Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 25, 2022 | Feb. 16, 2023 | Jun. 26, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 25, 2022 | ||
Current Fiscal Year End Date | --12-25 | ||
Document Transition Report | false | ||
Entity File Number | 0-2166050 | ||
Entity Registrant Name | PAPA JOHN’S INTERNATIONAL, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 61-1203323 | ||
Entity Address, Address Line One | 2002 Papa John’s Boulevard | ||
Entity Address, City or Town | Louisville | ||
Entity Address, State or Province | KY | ||
Entity Address, Postal Zip Code | 40299-2367 | ||
City Area Code | 502 | ||
Local Phone Number | 261-7272 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | PZZA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,906,744,039 | ||
Entity Common Stock, Shares Outstanding | 34,680,269 | ||
Documents Incorporated by Reference | Portions of the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held April 25, 2023 are incorporated by reference into Part III of this annual report where indicated. | ||
Entity Central Index Key | 0000901491 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 25, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Location | Louisville, Kentucky |
Auditor Name | Ernst & Young LLP |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 47,373 | $ 70,610 |
Accounts receivable (less allowance for credit losses of $6,718 in 2022 and $2,364 in 2021) | 102,533 | 81,370 |
Notes receivable, current portion | 6,848 | 12,352 |
Income tax receivable | 8,780 | 9,386 |
Inventories | 41,382 | 34,981 |
Prepaid expenses and other current assets | 44,123 | 46,310 |
Total current assets | 251,039 | 255,009 |
Property and equipment, net | 249,793 | 223,856 |
Finance lease right-of-use assets, net | 24,941 | 20,907 |
Operating lease right-of-use assets | 172,425 | 176,256 |
Notes receivable, less current portion (less allowance for credit losses of $14,499 in 2022 and $1,500 in 2021) | 21,248 | 35,504 |
Goodwill | 70,616 | 80,632 |
Deferred income taxes | 1,920 | 5,156 |
Other assets | 72,245 | 88,384 |
Total assets | 864,227 | 885,704 |
Current liabilities: | ||
Accounts payable | 62,316 | 28,092 |
Income and other taxes payable | 8,766 | 19,996 |
Accrued expenses and other current liabilities | 142,535 | 190,116 |
Current deferred revenue | 21,272 | 21,700 |
Current finance lease liabilities | 6,850 | 4,977 |
Current operating lease liabilities | 23,418 | 22,543 |
Total current liabilities | 265,157 | 287,424 |
Deferred revenue | 23,204 | 13,846 |
Long-term finance lease liabilities | 19,022 | 16,580 |
Long-term operating lease liabilities | 160,905 | 160,672 |
Long-term debt, net | 597,069 | 480,730 |
Deferred income taxes | 0 | 258 |
Other long-term liabilities | 68,317 | 93,154 |
Total liabilities | 1,133,674 | 1,052,664 |
Redeemable noncontrolling interests | 1,217 | 5,498 |
Stockholders’ deficit: | ||
Common stock ($0.01 par value per share; issued 49,138 at December 25, 2022 and 49,002 at December 26, 2021) | 491 | 490 |
Additional paid-in capital | 449,829 | 445,126 |
Accumulated other comprehensive loss | (10,135) | (9,971) |
Retained earnings | 195,856 | 183,157 |
Treasury stock (14,402 shares at December 25, 2022 and 13,205 shares at December 26, 2021, at cost) | (922,434) | (806,472) |
Total stockholders’ deficit | (286,393) | (187,670) |
Noncontrolling interests in subsidiaries | 15,729 | 15,212 |
Total Stockholders’ deficit | (270,664) | (172,458) |
Total Liabilities, Redeemable noncontrolling interests and Stockholders’ deficit | $ 864,227 | $ 885,704 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit losses | $ 6,718 | $ 2,364 |
Notes receivable, less current portion, allowance for credit losses | $ 14,499 | $ 1,500 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 49,138 | 49,002 |
Treasury stock (in shares) | 14,402 | 13,205 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Revenues: | |||
Total revenues | $ 2,102,103 | $ 2,068,421 | $ 1,813,234 |
Costs and expenses: | |||
General and administrative expenses | 217,412 | 212,265 | 204,242 |
Depreciation and amortization | 52,032 | 48,816 | 49,705 |
Total costs and expenses | 1,981,008 | 1,900,180 | 1,722,981 |
Refranchising and impairment loss | (12,065) | 0 | 0 |
Operating income | 109,030 | 168,241 | 90,253 |
Net interest expense | (25,261) | (17,293) | (14,891) |
Income before income taxes | 83,769 | 150,948 | 75,362 |
Income tax expense | 14,420 | 25,993 | 14,748 |
Net income before attribution to noncontrolling interests | 69,349 | 124,955 | 60,614 |
Net income attributable to noncontrolling interests | (1,577) | (4,939) | (2,682) |
Net income attributable to the Company | 67,772 | 120,016 | 57,932 |
Calculation of net income for earnings per share: | |||
Net income attributable to the Company | 67,772 | 120,016 | 57,932 |
Dividends on redemption of Series B Convertible Preferred Stock | 0 | (109,852) | 0 |
Dividends paid to participating securities | (306) | (6,091) | (14,059) |
Net income attributable to participating securities | (104) | 0 | (2,136) |
Net income attributable to common shareholders | $ 67,362 | $ 4,073 | $ 41,737 |
Basic earnings per common share (in dollars per share) | $ 1.90 | $ 0.12 | $ 1.29 |
Diluted earnings per common share (in dollars per share) | $ 1.89 | $ 0.12 | $ 1.28 |
Basic weighted average common shares outstanding (in shares) | 35,497 | 35,007 | 32,421 |
Diluted weighted average common shares outstanding (in shares) | 35,717 | 35,337 | 32,717 |
Dividends declared per common share (in dollars per share) | $ 1.54 | $ 1.15 | $ 0.90 |
Domestic Company-owned restaurants | |||
Revenues: | |||
Total revenues | $ 708,389 | $ 778,323 | $ 700,757 |
Costs and expenses: | |||
Operating costs (excluding depreciation and amortization shown separately below): | 585,307 | 621,871 | 563,799 |
North America franchising | |||
Revenues: | |||
Total revenues | 137,399 | 129,310 | 96,732 |
North America commissaries | |||
Revenues: | |||
Total revenues | 869,634 | 761,305 | 680,793 |
Costs and expenses: | |||
Operating costs (excluding depreciation and amortization shown separately below): | 811,446 | 703,622 | 630,937 |
International | |||
Revenues: | |||
Total revenues | 129,903 | 150,771 | 123,963 |
Costs and expenses: | |||
Operating costs (excluding depreciation and amortization shown separately below): | 76,001 | 87,286 | 73,994 |
All others | |||
Revenues: | |||
Total revenues | 256,778 | 248,712 | 210,989 |
Costs and expenses: | |||
Operating costs (excluding depreciation and amortization shown separately below): | $ 238,810 | $ 226,320 | $ 200,304 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income before attribution to noncontrolling interests | $ 69,349 | $ 124,955 | $ 60,614 | |
Other comprehensive income (loss), before tax: | ||||
Foreign currency translation adjustments | (4,970) | (1,397) | 2,344 | |
Interest rate swaps | [1] | 4,757 | 6,848 | (7,517) |
Other comprehensive income (loss), before tax | (213) | 5,451 | (5,173) | |
Income tax effect: | ||||
Foreign currency translation adjustments | 1,143 | 321 | (539) | |
Interest rate swaps | [2] | (1,094) | (1,575) | 1,729 |
Income tax effect | 49 | (1,254) | 1,190 | |
Other comprehensive income (loss), net of tax | (164) | 4,197 | (3,983) | |
Comprehensive income before attribution to noncontrolling interests | 69,185 | 129,152 | 56,631 | |
Less: comprehensive income, redeemable noncontrolling interests | (574) | (2,609) | (824) | |
Less: comprehensive income, nonredeemable noncontrolling interests | (1,003) | (2,330) | (1,858) | |
Comprehensive income attributable to the Company | $ 67,608 | $ 124,213 | $ 53,949 | |
[1]Amounts reclassified out of accumulated other comprehensive loss into interest expense included ($2,384), ($5,965) and ($5,068) for the years ended December 25, 2022, December 26, 2021 and December 27, 2020, respectively.[2]The income tax effects of amounts reclassified out of accumulated other comprehensive loss were $536, $1,342 and $1,140 for the years ended December 25, 2022, December 26, 2021 and December 27, 2020, respectively. |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Consolidated Statements of Comprehensive Income (Unaudited) | |||
