs, restaurant wages and related expenses, rent expense and advertising costs in other restaurant operating expenses. Its major components include royalty expenses paid to Burger King Company LLC (previously Burger King Corporation) ("BKC") and Popeyes Louisiana Kitchen, Inc. ("PLK"), utilities, repairs and maintenance, operating supplies, real estate taxes and credit card fees. Advertising Costs. All advertising costs are expensed as incurred. For the years ended January 1, 2023, January 2, 2022 and January 3, 2021, advertising costs were $69.4 million, $65.4 million and $60.7 million, respectively. Pre-opening Costs. The Company's pre-opening costs generally include payroll costs and travel associated with the opening of a new restaurant, rent and promotional costs. For the years ended January 1, 2023, January 2, 2022 and January 3, 2021, pre-opening costs were $0.3 million, $0.1 million and $0.2 million, respectively. These costs are expensed as incurred prior to a restaurant opening and are included in other restaurant operating expenses in the accompanying consolidated statements of comprehensive loss. Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period, including any changes in valuation allowances. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to an amount for which realization is likely. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company and its subsidiaries file a consolidated federal income tax return. Insurance. The Company is self-insured for general liability, medical insurance and most workers' compensation claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and in certain cases claims in the aggregate. Losses are accrued based upon the Company's estimates of the aggregate liability for claims based on Company experience and other methods used to measure such estimates. The Company does not discount any of its self-insurance obligations. Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect the Company's own assumptions. Financial instruments include cash and cash equivalents, trade and other receivables, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, trade and other receivables and accounts payable approximate fair value because of the short-term nature of these financial instruments. Borrowings under the Company's Senior Credit Facilities (including its term B loans) accrue interest at a floating rate tied to a standard short-term borrowing index selected at the Company's option, plus an applicable margin. The Company's liability for its Senior Credit Facilities and 5.875% Senior Notes due 2029 are carried at historical cost in the accompanying balance sheets. The fair value of our term B loans and 5.875% Senior Notes due 2029 is based on recent trading activity, which are Level 2 inputs in the fair value hierarchy. As of January 1, 2023, the term B loans traded at 87.8% of par value and the 5.875% Senior Notes due 2029 traded at 70.5% of par value. The Company recognizes its derivative arrangements on the balance sheet at fair value, which is considered a Level 2 input. The Company's only derivative is an interest rate swap (the "Swap") which is designated as a cash flow hedge. Accordingly, the effective portion of the changes in the fair value of this arrangement is recognized in accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. Any ineffective portion of the changes in the fair value of this arrangement is immediately recognized in earnings as interest expense, as applicable. The Company classifies cash inflows and outflows from derivatives within operating activities on the consolidated statements of cash flows. The Swap is valued at $8.6 million as of January 1, 2023 and it is classified as Level 2 within the fair value hierarchy. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of long-lived assets, goodwill and intangible assets. Long-lived assets and definite-lived intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs. As described in Notes 5 and 6, the Company recorded goodwill impairment charges of $16.7 million, franchise rights impairment charges of $0.2 million and long-lived asset impairment charges of $2.8 million during the year ended January 1, 2023. The Company recorded long-lived asset impairment charges of $3.9 million and $8.2 million during the years ended January 2, 2022 and January 3, 2021, respectively. Stock-Based Compensation. The Company has an incentive stock plan under which incentive stock options, non-qualified stock options, restricted stock units ("RSUs"), time-based non-vested shares and performance-based non-vested shares may be granted to employees and non-employee directors. The Company has granted time-based non-vested shares under this plan annually as well as granted time-based non-vested shares, performance-based non-vested shares, stock options, and RSUs to corporate employees for performance. Time-vested non-vested shares, options, and RSUs granted to corporate employees and non-employee directors generally vest in equal installments over three years. For time-vested non-vested stock awards and restricted stock units, the fair market value of the award is determined based upon the closing value of the Company's stock price on the grant date and is recorded to compensation expense on a straight-line basis over the requisite service period. For stock options, the fair-value of the options is estimated using the Black-Scholes option pricing model based on assumptions for the risk-free rate of interest, expected dividend yield, expected volatility, and the expected term of the award. Compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based restricted shares, the fair value of the market-based restricted shares is determined using a Monte Carlo simulation valuation model and these shares will be expensed over a three year performance-based vesting period based on the probability of the Company's attainment of the contractually defined targets. See Note 12 to the consolidated financial statements. Concentrations of Credit Risk. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains its day-to-day operating cash balances in interest-bearing transaction accounts at financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000. Although the Company maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and believes its credit risk to be minimal. Segment Information. Operating segments are components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker to allocate resources and assess performance. The Company's chief operating decision maker currently evaluates the Company's operations from a number of different operational perspectives; however resource allocation decisions are made based on the chief operating decision maker's evaluation of the total Company operations. The Company derives all significant revenues from a single operating segment. Accordingly, the Company views the operating results of its restaurants as one reportable segment. Recently Issued Accounting Pronouncements Adopted. In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04 ("ASU 2020-04"), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ("LIBOR"). This ASU is effective for all entities as of March 12, 2020 through December 31, 2022. On December 15, 2022, the Company executed an amendment to conform with the requirements of ASU 2020-04 and transitioned from LIBOR to Secured Overnight Financing Rate ("SOFR") as the benchmark rate for purposes of calculating interest on the Senior Credit Facilities. No other changes were made to the existing agreement. This amendment did not have a material impact on the Company's financial statements for the year ended January 1, 2023. Recently Issued Accounting Pronouncements Not Yet Adopted. In the normal course of business, the Company evaluates all new Accounting Standards Updates (“ASU”) and other accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), or other authoritative accounting bodies to determine the potential impact they may have on its Consolidated Financial Statements. The Company does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on its Consolidated Financial Statements. Subsequent events. The Company reviewed and evaluated subsequent events through the issuance date of the Company's consolidated financial statements. |
Acquisition
Acquisition | 12 Months Ended |
Jan. 01, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition [Text Block] | Acquisitions 2021 Acquisitions In 2021, the Company acquired an aggregate of 19 Burger King restaurants from other franchisees in the following transactions (in thousands except number of restaurants): Closing Date Number of Restaurants Purchase Price Fee-Owned (1)(2) Market Location June 17, 2021 14 $ 27,603 12 Fort Wayne, Indiana June 23, 2021 5 3,216 1 Battle Creek, Michigan 19 $ 30,819 13 (1) The 2021 acquisitions included the purchase of 13 fee-owned restaurants, of which 12 were sold in subsequent sale-leaseback transactions during the third quarter of 2021 for net proceeds of approximately $20.2 million. (2) One of the fee-owned restaurants was closed at the end of 2021 and subsequently sold in the second quarter of 2022 for proceeds of $0.2 million. The Company allocated the aggregate purchase price for the 2021 acquisitions at their estimated fair values. The following table summarizes the final allocation of the aggregate purchase price for the 2021 acquisitions reflected in the consolidated balance sheets as of January 1, 2023: Inventory $ 229 Land and buildings 20,376 Restaurant equipment 850 Restaurant equipment - subject to finance leases 29 Right-of-use assets 2,997 Leasehold improvements 550 Franchise fees 411 Franchise rights 6,025 Deferred income taxes 484 Goodwill 1,832 Operating lease liabilities (2,900) Finance lease liabilities for restaurant equipment (35) Accounts payable (29) Net assets acquired $ 30,819 Goodwill recorded in connection with the 2021 acquisitions represents costs in excess of fair values assigned to the underlying net assets of acquired restaurants. Acquired goodwill that is expected to be deductible for income tax purposes was $1.8 million in 2021. The results of operations for the restaurants acquired are included from the closing date of the respective acquisition. The 2021 acquired restaurants contributed restaurant sales of $21.9 million in the year ended January 1, 2023 and $12.9 million in the year ended January 2, 2022. It is impracticable to disclose net earnings for the post-acquisition period for the acquired restaurants as net earnings of these restaurants were not tracked on a collective basis due to the integration of administrative functions, including field supervision. The pro forma impact on the results of operations for the restaurants acquired in 2021 is included below. The pro forma results of operations are not necessarily indicative of the results that would have occurred had the acquisitions been consummated at the beginning of the periods presented, nor are they necessarily indicative of any future consolidated operating results. The following table summarizes the Company's unaudited pro forma operating results: Year Ended January 2, 2022 Total revenue $ 1,663,860 Net loss (41,796) Basic and diluted net loss per share (0.84) This pro forma financial information does not give effect to any anticipated synergies, operating efficiencies, cost savings or integration costs related to the 2021 acquired restaurants. The pro forma financial results exclude transaction costs recorded as general and administrative expenses of $0.4 million during the year ended January 2, 2022. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 01, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and Equipment Property and equipment at January 1, 2023 and January 2, 2022 consisted of the following: January 1, 2023 January 2, 2022 Land $ 7,685 $ 10,021 Owned buildings 12,895 14,581 Leasehold improvements 454,134 442,461 Equipment 342,118 337,533 Assets subject to finance leases 30,873 22,694 847,705 827,290 Less accumulated depreciation and amortization (535,359) (489,588) $ 312,346 $ 337,702 |
Intangible Assets (Notes)
Intangible Assets (Notes) | 12 Months Ended |
Jan. 01, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Franchise Rights. Amounts allocated to franchise rights for each acquisition of Burger King and Popeyes restaurants are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. As described in Note 2, the Company reviews its franchise rights for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. There was $0.2 million of impairment charges recorded related to the Company's franchise rights during the year ended January 1, 2023 as a result of a restaurant closure during the period which had been previously acquired and had a remaining franchise rights carrying value. No impairment charges were recorded related to the Company's franchise rights during the years ended January 2, 2022 and January 3, 2021. The following is a summary of the Company's franchise rights as of the respective balance sheet dates: Balance at January 3, 2021 $ 334,597 Acquisitions of restaurants (Note 3) 6,025 Amortization expense (13,853) Balance at January 2, 2022 326,769 Amortization expense (13,965) Impairment (245) Balance at January 1, 2023 $ 312,559 Amortization expense related to franchise rights for the year ended January 3, 2021 was $14.3 million. The Company expects annual amortization to be $14.0 million in 2023 and 2024 and $13.9 million in 2025, 2026 and 2027. Goodwill. The Company is required to review goodwill for impairment annually, or more frequently when events and circumstances indicate that the carrying amount may be impaired. The Company evaluated the impact of a sustained decline in the Company's stock price during the second quarter of 2022 due to the impact of continued increases in input costs on the Company's operating margins which resulted in an implied equity premium that was outside of an observable range and was determined to be an indicator of an impairment. As a result, the Company performed a quantitative interim goodwill impairment test for its reporting units in the second quarter of 2022. As part of this interim goodwill impairment test, the Company considered certain qualitative and quantitative factors, such as the Company's performance, business forecasts, capital expenditure plans, a discount rate approximating the Company's weighted average cost of capital, and an evaluation of peer company multiples, among other factors. Using both the income approach and the market approach, the Company compared the fair value of each of its reporting units to their respective carrying values. Based on the results of this analysis, the Company determined that the fair value of its Popeyes reporting unit was less than its carrying value, and as a result, recorded a non-cash goodwill impairment of $16.7 million. The non-cash goodwill impairment represented a full write-down of the goodwill for the Popeyes reporting unit and is included in impairment and other lease charges on the condensed consolidated statements of comprehensive loss. The Company performs its annual goodwill impairment test as of the end of the eighth month of its fiscal year. As part of the annual goodwill impairment test, the Company considered certain qualitative and quantitative factors, such as the Company's performance, business forecasts, capital expenditure plans, a discount rate approximating the Company's weighted average cost of capital, and an evaluation of peer company multiples, among other factors. Given the nature of the qualitative and quantitative factors considered, there is a degree of uncertainty associated with these judgments and estimates. Notably, the business forecasts and market conditions considered within the Company's annual goodwill impairment test reflect the Company's long-standing history of operating Burger King restaurants in various business cycles. The forecasts do not reflect an immediate change in commodity costs or wage pressures, but do reflect a normalization of these costs over time. Using both the income approach and the discounted cash flow approach, the Company compared the fair value of the Burger King reporting unit to the carrying value for the reporting unit. Based on the results of this analysis, the fair value of the reporting unit exceeded its carrying value and goodwill was not impaired. There can be no assurances that goodwill will not be impaired in future periods. Estimating the fair value of goodwill requires the use of estimates and significant judgments that are based on a number of factors. These estimates and judgments may not be within the control of the Company and accordingly it is possible that the factors, judgments, and estimates could change in future periods. The Company assessed events and circumstances from the date of its annual goodwill impairment test through January 1, 2023 and there were no indicators representing a further triggering event. Goodwill at January 3, 2021 $ 122,619 Acquisition of restaurants (Note 3) 1,832 Goodwill at January 2, 2022 124,451 Impairment of goodwill (16,700) Goodwill at January 1, 2023 $ 107,751 |
Impairment Of Long-Lived Assets
Impairment Of Long-Lived Assets And Other Lease Charges | 12 Months Ended |