Income tax effects | $ 14,420 | $ 25,993 | $ 14,748 |
Interest Rate Swap | Reclassification out of Accumulated Other Comprehensive Loss | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||
Consolidated Statements of Comprehensive Income (Unaudited) | |||
Income tax effects | 536 | 1,342 | 1,140 |
Interest Rate Swap | Interest Expense | Reclassification out of Accumulated Other Comprehensive Loss | |||
Consolidated Statements of Comprehensive Income (Unaudited) | |||
Amounts reclassified out of accumulated other comprehensive loss | $ (2,384) | $ (5,965) | $ (5,068) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | [1] | Retained Earnings | Treasury Stock | Noncontrolling Interests in Subsidiaries | Cumulative effect of adoption of ASU 2016-13 | [2] | Cumulative effect of adoption of ASU 2016-13 Retained Earnings | [2] | Adjusted balance | Adjusted balance Common Stock | Adjusted balance Additional Paid-In Capital | Adjusted balance Accumulated Other Comprehensive Loss | [1] | Adjusted balance Retained Earnings | Adjusted balance Treasury Stock | Adjusted balance Noncontrolling Interests in Subsidiaries | |
Beginning balance (in shares) at Dec. 29, 2019 | 31,894 | 31,894 | |||||||||||||||||||
Beginning balance at Dec. 29, 2019 | $ (316,656) | $ 447 | $ 219,047 | $ (10,185) | $ 205,697 | $ (747,327) | $ 15,665 | $ (1,066) | $ (1,066) | $ (317,722) | $ 447 | $ 219,047 | $ (10,185) | $ 204,631 | $ (747,327) | $ 15,665 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Net income | [3] | 59,790 | 57,932 | 1,858 | |||||||||||||||||
Other comprehensive income (loss), net of tax | (3,983) | (3,983) | |||||||||||||||||||
Cash dividends on common stock | (29,362) | 141 | (29,503) | ||||||||||||||||||
Cash dividends on preferred stock | $ (13,649) | (13,649) | |||||||||||||||||||
Exercise of stock options (in shares) | 541 | 540 | |||||||||||||||||||
Exercise of stock options | $ 30,622 | $ 6 | 30,616 | ||||||||||||||||||
Acquisition of Company common stock (in shares) | (32) | ||||||||||||||||||||
Acquisition of Company common stock | (2,701) | (2,701) | |||||||||||||||||||
Stock-based compensation expense | 16,310 | 16,310 | |||||||||||||||||||
Issuance of restricted stock (in shares) | 119 | ||||||||||||||||||||
Issuance of restricted stock | 0 | (6,922) | 6,922 | ||||||||||||||||||
Tax effect of restricted stock awards | (3,974) | (3,974) | |||||||||||||||||||
Distributions to noncontrolling interests | (2,284) | (2,284) | |||||||||||||||||||
Other (in shares) | 24 | ||||||||||||||||||||
Other | 14 | (1,115) | (253) | 1,382 | |||||||||||||||||
Ending balance (in shares) at Dec. 27, 2020 | 32,545 | ||||||||||||||||||||
Ending balance at Dec. 27, 2020 | (266,939) | $ 453 | 254,103 | (14,168) | 219,158 | (741,724) | 15,239 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Net income | [3] | 122,346 | 120,016 | 2,330 | |||||||||||||||||
Other comprehensive income (loss), net of tax | 4,197 | 4,197 | |||||||||||||||||||
Repurchase and conversion of Series B Convertible Preferred Stock (in shares) | 3,489 | ||||||||||||||||||||
Repurchase and conversion of Series B Convertible Preferred Stock | 64,168 | $ 35 | 174,631 | (110,498) | |||||||||||||||||
Cash dividends on common stock | (40,356) | 158 | (40,514) | ||||||||||||||||||
Cash dividends on preferred stock | $ (4,121) | (4,121) | |||||||||||||||||||
Exercise of stock options (in shares) | 212 | 212 | |||||||||||||||||||
Exercise of stock options | $ 11,969 | $ 2 | 11,967 | ||||||||||||||||||
Acquisition of Company common stock (in shares) | (594) | ||||||||||||||||||||
Acquisition of Company common stock | (72,499) | (72,499) | |||||||||||||||||||
Stock-based compensation expense | 16,919 | 16,919 | |||||||||||||||||||
Issuance of restricted stock (in shares) | 132 | ||||||||||||||||||||
Issuance of restricted stock | 0 | (6,970) | 6,970 | ||||||||||||||||||
Tax effect of restricted stock awards | (5,847) | (5,847) | |||||||||||||||||||
Distributions to noncontrolling interests | (2,357) | (2,357) | |||||||||||||||||||
Other (in shares) | 13 | ||||||||||||||||||||
Other | $ 62 | 165 | (884) | 781 | |||||||||||||||||
Ending balance (in shares) at Dec. 26, 2021 | 35,800 | 35,797 | |||||||||||||||||||
Ending balance at Dec. 26, 2021 | $ (172,458) | $ 490 | 445,126 | (9,971) | 183,157 | (806,472) | 15,212 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Net income | [3] | 68,775 | 67,772 | 1,003 | |||||||||||||||||
Other comprehensive income (loss), net of tax | (164) | (164) | |||||||||||||||||||
Cash dividends on common stock | $ (54,767) | 210 | (54,977) | ||||||||||||||||||
Exercise of stock options (in shares) | 82 | 82 | |||||||||||||||||||
Exercise of stock options | $ 4,036 | $ 1 | 4,035 | ||||||||||||||||||
Acquisition of Company common stock (in shares) | (1,343) | ||||||||||||||||||||
Acquisition of Company common stock | (125,000) | (125,000) | |||||||||||||||||||
Stock-based compensation expense | 18,388 | 18,388 | |||||||||||||||||||
Issuance of restricted stock (in shares) | 285 | ||||||||||||||||||||
Issuance of restricted stock | 0 | (8,443) | 8,443 | ||||||||||||||||||
Tax effect of restricted stock awards (in shares) | (94) | ||||||||||||||||||||
Tax effect of restricted stock awards | (9,546) | (9,546) | |||||||||||||||||||
Distributions to noncontrolling interests | (486) | (486) | |||||||||||||||||||
Other (in shares) | 9 | ||||||||||||||||||||
Other | $ 558 | 59 | (96) | 595 | |||||||||||||||||
Ending balance (in shares) at Dec. 25, 2022 | 34,700 | 34,736 | |||||||||||||||||||
Ending balance at Dec. 25, 2022 | $ (270,664) | $ 491 | $ 449,829 | $ (10,135) | $ 195,856 | $ (922,434) | $ 15,729 | ||||||||||||||
[1] (3) At December 25, 2022, the accumulated other comprehensive loss of $10,135 was comprised of net unrealized foreign currency translation loss of $8,696 and a net unrealized loss on the interest rate swap agreements of $1,439. At December 26, 2021, the accumulated other comprehensive loss of $9,971 was comprised of net unrealized foreign currency translation loss of $4,869 and a net unrealized loss on the interest rate swap agreements of $5,102. At December 27, 2020, the accumulated other comprehensive loss of $14,168 was comprised of net unrealized foreign currency translation loss of $3,793 and a net unrealized loss on the interest rate swap agreements of $10,375. (2) As of December 30, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .” See “Note 10. Allowance for Credit Losses” of “Notes to Consolidated Financial Statements” for additional information. (1) Net income to the Company for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 excludes $574, $2,609 and $824, respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Deficit (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | Dec. 29, 2019 | ||
Stockholders' deficit | $ 270,664 | $ 172,458 | $ 266,939 | $ 316,656 | |
Accumulated other comprehensive loss | |||||
Stockholders' deficit | [1] | 10,135 | 9,971 | 14,168 | $ 10,185 |
Net unrealized foreign currency translation loss | |||||
Stockholders' deficit | 8,696 | 4,869 | 3,793 | ||
Net unrealized loss on interest rate swap agreements | |||||
Stockholders' deficit | 1,439 | 5,102 | 10,375 | ||
Corporate joint venture | |||||
Net income (loss) allocated to the redeemable noncontrolling interest from joint venture arrangements | $ 574 | $ 2,609 | $ 824 | ||
[1] (3) At December 25, 2022, the accumulated other comprehensive loss of $10,135 was comprised of net unrealized foreign currency translation loss of $8,696 and a net unrealized loss on the interest rate swap agreements of $1,439. At December 26, 2021, the accumulated other comprehensive loss of $9,971 was comprised of net unrealized foreign currency translation loss of $4,869 and a net unrealized loss on the interest rate swap agreements of $5,102. At December 27, 2020, the accumulated other comprehensive loss of $14,168 was comprised of net unrealized foreign currency translation loss of $3,793 and a net unrealized loss on the interest rate swap agreements of $10,375. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Operating activities | |||
Net income before attribution to noncontrolling interests | $ 69,349 | $ 124,955 | $ 60,614 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision (benefit) for allowance for credit losses on accounts and notes receivable | 20,539 | (852) | (4,734) |
Depreciation and amortization | 52,032 | 48,816 | 49,705 |
Refranchising and impairment loss | 12,065 | 0 | 0 |
Deferred income taxes | 2,798 | 3,753 | (9,268) |
Stock-based compensation expense | 18,388 | 16,919 | 16,310 |
Other | 1,056 | 581 | 2,257 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (29,167) | 4,023 | (22,420) |
Income tax receivable | 586 | (8,113) | 3,760 |
Inventories | (7,496) | (4,708) | (2,736) |
Prepaid expenses and other current assets | 5,587 | 2,866 | 2,884 |
Other assets and liabilities | (13,458) | (20,077) | 20,879 |
Accounts payable | (8,350) | (9,278) | 8,229 |
Income and other taxes payable | (10,710) | 9,733 | 2,664 |
Accrued expenses and other current liabilities | 4,846 | 15,875 | 59,353 |
Deferred revenue | (257) | 182 | (1,058) |
Net cash provided by operating activities | 117,808 | 184,675 | 186,439 |
Investing activities | |||
Purchases of property and equipment | (78,391) | (68,559) | (35,652) |
Notes issued | (9,296) | (16,132) | (16,589) |
Repayments of notes issued | 13,045 | 18,555 | 11,154 |
Acquisitions, net of cash acquired | (1,219) | (699) | 0 |
Proceeds from refranchising, net of cash transferred | 13,588 | 0 | 0 |
Other | (520) | 3,323 | 16 |
Net cash used in investing activities | (62,793) | (63,512) | (41,071) |
Financing activities | |||
Proceeds from issuance of senior notes | 0 | 400,000 | 0 |
Net proceeds of revolving credit facilities | 115,000 | 80,000 | 0 |
Debt issuance costs | 0 | (9,179) | 0 |
Proceeds from exercise of stock options | 4,036 | 11,969 | 30,622 |
Repurchase of Series B Convertible Preferred Stock | 0 | (188,647) | 0 |
Acquisition of Company common stock | (125,000) | (72,499) | (2,701) |
Dividends paid to common stockholders | (54,767) | (40,356) | (29,362) |
Dividends paid to preferred stockholders | 0 | (6,394) | (13,649) |
Tax payments for equity award issuances | (9,546) | (5,847) | (3,974) |
Distributions to noncontrolling interests | (1,211) | (5,942) | (2,420) |
Repayments of term loan | 0 | (340,000) | (20,000) |
Other | (4,752) | (3,631) | (1,977) |
Net cash used in financing activities | (76,240) | (180,526) | (43,461) |
Effect of exchange rate changes on cash and cash equivalents | (2,012) | (231) | 386 |
Change in cash and cash equivalents | (23,237) | (59,594) | 102,293 |
Cash and cash equivalents at beginning of period | 70,610 | 130,204 | 27,911 |
Cash and cash equivalents at end of period | $ 47,373 | $ 70,610 | $ 130,204 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 25, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first person notations of “we,” “us” and “our”), operates and franchises pizza delivery and carryout restaurants under the trademark “Papa John’s,” in 48 countries and territories as of December 25, 2022. Our revenues are derived from retail sales of pizza and other food and beverage products to the general public by Company-owned restaurants, franchise royalties and sales of franchise and development rights, printing and promotional items and information systems equipment, and software and related services. We generate revenues from the operation of our Quality Control Centers (“QC Centers”) which supply pizza sauce, dough, food products, paper products, smallwares and cleaning supplies to restaurants. We also derive revenue from contributions received into our national marketing funds. In discussions of our business, “Domestic” is defined as within the contiguous United States, “North America” includes Canada, and “International” includes the rest of the world other than North America. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 25, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of Papa John’s International, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. Variable Interest Entity Papa John’s Domestic restaurants, both Company-owned and franchised, participate in Papa John’s Marketing Fund, Inc. (“PJMF”), a nonstock corporation designed to operate at break-even as it spends all annual contributions received from the system. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs. PJMF is a variable interest entity (“VIE”) that funds its operations with ongoing financial support and contributions from the Domestic restaurants, of which approximately 85 percent are franchised, and does not have sufficient equity to fund its operations without these ongoing financial contributions. Based on an assessment of the governance structure and operating procedures of PJMF, the Company determined it has the power to control certain significant activities of PJMF, and therefore, is the primary beneficiary. The Company has consolidated PJMF in its financial results in accordance with Accounting Standards Codification (“ASC”) 810, “ Consolidation .” Fiscal Year Our fiscal year ends on the last Sunday in December of each year. All fiscal years presented consist of 52 weeks. Use of Estimates The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Significant items that are subject to such estimates and assumptions include the allowance for credit losses on accounts and notes receivable, intangible assets, contract assets and contract liabilities including the customer loyalty program obligation, right-of-use assets and lease liabilities, gift card breakage, insurance reserves and tax reserves. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. Revenue Recognition Revenue is measured based on consideration specified in contracts with customers and excludes waivers or incentives and amounts collected on behalf of third parties, primarily sales tax. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Delivery costs, including freight associated with our Domestic commissary and other sales, are accounted for as fulfillment costs and are included in operating costs. The following describes principal activities, separated by major product or service, from which the Company generates its revenues: Domestic Company-owned Restaurant Sales The Domestic Company-owned restaurants principally generate revenue from retail sales of high-quality pizza, Papadias, which are flatbread-style sandwiches, and side items including breadsticks, Papa Bites, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages. Revenues from Company-owned restaurants are recognized when the products are delivered to or carried out by customers. Our North American customer loyalty program, Papa Rewards, is a spend-based program that rewards customers with points for each purchase. Papa Rewards points are accumulated and redeemed for dollar off discounts (“Papa Dough”) to be used on future purchases within a six-month expiration window. The accrued liability in the Consolidated Balance Sheets, and corresponding reduction of Company-owned restaurant sales in the Consolidated Statements of Operations, is for the estimated reward redemptions at Domestic Company-owned restaurants based upon estimated redemption patterns. The liability related to Papa Rewards is calculated using the estimated redemption value for which the points and accumulated rewards are expected to be redeemed. Revenue is recognized when the customer redeems the Papa Dough reward and when the points or Papa Dough reward expires. Franchise Royalties and Fees Franchise royalties, which are based on a percentage of franchise restaurant sales, are recognized as sales occur. Incentives offered from time to time, including new store incentives, will reduce the contractual royalty rate paid. Any royalty reductions, including waivers or those offered as part of a new store development incentive or as incentive for other behaviors, including acceleration of restaurant remodels or equipment upgrades, are recognized at the same time as the related royalty, as they are not separately distinguishable from the full royalty rate. Our current standard franchise agreement requires the franchisee to pay a royalty fee of 5% of sales, and the majority of our existing franchised restaurants have a 