Jan. 01, 2023 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Asset Impairment Charges [Text Block] | Impairment of Long-Lived Assets and Other Lease Charges The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of the undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset's carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for any ROU lease asset impairment or lease-related costs during the remaining term, net of any estimated sublease recoveries. The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions. The Company determines the fair value of ROU lease assets based on an assessment of market rents and a discounted future cash flow model. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy. During the year ended January 1, 2023, the Company recorded impairment and other lease charges of $4.9 million consisting of $2.1 million related to initial impairment charges for 15 underperforming restaurants, capital expenditures at previously impaired restaurants of $0.7 million, and other lease charges of $2.1 million primarily related to eight restaurants closed during the year of $1.7 million. During the year ended January 2, 2022, the Company recorded impairment and other lease charges of $4.5 million consisting of $0.5 million for capital expenditures at previously impaired restaurants, $1.5 million related to initial impairment charges for nine underperforming restaurants, other lease charges of $0.6 million and $1.9 million related to impairment of certain owned non-operating properties. During the year ended January 3, 2021, the Company recorded impairment and other lease charges of $12.8 million including $1.2 million for capital expenditures at previously impaired restaurants, $5.0 million related to initial impairment charges for fifteen underperforming restaurants, other lease charges of $4.6 million primarily from 22 restaurant closures, and $2.0 million related to impairment of its right of first refusal under its Area Development and Remodeling Agreement with BKC (see Note 16). |
Other Liabilities, Long-Term (N
Other Liabilities, Long-Term (Notes) | 12 Months Ended |
Jan. 01, 2023 | |
Liabilities, Noncurrent [Abstract] | |
Other Liabilities Disclosure [Text Block] | Other Liabilities, Long-Term Other liabilities, long-term, at January 1, 2023 and January 2, 2022 consisted of the following: January 1, 2023 January 2, 2022 Accrued occupancy costs $ 1,797 $ 1,741 Accrued workers' compensation and general liability claims 5,239 4,947 Deferred compensation 3,002 2,286 Deferred federal payroll taxes — 10,808 Lease financing obligations 1,179 5,780 Other 1,026 1,210 $ 12,243 $ 26,772 |
Leases
Leases | 12 Months Ended |
Jan. 01, 2023 | |
Leases [Abstract] | |
Leases | Leases During the years ended January 1, 2023, January 2, 2022 and January 3, 2021, the Company sold two, 13 and 12 restaurant properties, respectively, in sale-leaseback transactions for net proceeds of $4.1 million, $22.3 million and $22.5 million, respectively. These leases have been classified as operating leases and generally contain a twenty-year initial term plus renewal options. Rent commitments under finance and non-cancelable operating leases at January 1, 2023 were as follows: Fiscal year ending: Operating Leases Finance Leases December 31, 2023 $ 102,764 $ 3,840 December 29, 2024 101,867 3,453 December 28, 2025 99,971 3,332 December 27, 2026 98,252 3,242 January 2, 2028 96,010 763 Thereafter 774,129 4 Total lease payments 1,272,993 14,634 Less: imputed interest (449,120) (1,808) Present value of lease liabilities 823,873 12,826 Less: current portion (47,408) (3,091) Total long-term lease liabilities $ 776,465 $ 9,735 Lease Cost The components and classification of lease expense for the years ended January 1, 2023, January 2, 2022 and January 3, 2021 are as follows: Year ended Lease cost Classification January 1, 2023 January 2, 2022 January 3, 2021 Operating lease cost (1) Restaurant rent expense $ 105,285 $ 103,733 $ 102,651 Operating lease cost (2) General and administrative 853 946 606 Variable lease cost - variable rent Restaurant rent expense 20,196 18,929 15,793 Variable lease cost - common area maintenance Other restaurant operating expenses 578 585 521 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization 2,798 755 1,233 Interest on lease liabilities Interest expense 723 133 130 Total lease cost $ 130,433 $ 125,081 $ 120,934 (1) Includes short-term leases which are not material. (2) Represents operating lease costs for property and equipment not directly related to restaurant operations. Lease Position Supplemental balance sheet information related to leases was as follows as of January 1, 2023 and January 2, 2022: Leases Classification January 1, 2023 January 2, 2022 Assets Operating leases Operating right-of-use assets, net $ 763,935 $ 791,763 Finance leases Property and equipment, net 12,429 6,153 Total leased assets $ 776,364 $ 797,916 Liabilities Current Operating leases Current portion of operating lease liabilities $ 47,408 $ 44,688 Finance leases Current portion of long-term debt and finance lease liabilities 3,091 1,544 Long-term Operating leases Operating lease liabilities 776,465 802,959 Finance leases Long-term debt and finance lease liabilities 9,735 4,762 Total lease liabilities $ 836,699 $ 853,953 Weighted Average Remaining Lease Term Operating leases 12.9 years 13.5 years Finance leases 4.1 years 4.3 years Weighted Average Discount Rate Operating leases 7.0 % 7.0 % Finance leases 6.7 % 5.8 % |
Leases | Leases During the years ended January 1, 2023, January 2, 2022 and January 3, 2021, the Company sold two, 13 and 12 restaurant properties, respectively, in sale-leaseback transactions for net proceeds of $4.1 million, $22.3 million and $22.5 million, respectively. These leases have been classified as operating leases and generally contain a twenty-year initial term plus renewal options. Rent commitments under finance and non-cancelable operating leases at January 1, 2023 were as follows: Fiscal year ending: Operating Leases Finance Leases December 31, 2023 $ 102,764 $ 3,840 December 29, 2024 101,867 3,453 December 28, 2025 99,971 3,332 December 27, 2026 98,252 3,242 January 2, 2028 96,010 763 Thereafter 774,129 4 Total lease payments 1,272,993 14,634 Less: imputed interest (449,120) (1,808) Present value of lease liabilities 823,873 12,826 Less: current portion (47,408) (3,091) Total long-term lease liabilities $ 776,465 $ 9,735 Lease Cost The components and classification of lease expense for the years ended January 1, 2023, January 2, 2022 and January 3, 2021 are as follows: Year ended Lease cost Classification January 1, 2023 January 2, 2022 January 3, 2021 Operating lease cost (1) Restaurant rent expense $ 105,285 $ 103,733 $ 102,651 Operating lease cost (2) General and administrative 853 946 606 Variable lease cost - variable rent Restaurant rent expense 20,196 18,929 15,793 Variable lease cost - common area maintenance Other restaurant operating expenses 578 585 521 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization 2,798 755 1,233 Interest on lease liabilities Interest expense 723 133 130 Total lease cost $ 130,433 $ 125,081 $ 120,934 (1) Includes short-term leases which are not material. (2) Represents operating lease costs for property and equipment not directly related to restaurant operations. Lease Position Supplemental balance sheet information related to leases was as follows as of January 1, 2023 and January 2, 2022: Leases Classification January 1, 2023 January 2, 2022 Assets Operating leases Operating right-of-use assets, net $ 763,935 $ 791,763 Finance leases Property and equipment, net 12,429 6,153 Total leased assets $ 776,364 $ 797,916 Liabilities Current Operating leases Current portion of operating lease liabilities $ 47,408 $ 44,688 Finance leases Current portion of long-term debt and finance lease liabilities 3,091 1,544 Long-term Operating leases Operating lease liabilities 776,465 802,959 Finance leases Long-term debt and finance lease liabilities 9,735 4,762 Total lease liabilities $ 836,699 $ 853,953 Weighted Average Remaining Lease Term Operating leases 12.9 years 13.5 years Finance leases 4.1 years 4.3 years Weighted Average Discount Rate Operating leases 7.0 % 7.0 % Finance leases 6.7 % 5.8 % |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Jan. 01, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-term Debt Long-term debt at January 1, 2023 and January 2, 2022 consisted of the following: January 1, 2023 January 2, 2022 Senior Credit Facility: Term B Loans $ 167,625 $ 171,875 Revolving credit borrowings 12,500 — Senior Notes Due 2029 300,000 300,000 Finance lease liabilities 12,826 6,306 Total Funded debt 492,951 478,181 Less: current portion of long-term debt and finance lease liabilities (7,341) (5,794) Less: unamortized debt issuance costs (5,401) (6,490) Less: original issue discount (453) (580) Total Long-term Debt $ 479,756 $ 465,317 Senior Credit Facilities . On April 30, 2019, the Company entered into senior secured credit facilities in an aggregate principal amount of $550.0 million, consisting of (i) a Term Loan B Facility in an aggregate principal amount of $425.0 million (the "Term Loan B Facility") maturing on April 30, 2026 and (ii) a revolving credit facility (including a sub-facility of $35.0 million for standby letters of credit) in an aggregate principal amount of $125.0 million maturing on April 30, 2024 (the "Revolving Credit Facility" and, together with the Term Loan B Facility, the "Senior Credit Facilities"). As of January 1, 2023, the Senior Credit Facilities, as amended, provide for an aggregate maximum commitment available for borrowings under the Revolving Credit Facility of $215.0 million and the Revolving Credit Facility matures on January 29, 2026. The Company's obligations under the Senior Credit Facilities are guaranteed by its subsidiaries and are secured by first priority liens on substantially all of the assets of the Company and its subsidiaries, including a pledge of all of the capital stock and equity interests of its subsidiaries. Under the Senior Credit Facilities, the Company is required to make mandatory prepayments of borrowings in the event of dispositions of assets, debt issuances and insurance and condemnation proceeds (all subject to certain exceptions). The Senior Credit Facilities contain certain covenants, including, without limitation, those limiting the Company's and its subsidiaries' ability to, among other things, incur indebtedness, incur liens, sell or acquire assets or businesses, change the character of its business in all material respects, engage in transactions with related parties, make certain investments, make certain restricted payments or pay dividends. In addition, the Senior Credit Facilities require the Company to meet a First Lien Leverage Ratio (as defined in the Senior Credit Facilities) under certain circumstances. The Company is only required to maintain a First Lien Leverage Ratio (as defined in the Senior Credit Facilities) of not greater than 5.75 to 1.00 (as measured on a most recent four quarter basis) if, and only if, on the last day of any fiscal quarter, the sum of the aggregate principal amount of outstanding revolving credit borrowings under the Revolving Credit Facility and the aggregate face amount of letters of credit issued under the Revolving Credit Facility (excluding undrawn letters of credit in an aggregate face amount up to $12.0 million) exceed 35% of the aggregate borrowing capacity under the Revolving Credit Facility. The Senior Credit Facilities contain customary default provisions, including that the lenders may terminate their obligation to advance and may declare the unpaid balance of borrowings, or any part thereof, immediately due and payable upon the occurrence and during the continuance of customary events of default which include, without limitation, payment default, covenant default, bankruptcy default, cross-default on other indebtedness, judgment default and the occurrence of a change of control. As of January 1, 2023, there were $12.5 million revolving credit borrowings outstanding and $9.6 million of letters of credit issued under the Revolving Credit Facility. After reserving for issued letters of credit and outstanding revolving credit borrowings, $192.9 million was available for revolving credit borrowings under the Revolving Credit Facility at January 1, 2023. The Term Loan B Facility requires quarterly installment payments, which began on September 30, 2019. Amounts outstanding at January 1, 2023 are due and payable as follows: (i) thirteen quarterly installments of $1.1 million; (ii) one final payment of $153.8 million on April 30, 2026. At January 1, 2023, borrowings under the Senior Credit Facilities bore interest as follows (subject to interest rate swap as described below): (i) Revolving Credit Facility: at a rate per annum equal to (a) the Alternate Base Rate (as defined in the Senior Credit Facilities) plus 2.25% or (b) Adjusted Term SOFR (as defined in the Senior Credit Facilities) plus 3.25%. (ii) Term Loan B Facility borrowings: at a rate per annum equal to (a) the Alternate Base Rate (as defined in the Senior Credit Facilities) plus 2.25% or (b) Adjusted Term SOFR (as defined in the Senior Credit Facilities) plus 3.25%. Senior Notes due 2029 . On June 28, 2021, the Company issued $300.0 million principal amount of 5.875% Senior Notes due 2029 (the "Notes") in a private placement. The proceeds of the offering, together with $46.0 million of revolving credit borrowings under the Senior Credit Facilities, were used (i) to repay $74.4 million of outstanding term B-1 loans and $243.6 million of outstanding term B loans under the Senior Credit Facilities (which included scheduled principal payments), (ii) to pay fees and expenses related to the offering of the Notes and the Seventh Amendment and (iii) for working capital and general corporate purposes. Carrols Restaurant Group and certain of its subsidiaries (the "Guarantors") entered into the Indenture (the "Indenture") dated as of June 28, 2021 with the Bank of New York Mellon Trust Company governing the Notes. The Indenture provides that the Notes will mature on July 1, 2029 and will bear interest at the rate of 5.875% per annum, payable semi-annually on July 1 and January 1 of each year, beginning on January 1, 2022. The entire principal amount of the Notes will be due and payable in full on the maturity date. The Indenture further provides that the Company (i) may redeem some or all of the Notes at any time after July 1, 2024 at the redemption prices described therein, (ii) may redeem up to 40% of the Notes using the proceeds of certain equity offerings completed before July 1, 2024 and (iii) must offer to purchase the Notes if it sells certain of its assets or if specific kinds of changes in control occur, all as set forth in the Indenture. The Notes are senior unsecured obligations of Carrols Restaurant Group and are guaranteed on an unsecured basis by the Guarantors. The Indenture contains certain covenants that limit the ability of Carrols Restaurant Group and the Guarantors to, among other things: incur indebtedness or issue preferred stock; incur liens; pay dividends or make distributions in respect of capital stock or make certain other restricted payments or investments; sell assets; agree to payment restrictions affecting Restricted Subsidiaries (as defined in the Indenture); enter into transactions with affiliates; or merge, consolidate or sell substantially all of the assets. Such restrictions are subject to certain exceptions and qualifications all as set forth in the Indenture. The Company was in compliance with all such covenants as of January 1, 2023. Interest Rate Swap. In March 2020, the Company entered into an interest rate swap agreement with certain of its lenders under the Senior Credit Facilities to mitigate the risk of increases in the variable interest rate related to term loan borrowings under the Senior Credit Facilities. The interest rate swap originally fixed the interest rate on 50% of the outstanding borrowings under the Senior Credit Facility at 0.915% plus the applicable margin in its Senior Credit Facilities with the differences settled monthly. The Company received $1.0 million to settle the interest rate swap during the twelve months ended January 1, 2023 and made additional interest payments of $1.7 million to settle the interest rate swap during the twelve months ended January 2, 2022. The agreement matures on February 28, 2025 and had an original notional amount of $220.0 million. On November 12, 2021, the Company partially terminated this interest rate swap to reduce the notional amount hedged from $220.0 million to $120.0 million. The reduction, which settled with net proceeds to the Company of $0.2 million, leaves the fixed rate and other terms of the swap arrangement unchanged and provided the flexibility to repay borrowings under the Senior Credit Facilities which previously needed to be maintained at the hedged $220.0 million notional amount. On December 15, 2022, the Company executed an amendment to our interest rate swap to transition from LIBOR to SOFR as the benchmark rate for purposes of calculating interest, which also changed the fixed rate of interest from 0.915% plus the applicable margin to 0.847% plus the applicable margin. No other changes were made to the terms of the interest rate swap. The fair value of the Company's interest rate swap agreement was an asset of $8.6 million as of January 1, 2023 which is included in other assets in the accompanying consolidated balance sheets. Changes in the valuation of the Company's interest rate swap were included as a component of other comprehensive income and will be reclassified to earnings as the income or losses are realized. The Company expects to reclassify net gains totaling $4.7 million into earnings in the next twelve months. The Company's counterparties under this arrangement provided the Company with quarterly statements of the market values of these instruments based on significant inputs that were observable or could be derived principally from, or corroborated by, observable market data for substantially the full term of the asset or liability. The Company classified this within Level 2 of the fair value hierarchy described in Note 2. The impact on the derivative liabilities for the Company and the counterparties' non-performance risk to the derivative trades was considered when measuring the fair value of derivative liabilities. At January 1, 2023, principal payments required on long-term debt, including finance leases, were as follows: Fiscal year ending: December 31, 2023 $ 7,341 December 29, 2024 7,156 December 28, 2025 7,228 December 27, 2026 170,468 January 2, 2028 754 Thereafter 300,004 $ 492,951 |
Other Income (Notes)
Other Income (Notes) | 12 Months Ended |
Jan. 01, 2023 | |
Other Income and Expenses [Abstract] | |
Other Income | Other Income, net In 2022, the Company recorded other income, net of $0.9 million, which consisted of a $2.5 million gain from a settlement with a vendor, a loss on disposal of assets of $1.2 million and a loss on sale-leaseback transactions of $0.4 million. In 2021, the Company recorded other income, net of $1.2 million, which consisted of a $1.1 million gain from the sale of a litigation claim, insurance recoveries of $1.3 million from property damage at two of the Company's and a loss on disposal of assets of $1.2 million. In 2020, the Company recorded other income, net of $1.3 million which consisted of gains related to insurance recoveries from fire at four of its restaurants of $2.1 million, net gain on 12 sale-leaseback transactions of $0.2 million and a loss on disposal of assets of $1.0 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision (benefit) for income taxes was comprised of the following: Year ended January 1, 2023 January 2, 2022 January 3, 2021 Current: Federal $ — $ — $ — State (37) (36) 268 (37) (36) 268 Deferred: Federal (16,790) (12,374) (6,039) State (5,027) (4,021) (1,073) (21,817) (16,395) (7,112) Increase in valuation allowance 21,065 11,272 13,138 Provision (benefit) for income taxes $ (789) $ (5,159) $ 6,294 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The components of deferred income tax assets and liabilities at January 1, 2023 and January 2, 2022 were as follows: January 1, 2023 January 2, 2022 Deferred income tax assets: Operating lease liabilities $ 211,000 $ 217,236 Federal net operating loss carryforwards 26,122 26,839 Tax credit carryforwards 43,906 39,965 State net operating loss carryforwards 8,216 6,837 Interest expense limitation under section 163 (j) 8,090 1,345 Stock-based compensation expense 1,467 1,683 Accrued vacation benefits 2,904 2,844 Postretirement benefit obligations 721 766 Intangible Assets 757 — Other deferred income tax assets 5,981 6,507 Gross deferred income tax assets 309,164 304,022 Less: Valuation allowance (44,263) (24,410) Total deferred income tax assets $ 264,901 $ 279,612 Deferred income tax liabilities: Operating right-of-use assets (195,705) (202,887) Property and equipment depreciation (12,247) (18,092) Franchise rights (61,755) (63,030) Accumulated other comprehensive income-postretirement benefits (386) (380) Accumulated other comprehensive income-accrued interest rate swap (2,160) (161) Other deferred income tax liabilities (313) (2,679) Total deferred income tax liabilities (272,566) (287,229) Net long-term deferred income tax liabilities $ (7,665) $ (7,617) The Company's federal net operating loss carryforwards generated prior to December 31, 2017 expire beginning in 2035. Federal net operating losses generated subsequent to 2017 have no expiration date. As of January 1, 2023, the Company had federal net operating loss carryforwards of approximately $124.4 million, general business credits ("GBC") carryforwards of $43.9 million and approximately $170.5 million in state net operating loss carryforwards. The Company's GBC carryforwards begin to expire in 2031 and state net operating loss carryforwards begin to expire in 2023. The Company has performed the required assessment of positive and negative evidence regarding the realization of deferred income tax assets in accordance with ASC 740 at January 1, 2023 and January 2, 2022. Under ASC 740, the weight given to negative and positive evidence is commensurate only to the extent that such evidence can be objectively verified. ASC 740 prescribes that objective historical evidence, in particular the Company's three-year cumulative loss position at January 1, 2023, be given a greater weight than subjective evidence, including the Company's forecast of future taxable income, which include assumptions that cannot be objectively verified. In determining the likelihood of future realization of the deferred income tax assets as of January 1, 2023 and January 2, 2022 the Company considered both positive and negative evidence and weighted the effect of such evidence based upon its objectivity. Based on the required weight of evidence under ASC 740, as of January 1, 2023 and January 2, 2022, the Company determined the valuation allowance needed for certain federal income tax credits, federal net operating losses and state net operating losses that may expire prior to their utilization by the Company was $44.3 million and $24.4 million, respectively. The amount of the deferred tax asset to be considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as projections for growth. The Company recorded income tax expense of $21.1 million, $11.3 million and $13.1 million in fiscal 2022, 2021 and 2020, respectively, relative to this valuation reserve. The Company records goodwill as a result of acquisitions which is not amortized for financial reporting purposes, however, has a tax deductible life of 15 years. This results in a deferred tax expense and deferred tax liability for the indefinitely lived asset which is known as a naked credit. The deferred tax liability will have an indefinite life and is expected to increase over the 15-year amortization period. Due to the indefinite life of the cumulative losses the Company incurred in 2021 and 2022, the federal deferred tax liability from amortization of the goodwill was offset against the federal operating net losses to the extent allowed. The remaining deferred tax liability may remain on the Company's consolidated balance sheet indefinitely unless there is a financial statement impairment of goodwill recorded, or if a portion of the business is sold. Due to the potential for an indefinite life of the previously mentioned liability, it is not netted against the deferred tax assets for purposes of determining the required valuation allowance. A reconciliation of the statutory federal income tax provision to the income tax provision (benefit) for the years ended January 1, 2023, January 2, 2022, and January 3, 2021 was as follows: Year ended January 1, 2023 January 2, 2022 January 3, 2021 Statutory federal income tax provision (benefit) $ (16,036) $ (10,119) $ (4,865) State income taxes, net of federal benefit (4,085) (2,934) (726) Employment tax credits (2,817) (3,274) (2,585) Change in valuation allowances 21,065 11,272 13,138 Non-deductible expenses 597 431 214 Stock-based compensation 684 127 525 Rate change — (163) 312 Miscellaneous (197) (499) 281 Provision (benefit) for income taxes $ (789) $ (5,159) $ 6,294 The Company's policy is to recognize interest and/or penalties related to uncertain tax positions in income tax expense. At January 1, 2023 and January 2, 2022, the Company had no unrecognized tax benefits and no accrued interest related to uncertain tax positions. The tax years 2017 - 2021 remain open to examination by the major taxing jurisdictions to which the Company is subject. Although it is not reasonably possible to estimate the amount by which unrecognized tax benefits may increase within the next twelve months due to uncertainties regarding the timing of examinations, the Company does not expect unrecognized tax benefits to significantly change in the next twelve months. On March 27, 2020, the United States enacted the CARES Act as a response to the economic uncertainty resulting from COVID-19. The CARES Act includes modifications for net operating loss carryovers and carrybacks, limitations of business interest expense for tax, immediate refund of alternative minimum tax ("AMT") credit carryovers as well as a technical correction to the Tax Cuts and Jobs Act of 2017, referred to herein as the |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 01, 2023 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Stock Incentive Plan. In 2016, the Company adopted a stock plan entitled the 2016 Stock Incentive Plan (the "2016 Plan") and reserved and authorized a total of 4,000,000 shares of common stock for grant thereunder. On June 18, 2021, at the 2021 Annual Meeting of Stockholders, the Company' stockholders approved the Second Amendment to the 2016 Plan increasing the authorized total by 3,500,000 to 7,500,000 shares of common stock for grant thereunder. As of January 1, 2023, 2,186,096 shares were available for future grant or issuance. Stock-based compensation expense for the years ended January 1, 2023, January 2, 2022, and January 3, 2021 was $4.9 million, $6.2 million and $5.2 million, respectively. As of January 1, 2023, the total remaining stock-based compensation expense relating to time-based non-vested shares and stock options was approximately $3.8 million and the remaining weighted average vesting period for time-based non-vested shares and stock options was 1.6 years. Time-based Non-vested Shares . During the year ended January 1, 2023, the Company granted 1,116,000 non-vested shares of common stock to certain employees and officers of the Company and 226,584 non-vested shares of common stock to outside directors of the Company. These shares generally vest in equal installments over their three-year service period, provided the participant has continuously remained an employee, officer, or director of the Company. In addition, on April 1, 2022, the Company granted 100,000 time-vested restricted shares with an original two-year vesting period to its new CEO, which became fully vested on December 31, 2022. During the year ended January 2, 2022, the Company granted 895,000 non-vested shares of common stock to certain employees and officers of the Company and 92,744 non-vested shares of common stock to outside directors of the Company. These shares generally vest in equal installments over their three-year service period, provided the participant has continuously remained an employee, officer, or director of the Company. During the year ended January 3, 2021, the Company granted 790,000 non-vested shares of common stock to certain employees and officers of the Company and 73,128 non-vested shares of common stock to non-employee directors. These shares generally vest in equal installments over their three-year service period provided that the participant has continuously remained an employee, officer or director of the Company. A summary of all non-vested common share activity for the year ended January 1, 2023 was as follows: Shares Weighted Average Grant Date Price Non-vested at January 2, 2022 1,336,830 $ 6.55 Granted 1,442,584 $ 2.72 Vested (882,053) $ 6.18 Forfeited (129,550) $ 4.08 Non-vested at January 1, 2023 1,767,811 $ 3.79 The fair value of the non-vested shares is based on the closing price of the Company's common stock on the date of grant. Performance-based Restricted Shares . On April 1, 2022, 600,000 performance-based restricted shares were granted to the Company's new CEO, of which 450,000 shares were subsequently forfeited on December 31, 2022. These shares fully vest on the third anniversary of the grant date based on the achievement of contractually defined EBITDA and share price growth targets. The fair value of the market-based restricted shares was determined using a Monte Carlo simulation valuation model and these shares will be expensed over a three year performance-based vesting period based on the probability of the Company's attainment of the contractually defined targets. Stock Options. During the twelve months ended January 3, 2021, the Company granted in the aggregate options to purchase 1,075,000 shares of its common stock to certain employees and officers of the Company, consisting of 739,340 shares of non-qualified stock options and 335,660 shares of incentive stock options ("ISOs"). These options become exercisable in three annual installments and are being expensed over their three-year service period. The options expire seven years from the date of the grant and were issued with an exercise price equal to the fair market value of the stock price, or $7.12 per share of common stock, on the date of grant. The following assumptions were used in the Black-Scholes option-pricing model to determine the fair value of stock option awards at the grant date: 2020 Risk-free interest rate 0.21 % Expected term (in years) 4.5 Expected volatility 65.10 % Expected dividend yield — % Fair Value $ 3.65 Expected term represents the period that the stock option awards were expected to be outstanding. Given the Company has not issued stock options since 2010, it concluded that its stock option exercise history did not provide a reasonable basis upon which to estimate expected term and therefore used the simplified method to determine the expected term of this stock option grant. This method bases the expected term calculation on the average of the vesting term and the contractual term of the awards. The risk-free interest rate was based on the yield of constant maturity U.S. treasury bonds with a remaining term equal to the expected term of the awards. There was no expected dividend yield. The Company estimated the stock price volatility using weekly price observations over the most recent historical period equal to the expected life of the awards. A summary of all stock option activity for the year ended January 1, 2023 was as follows: Options Weighted Average Exercise Price Average Remaining Contractual Life Aggregate Intrinsic Value (1) Options outstanding at January 2, 2022 1,025,000 $ 7.12 Forfeited (49,500) $ 7.12 Options Outstanding at January 1, 2023 975,500 $ 7.12 4.6 $ — Vested or expected to vest at January 1, 2023 975,500 $ 7.12 4.6 $ — Options exercisable at January 1, 2023 868,250 $ 7.12 4.6 $ — (1) The aggregate intrinsic value is calculated using the difference between the market price of the Company's common stock at January 1, 2023 of $1.36 and the grant date exercise price for only those awards that have a grant date exercise price that is less than the market price of the Company's common stock at January 1, 2023. There were no awards having a grant date exercise price less than the market price of the Company's common stock at January 1, 2023. Restricted Stock Units. The Company has issued restricted stock units RSUs on shares of the Company's common shares to certain officers of the Company. During the twelve months ended January 1, 2023, 90,850 RSUs vested into shares of the Company's common stock at a weighted average price of $2.15 per share. A summary of all RSU activity for the year ended January 1, 2023 was as follows: Units Non-vested at January 2, 2022 129,620 Granted — Vested (90,850) Non-vested at January 1, 2023 38,770 |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Jan. 01, 2023 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | |
Preferred Stock [Text Block] | Stockholders' Equity Preferred Stock . In 2012, Carrols Restaurant Group issued to BKC 100 shares of the Company's Series A Convertible Preferred Stock (the "Series A Convertible Preferred Stock") pursuant to a certificate of designation. These shares were convertible into 9,414,580 shares of Carrols Restaurant Group Common Stock ("Carrols Common Stock"). In 2018, Carrols Restaurant Group, BKC and Blue Holdco 1, LLC ("Blue Holdco" and together with BKC, the "BKC Stockholders") exchanged the Series A Convertible Preferred Stock for Series B Convertible Preferred Stock (the "Series B Convertible Preferred Stock"), with substantially the same powers, preferences and rights of the shares of Series A Convertible Preferred Stock, except to provide that such shares will be transferable by the BKC Stockholders solely to certain of its affiliates or subsidiaries. In 2022, Carrols Restaurant Group entered into a Preferred Stock Exchange Agreement with two wholly-owned indirect subsidiaries of Restaurant Brands International, Inc. RBI and Restaurant Brands International Limited Partnership ("RBI LP") (collectively, such subsidiaries are referred to herein as the "Investors") to exchange all Series B Convertible Preferred Stock for Series D Convertible Preferred Stock (the "Series D Preferred Stock") with substantially the same powers, preferences and rights of the shares of Series B Convertible Preferred Stock except that the Series D Preferred Stock may be transferred by the holders of the Series D Preferred Stock to certain other entities that are both the franchisor of the Burger King brand or an affiliate thereof and a wholly-owned direct or indirect subsidiary of either RBI or RBI LP, each an indirect parent of the Investors. The Series D Convertible Preferred Stock ranks senior to Carrols Common Stock with respect to rights on liquidation, winding-up and dissolution of Carrols Restaurant Group. The Series D Convertible Preferred Stock is perpetual, will receive any dividends and amounts upon a liquidation event on an as converted basis, does not pay interest and has no mandatory prepayment features. The BKC Stockholders also have certain approval and voting rights as set forth in the certificate of designation for the Series D Convertible Preferred Stock so long as they own greater than 7.5% of the outstanding shares of Carrols Common Stock (on an as-converted basis). The Series D Convertible Preferred Stock will vote with the Company's Common Stock on an as converted basis and provides for the right of the BKC Stockholders to elect (a) two members to the Company's Board of Directors until the date on which the number of shares of common stock into which the outstanding shares of Series D Convertible Preferred Stock held by the BKC stockholders are then convertible constitutes less than 11.5% of the total number of outstanding shares of the Company's Common Stock and (b) one member to the Company's Board of Directors until the BKC Stockholders own Series D Convertible Preferred Stock (on an as converted basis) of less than 7.5% of the total number of outstanding shares of the Company's Common Stock. In connection with the Cambridge Merger, Cambridge Holdings was issued 10,000 shares of the Company's Series C Convertible Preferred Stock (the "Series C Convertible Preferred Stock") that was automatically converted during the third quarter of 2019 into approximately 7.5 million shares of the Company's Common Stock when such conversion was approved by the Company's stockholders at the Company's annual stockholders meeting on August 29, 2019. A Registration Rights and Stockholders' Agreement was entered into between the Company and Cambridge Holdings in connection with the issuance of Series C Convertible Preferred Stock which requires (a) two members to be nominated for election or re-election to the Company's Board of Directors until the date on which the number of shares of common stock held by Cambridge Holdings is less than 14.5% of the total number of outstanding shares of the Company's Common Stock and (b) one member to be nominated for election or re-election to the Company's Board of Directors until the date on which the number of shares of common stock held by Cambridge Holdings is less than 10% of the total number of outstanding shares of the Company's Common Stock. As of January 1, 2023 Cambridge Holdings beneficially owns approximately 23.8% of the Company's outstanding Common Stock after giving effect to treasury share repurchases. Stock Repurchase Program. On August 2, 2019, the Company's Board of Directors approved a stock repurchase plan ("Repurchase Program") under which the Company may repurchase up to $25.0 million of its outstanding common stock. The authorization became effective August 2, 2019. On August 10, 2021, the Company's Board of Directors approved an extension of the Company's Repurchase Program with approximately $11.0 million of its original $25 million in capacity remaining. The authorization will expire on August 2, 2023, unless terminated earlier by the Board of Directors. Purchases under the Repurchase Program may be made from time to time in open market transactions at prevailing market prices or in privately negotiated transactions (including, without limitation, the use of Rule 10b5-1 plans) in compliance with applicable federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company has no obligation to repurchase stock under the Repurchase Program, and the timing, actual number and value of shares purchased will depend on the Company's stock price, trading volume, general market and economic conditions, and other factors. During the twelve months ended January 3, 2021, the Company repurchased in open market transactions 1,534,304 shares of the Company's Common Stock at an average share price of $6.52 for a total cost of $10.0 million under the Repurchase Program. At January 1, 2023, $11.0 million was available to repurchase shares under the Repurchase Program. Shares repurchased are being held in treasury until they are retired at the discretion of the Board of Directors. Special Cash Dividend. Effective August 12, 2021, the Board declared a $0.41 per share special cash dividend amounting to $0.41 per share on all issued and outstanding shares of common stock, including common stock issuable on the conversion of our Series B Convertible Preferred Stock. The special cash dividend of $24.9 million was paid on October 5, 2021 to stockholders of record as of the close of business on August 25, 2021. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Jan. 01, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Loss per Share The Company applies the two-class method to calculate and present net loss per share. The Company's non-vested restricted share awards and Series D Convertible Preferred Stock held by the BKC Stockholders contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted net loss per share reflects additional shares of common stock outstanding, where applicable, calculated using the treasury stock method or the two-class method. The following table sets forth the calculation of basic and diluted net loss per share: Year ended January 1, 2023 January 2, 2022 January 3, 2021 Basic net loss per share: Net loss $ (75,572) $ (43,029) $ (29,463) Less: Income attributable to non-vested shares — — — Less: Income attributable to preferred stock — — — Net loss available to common stockholders $ (75,572) $ (43,029) $ (29,463) Weighted average common shares outstanding 50,718,387 49,899,274 50,751,185 Basic net loss per share $ (1.49) $ (0.86) $ (0.58) Diluted net loss per share: Net loss $ (75,572) $ (43,029) $ (29,463) Weighted average common shares outstanding 50,718,387 49,899,274 50,751,185 Dilutive effect of preferred stock and non-vested shares — — — Dilutive weighted average common shares outstanding 50,718,387 49,899,274 50,751,185 Diluted net loss per share (1) $ (1.49) $ (0.86) $ (0.58) Shares excluded from diluted net loss per share computations (1) 9,624,963 9,681,878 9,615,435 |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Jan. 01, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Lease Guarantees. Fiesta Restaurant Group, Inc. ("Fiesta"), a former wholly-owned subsidiary of the Company, was spun-off in 2012 to the Company's stockholders. As of January 1, 2023, the Company is a guarantor under 17 leases from the time when Fiesta was its subsidiary, which have lease terms expiring on various dates through 2030. As of January 1, 2023, the guarantees include eight Fiesta restaurant property leases and nine Taco Cabana leases of which all but one Fiesta-owned restaurant is still operating. Eight of these guarantees are for leases with Pollo Operations, Inc, a wholly owned subsidiary of Fiesta, and nine of the guarantees are for leases with Texas Taco Cabana, L.P., an indirect subsidiary of Taco Cabana, Inc. (together with all direct and indirect subsidiaries, "Taco"). Taco was a wholly owned subsidiary of Fiesta until August 16, 2021 when Fiesta sold all of its outstanding capital stock of Taco Cabana, Inc. to YTC Enterprises, LLC, an affiliate of Yadav Enterprises, Inc. The Company is fully liable for all obligations under the terms of the leases in the event that a tenant fails to pay any sums due under the lease, subject to indemnification provisions of the Separation and Distribution Agreement entered into in connection with the spin-off of Fiesta. The maximum potential amount of future undiscounted rental payments the Company could be required to make under these leases at January 1, 2023 was $7.0 million. The obligations under these leases will generally continue to decrease over time as these operating leases expire, other than execution of option renewals that exist under the original leases. No payments related to these guarantees have been made by the Company to date and none are expected to be required to be made in the future. The Company has not recorded a liability for these guarantees in accordance with ASC 460 - Guarantees as Fiesta has indemnified the Company for all such obligations and the Company did not believe it was probable it would be required to perform under any of the guarantees or direct obligations. Litigation. The Company is a party to various litigation matters that arise in the ordinary course of business. The Company does not believe that the ultimate resolution of any of these other matters will have a material adverse effect on its consolidated financial statements. |
Related Parties
Related Parties | 12 Months Ended |
Jan. 01, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Transactions with Related Parties In connection with an acquisition of restaurants from BKC in 2012, the Company issued to BKC 100 shares of Series A Convertible Preferred Stock, which was exchanged for 100 shares of newly issued Series B Convertible Preferred Stock in 2018. The Series B Convertible Preferred Stock was further exchanged for 100 shares of newly issued Series D Convertible Preferred Stock in 2022. These preferred shares are convertible into 9,414,580 shares of common stock, which as of January 1, 2023 represents approximately 15.1% of the outstanding shares of the Company's common stock after giving effect to the conversion of the Series D Convertible Preferred Stock and excluding shares held in treasury. See Note 13—Stockholder's Equity for further information. Pursuant to the Certificate of Designation of the Series D Convertible Preferred Stock (the "Certificate of Designation"), the BKC Stockholders are entitled to elect two representatives on the Company's Board of Directors. The approval of the BKC Stockholders is also required before the Company can take certain actions, including, among other things, amending the Company's certificate of incorporation or bylaws, declaring or paying a special cash dividend, amending the size of the Company's Board of Directors, or engaging in any business other than the ownership and operation of Burger King restaurants, in each case as more particularly described in the Certificate of Designation. The Company operates its Burger King restaurants under franchise agreements with BKC and its Popeyes restaurants under franchise agreements with PLK, both subsidiaries of RBI. These franchise agreements generally provide for an initial term of twenty years and currently have an initial franchise fee of $50,000. With BKC's and PLK's respective approval, the Company can elect to extend franchise agreements for additional 20-year terms, provided that the restaurant meets the current restaurant image standard and the Company is not in default under terms of the franchise agreement. In addition to the initial franchise fee, the Company generally pays BKC a monthly royalty at a rate of 4.5% of its Burger King sales and PLK a weekly royalty at a rate of 5.0% of its Popeyes sales. Royalty expense was $76.8 million, $72.8 million, and $67.2 million for the years ended January 1, 2023, January 2, 2022 and January 3, 2021, respectively and is included in other restaurant operating expenses in the consolidated statements of comprehensive loss. Beginning in May of 2021, the Company also pays a monthly fee to BKC for use of its digital platform which was $2.1 million and $1.3 million for the years ended January 1, 2023 and January 2, 2022, respectively, and is included in other restaurant operating expenses in the consolidated statements of comprehensive loss. The Company is also generally required to contribute 4% of restaurant sales from the Company's restaurants to the advertising funds utilized by BKC and PLK for their advertising, promotional programs and public relations activities, and amounts for additional local advertising in markets that approve such advertising. Advertising expense associated with these expenditures was $67.7 million, $64.0 million and $59.3 million for the years ended January 1, 2023, January 2, 2022 and January 3, 2021, respectively. As of January 1, 2023, January 2, 2022, and January 3, 2021, the Company leased 217, 225 and 232 of its restaurant locations from BKC, respectively. As of January 1, 2023, the terms and conditions of the leases with BKC are identical to those between BKC and their third-party lessor for 94 of the restaurants. Aggregate rent under these BKC leases for the years ended January 1, 2023, January 2, 2022 and January 3, 2021 was $27.7 million, $26.9 million, and $25.9 million, respectively. The Company does not believe that such lease terms have been significantly affected by the fact that the Company and BKC are deemed to be related parties. As of January 1, 2023 and January 2, 2022, the Company owed BKC $16.0 million and $16.3 million respectively, related to the payment of advertising, royalties, digital fees, rent and real estate taxes, which is normally remitted on a monthly basis. These costs are included in accounts payable, other current liabilities, and accrued real estate taxes on the accompanying consolidated balance sheets. The Company, Carrols Corporation, Carrols LLC, and BKC entered into an Amended Area Development Agreement on January 4, 2021 (the "Amended ADA"). Under the Amended ADA, Carrols LLC has agreed to open, build and operate a total of 50 new Burger King restaurants, 80% of which must be in Kentucky, Tennessee and Indiana. This includes four Burger King restaurants by September 30, 2021 (which were completed in 2021), 10 additional Burger King restaurants by September 30, 2022, 12 additional Burger King restaurants by September 30, 2023, 12 additional Burger King restaurants by September 30, 2024 and 12 additional Burger King restaurants by September 30, 2025. There is a 90-day cure period to meet the required restaurant development each development year. The Company is in ongoing discussions with BKC regarding its development plans, and does not believe the penalties, if any, associated with not meeting these commitments will be material. In addition, pursuant to the Amended ADA, BKC granted Carrols LLC franchise pre-approval to build new Burger King restaurants or acquire Burger King restaurants from Burger King franchisees with respect to 500 Burger King restaurants in the aggregate in (i) Kentucky, Tennessee and Indiana (excluding certain geographic areas in Indiana) and (ii) (a) 16 states, which include Arkansas, Indiana, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont and Virginia (subject to certain exceptions for certain limited geographic areas within certain states) and (b) any other geographic locations that Carrols LLC enters after the commencement date of the Amended ADA pursuant to BKC procedures subject to certain limitations. In connection with an acquisition of restaurants in 2019, the Company assumed a development agreement for Popeyes, which included an assignment by PLK of its right of first refusal under its franchise agreements with its franchisees for acquisitions in two southern states, as well as a development commitment to open, build and operate approximately 80 new Popeyes restaurants over six years. This development agreement with PLK was terminated on March 17, 2021, with certain covenants applicable to the Company surviving the termination. PLK reserved the right to charge the Company a $0.6 million fee if PLK and the Company are not able to come to a mutually agreeable solution with respect to such fee within a six-month period. The Company has not recorded a liability for such amount as the risk of loss is only considered reasonably possible at this time. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Jan. 01, 2023 | |
Retirement Benefits [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | Retirement Plans The Company offers its salaried employees the option to participate in the Carrols Corporation Retirement Savings Plan (the "Retirement Plan"). The Retirement Plan includes a savings option pursuant to section 401(k) of the Internal Revenue Code in addition to a post-tax savings option. Participating employees may contribute up to 50% of their salary annually to either of the savings options, subject to other limitations. The employees may allocate their contributions to various investment options available under a trust established by the Retirement Plan. The Company may elect to contribute to the Retirement Plan on an annual basis. The Company's contribution is equal to 50% of the employee's contribution subject to a maximum annual amount and begins to vest after one year of service and fully vests after five years of service. A year of service is defined as a plan year during which an employee completes at least 1,000 hours of service. Expense recognized for the Company's contributions to the Retirement Plan was $1.9 million, $1.8 million and $1.9 million for the years ended January 1, 2023, January 2, 2022 and January 3, 2021, respectively. The Company also has an Amended and Restated Deferred Compensation Plan which permits employees not eligible to participate in the Retirement Plan because they have been excluded as "highly compensated" employees (as so defined in the Retirement Plan) to voluntarily defer portions of their base salary and annual bonus. All amounts deferred by the participants earn interest at 8% per annum. There is no Company matching on any portion of the funds. At January 1, 2023 and January 2, 2022, a total of $3.1 million and $4.9 million, respectively, was deferred under this plan, including accrued interest, which is included in accrued payroll and long-term other liabilities on the accompanying consolidated balance sheets. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts (Notes) | 12 Months Ended |
Jan. 01, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Column B Column C Column D Column E Description Balance at Beginning of Period Charged to Costs and Expenses Charged to other accounts Deductions Balance at End of Period Year Ended January 1, 2023 Deferred income tax valuation allowance $ 24,410 21,065 (1,212) $ — $ 44,263 Year Ended January 2, 2022 Deferred income tax valuation allowance $ 13,138 11,272 — $ — $ 24,410 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 01, 2023 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation. The accompanying consolidated financial statements include the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year. The Company uses a 52 |