5% contractual royalty rate in effect. Franchise royalties are billed on a monthly basis. The majority of initial franchise license fees and area development exclusivity fees are from International locations. Initial franchise license fees are billed at the store opening date. The pre-opening services provided to franchisees do not contain separate and distinct performance obligations from the franchise right; thus, the fees collected will be deferred and amortized on a straight-line basis beginning at the store opening date through the term of the franchise agreement, which is typically 10 years. Franchise license renewal fees for both Domestic and International locations, which generally occur every 10 years, are billed before the renewal date. Fees received for future license renewal periods are deferred and amortized over the life of the renewal period. Area development exclusivity fees are billed upon execution of the development agreements which grant the right to develop franchised restaurants in future periods in specific geographic areas. Area development exclusivity fees are allocated on a pro rata basis to all restaurants opened under that specific development agreement. These fees are deferred and amortized over the term of the related franchise agreements, which is typically 10 years. Commissary Revenues Commissary revenues are comprised of food and supplies sold to franchised restaurants and are recognized as revenue upon shipment of the related products to the franchisees. Payments are generally due within 30 days. There are various incentive programs available to franchisees related to new restaurant openings including discounts on initial commissary orders and new store equipment incentives, at substantially no cost to franchisees. Commissary revenues are reduced to reflect incentives in the form of direct discounts on initial commissary orders. The new store equipment incentive is also recorded as a reduction of commissary sales over the term of the incentive agreement, which is generally three Other Revenues Franchise Marketing Fund revenues represent a required established percentage of monthly restaurant sales collected by PJMF, which is our national marketing fund, and various other international and Domestic marketing funds (“Co-op” or “Co-operative” Funds) where we have determined for purposes of accounting that we have control over the significant activities of the funds. PJMF funds its operations with ongoing financial support and contributions from Domestic Papa John’s restaurants, of which approximately 85% are franchised restaurant members. Contributions are based on a percentage of monthly restaurant sales and are billed monthly. When we are determined to be the principal in these arrangements, advertising fund contributions and expenditures are reported on a gross basis in the Consolidated Statements of Operations. Our obligation related to these funds is to develop and conduct advertising activities in a specific country, region, or market, including the placement of electronic and print materials. There are no expiration dates and we do not deduct non-usage fees from outstanding gift cards. While the Company and the franchisees continue to honor all gift cards presented for payment, the likelihood of redemption may be determined to be remote for certain cards due to long periods of inactivity. In these circumstances, the Company recognizes breakage revenue for amounts not subject to unclaimed property laws. Based upon our analysis of historical gift card redemption patterns, we can reasonably estimate the amount of gift cards for which redemption is remote. Breakage revenue is recognized over time in proportion to estimated redemption patterns as Other revenues. Commissions on gift cards sold by third parties are recorded as a reduction to Deferred revenue and a reduction to Other revenues based upon estimated redemption patterns. Fees for information services, including software maintenance fees, help desk fees, centralized call center fees, and online ordering fees are recognized as revenue as such services are provided and are included in Other revenues. Revenues for printing, promotional items, and direct mail marketing services are recognized upon shipment of the related products to franchisees and other customers. Direct mail advertising discounts are also periodically offered by our Preferred Marketing Solutions subsidiary. Other revenues are reduced to reflect these advertising discounts. Rental income, primarily derived from properties leased by the Company and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. Advertising and Related Costs Domestic Company-owned advertising and related costs of $55.2 million, $61.7 million and $56.7 million in 2022, 2021, and 2020, respectively, include the costs of Domestic Company-owned local restaurant activities such as mail coupons, door hangers and promotional items and advertising activities administered through PJMF and various local market cooperative advertising funds. PJMF is responsible for developing and conducting marketing and advertising for the Domestic Papa John’s system. The Co-op Funds are responsible for developing and conducting advertising activities in a specific market, including the placement of electronic and print materials developed by PJMF. During 2020 the Company recorded additional amounts of $15.0 million to PJMF, representing incremental discretionary marketing fund investments in excess of contractual Company-owned restaurant-level contributions as part of our temporary financial support package to our franchisees. The marketing fund investments are included in General and administrative expenses within the accompanying Consolidated Statements of Operations. Leases Lease expense is recognized on a straight-line basis over the expected life of the lease term for operating leases, whereas lease expense follows an accelerated expense recognition for finance leases. A lease term often includes option periods, available at the inception of the lease. Lease expense is comprised of operating and finance lease costs, short-term lease costs, and variable lease costs, which primarily include common area maintenance, real estate taxes, and insurance for the Company’s real estate leases. Lease costs also include variable rent, which is primarily related to the Company’s supply chain tractor and trailer leases that are based on a rate per mile. Stock-Based Compensation Compensation expense for equity grants is estimated on the grant date, net of projected forfeitures, and is recognized over the vesting period (graded vesting over three years). Restricted stock is valued based on the market price of the Company’s shares on the date of grant. Management evaluates its award grants and modifications and will adjust the fair value if any are determined to be spring-loaded. Cash Equivalents Cash equivalents consist of highly liquid investments with maturity of three months or less at date of purchase. These investments are carried at cost, which approximates fair value. Accounts Receivable Substantially all accounts receivable is due from franchisees for purchases of food, paper products, point of sale equipment, printing and promotional items, information systems and related services, marketing and royalties. Credit is extended based on an evaluation of the franchisee’s financial condition and collateral is generally not required. An allowance for credit losses is an estimate, even if remote, based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics and macroeconomic factors. Account balances are charged off against the allowance after recovery efforts have ceased. Notes Receivable The Company has provided financing to select Domestic and International franchisees principally for use in the construction and development of their restaurants and for the purchase of restaurants from the Company or other franchisees. Most notes receivable bear interest at fixed or floating rates and are generally secured by the assets of each restaurant and the ownership interests in the franchise. The Company has provided long-term financing to certain franchisees with royalty payment plans. We establish an allowance for credit losses for franchisee notes receivables to reduce the outstanding notes receivable to their net realizable values based on a review of each franchisee’s economic performance and market conditions after consideration of the fair value of our underlying collateral rights (e.g., underlying franchisee business, property and equipment) and any guarantees. Note balances are charged off against the allowance after recovery efforts have ceased. Interest income recorded on franchisee loans was approximately $1.3 million in 2022, $1.9 million in 2021 and $2.1 million in 2020 and is reported in Net interest expense in the accompanying Consolidated Statements of Operations. Inventories Inventories, which consist of food products, paper goods and supplies, smallwares, and printing and promotional items, are stated at the lower of cost, determined under the first-in, first-out (FIFO) method, or net realizable value. Property and Equipment Property and equipment are stated at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets (generally five twenty five Depreciation expense was $45.6 million in 2022, $43.0 million in 2021 and $46.6 million in 2020. Deferred Costs We capitalize certain information systems development and related costs that meet established criteria. Amounts capitalized, which are included in property and equipment, are amortized principally over periods not exceeding five years upon completion of the related information systems project. Total costs capitalized were approximately $4.1 million in 2022, $4.1 million in 2021 and $3.3 million in 2020. The unamortized information systems development costs approximated $9.6 and $10.5 million as of December 25, 2022 and December 26, 2021, respectively. Intangible Assets — Goodwill We evaluate goodwill annually in the fourth quarter or whenever we identify certain triggering events or circumstances that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Such tests are completed separately with respect to the goodwill of each of our reporting units, which includes our Domestic Company-owned restaurants, United Kingdom (“PJUK”), China, and Preferred Marketing Solutions operations. We may perform a qualitative assessment or move directly to the quantitative assessment for any reporting unit in any period if we believe that it is more efficient or if impairment indicators exist. We elected to perform a quantitative assessment for our Domestic Company-owned restaurants, PJUK, China, and Preferred Marketing Solutions operations in the fourth quarter of 2022. Our Domestic Company-owned restaurants, PJUK, China and Preferred Marketing Solutions fair value calculations considered both an income approach and a market approach. The income approach used projected net cash flows, with various growth assumptions, over a ten-year discrete period and a terminal value, which were discounted using appropriate rates. The selected discount rate considered the risk and nature of each reporting unit’s cash flow and the rates of return market participants would require to invest their capital in the reporting unit. In determining the fair value from a market approach, we considered sales multiples and earnings before interest, taxes, depreciation and amortization multiples that a potential buyer would pay based on third-party transactions in similar markets. As a result of our quantitative analyses, we determined that it was more-likely-than-not that the fair values of our reporting units were greater than their carrying amounts. Subsequent to completing our goodwill impairment tests, no indicators of impairment were identified. See “Note 11. Goodwill” for additional information. Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable and those deferred. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets and liabilities are netted by tax jurisdiction. Deferred tax assets are also recognized for the estimated future effects of tax attribute carryforwards (e.g., net operating losses, capital losses, and foreign tax credits). The effect on deferred taxes of changes in tax rates is recognized in the period in which the new tax rate is enacted. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize. Tax authorities periodically audit the Company. We record reserves and related interest and penalties for identified exposures as income tax expense. We evaluate these issues and adjust for events, such as statute of limitations expirations, court rulings or audit settlements, which may impact our ultimate payment for such exposures. See “Note 17. Income Taxes” for additional information. Insurance Reserves Our insurance programs for workers’ compensation, owned and non-owned automobiles, general liability and property insurance coverage provided to our employees are funded by the Company up to certain retention limits which range up to $0.5 million. Losses are accrued based upon undiscounted estimates of the liability for claims incurred and for events that have occurred but have not been reported using certain third-party actuarial projections and our claims loss experience. The determination of the recorded insurance reserves is highly judgmental and complex due to the significant uncertainty in the potential value of reported claims and the number and potential value of incurred but not reported claims, the application of significant judgment in making those estimates and the use of various actuarial valuation methods. The estimated insurance claims losses could be significantly affected should the frequency or ultimate cost of claims differ significantly from historical trends used to estimate the insurance reserves recorded by the Company. The Company records estimated losses above retention within its reserve with a corresponding receivable for expected amounts due from insurance carriers. As of December 25, 2022, our insurance reserve was $67.3 million as compared to $88.1 million as of December 26, 2021 primarily related to auto liability and workers’ compensation claims. Of these amounts, approximately $29.7 million and $34.7 million were recorded in Accrued expenses and other current liabilities and $37.6 million and $53.6 million were recorded in Other long-term liabilities on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021, respectively. Our reserves include claim costs above our retention that have a corresponding receivable. Our insurance receivable for claims above retention totaled $38.4 million and $48.1 million as of December 25, 2022 and December 26, 2021, respectively. Of these amounts, approximately $17.0 million and $18.7 million were recorded in Prepaid expenses and other current assets, and $21.4 million and $29.4 million were recorded in Other assets on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021, respectively. Derivative Financial Instruments We recognize all derivatives on the balance sheet at fair value. At inception and on an ongoing basis, we assess whether each derivative that qualifies for hedge accounting continues to be highly effective in offsetting changes in the cash flows of the hedged item. If the derivative meets the hedge criteria as defined by certain accounting standards, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of assets, liabilities or firm commitments through earnings or recognized in accumulated other comprehensive income/(loss) until the hedged item is recognized in earnings. In 2021, ou r interest rate swaps were de-designated as cash flow hedges following the issuance of the Notes (as defined in “Note 12. Debt”) and remained undesignated as hedges through June 26, 2022. For these de-designated hedges, the portion of gains or losses on the derivative instruments previously recognized in accumulated other comprehensive loss (“AOCL”) will be reclassified into earnings as adjustments to interest expense on a straight-line basis over the remaining life of the originally hedged transactions. As of June 27, 2022, the interest rate swaps were re-designated as cash flow hedges to provide a hedge against changes in variable rate cash flows regarding fluctuations in the London Interbank Offered Rates (“LIBOR”) rate utilized