Use of Estimates | Use of Estimates. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include accrued occupancy costs, insurance liabilities, lease accounting matters, the valuation of acquired assets and liabilities, interest rate swap valuation, the valuation of deferred income tax assets and liabilities, and the evaluation for impairment of goodwill, long-lived assets and franchise rights. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At both January 1, 2023 and January 2, 2022, the Company did not have any cash invested in money market funds which are classified as cash equivalents on the consolidated balance sheets. |
Inventories | Inventories. Inventories, consisting primarily of food, beverage, and paper supplies, are stated at the lower of cost (determined on the first-in, first-out method) or net realizable value. Net realizable value is determined as the estimated selling price in the normal course of business minus the cost of disposal and transportation. |
Property and Equipment | Property and Equipment. Property and equipment is recorded at cost. The Company capitalizes all direct costs incurred to develop, construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Repairs and maintenance expenditures are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives: Owned buildings 9 to 30 years Equipment 3 to 7 years Computer hardware and software 3 to 7 years Assets subject to finance leases Shorter of useful life or lease term |
Business Combinations | Business Combinations. In accordance with ASC 805, the Company allocates the purchase price of an acquired business to its identifiable assets and liabilities based on the estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The excess value of the net identifiable assets and liabilities acquired over the purchase price, if any, is recorded as a bargain purchase gain. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third party valuation specialist to assist with the valuation of certain leasehold improvements, franchise rights and favorable and unfavorable leases. The Company estimates that the seller's carrying value of acquired restaurant equipment, subject to certain adjustments, is equivalent to the fair value of this equipment at the date of the acquisition. The fair values of assumed franchise agreements are valued as if the remaining term of the agreement is at the market rate. The fair values of acquired land, buildings, certain leasehold improvements, and restaurant equipment subject to finance leases are determined using both the cost approach and market approach and include significant inputs observable in the open market. The Company categorizes these inputs as Level 2 inputs under ASC 820. The fair value of acquired franchise rights and favorable or unfavorable lease positions are determined using the income approach and includes unobservable inputs. The Company categorizes these inputs as Level 3 inputs under ASC 820. |
Franchise Rights | Franchise Agreements. Fees for initial franchises and renewals are amortized using the straight-line method over the term of each individual agreement, which is generally twenty years. Franchise Rights. To determine the fair value attributable to franchise rights of restaurant acquisitions, the Company estimates the acquired restaurants' future earnings, discounts those earnings using an appropriate market discount rate and subtracts a contributory charge for net working capital, property and equipment and assembled workforce. Amounts allocated to franchise rights for each acquisition are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period. The Company assesses the potential impairment of franchise rights whenever events or changes in circumstances indicate that the carrying value may not be recoverable, which includes consideration of the impact of a decline in the Company's market value. If an indicator of impairment exists, an estimate of the aggregate undiscounted cash flows from the acquired restaurants is compared to the respective carrying value of franchise rights for each acquisition. If an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. |
Goodwill | Goodwill. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of the businesses acquired. Goodwill is not amortized, but is tested for impairment annually, or more frequently when events and circumstances indicate that the carrying amount may be impaired. The Company conducts its annual goodwill impairment as of the end of the eighth month of its fiscal year. The Company's measurement of the fair value of reporting units is a Level 3 measurement under the fair value hierarchy. Refer to Note 5 herein for further discussion. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. The Company assesses the potential impairment of long-lived assets, principally property and equipment, by determining whether the carrying value of these assets can be recovered over their respective remaining useful lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Impairment indicators at the restaurant level include sustained low or negative restaurant-level operating cash flows, sustained declining restaurant-level sales and if the ratio of trailing twelve months cash flows extended over the remaining lease term does not exceed the net book value of the asset group. |
Deferred Financing Costs | Deferred Financing Costs. Financing costs incurred in obtaining long-term debt and lease financing obligations are capitalized and amortized over the life of the related obligation as interest expense using the effective interest method. Long-term debt on the consolidated balance sheets is presented net of the unamortized amount of the financing costs related to long-term borrowings. |
Leases | Leases. The Company utilizes land and buildings in its operations under various lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for twenty years and provide for renewal options with rent escalations. The exercise of such renewal options are generally at the Company's sole discretion. The Company evaluates renewal options at lease commencement (and any subsequent amendment or modification) to determine if such options are reasonably certain to be exercised based on economic factors. Certain leases also require variable rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Right-of-use ("ROU") lease assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make payments in exchange for that right of use. As the rate implicit within our leases is not readily determinable, the Company uses market and term specific incremental borrowing rates which consider the rate of interest it expects to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. ROU assets are reduced by lease incentives, increased for initial direct costs and adjusted by favorable lease assets and unfavorable lease liabilities. Variable lease components represent amounts that are contractually fixed as a percentage of sales and are recognized in expense as incurred. Leases with a term of 12 months or less are not recorded on the consolidated balance sheets and are recognized as lease expense on a straight-line basis over the lease term. The Company does not account for lease components (e.g., fixed payments including rent) separately from the non-lease components (e.g., common area maintenance) except in instances where the lease components are considered variable in nature. For certain leases where rent escalates based upon a change in a financial index, such as the Consumer Price Index, the difference between the rate at lease inception and the subsequent fluctuations in that rate are included in variable lease costs. Additionally, because the Company has elected to not separate lease and non-lease components, in limited instances variable costs also include payments to the landlord for common area maintenance, real estate taxes, insurance and other operating expenses. Rent expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred. The Company also utilizes certain restaurant equipment under various finance lease agreements with initial terms of generally three |
Lease Financing Obligations | Lease Financing Obligations. Lease financing obligations as of January 1, 2023 includes one sale-leaseback transaction accounted for under the financing method. As of January 2, 2022 lease financing obligations also included two sale-leaseback transactions because the Company controlled the underlying assets during construction which were subsequently reclassified as an operating lease from a finance lease in 2022 when construction was completed (See Note 7). For sale-leaseback transactions accounted for under the financing method, the land and building assets subject to this obligation remain on the Company's consolidated balance sheets at their historical costs and the building assets continue to be depreciated over their remaining useful lives. The proceeds received by the Company from this sale-leaseback transaction were recorded as lease financing obligations and the lease payments are applied as payments of principal and interest. The selection of the interest rate on this lease financing obligation was evaluated at inception of the lease based on the Company's incremental borrowing rate adjusted to the rate required to prevent recognition of a non-cash loss or negative amortization of the obligation through the end of the primary lease term. As of January 1, 2023, lease financing obligations included $1.2 million associated with this sale-leaseback transaction. To the extent the Company is involved with the construction of an asset it is leasing and receives proceeds associated with the sale of such asset prior to completing construction, costs incurred as of the consolidated balance sheet dates are recorded within property and equipment and a lease financing obligation representing sale proceeds from the lessor is recorded in other long-term liabilities. Once construction is complete, the accounting requirements for a sale-leaseback transaction are considered. If the arrangement does not qualify for sale-leaseback accounting treatment, it is accounted for as a financing transaction. If an arrangement meets the requirements for sale-leaseback treatment, the Company will record a gain or loss on the sale and derecognize the completed construction assets and lease financing obligation. As of January 1, 2023, there were no lease financing obligations remaining associated with this type of arrangement. |
Revenue Recognition | Revenue Recognition . Revenues from Company restaurants are recognized net of sales discounts and refunds, when payment is tendered at the time of sale or upon fulfillment of delivery orders. Revenues are reported net of sales tax collected from customers and remitted to governmental taxing authorities. Food, beverage and packaging costs. The Company includes food, beverage and paper costs and delivery commissions, net of any vendor purchase discounts and rebates, in food, beverage and packaging costs. Other restaurant operating expenses. The Company includes restaurant-level operating costs other than food, beverage and packaging costs, restaurant wages and related expenses, rent expense and advertising costs in other restaurant operating expenses. Its major components include royalty expenses paid to Burger King Company LLC (previously Burger King Corporation) ("BKC") and Popeyes Louisiana Kitchen, Inc. ("PLK"), utilities, repairs and maintenance, operating supplies, real estate taxes and credit card fees. |
Gift cards | Gift cards. The Company sells gift cards in its restaurants that are issued under the gift card program of Restaurant Brands International, Inc. ("RBI"). Proceeds from the sale of Burger King and Popeyes gift cards at the Company's restaurants are remitted to RBI, and RBI reimburses the Company for any gift card redemptions at its restaurants. The Company recognizes revenue for restaurant sales upon redemption of gift cards by the customer. |
Advertising Costs | Advertising Costs. All advertising costs are expensed as incurred. |
Pre-opening Costs | Pre-opening Costs. The Company's pre-opening costs generally include payroll costs and travel associated with the opening of a new restaurant, rent and promotional costs. |
Income Taxes | Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period, including any changes in valuation allowances. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to an amount for which realization is likely. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company and its subsidiaries file a consolidated federal income tax return. |
Insurance | Insurance. The Company is self-insured for general liability, medical insurance and most workers' compensation claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and in certain cases claims in the aggregate. Losses are accrued based upon the Company's estimates of the aggregate liability for claims based on Company experience and other methods used to measure such estimates. The Company does not discount any of its self-insurance obligations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect the Company's own assumptions. Financial instruments include cash and cash equivalents, trade and other receivables, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, trade and other receivables and accounts payable approximate fair value because of the short-term nature of these financial instruments. Borrowings under the Company's Senior Credit Facilities (including its term B loans) accrue interest at a floating rate tied to a standard short-term borrowing index selected at the Company's option, plus an applicable margin. The Company's liability for its Senior Credit Facilities and 5.875% Senior Notes due 2029 are carried at historical cost in the accompanying balance sheets. The fair value of our term B loans and 5.875% Senior Notes due 2029 is based on recent trading activity, which are Level 2 inputs in the fair value hierarchy. As of January 1, 2023, the term B loans traded at 87.8% of par value and the 5.875% Senior Notes due 2029 traded at 70.5% of par value. The Company recognizes its derivative arrangements on the balance sheet at fair value, which is considered a Level 2 input. The Company's only derivative is an interest rate swap (the "Swap") which is designated as a cash flow hedge. Accordingly, the effective portion of the changes in the fair value of this arrangement is recognized in accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. Any ineffective portion of the changes in the fair value of this arrangement is immediately recognized in earnings as interest expense, as applicable. The Company classifies cash inflows and outflows from derivatives within operating activities on the consolidated statements of cash flows. The Swap is valued at $8.6 million as of January 1, 2023 and it is classified as Level 2 within the fair value hierarchy. |
Stock-based Compensation | Stock-Based Compensation. The Company has an incentive stock plan under which incentive stock options, non-qualified stock options, restricted stock units ("RSUs"), time-based non-vested shares and performance-based non-vested shares may be granted to employees and non-employee directors. The Company has granted time-based non-vested shares under this plan annually as well as granted time-based non-vested shares, performance-based non-vested shares, stock options, and RSUs to corporate employees for performance. Time-vested non-vested shares, options, and RSUs granted to corporate employees and non-employee directors generally vest in equal installments over three years. For time-vested non-vested stock awards and restricted stock units, the fair market value of the award is determined based upon the closing value of the Company's stock price on the grant date and is recorded to compensation expense on a straight-line basis over the requisite service period. For stock options, the fair-value of the options is estimated using the Black-Scholes option pricing model based on assumptions for the risk-free rate of interest, expected dividend yield, expected volatility, and the expected term of the award. Compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based restricted shares, the fair value of the market-based restricted shares is determined using a Monte Carlo simulation valuation model and these shares will be expensed over a three year performance-based vesting period based on the probability of the Company's attainment of the contractually defined targets. See Note 12 to the consolidated financial statements. |
Concentrations of Credit Risk | Concentrations of Credit Risk. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains its day-to-day operating cash balances in interest-bearing transaction accounts at financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000. Although the Company maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and believes its credit risk to be minimal. |
Segment Information | Segment Information. Operating segments are components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker to allocate resources and assess performance. The Company's chief operating decision maker currently evaluates the Company's operations from a number of different operational perspectives; however resource allocation decisions are made based on the chief operating decision maker's evaluation of the total Company operations. The Company derives all significant revenues from a single operating segment. Accordingly, the Company views the operating results of its restaurants as one reportable segment. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Not Yet Adopted. In the normal course of business, the Company evaluates all new Accounting Standards Updates (“ASU”) and other accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), or other authoritative accounting bodies to determine the potential impact they may have on its Consolidated Financial Statements. The Company does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on its Consolidated Financial Statements. |
Net Income (Loss) Per Share Ear
Net Income (Loss) Per Share Earnings per share narrative (Policies) | 12 Months Ended |
Jan. 01, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | The Company applies the two-class method to calculate and present net loss per share. The Company's non-vested restricted share awards and Series D Convertible Preferred Stock held by the BKC Stockholders contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted net loss per share reflects additional shares of common stock outstanding, where applicable, calculated using the treasury stock method or the two-class method. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Accounting Policies [Abstract] | |
Summary of Depreciation and Amortization | Depreciation and amortization is provided using the straight-line method over the following estimated useful lives: Owned buildings 9 to 30 years Equipment 3 to 7 years Computer hardware and software 3 to 7 years Assets subject to finance leases Shorter of useful life or lease term Property and equipment at January 1, 2023 and January 2, 2022 consisted of the following: January 1, 2023 January 2, 2022 Land $ 7,685 $ 10,021 Owned buildings 12,895 14,581 Leasehold improvements 454,134 442,461 Equipment 342,118 337,533 Assets subject to finance leases 30,873 22,694 847,705 827,290 Less accumulated depreciation and amortization (535,359) (489,588) $ 312,346 $ 337,702 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | In 2021, the Company acquired an aggregate of 19 Burger King restaurants from other franchisees in the following transactions (in thousands except number of restaurants): Closing Date Number of Restaurants Purchase Price Fee-Owned (1)(2) Market Location June 17, 2021 14 $ 27,603 12 Fort Wayne, Indiana June 23, 2021 5 3,216 1 Battle Creek, Michigan 19 $ 30,819 13 (1) The 2021 acquisitions included the purchase of 13 fee-owned restaurants, of which 12 were sold in subsequent sale-leaseback transactions during the third quarter of 2021 for net proceeds of approximately $20.2 million. (2) One of the fee-owned restaurants was closed at the end of 2021 and subsequently sold in the second quarter of 2022 for proceeds of $0.2 million. |
Schedule of Purchase Price Allocation [Table Text Block] | The Company allocated the aggregate purchase price for the 2021 acquisitions at their estimated fair values. The following table summarizes the final allocation of the aggregate purchase price for the 2021 acquisitions reflected in the consolidated balance sheets as of January 1, 2023: Inventory $ 229 Land and buildings 20,376 Restaurant equipment 850 Restaurant equipment - subject to finance leases 29 Right-of-use assets 2,997 Leasehold improvements 550 Franchise fees 411 Franchise rights 6,025 Deferred income taxes 484 Goodwill 1,832 Operating lease liabilities (2,900) Finance lease liabilities for restaurant equipment (35) Accounts payable (29) Net assets acquired $ 30,819 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table summarizes the Company's unaudited pro forma operating results: Year Ended January 2, 2022 Total revenue $ 1,663,860 Net loss (41,796) Basic and diluted net loss per share (0.84) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Depreciation and Amortization | Depreciation and amortization is provided using the straight-line method over the following estimated useful lives: Owned buildings 9 to 30 years Equipment 3 to 7 years Computer hardware and software 3 to 7 years Assets subject to finance leases Shorter of useful life or lease term Property and equipment at January 1, 2023 and January 2, 2022 consisted of the following: January 1, 2023 January 2, 2022 Land $ 7,685 $ 10,021 Owned buildings 12,895 14,581 Leasehold improvements 454,134 442,461 Equipment 342,118 337,533 Assets subject to finance leases 30,873 22,694 847,705 827,290 Less accumulated depreciation and amortization (535,359) (489,588) $ 312,346 $ 337,702 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets [Table Text Block] | The following is a summary of the Company's franchise rights as of the respective balance sheet dates: Balance at January 3, 2021 $ 334,597 Acquisitions of restaurants (Note 3) 6,025 Amortization expense (13,853) Balance at January 2, 2022 326,769 Amortization expense (13,965) Impairment (245) Balance at January 1, 2023 $ 312,559 |
Schedule of Goodwill [Table Text Block] | The Company assessed events and circumstances from the date of its annual goodwill impairment test through January 1, 2023 and there were no indicators representing a further triggering event. Goodwill at January 3, 2021 $ 122,619 Acquisition of restaurants (Note 3) 1,832 Goodwill at January 2, 2022 124,451 Impairment of goodwill (16,700) Goodwill at January 1, 2023 $ 107,751 |
Other Liabilities, Long-Term (T
Other Liabilities, Long-Term (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Liabilities, Noncurrent [Abstract] | |
Schedule of Other Liabilities [Table Text Block] | Other liabilities, long-term, at January 1, 2023 and January 2, 2022 consisted of the following: January 1, 2023 January 2, 2022 Accrued occupancy costs $ 1,797 $ 1,741 Accrued workers' compensation and general liability claims 5,239 4,947 Deferred compensation 3,002 2,286 Deferred federal payroll taxes — 10,808 Lease financing obligations 1,179 5,780 Other 1,026 1,210 $ 12,243 $ 26,772 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Leases [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Rent commitments under finance and non-cancelable operating leases at January 1, 2023 were as follows: Fiscal year ending: Operating Leases Finance Leases December 31, 2023 $ 102,764 $ 3,840 December 29, 2024 101,867 3,453 December 28, 2025 99,971 3,332 December 27, 2026 98,252 3,242 January 2, 2028 96,010 763 Thereafter 774,129 4 Total lease payments 1,272,993 14,634 Less: imputed interest (449,120) (1,808) Present value of lease liabilities 823,873 12,826 Less: current portion (47,408) (3,091) Total long-term lease liabilities $ 776,465 $ 9,735 |
Finance Lease, Liability, Maturity [Table Text Block] | Rent commitments under finance and non-cancelable operating leases at January 1, 2023 were as follows: Fiscal year ending: Operating Leases Finance Leases December 31, 2023 $ 102,764 $ 3,840 December 29, 2024 101,867 3,453 December 28, 2025 99,971 3,332 December 27, 2026 98,252 3,242 January 2, 2028 96,010 763 Thereafter 774,129 4 Total lease payments 1,272,993 14,634 Less: imputed interest (449,120) (1,808) Present value of lease liabilities 823,873 12,826 Less: current portion (47,408) (3,091) Total long-term lease liabilities $ 776,465 $ 9,735 |
Lease, Cost [Table Text Block] | The components and classification of lease expense for the years ended January 1, 2023, January 2, 2022 and January 3, 2021 are as follows: Year ended Lease cost Classification January 1, 2023 January 2, 2022 January 3, 2021 Operating lease cost (1) Restaurant rent expense $ 105,285 $ 103,733 $ 102,651 Operating lease cost (2) General and administrative 853 946 606 Variable lease cost - variable rent Restaurant rent expense 20,196 18,929 15,793 Variable lease cost - common area maintenance Other restaurant operating expenses 578 585 521 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization 2,798 755 1,233 Interest on lease liabilities Interest expense 723 133 130 Total lease cost $ 130,433 $ 125,081 $ 120,934 (1) Includes short-term leases which are not material. (2) Represents operating lease costs for property and equipment not directly related to restaurant operations. |
Assets And Liabilities, Lessee [Table Text Block] | Supplemental balance sheet information related to leases was as follows as of January 1, 2023 and January 2, 2022: Leases Classification January 1, 2023 January 2, 2022 Assets Operating leases Operating right-of-use assets, net $ 763,935 $ 791,763 Finance leases Property and equipment, net 12,429 6,153 Total leased assets $ 776,364 $ 797,916 Liabilities Current Operating leases Current portion of operating lease liabilities $ 47,408 $ 44,688 Finance leases Current portion of long-term debt and finance lease liabilities 3,091 1,544 Long-term Operating leases Operating lease liabilities 776,465 802,959 Finance leases Long-term debt and finance lease liabilities 9,735 4,762 Total lease liabilities $ 836,699 $ 853,953 Weighted Average Remaining Lease Term Operating leases 12.9 years 13.5 years Finance leases 4.1 years 4.3 years Weighted Average Discount Rate Operating leases 7.0 % 7.0 % Finance leases 6.7 % 5.8 % |
Long-Term Debt Long-Term Debt (
Long-Term Debt Long-Term Debt (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt at January 1, 2023 and January 2, 2022 consisted of the following: January 1, 2023 January 2, 2022 Senior Credit Facility: Term B Loans $ 167,625 $ 171,875 Revolving credit borrowings 12,500 — Senior Notes Due 2029 300,000 300,000 Finance lease liabilities 12,826 6,306 Total Funded debt 492,951 478,181 Less: current portion of long-term debt and finance lease liabilities (7,341) (5,794) Less: unamortized debt issuance costs (5,401) (6,490) Less: original issue discount (453) (580) Total Long-term Debt $ 479,756 $ 465,317 |
Schedule of Maturities of Long-term Debt [Table Text Block] | At January 1, 2023, principal payments required on long-term debt, including finance leases, were as follows: Fiscal year ending: December 31, 2023 $ 7,341 December 29, 2024 7,156 December 28, 2025 7,228 December 27, 2026 170,468 January 2, 2028 754 Thereafter 300,004 $ 492,951 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The provision (benefit) for income taxes was comprised of the following: Year ended January 1, 2023 January 2, 2022 January 3, 2021 Current: Federal $ — $ — $ — State (37) (36) 268 (37) (36) 268 Deferred: Federal (16,790) (12,374) (6,039) State (5,027) (4,021) (1,073) (21,817) (16,395) (7,112) Increase in valuation allowance 21,065 11,272 13,138 Provision (benefit) for income taxes $ (789) $ (5,159) $ 6,294 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of deferred income tax assets and liabilities at January 1, 2023 and January 2, 2022 were as follows: January 1, 2023 January 2, 2022 Deferred income tax assets: Operating lease liabilities $ 211,000 $ 217,236 Federal net operating loss carryforwards 26,122 26,839 Tax credit carryforwards 43,906 39,965 State net operating loss carryforwards 8,216 6,837 Interest expense limitation under section 163 (j) 8,090 1,345 Stock-based compensation expense 1,467 1,683 Accrued vacation benefits 2,904 2,844 Postretirement benefit obligations 721 766 Intangible Assets 757 — Other deferred income tax assets 5,981 6,507 Gross deferred income tax assets 309,164 304,022 Less: Valuation allowance (44,263) (24,410) Total deferred income tax assets $ 264,901 $ 279,612 Deferred income tax liabilities: Operating right-of-use assets (195,705) (202,887) Property and equipment depreciation (12,247) (18,092) Franchise rights (61,755) (63,030) Accumulated other comprehensive income-postretirement benefits (386) (380) Accumulated other comprehensive income-accrued interest rate swap (2,160) (161) Other deferred income tax liabilities (313) (2,679) Total deferred income tax liabilities (272,566) (287,229) Net long-term deferred income tax liabilities $ (7,665) $ (7,617) |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the statutory federal income tax provision to the income tax provision (benefit) for the years ended January 1, 2023, January 2, 2022, and January 3, 2021 was as follows: Year ended January 1, 2023 January 2, 2022 January 3, 2021 Statutory federal income tax provision (benefit) $ (16,036) $ (10,119) $ (4,865) State income taxes, net of federal benefit (4,085) (2,934) (726) Employment tax credits (2,817) (3,274) (2,585) Change in valuation allowances 21,065 11,272 13,138 Non-deductible expenses 597 431 214 Stock-based compensation 684 127 525 Rate change — (163) 312 Miscellaneous (197) (499) 281 Provision (benefit) for income taxes $ (789) $ (5,159) $ 6,294 |
Stock-based Compensation Stock-
Stock-based Compensation Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Nonvested Share Activity [Table Text Block] | A summary of all non-vested common share activity for the year ended January 1, 2023 was as follows: Shares Weighted Average Grant Date Price Non-vested at January 2, 2022 1,336,830 $ 6.55 Granted 1,442,584 $ 2.72 Vested (882,053) $ 6.18 Forfeited (129,550) $ 4.08 Non-vested at January 1, 2023 1,767,811 $ 3.79 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following assumptions were used in the Black-Scholes option-pricing model to determine the fair value of stock option awards at the grant date: 2020 Risk-free interest rate 0.21 % Expected term (in years) 4.5 Expected volatility 65.10 % Expected dividend yield — % Fair Value $ 3.65 Expected term represents the period that the stock option awards were expected to be outstanding. Given the Company has not issued stock options since 2010, it concluded that its stock option exercise history did not provide a reasonable basis upon which to estimate expected term and therefore used the simplified method to determine the expected term of this stock option grant. This method bases the expected term calculation on the average of the vesting term and the contractual term of the awards. The risk-free interest rate was based on the yield of constant maturity U.S. treasury bonds with a remaining term equal to the expected term of the awards. There was no expected dividend yield. The Company estimated the stock price volatility using weekly price observations over the most recent historical period equal to the expected life of the awards. |
Share-based Payment Arrangement, Option, Activity | A summary of all stock option activity for the year ended January 1, 2023 was as follows: Options Weighted Average Exercise Price Average Remaining Contractual Life Aggregate Intrinsic Value (1) Options outstanding at January 2, 2022 1,025,000 $ 7.12 Forfeited (49,500) $ 7.12 Options Outstanding at January 1, 2023 975,500 $ 7.12 4.6 $ — Vested or expected to vest at January 1, 2023 975,500 $ 7.12 4.6 $ — Options exercisable at January 1, 2023 868,250 $ 7.12 4.6 $ — (1) The aggregate intrinsic value is calculated using the difference between the market price of the Company's common stock at January 1, 2023 of $1.36 and the grant date exercise price for only those awards that have a grant date exercise price that is less than the market price of the Company's common stock at January 1, 2023. There were no awards having a grant date exercise price less than the market price of the Company's common stock at January 1, 2023. |
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | A summary of all RSU activity for the year ended January 1, 2023 was as follows: Units Non-vested at January 2, 2022 129,620 Granted — Vested (90,850) Non-vested at January 1, 2023 38,770 |
Net Income (Loss) Per Share E_2
Net Income (Loss) Per Share Earnings per Share Table (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the calculation of basic and diluted net loss per share: Year ended January 1, 2023 January 2, 2022 January 3, 2021 Basic net loss per share: Net loss $ (75,572) $ (43,029) $ (29,463) Less: Income attributable to non-vested shares — — — Less: Income attributable to preferred stock — — — Net loss available to common stockholders $ (75,572) $ (43,029) $ (29,463) Weighted average common shares outstanding 50,718,387 49,899,274 50,751,185 Basic net loss per share $ (1.49) $ (0.86) $ (0.58) Diluted net loss per share: Net loss $ (75,572) $ (43,029) $ (29,463) Weighted average common shares outstanding 50,718,387 49,899,274 50,751,185 Dilutive effect of preferred stock and non-vested shares — — — Dilutive weighted average common shares outstanding 50,718,387 49,899,274 50,751,185 Diluted net loss per share (1) $ (1.49) $ (0.86) $ (0.58) Shares excluded from diluted net loss per share computations (1) 9,624,963 9,681,878 9,615,435 (1) Shares issuable upon conversion of preferred stock and non-vested shares were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive. |
Basis Of Presentation Narrative
Basis Of Presentation Narrative (Details) | Jan. 01, 2023 |
Entity Information [Line Items] | |
Number of states | 23 |
Burger King Corporate [Member] | |
Entity Information [Line Items] | |
Number of restaurants | 1,022 |
Popeyes Franchises [Member] | |
Entity Information [Line Items] | |
Number of restaurants | 65 |
Number of states | 7 |
Significant Accounting Polici_4
Significant Accounting Policies - Summary of Depreciation and Amortization (Details) | 12 Months Ended |
Jan. 01, 2023 segment | |
Property and equipment [Line Items] | |
Number of Reportable Segments | 1 |
Minimum [Member] | Owned buildings | |
Property and equipment [Line Items] | |
Useful life | 9 years |
Minimum [Member] | Equipment | |
Property and equipment [Line Items] | |
Useful life | 3 years |
Minimum [Member] | Computer hardware and software | |
Property and equipment [Line Items] | |
Useful life | 3 years |
Maximum [Member] | Owned buildings | |
Property and equipment [Line Items] | |
Useful life | 30 years |
Maximum [Member] | Equipment | |
Property and equipment [Line Items] | |
Useful life | 7 years |
Maximum [Member] | Computer hardware and software | |
Property and equipment [Line Items] | |
Useful life | 7 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jan. 15, 2019 | Jan. 15, 2018 | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Entity Information [Line Items] | |||||
Operating leases, term | 20 years | ||||
Franchise agreement, term | 20 years | ||||