on the revolving credit facility. Therefore, beginning in the third quarter of 2022, our interest rate swaps are accounted for utilizing cash flow hedge accounting treatment. The interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in AOCL and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. Noncontrolling Interests Papa John’s has joint venture arrangements in which there are noncontrolling interests held by third parties that included 98 and 188 restaurants at December 25, 2022 and December 26, 2021, respectively. As further described in “Note 22. Divestitures,” the Company divested its 51 percent interest in one joint venture that owned 90 restaurants in the second quarter of 2022. Consolidated net income is required to be reported separately at amounts attributable to both the Company and the noncontrolling interests. Additionally, disclosures are required to clearly identify and distinguish between the interests of the Company and the interests of the noncontrolling owners, including a disclosure on the face of the Consolidated Statements of Operations of income attributable to the noncontrolling interest holder. The following summarizes the redemption feature, location and related accounting within the Consolidated Balance Sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Consolidated Balance Sheets Recorded Value Joint ventures with no redemption feature Permanent equity Carrying value Joint venture with option to require the Company to purchase the noncontrolling interest - not currently redeemable or redemption not probable Temporary equity Carrying value See “Note 9. Noncontrolling Interests” for additional information regarding noncontrolling interests. Foreign Currency Translation The local currency is the functional currency for each of our foreign subsidiaries. Revenues and expenses are translated into United States (“U.S.”) dollars using monthly average exchange rates, while assets and liabilities are translated using year-end exchange rates and historical rates. The resulting translation adjustments are included as a component of AOCL, net of income taxes. Recent Accounting Pronouncements Reference Rate Reform – Hedging In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “ Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ” The ASU provides optional expedients and exceptions for applying guidance on contract modifications and hedge accounting related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates if certain criteria are met. This guidance was effective beginning on March 12, 2020, and amendments could be applied prospectively through December 31, 2022. The hedge accounting expedients may be applied, on an individual hedging relationship basis, to eligible hedge accounting relationships that existed as of the beginning of the effective date of this guidance, and to new eligible hedging relationships entered into after the effective date of this guidance; however, those expedients generally could not be applied to hedging relationships for periods after December 31, 2022. The FASB issued ASU 2022-06, “Deferral of the Sunset Date of Topic 848,” |
Leases
Leases | 12 Months Ended |
Dec. 25, 2022 | |
Leases [Abstract] | |
Leases | 3. Leases The Company has significant leases that include most Domestic Company-owned restaurant and commissary locations as well as our corporate office located in Atlanta, Georgia. Other Domestic leases include tractor and trailer leases used by our distribution subsidiary as well as commissary equipment. Additionally, the Company leases a significant number of restaurants within the United Kingdom (“UK”); these restaurants are then subleased to the franchisees. The Company’s leases have terms as follows: Average lease term Domestic Company-owned restaurants Five years, plus at least one renewal UK franchise-owned restaurants 15 years Domestic commissary locations 10 years, plus at least one renewal Domestic and International tractors and trailers Five Domestic and International commissary and office equipment Three The Company determines if an arrangement is or contains a lease at contract inception and recognizes a right-of-use asset and a lease liability at the lease commencement date. Leases with an initial term of 12 months or less but greater than one month are not recorded on the balance sheet for select asset classes. The lease liability is measured at the present value of future lease payments as of the lease commencement date. The right-of-use asset recognized is based on the lease liability adjusted for prepaid and deferred rent and unamortized lease incentives. An operating lease right-of-use asset is amortized on a straight-line basis over the lease term and is recognized as a single lease cost against the operating lease liability. A finance lease right-of-use asset is amortized on a straight-line basis, with interest costs reported separately, over the lesser of the useful life of the leased asset or lease term. Operating lease expense is recognized on a straight-line basis over the lease term and is included in Operating costs or General and administrative expenses. Variable lease payments are expensed as incurred. The Company uses its incremental borrowing rates as the discount rate for its leases, which is equal to the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease terms for all the Company’s leases include the contractually obligated period of the leases, plus any additional periods covered by Company options to extend the leases that the Company is reasonably certain to exercise. Certain leases provide that the lease payments may be increased annually based on the fixed rate terms or adjustable terms such as the Consumer Price Index. Future base rent escalations that are not contractually quantifiable as of the lease commencement date are not included in our lease liability. The following schedule details the total right-of-use assets and lease liabilities on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021 (in thousands): Leases Classification December 25, December 26, Assets Finance lease assets, net Finance lease right-of-use assets, net $ 24,941 $ 20,907 Operating lease assets, net Operating lease right-of-use assets 172,425 176,256 Total lease assets $ 197,366 $ 197,163 Liabilities Current finance lease liabilities Current finance lease liabilities $ 6,850 $ 4,977 Current operating lease liabilities Current operating lease liabilities 23,418 22,543 Noncurrent finance lease liabilities Long-term finance lease liabilities 19,022 16,580 Noncurrent operating lease liabilities Long-term operating lease liabilities 160,905 160,672 Total lease liabilities $ 210,195 $ 204,772 Lease costs for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 were as follows (in thousands): Year Ended Year Ended Year Ended Finance lease: Amortization of right-of-use assets $ 5,704 $ 4,980 $ 2,342 Interest on lease liabilities 1,029 1,140 606 Operating lease: Operating lease cost 42,815 43,072 40,026 Short-term lease cost 4,171 2,032 3,960 Variable lease cost 9,129 8,572 6,503 Total lease costs 62,848 59,796 53,437 Sublease income (11,654) (12,039) (10,407) Total lease costs, net of sublease income $ 51,194 $ 47,757 $ 43,030 Future minimum lease payments under contractually-obligated leases and associated sublease income as of December 25, 2022 were as follows (in thousands): Fiscal Year Finance Operating Expected 2023 $ 7,849 $ 32,860 $ 10,303 2024 6,801 32,267 10,371 2025 5,171 30,695 9,952 2026 4,125 26,973 9,251 2027 2,971 21,568 8,523 Thereafter 1,440 92,002 42,089 Total future minimum lease payments 28,357 236,365 90,489 Less imputed interest (2,485) (52,042) — Total present value of lease liabilities $ 25,872 $ 184,323 $ 90,489 Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK which are primarily operating leases. At December 25, 2022, we leased and subleased approximately 442 Papa John’s restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five Lease Guarantees As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of approximately 53 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of December 25, 2022, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $9.2 