Sale-leaseback obligations | $ 1,179 | $ 5,780 | |||
Marketing and Advertising Expense | 69,389 | 65,433 | $ 60,735 | ||
Pre-Opening Costs | 300 | 100 | 200 | ||
Fair value of swap | 8,600 | ||||
Goodwill impairment loss | 16,700 | 0 | 0 | ||
Franchise rights impairment | 245 | 0 | 0 | ||
Impairment charges | $ 2,800 | $ 3,900 | $ 8,200 | ||
Stock Award Vesting Period | 3 years | ||||
Term Loan B Facility [Member] | |||||
Entity Information [Line Items] | |||||
Trading percentage | 87.80% | ||||
Senior Notes due 2029 | |||||
Entity Information [Line Items] | |||||
Interest Rate | 5.875% | ||||
Trading percentage | 70.50% | ||||
Management [Member] | |||||
Entity Information [Line Items] | |||||
Stock Award Vesting Period | 3 years | 3 years | |||
Maximum [Member] | |||||
Entity Information [Line Items] | |||||
Finance lease terms | 8 years | ||||
Minimum [Member] | |||||
Entity Information [Line Items] | |||||
Finance lease terms | 3 years | ||||
Minimum [Member] | Management [Member] | |||||
Entity Information [Line Items] | |||||
Stock Award Vesting Period | 3 years |
Acquisition Narrative (Details)
Acquisition Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jun. 23, 2021 restaurant | Jun. 17, 2021 restaurant | Jul. 03, 2022 USD ($) | Jan. 01, 2023 USD ($) restaurant | Jan. 02, 2022 USD ($) | Jan. 03, 2021 restaurant | |
Business Acquisition [Line Items] | ||||||
Proceeds From Sale Of Fee-Owned Properties | $ 0.2 | |||||
Number Of Businesses Acquired, Fee Owned | restaurant | 1 | 12 | 13 | |||
Sale Leaseback Transaction, Number Of Restaurants Expected To Be Sold | restaurant | 12 | |||||
Sale Leaseback Transaction, Net Book Value | $ 20.2 | |||||
Number of Businesses Sold, Fee Owned | restaurant | 1 | |||||
Deferred income taxes | 1.8 | |||||
Pro forma transaction costs | 0.4 | |||||
2021 Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | $ 12.9 | $ 21.9 |
Acquisition Table of Acquisitio
Acquisition Table of Acquisitions (Details) $ in Thousands | 12 Months Ended | ||||
Jun. 23, 2021 USD ($) restaurant | Jun. 17, 2021 USD ($) restaurant | Jan. 01, 2023 USD ($) restaurant | Jan. 02, 2022 USD ($) | Jan. 03, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||
Restaurants Acquired | restaurant | 5 | 14 | 19 | ||
Payments to Acquire Businesses, Gross | $ | $ 3,216 | $ 27,603 | $ 30,819 | ||
Acquisition of restaurants, net of cash acquired | $ | $ 0 | $ (30,819) | $ 0 | ||
Number Of Businesses Acquired, Fee Owned | restaurant | 1 | 12 | 13 | ||
Sale Leaseback Transaction, Number Of Restaurants Expected To Be Sold | restaurant | 12 | ||||
Sale Leaseback Transaction, Net Book Value | $ | $ 20,200 |
Acquisition Purchase Price Allo
Acquisition Purchase Price Allocation, Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 01, 2023 | Jan. 03, 2021 | |
Business Acquisition [Line Items] | |||
Goodwill, Acquired During Period | $ 1,832 | ||
Goodwill | $ 124,451 | $ 107,751 | $ 122,619 |
2021 Acquisitions | |||
Business Acquisition [Line Items] | |||
Inventory | 229 | ||
Land and building | 20,376 | ||
Restaurant equipment | 850 | ||
Restaurant equipment - subject to capital lease | 29 | ||
Right-of-use assets | 2,997 | ||
Leasehold improvements | 550 | ||
Franchise fees | 411 | ||
Franchise rights | 6,025 | ||
Goodwill | 1,832 | ||
Finance lease obligations for restaurant equipment | (35) | ||
Operating lease liabilities | (2,900) | ||
Accounts payable | (29) | ||
Net assets acquired | 30,819 | ||
Deferred taxes | $ 484 |
Acquisition Pro Forma Informati
Acquisition Pro Forma Information, Acquisitions (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Jan. 01, 2023 USD ($) $ / shares | |
Business Combination and Asset Acquisition [Abstract] | |
Restaurant sales | $ 1,663,860 |
Net income | $ (41,796) |
Basic net loss per share (dollars per share) | $ / shares | $ (0.84) |
Diluted net loss per share (dollars per share) | $ / shares | $ (0.84) |
Pro forma transaction costs | $ 400 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Property and equipment [Line Items] | |||
Land | $ 7,685 | $ 10,021 | |
Owned buildings | 12,895 | 14,581 | |
Leasehold improvements | 454,134 | 442,461 | |
Equipment | 342,118 | 337,533 | |
Assets subject to capital leases | 30,873 | 22,694 | |
Propert and equipment, gross | 847,705 | 827,290 | |
Less accumulated depreciation and amortization | (535,359) | (489,588) | |
Property and equipment, net | 312,346 | 337,702 | |
Depreciation expense | 78,068 | 80,798 | $ 81,727 |
Finance Lease, Right-of-Use Asset, Accumulated Amortization | 18,400 | 16,500 | |
Property and Equipment [Member] | |||
Property and equipment [Line Items] | |||
Depreciation expense | $ 61,400 | $ 64,500 | $ 64,400 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Franchise rights impairment | $ (245) | $ 0 | $ 0 |
Franchise Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets, Net (Excluding Goodwill) | 312,559 | 326,769 | 334,597 |
Finite-lived Intangible Assets Acquired | 6,025 | ||
Amortization expense | $ (13,965) | $ (13,853) | $ 14,300 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 124,451 | $ 122,619 | |
Goodwill, Acquired During Period | 1,832 | ||
Goodwill | 107,751 | 124,451 | $ 122,619 |
Goodwill impairment loss | $ (16,700) | $ 0 | $ 0 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Franchise agreement, term | 20 years | ||
Franchise rights impairment | $ 245 | $ 0 | $ 0 |
Expected Amortization, year three | 14,000 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 14,000 | ||
Expected Amortization, next fiscal year | 14,000 | ||
Expected Amortization, year five | 13,900 | ||
Expected Amortization, year four | 13,900 | ||
Goodwill impairment loss | 16,700 | 0 | 0 |
Franchise Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ (13,965) | $ (13,853) | $ 14,300 |
Impairment Of Long-Lived Asse_2
Impairment Of Long-Lived Assets And Other Lease Charges (Details) $ in Millions | 12 Months Ended | ||
Jan. 01, 2023 USD ($) restaurant | Jan. 02, 2022 USD ($) | Jan. 03, 2021 USD ($) restaurant | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment and other lease charges | $ 4.9 | $ 4.5 | $ 12.8 |
Impairment charges | 2.8 | 3.9 | 8.2 |
Other lease charges | $ 2.1 | 0.6 | $ 4.6 |
Impairment, Nonoperating | $ 1.9 | ||
Asset impairment charges, number of restaurants | 15 | 9 | 15 |
Asset Impairment Charges, Number of Restaurant Closures | restaurant | 22 | ||
Asset Impairment Charges, Right of First Refusal | $ 2 | ||
Previously Impaired [Member] | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment charges | $ 0.7 | $ 0.5 | 1.2 |
Initial Impairments [Member] | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment charges | 2.1 | $ 1.5 | $ 5 |
Other Lease Charges | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Long-lived Assets Impairment and Other Lease Charges | $ 1.7 | ||
Closed Restaurants [Member] | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Asset Impairment Charges, Number of Restaurant Closures | restaurant | 8 |
Other Liabilities, Long-Term (D
Other Liabilities, Long-Term (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Unusual or Infrequent Item, or Both [Line Items] | ||
Accrued Occupancy Costs | $ 1,797 | $ 1,741 |
Accrued workers' compensation and general liability claims | 5,239 | 4,947 |
Deferred compensation | 3,002 | 2,286 |
Deferred Federal Payroll Taxes, Noncurrent | 0 | 10,808 |
Sale-leaseback obligations | 1,179 | 5,780 |
Other Accrued Liabilities, Noncurrent | 1,026 | 1,210 |
Other Liabilities, Noncurrent | 12,243 | $ 26,772 |
Deferred Federal Payroll Taxes, Current | $ 10,800 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 USD ($) restaurant | Jan. 02, 2022 USD ($) restaurant | Jan. 03, 2021 USD ($) restaurant | |
Lessee, Lease, Description [Line Items] | |||
Operating leases, term | 20 years | ||
Properties sold in sale-leaseback transactions | restaurant | 2 | 13 | 12 |
Proceeds from sale-leaseback transactions | $ | $ 4,052 | $ 22,251 | $ 22,499 |
Leases - Minimum Rent Commitmen
Leases - Minimum Rent Commitments (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Leases [Abstract] | ||
January, 3, 2021 | $ 102,764 | |
January 2, 2022 | 101,867 | |
January, 1, 2023 | 99,971 | |
46383 | 98,252 | |
46754 | 96,010 | |
Thereafter | 774,129 | |
Total lease payments | 1,272,993 | |
Less: imputed interest | $ (449,120) | |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Total Long-term Debt | Total Long-term Debt |
Present value of lease liabilities | $ 823,873 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Less: current portion | $ (47,408) | $ (44,688) |
Total long-term lease liabilities | 776,465 | 802,959 |
Finance Leases | ||
January, 3, 2021 | 3,840 | |
January 2, 2022 | 3,453 | |
January, 1, 2023 | 3,332 | |
46383 | 3,242 | |
46754 | 763 | |
Thereafter | 4 | |
Total lease payments | 14,634 | |
Less: imputed interest | (1,808) | |
Present value of lease liabilities | 12,826 | |
Less: current portion | (3,091) | |
Total long-term lease liabilities | $ 9,735 | $ 4,762 |
Leases - Cost (Details)
Leases - Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Finance Lease, Right-of-Use Asset, Amortization | $ 2,798 | $ 755 | $ 1,233 |
Finance Lease, Interest Expense | 723 | 133 | 130 |
Lease, Cost | 130,433 | 125,081 | 120,934 |
Restaurant Rent Expense [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Cost | 105,285 | 103,733 | 102,651 |
Variable Lease, Cost | 20,196 | 18,929 | 15,793 |
General and Administrative Expense [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Cost | 853 | 946 | 606 |
Other Restaurant Operating Expenses [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Variable Lease, Cost | $ 578 | $ 585 | $ 521 |
Leases - Balance Sheet (Details
Leases - Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Leases [Abstract] | ||
Operating right-of-use assets, net | $ 763,935 | $ 791,763 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Finance Lease, Right-of-Use Asset | $ 12,429 | $ 6,153 |
Leased Assets | 776,364 | 797,916 |
Less: current portion | 47,408 | 44,688 |
Long-term Debt and Lease Obligation, Including Current Maturities | 3,091 | 1,544 |
Operating Lease, Liability, Noncurrent | 776,465 | 802,959 |
Finance Lease, Liability, Noncurrent | 9,735 | 4,762 |
Lease Liabilities | $ 836,699 | $ 853,953 |
Operating Lease, Weighted Average Remaining Lease Term | 12 years 10 months 24 days | 13 years 6 months |
Finance Lease, Weighted Average Remaining Lease Term | 4 years 1 month 6 days | 4 years 3 months 18 days |
Operating Lease, Weighted Average Discount Rate, Percent | 7% | 7% |
Finance Lease, Weighted Average Discount Rate, Percent | 6.70% | 5.80% |
Leases - Cash Flow (Details)
Leases - Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Leases [Abstract] | |||
Gain (loss) on sale-leaseback transactions | $ (425) | $ (22) | $ 189 |
Operating cash flows related to operating leases | 102,529 | 100,660 | 98,561 |
Interest paid on finance leases | 723 | 133 | 130 |
Finance Lease, Principal Payments | 2,552 | 981 | 1,617 |
Operating lease assets and liabilities resulting from lease modifications and new leases | $ 23,773 | $ 36,633 | $ 50,978 |
Long-Term Debt Long Term Debt (
Long-Term Debt Long Term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2023 | Jan. 02, 2022 | |
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 12,500 | |
Finance Lease Obligations | 12,826 | $ 6,306 |
Long-term Debt | 492,951 | 478,181 |
Less: current portion of long-term debt and finance lease liabilities | (7,341) | (5,794) |
Less: unamortized debt issuance costs | 5,401 | 6,490 |
Less: original issue discount | (453) | (580) |
Total Long-term Debt | 479,756 | 465,317 |
Letters of Credit Outstanding, Amount | 9,600 | |
Payments for (Proceeds from) Derivative Instrument, Financing Activities | 1,000 | |
Term Loan B Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | 167,625 | 171,875 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 12,500 | $ 0 |
Long-Term Debt Senior Secured S
Long-Term Debt Senior Secured Second Lien Notes (Details) | 12 Months Ended | ||||||||
Apr. 30, 2026 USD ($) | Jun. 28, 2021 USD ($) | Jun. 28, 2020 | Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) | Jan. 03, 2021 USD ($) | Apr. 03, 2022 | Dec. 13, 2019 | Apr. 30, 2019 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Letters of Credit Outstanding, Amount | $ 9,600,000 | ||||||||
Line of Credit Facility, Unused Borrowing Capacity | 192,900,000 | ||||||||
Debt Instrument, Redemption Price, Percentage | 40% | ||||||||
Proceeds from issuance of senior secured second lien notes | 0 | $ 300,000,000 | $ 0 | ||||||
Debt Issuance Costs, Net | 5,401,000 | 6,490,000 | |||||||
Long-term Line of Credit | 12,500,000 | ||||||||
Loss on extinguishment of debt | (8,538,000) | $ 0 | |||||||
Senior Secured Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 550,000,000 | ||||||||
Interest Rate | 0.915% | ||||||||
First Lien Leverage Ratio | 5.75 | ||||||||
Term Loan B Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 425,000,000 | ||||||||
Repayment of Debt Quarterly Payment | 1,100,000 | ||||||||
Long-term Line of Credit | 167,625,000 | 171,875,000 | |||||||
Repayments of Long-term Debt | $ 243,600,000 | ||||||||
Term Loan B Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||
Term Loan B Facility [Member] | Base Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | ||||||||
Standby Letters of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 35,000,000 | ||||||||
Revolving Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 125,000,000 | ||||||||
Debt, Percent of Aggregate Amount of Borrowing | 35% | ||||||||
Long-term Line of Credit | $ 12,500,000 | 0 | |||||||
Borrowings Under Prior Revolving Credit Facility | 46,000,000 | ||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||
Revolving Credit Facility [Member] | Base Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | ||||||||
Term Loan B-1 Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of Long-term Debt | $ 74,400,000 | ||||||||
Term Loan B And B-1 Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, Number of Payments | 13 | ||||||||
Senior Notes due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Line of Credit | $ 300,000,000 | $ 300,000,000 | |||||||
Senior Unsecured Notes Due 2029 | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest Rate | 5.875% | ||||||||
Debt Instrument, Face Amount | $ 300,000,000 | ||||||||
Seventh Amendment, Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 215,000,000 | ||||||||
Scenario, Forecast | Term Loan B Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of Debt | $ 153,800,000 |
Long-Term Debt Senior Credit Fa
Long-Term Debt Senior Credit Facility (Details) $ in Thousands | 12 Months Ended | ||||||
Jan. 01, 2023 USD ($) Rate | Jan. 02, 2022 USD ($) Rate | Jan. 03, 2021 USD ($) | Apr. 03, 2022 | Dec. 29, 2019 Rate | Dec. 13, 2019 | Apr. 30, 2019 USD ($) | |
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of senior secured second lien notes | $ 0 | $ 300,000 | $ 0 | ||||
Loss on extinguishment of debt | $ (8,538) | 0 | |||||
Long-term Line of Credit | 12,500 | ||||||
Letters of Credit Outstanding, Amount | 9,600 | ||||||
Line of Credit Facility, Unused Borrowing Capacity | $ 192,900 | ||||||
Debt, Weighted Average Interest Rate | Rate | 5.30% | 4.80% | 4.60% | ||||
Interest Expense, Debt | $ 30,700 | $ 28,700 | $ 27,200 | ||||
Senior Secured Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 550,000 | ||||||
Interest Rate | 0.915% | ||||||
First Lien Leverage Ratio | 5.75 |
Long-Term Debt Future Maturitie
Long-Term Debt Future Maturities (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Debt Disclosure [Abstract] | ||
Next Twelve Months | $ 7,341 | |
Year Two | 7,156 | |
Year Three | 7,228 | |
Year Four | 170,468 | |
Year Five | 754 | |
Thereafter | 300,004 | |
Long-term Debt | $ 492,951 | $ 478,181 |
Long-Term Debt - Interest Rate
Long-Term Debt - Interest Rate Swap (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Jan. 01, 2023 | Apr. 03, 2022 | Jan. 02, 2022 | Dec. 12, 2021 | |
Debt Instrument [Line Items] | |||||
Derivative Asset, Notional Amount | $ 220,000,000 | $ 120,000,000 | |||
Payments for Derivative Instrument, Financing Activities | 1,700,000 | ||||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 4,700,000 | ||||
Proceeds from Derivative Instrument, Financing Activities | $ 200,000 | ||||
Fair value of swap | $ 8,600,000 | ||||
Term Loan B Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative, Interest Rate Swap Debt Fix | $ 0.50 | ||||
Senior Secured Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest Rate | 0.915% |
Other Income (Details)
Other Income (Details) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) restaurant | Jan. 03, 2021 USD ($) transaction restaurant | |
Other Income and Expenses [Abstract] | |||
Other Operating Income (Expense), Net | $ 926 | $ 1,186 | $ 1,271 |
Sale and Leaseback Transaction, Gain (Loss), Net | 425 | 22 | (189) |
Property, Plant and Equipment, Disposals | 1,200 | 1,200 | 1,000 |
Gain on insurance recoveries | $ (1,300) | $ (2,100) | |
Number Of Restaurants Subject To Insurance Recovery | restaurant | 2 | 4 | |
Number Of Sale-leaseback Transactions In Gain Position | transaction | 12 | ||
Gain on Sale of Litigation Claim | (2,500) | $ (1,100) | |
Sales-type and Direct Financing Leases, Profit (Loss) | $ 400 |
Income Taxes Schedule of Compon
Income Taxes Schedule of Components of income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ 0 | $ 0 | $ 0 |
State | (37) | (36) | 268 |
Current Income Tax Expense (Benefit) | (37) | (36) | 268 |
Federal | (16,790) | (12,374) | (6,039) |
State | (5,027) | (4,021) | (1,073) |
Deferred | (21,817) | (16,395) | (7,112) |
Increase in valuation allowance | 21,065 | 11,272 | 13,138 |
Provision (benefit) for income taxes | $ (789) | $ (5,159) | $ 6,294 |