million. This contingent liability is not included in the Consolidated Balance Sheet or future minimum lease obligation. The fair value of the guarantee is not material. There were no leases recorded between related parties. Supplemental Cash Flow & Other Information The following table presents supplemental cash flow information related to leases for the years ended December 25, 2022, December 26, 2021 and December 27, 2020: (Dollars in thousands) Year Ended December 25, 2022 December 26, 2021 December 27, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,029 $ 1,140 $ 606 Financing cash flows from finance leases $ 5,416 $ 4,566 $ 2,139 Operating cash flows from operating leases (a) $ 35,573 $ 38,530 $ 37,113 Right-of-use assets obtained in exchange for new finance lease liabilities $ 9,875 $ 9,486 $ 9,152 Right-of-use assets obtained in exchange for new operating lease liabilities (b) $ 53,869 $ 64,420 $ 30,266 Cash received from sublease income $ 10,847 $ 11,597 $ 10,545 Weighted-average remaining lease term (in years): Finance leases 4.43 4.51 4.71 Operating leases 8.44 8.30 7.00 Weighted-average discount rate: Finance leases 4.59% 5.08% 5.34% Operating leases 5.63% 6.20% 6.65% ______________________________ (a) Included within the change in Other assets and liabilities within the Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. (b) Includes right-of-use assets of approximately $21.8 million for the year ended December 25, 2021 associated with the lease commencement of our Atlanta, Georgia corporate office. |
Leases | 3. Leases The Company has significant leases that include most Domestic Company-owned restaurant and commissary locations as well as our corporate office located in Atlanta, Georgia. Other Domestic leases include tractor and trailer leases used by our distribution subsidiary as well as commissary equipment. Additionally, the Company leases a significant number of restaurants within the United Kingdom (“UK”); these restaurants are then subleased to the franchisees. The Company’s leases have terms as follows: Average lease term Domestic Company-owned restaurants Five years, plus at least one renewal UK franchise-owned restaurants 15 years Domestic commissary locations 10 years, plus at least one renewal Domestic and International tractors and trailers Five Domestic and International commissary and office equipment Three The Company determines if an arrangement is or contains a lease at contract inception and recognizes a right-of-use asset and a lease liability at the lease commencement date. Leases with an initial term of 12 months or less but greater than one month are not recorded on the balance sheet for select asset classes. The lease liability is measured at the present value of future lease payments as of the lease commencement date. The right-of-use asset recognized is based on the lease liability adjusted for prepaid and deferred rent and unamortized lease incentives. An operating lease right-of-use asset is amortized on a straight-line basis over the lease term and is recognized as a single lease cost against the operating lease liability. A finance lease right-of-use asset is amortized on a straight-line basis, with interest costs reported separately, over the lesser of the useful life of the leased asset or lease term. Operating lease expense is recognized on a straight-line basis over the lease term and is included in Operating costs or General and administrative expenses. Variable lease payments are expensed as incurred. The Company uses its incremental borrowing rates as the discount rate for its leases, which is equal to the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease terms for all the Company’s leases include the contractually obligated period of the leases, plus any additional periods covered by Company options to extend the leases that the Company is reasonably certain to exercise. Certain leases provide that the lease payments may be increased annually based on the fixed rate terms or adjustable terms such as the Consumer Price Index. Future base rent escalations that are not contractually quantifiable as of the lease commencement date are not included in our lease liability. The following schedule details the total right-of-use assets and lease liabilities on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021 (in thousands): Leases Classification December 25, December 26, Assets Finance lease assets, net Finance lease right-of-use assets, net $ 24,941 $ 20,907 Operating lease assets, net Operating lease right-of-use assets 172,425 176,256 Total lease assets $ 197,366 $ 197,163 Liabilities Current finance lease liabilities Current finance lease liabilities $ 6,850 $ 4,977 Current operating lease liabilities Current operating lease liabilities 23,418 22,543 Noncurrent finance lease liabilities Long-term finance lease liabilities 19,022 16,580 Noncurrent operating lease liabilities Long-term operating lease liabilities 160,905 160,672 Total lease liabilities $ 210,195 $ 204,772 Lease costs for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 were as follows (in thousands): Year Ended Year Ended Year Ended Finance lease: Amortization of right-of-use assets $ 5,704 $ 4,980 $ 2,342 Interest on lease liabilities 1,029 1,140 606 Operating lease: Operating lease cost 42,815 43,072 40,026 Short-term lease cost 4,171 2,032 3,960 Variable lease cost 9,129 8,572 6,503 Total lease costs 62,848 59,796 53,437 Sublease income (11,654) (12,039) (10,407) Total lease costs, net of sublease income $ 51,194 $ 47,757 $ 43,030 Future minimum lease payments under contractually-obligated leases and associated sublease income as of December 25, 2022 were as follows (in thousands): Fiscal Year Finance Operating Expected 2023 $ 7,849 $ 32,860 $ 10,303 2024 6,801 32,267 10,371 2025 5,171 30,695 9,952 2026 4,125 26,973 9,251 2027 2,971 21,568 8,523 Thereafter 1,440 92,002 42,089 Total future minimum lease payments 28,357 236,365 90,489 Less imputed interest (2,485) (52,042) — Total present value of lease liabilities $ 25,872 $ 184,323 $ 90,489 Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK which are primarily operating leases. At December 25, 2022, we leased and subleased approximately 442 Papa John’s restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five Lease Guarantees As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of approximately 53 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of December 25, 2022, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $9.2 million. This contingent liability is not included in the Consolidated Balance Sheet or future minimum lease obligation. The fair value of the guarantee is not material. There were no leases recorded between related parties. Supplemental Cash Flow & Other Information The following table presents supplemental cash flow information related to leases for the years ended December 25, 2022, December 26, 2021 and December 27, 2020: (Dollars in thousands) Year Ended December 25, 2022 December 26, 2021 December 27, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,029 $ 1,140 $ 606 Financing cash flows from finance leases $ 5,416 $ 4,566 $ 2,139 Operating cash flows from operating leases (a) $ 35,573 $ 38,530 $ 37,113 Right-of-use assets obtained in exchange for new finance lease liabilities $ 9,875 $ 9,486 $ 9,152 Right-of-use assets obtained in exchange for new operating lease liabilities (b) $ 53,869 $ 64,420 $ 30,266 Cash received from sublease income $ 10,847 $ 11,597 $ 10,545 Weighted-average remaining lease term (in years): Finance leases 4.43 4.51 4.71 Operating leases 8.44 8.30 7.00 Weighted-average discount rate: Finance leases 4.59% 5.08% 5.34% Operating leases 5.63% 6.20% 6.65% ______________________________ (a) Included within the change in Other assets and liabilities within the Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. (b) Includes right-of-use assets of approximately $21.8 million for the year ended December 25, 2021 associated with the lease commencement of our Atlanta, Georgia corporate office. |