Income Taxes Schedule of Deferr
Income Taxes Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 |
Income Tax Disclosure [Abstract] | |||
Deferred Tax Assets, Interest Expense | $ 8,090 | $ 1,345 | |
Deferred Tax Assets, Operating Lease Liabilities | 211,000 | 217,236 | |
Postretirement benefit expenses | 721 | 766 | |
Intangible assets | 757 | 0 | |
Stock-based compensation expense | 1,467 | 1,683 | |
Federal net operating loss carryforwards | 26,122 | 26,839 | |
State net operating loss carryforwards | 8,216 | 6,837 | |
Tax credit carryforwards | 43,906 | 39,965 | |
Accrued vacation benefits | 2,904 | 2,844 | |
Accumulated other comprehensive income-postretirement benefits | (386) | (380) | |
Deferred Tax Assets, Accumulated Other Comprehensive Income, Interest Rate Swap | (2,160) | (161) | |
Deferred Tax Liabilities, Other | (313) | (2,679) | |
Other | 5,981 | 6,507 | |
Deferred Tax Assets, Gross, Total | 309,164 | 304,022 | |
Less: Valuation allowance | (44,263) | (24,410) | $ (13,138) |
Net deferred income tax assets | 264,901 | 279,612 | |
Deferred Tax Liabilities, Operating Right-of-use Assets | (195,705) | (202,887) | |
Property and equipment depreciation | (12,247) | (18,092) | |
Franchise rights | (61,755) | (63,030) | |
Deferred Tax Liabilities, Gross | (272,566) | (287,229) | |
Carrying value of net deferred income tax assets | $ (7,665) | $ (7,617) |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Income Tax Contingency [Line Items] | |||
Federal operating loss carryforwards | $ 124,400,000 | ||
Miscellaneous | (197,000) | $ (499,000) | $ 281,000 |
Unrecognized Tax Benefits | 0 | 0 | |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | 0 | 0 | |
Deferred Tax Assets, Tax Credit Carryforwards, General Business | 43,900,000 | ||
Deferred Tax Assets, Valuation Allowance | 44,263,000 | 24,410,000 | 13,138,000 |
Valuation Allowances and Reserves, Charged to Cost and Expense | 21,065,000 | $ 11,272,000 | $ 13,100,000 |
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Federal operating loss carryforwards | $ 170,500,000 |
Income Taxes Effective Rate Rec
Income Taxes Effective Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Statutory federal income tax provision (benefit) | $ (16,036) | $ (10,119) | $ (4,865) |
State income taxes (benefit), net of federal provision (benefit) | (4,085) | (2,934) | (726) |
Employment tax credits | (2,817) | (3,274) | (2,585) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | 21,065 | 11,272 | 13,138 |
Non-deductible expenses | 597 | 431 | 214 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Payment Arrangement, Amount | 684 | 127 | 525 |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 0 | (163) | 312 |
Miscellaneous | (197) | (499) | 281 |
Provision (benefit) for income taxes | $ (789) | $ (5,159) | $ 6,294 |
Stock-based Compensation Stoc_2
Stock-based Compensation Stock-Based Compensation Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2022 | Jan. 15, 2019 | Jan. 15, 2018 | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Apr. 01, 2022 | Jun. 18, 2021 | Jan. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock Award Vesting Period | 3 years | ||||||||
Stock-based compensation | $ 4,902 | $ 6,234 | $ 5,223 | ||||||
Nonvested stock-based compensation expense | $ 3,800 | ||||||||
Remaining weighted average vesting period | 1 year 7 months 6 days | ||||||||
Grants in Period | 1,442,584 | ||||||||
Granted (in dollars per share) | $ 7.12 | ||||||||
Granted (in shares) | 1,075,000 | ||||||||
Share price (in dollars per share) | $ 1.36 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 882,053 | ||||||||
Management [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted Stock Awards Issued During Period | 895,000 | 790,000 | |||||||
Stock Award Vesting Period | 3 years | 3 years | |||||||
Director [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted Stock Awards Issued During Period | 92,744 | 73,128 | |||||||
2016 Stock Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares Authorized Under Stock Incentive Plan | 7,500,000 | 3,500,000 | 4,000,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,186,096 | ||||||||
Restricted Stock [Member] | Certain Employees and Officers | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,116,000 | ||||||||
Restricted Stock [Member] | Outside Directors | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 226,584 | ||||||||
Restricted Stock [Member] | Chief Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 100,000 | ||||||||
Non-Qualified Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 739,340 | ||||||||
Incentive Stock Options (ISOs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 335,660 | ||||||||
Share-based Payment Arrangement, Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years | ||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 0 | ||||||||
Share price (in dollars per share) | $ 2.15 | ||||||||
Vested | (90,850) | ||||||||
Performance-based Restricted Stock | Chief Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 600,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | 450,000 |
Stock-based Compensation Summar
Stock-based Compensation Summary of Stock Activity (Details) | 12 Months Ended |
Jan. 01, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Nonvested shares at beginning of period | shares | 1,336,830 |
Nonvested shares, Weighted Average Grant Date Price at beginning of period | $ / shares | $ 6.55 |
Grants in Period | shares | 1,442,584 |
Grants in Period, Weighted Average Grant Date Price | $ / shares | $ 2.72 |
Vested | shares | (882,053) |
Vested, Weighted Average Grant Date Price | $ / shares | $ 6.18 |
Forfeited | shares | (129,550) |
Forfeited, Weighed Average Grant Date Price | $ / shares | $ 4.08 |
Nonvested shares at end of period | shares | 1,767,811 |
Nonvested shares, Weighted Average Grant Date Price at end of period | $ / shares | $ 3.79 |
Stock-based Compensation - Fair
Stock-based Compensation - Fair Value Assumptions (Details) - Share-based Payment Arrangement, Option | 12 Months Ended |
Jan. 01, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.21% |
Expected term (in years) | 4 years 6 months |
Expected volatility | 65.10% |
Expected dividend yield | 0% |
Fair Value | $ 3.65 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Jan. 01, 2023 USD ($) $ / shares shares | |
Options | |
Beginning balance (in shares) | shares | 1,025,000 |
Forfeited (in shares) | shares | (49,500) |
Ending balance (in shares) | shares | 975,500 |
Options, Vested or expected to vest (in shares) | shares | 975,500 |
Options, Options exercisable (in shares) | shares | 868,250 |
Weighted Average Exercise Price | |
Granted (in dollars per share) | $ / shares | $ 7.12 |
Forfeited (in dollars per share) | $ / shares | 7.12 |
Options Outstanding (in dollars per share) | $ / shares | 7.12 |
Vested or expected to vest (in dollars per share) | $ / shares | $ 7.12 |
Average Remaining Contractual Life | |
Options Outstanding at January 1, 2023 | 4 years 7 months 6 days |
Vested or expected to vest at January 1, 2023 | 4 years 7 months 6 days |
Options exercisable at January 1, 2023 | 4 years 7 months 6 days |
Aggregate Intrinsic Value | |
Options Outstanding at January 1, 2023 | $ | $ 0 |
Vested or expected to vest at January 1, 2023 | $ | 0 |
Options exercisable at January 1, 2023 | $ | $ 0 |
Share price (in dollars per share) | $ / shares | $ 1.36 |
Stock-Based Compensation Summ_2
Stock-Based Compensation Summary of RSU Activity (Details) (Details) | 12 Months Ended |
Jan. 01, 2023 shares | |
Options | |
Granted (in shares) | 1,075,000 |
Restricted Stock Units (RSUs) [Member] | |
Options | |
Non-vested at December 29, 2019 | 129,620 |
Granted (in shares) | 0 |
Vested | (90,850) |
Non-vested at September 27, 2020 | 38,770 |
Stockholder's Equity - Preferre
Stockholder's Equity - Preferred Stock (Details) | 3 Months Ended | 12 Months Ended | ||||||||
Oct. 05, 2021 USD ($) | Aug. 12, 2021 | Sep. 29, 2019 | Sep. 27, 2020 | Jan. 01, 2023 USD ($) $ / shares shares | Jan. 02, 2022 USD ($) shares | Jan. 03, 2021 USD ($) | Jan. 03, 2016 | Oct. 02, 2022 shares | Aug. 02, 2019 USD ($) | |
Class of Stock [Line Items] | ||||||||||
Preferred Stock, Shares Issued | 100 | 100 | ||||||||
Common Stock, Dividends, Per Share, Declared | 0.41 | |||||||||
Convertible Preferred Stock, Common Shares Issuable upon Conversion | 9,414,580 | |||||||||
Payment of Special Cash Dividend, Financing Activities | $ | $ 24,900,000 | $ 0 | $ 24,882,000 | $ 0 | ||||||
Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Board of directors, number of members | 1 | |||||||||
Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Board of directors, number of members | 1 | 2 | ||||||||
Repurchase Program [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock Repurchased During Period, Shares | 1,534,304 | |||||||||
Treasury Stock Acquired, Average Cost Per Share | $ / shares | $ 6.52 | |||||||||
Stock Repurchased During Period, Value | $ | $ 10,000,000 | |||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ | $ 11,000,000 | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Outstanding Shares | 7.50% | |||||||||
Preferred Stock, Shares Issued | 100 | |||||||||
Series C Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred Units, Issued | 10,000 | |||||||||
Common Stock [Member] | Repurchase Program [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ | $ 11,000,000 | |||||||||
Stock Repurchase Program, Authorized Amount | $ | $ 25,000,000 | |||||||||
BKC [Member] | Series B Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Outstanding Shares | 14.50% | 10% | 11.50% | |||||||
Cambridge Holdings, LLC [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 7,500,000 | |||||||||
Cambridge Holdings, LLC [Member] | Carrols Restaurant Group, Inc. | ||||||||||
Class of Stock [Line Items] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 23.80% | |||||||||
2016 Stock Incentive Plan [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,186,096 |
Net Income (Loss) Per Share E_3
Net Income (Loss) Per Share Earnings Per Share Table (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Net income (loss) | $ (75,572) | $ (43,029) | $ (29,463) |
Net income available to common stockholders | $ (75,572) | $ (43,029) | $ (29,463) |
Basic weighted average common shares outstanding | 50,718,387 | 49,899,274 | 50,751,185 |
Net income (loss) | $ (75,572) | $ (43,029) | $ (29,463) |
Basic weighted average common shares outstanding | 50,718,387 | 49,899,274 | 50,751,185 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 0 | 0 | 0 |
Diluted weighted average common shares outstanding | 50,718,387 | 49,899,274 | 50,751,185 |
Basic net income (loss) per share (dollars per share) | $ (1.49) | $ (0.86) | $ (0.58) |
Shares excluded from diluted net income (loss) per share computations (2) | 9,624,963 | 9,681,878 | 9,615,435 |
Restricted Stock [Member] | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Less: income attributable to participating securities | $ 0 | $ 0 | $ 0 |
Convertible Preferred Stock | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Less: income attributable to participating securities | $ 0 | $ 0 | $ 0 |
Commitments And Contingencies L
Commitments And Contingencies Lease Guarantees (Details) $ in Millions | 12 Months Ended |
Jan. 01, 2023 USD ($) | |
Guarantor Obligations [Line Items] | |
Maximum potential undiscounted rental payments | $ 7 |
Loss Contingency Accrual, Payments | $ 0 |
McLane Company Inc. | Revenue Benchmark | Supplier Concentration Risk | |
Guarantor Obligations [Line Items] | |
Concentration Risk, Percentage | 31% |
McLane Company Inc. | Revenue Benchmark | Supplier Concentration Risk | Poultry Products | |
Guarantor Obligations [Line Items] | |
Concentration Risk, Percentage | 69% |
McLane Company Inc. | Revenue Benchmark | Supplier Concentration Risk | Non-poultry Products | |
Guarantor Obligations [Line Items] | |
Concentration Risk, Percentage | 91% |
Lineage Foodservice Solutions | Revenue Benchmark | Supplier Concentration Risk | |
Guarantor Obligations [Line Items] | |
Concentration Risk, Percentage | 30% |
Reinhart Food Service LLC | Revenue Benchmark | Supplier Concentration Risk | |
Guarantor Obligations [Line Items] | |
Concentration Risk, Percentage | 29% |
Burger King | Revenue Benchmark | Supplier Concentration Risk | |
Guarantor Obligations [Line Items] | |
Concentration Risk, Percentage | 10% |
Bakery | Revenue Benchmark | Supplier Concentration Risk | |
Guarantor Obligations [Line Items] | |
Concentration Risk, Percentage | 50% |
Property Lease Guarantee [Member] | |
Guarantor Obligations [Line Items] | |
Property Leases | 17 |
Property Lease Guarantee [Member] | Pollo Operations, Inc | |
Guarantor Obligations [Line Items] | |
Property Leases | 8 |
Property Lease Guarantee [Member] | Texas Taco Cabana, L.P. | |
Guarantor Obligations [Line Items] | |
Property Leases | 9 |
Closed Restaurants [Member] | |
Guarantor Obligations [Line Items] | |
Property Leases | 1 |
Related Parties (Details)
Related Parties (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Apr. 30, 2019 | Jan. 01, 2023 USD ($) Rate shares | Jan. 02, 2022 USD ($) shares | Jan. 01, 2023 USD ($) yr Rate shares | Jan. 02, 2022 USD ($) shares | Jan. 03, 2021 USD ($) shares restaurant | Sep. 30, 2025 restaurant | Sep. 30, 2024 restaurant | Sep. 30, 2023 restaurant | Sep. 30, 2022 restaurant | Sep. 30, 2021 restaurant | Jan. 04, 2021 state restaurant | Dec. 30, 2018 | |
Related Party Transaction [Line Items] | |||||||||||||
Preferred Stock, Shares Issued | shares | 100 | 100 | 100 | 100 | |||||||||
Convertible Preferred Stock, Common Shares Issuable upon Conversion | shares | 9,414,580 | 9,414,580 | |||||||||||
Franchise Term | yr | 20 | ||||||||||||
Franchise agreement, term | 20 years | ||||||||||||
Related Party Transaction, Accounts Payable | $ 30,491 | $ 31,164 | $ 30,491 | $ 31,164 | |||||||||
Monthly Digital Platform Fee | $ 2,100 | $ 1,300 | |||||||||||
Area Development Agreement, Restaurants To Be Opened, Built, And Operated | restaurant | 10 | 4 | 50 | ||||||||||
Area Development Agreement, Percentage Of New Restaurants To Be In Kentucky, Tennessee And Indiana | 80% | ||||||||||||
Area Development Agreement, Number Of Restaurants To Be Acquired | restaurant | 500 | ||||||||||||
Area Development Agreement, Number Of States | state | 16 | ||||||||||||
Area Development Agreement, Prepaid Franchise Fees | $ 600 | ||||||||||||
Lessee, Operating Leases, Rent Expense, Net | $ 125,481 | 122,662 | 118,444 | ||||||||||
Scenario, Forecast | Subsequent Event | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Area Development Agreement, Restaurants To Be Opened, Built, And Operated | restaurant | 12 | 12 | 12 | ||||||||||
Related Party, Burger King Corporate [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Related Party Transaction, Royalty Fee Rate | Rate | 4.50% | 4.50% | |||||||||||
Royalty Expense | $ 76,800 | 72,800 | 67,200 | ||||||||||
Related Party Transaction, Advertising Fee Rate | Rate | 4% | 4% | |||||||||||
Advertising Expense | $ 67,700 | $ 64,000 | 59,300 | ||||||||||
Leases, Number of Leased Restaurants | 217 | 225 | 217 | 225 | 232 | ||||||||
Related Party Transaction, Accounts Payable | $ 16,000 | $ 16,300 | $ 16,000 | $ 16,300 | |||||||||
Related Party Transaction, Percentage of Voting Interests Acquired | Rate | 15.10% | 15.10% | |||||||||||
Lessee, Operating Leases, Rent Expense, Net | $ 27,700 | $ 26,900 | $ 25,900 | ||||||||||
Affiliated Entity [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Franchise Fees, Initial, Net | $ 50 | ||||||||||||
Affiliated Entity [Member] | Burger King Corporate [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes Payable, Related Parties, Maximum Borrowing Capacity | $ 120,000 | ||||||||||||
Popeyes Franchises [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Right Of First Refusal, Number Of Franchises | restaurant | 80 | ||||||||||||
Right of First Refusal, Term | 6 years | ||||||||||||
Related Party, PLK | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Related Party Transaction, Royalty Fee Rate | Rate | 5% | 5% | |||||||||||
Property Leases Identical to BKC's Lease with Third Party [Member] | Affiliated Entity [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Leases, Number of Leased Restaurants | 94 | 94 | |||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Preferred Stock, Shares Issued | shares | 100 | 100 | |||||||||||
Popeyes Franchises [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Right of First Refusal, Number of States | shares | 2 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 50% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent | 50% | ||
Defined Contribution Plan, Requisite Service Period, Hours of Service | 1,000 | ||
Defined Contribution Plan, Cost | $ 1,900 | $ 1,800 | $ 1,900 |
Deferred Compensation Arrangements, Interest Rate | 8% | ||
Deferred Compensation Arrangement with Individual, Contributions by Employer | $ 0 | ||
Deferred Compensation Liability, Current and Noncurrent | $ 3,100 | $ 4,900 | |
Minimum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Vesting Period of Company Contributions | 1 year | ||
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Vesting Period of Company Contributions | 5 years |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||
Deferred Tax Assets, Valuation Allowance Beginning of Year | $ 24,410 | $ 13,138 | |
Valuation Allowances and Reserves, Charged to Cost and Expense | 21,065 | 11,272 | $ 13,100 |
Valuation Allowances and Reserves, Charged to Other Accounts | (1,212) | 0 | |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Deduction | 0 | 0 | |
Deferred Tax Assets, Valuation Allowance, End of Year | $ 44,263 | $ 24,410 | $ 13,138 |