Leases | 3. Leases The Company has significant leases that include most Domestic Company-owned restaurant and commissary locations as well as our corporate office located in Atlanta, Georgia. Other Domestic leases include tractor and trailer leases used by our distribution subsidiary as well as commissary equipment. Additionally, the Company leases a significant number of restaurants within the United Kingdom (“UK”); these restaurants are then subleased to the franchisees. The Company’s leases have terms as follows: Average lease term Domestic Company-owned restaurants Five years, plus at least one renewal UK franchise-owned restaurants 15 years Domestic commissary locations 10 years, plus at least one renewal Domestic and International tractors and trailers Five Domestic and International commissary and office equipment Three The Company determines if an arrangement is or contains a lease at contract inception and recognizes a right-of-use asset and a lease liability at the lease commencement date. Leases with an initial term of 12 months or less but greater than one month are not recorded on the balance sheet for select asset classes. The lease liability is measured at the present value of future lease payments as of the lease commencement date. The right-of-use asset recognized is based on the lease liability adjusted for prepaid and deferred rent and unamortized lease incentives. An operating lease right-of-use asset is amortized on a straight-line basis over the lease term and is recognized as a single lease cost against the operating lease liability. A finance lease right-of-use asset is amortized on a straight-line basis, with interest costs reported separately, over the lesser of the useful life of the leased asset or lease term. Operating lease expense is recognized on a straight-line basis over the lease term and is included in Operating costs or General and administrative expenses. Variable lease payments are expensed as incurred. The Company uses its incremental borrowing rates as the discount rate for its leases, which is equal to the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease terms for all the Company’s leases include the contractually obligated period of the leases, plus any additional periods covered by Company options to extend the leases that the Company is reasonably certain to exercise. Certain leases provide that the lease payments may be increased annually based on the fixed rate terms or adjustable terms such as the Consumer Price Index. Future base rent escalations that are not contractually quantifiable as of the lease commencement date are not included in our lease liability. The following schedule details the total right-of-use assets and lease liabilities on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021 (in thousands): Leases Classification December 25, December 26, Assets Finance lease assets, net Finance lease right-of-use assets, net $ 24,941 $ 20,907 Operating lease assets, net Operating lease right-of-use assets 172,425 176,256 Total lease assets $ 197,366 $ 197,163 Liabilities Current finance lease liabilities Current finance lease liabilities $ 6,850 $ 4,977 Current operating lease liabilities Current operating lease liabilities 23,418 22,543 Noncurrent finance lease liabilities Long-term finance lease liabilities 19,022 16,580 Noncurrent operating lease liabilities Long-term operating lease liabilities 160,905 160,672 Total lease liabilities $ 210,195 $ 204,772 Lease costs for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 were as follows (in thousands): Year Ended Year Ended Year Ended Finance lease: Amortization of right-of-use assets $ 5,704 $ 4,980 $ 2,342 Interest on lease liabilities 1,029 1,140 606 Operating lease: Operating lease cost 42,815 43,072 40,026 Short-term lease cost 4,171 2,032 3,960 Variable lease cost 9,129 8,572 6,503 Total lease costs 62,848 59,796 53,437 Sublease income (11,654) (12,039) (10,407) Total lease costs, net of sublease income $ 51,194 $ 47,757 $ 43,030 Future minimum lease payments under contractually-obligated leases and associated sublease income as of December 25, 2022 were as follows (in thousands): Fiscal Year Finance Operating Expected 2023 $ 7,849 $ 32,860 $ 10,303 2024 6,801 32,267 10,371 2025 5,171 30,695 9,952 2026 4,125 26,973 9,251 2027 2,971 21,568 8,523 Thereafter 1,440 92,002 42,089 Total future minimum lease payments 28,357 236,365 90,489 Less imputed interest (2,485) (52,042) — Total present value of lease liabilities $ 25,872 $ 184,323 $ 90,489 Lessor Operating Leases The Company subleases certain retail space to our franchisees in the UK which are primarily operating leases. At December 25, 2022, we leased and subleased approximately 442 Papa John’s restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five Lease Guarantees As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of approximately 53 Domestic leases. These leases have varying terms, the latest of which expires in 2036. As of December 25, 2022, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $9.2 million. This contingent liability is not included in the Consolidated Balance Sheet or future minimum lease obligation. The fair value of the guarantee is not material. There were no leases recorded between related parties. Supplemental Cash Flow & Other Information The following table presents supplemental cash flow information related to leases for the years ended December 25, 2022, December 26, 2021 and December 27, 2020: (Dollars in thousands) Year Ended December 25, 2022 December 26, 2021 December 27, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,029 $ 1,140 $ 606 Financing cash flows from finance leases $ 5,416 $ 4,566 $ 2,139 Operating cash flows from operating leases (a) $ 35,573 $ 38,530 $ 37,113 Right-of-use assets obtained in exchange for new finance lease liabilities $ 9,875 $ 9,486 $ 9,152 Right-of-use assets obtained in exchange for new operating lease liabilities (b) $ 53,869 $ 64,420 $ 30,266 Cash received from sublease income $ 10,847 $ 11,597 $ 10,545 Weighted-average remaining lease term (in years): Finance leases 4.43 4.51 4.71 Operating leases 8.44 8.30 7.00 Weighted-average discount rate: Finance leases 4.59% 5.08% 5.34% Operating leases 5.63% 6.20% 6.65% ______________________________ (a) Included within the change in Other assets and liabilities within the Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. (b) Includes right-of-use assets of approximately $21.8 million for the year ended December 25, 2021 associated with the lease commencement of our Atlanta, Georgia corporate office. |
Papa John's Marketing Fund, Inc
Papa John's Marketing Fund, Inc. | 12 Months Ended |
Dec. 25, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Papa John's Marketing Fund, Inc. | 4. Papa John’s Marketing Fund, Inc. PJMF, which is a consolidated variable interest entity where the Company has been identified as the primary beneficiary, collects a percentage of revenues from Company-owned and franchised restaurants in the United States, for the purpose of designing and administering advertising and promotional programs for all participating Domestic restaurants. Contributions and expenditures are reported on a gross basis in the Consolidated Statements of Operations within Other revenues and Other expenses. PJMF also has a wholly-owned subsidiary, Papa Card, Inc., which administers the Company’s gift card programs. Assets and liabilities of PJMF, which are utilized solely for the Company’s advertising and promotional programs, were as follows in the Consolidated Balance Sheets (in thousands): December 25, December 26, Assets Current assets: Cash and cash equivalents $ 17,174 $ 24,481 Accounts receivable, net 14,780 14,150 Income tax receivable — 300 Prepaid expenses and other current assets 1,815 1,718 Total current assets 33,769 40,649 Deferred income taxes 655 614 Total assets $ 34,424 $ 41,263 Liabilities Current liabilities: Accounts payable $ 12,428 $ 140 Income and other taxes payable 8 2 Accrued expenses and other current liabilities 17,928 40,154 Current deferred revenue 4,395 4,317 Total current liabilities 34,759 44,613 Deferred revenue 2,503 2,478 Total liabilities $ 37,262 $ 47,091 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 5. Revenue Recognition Contract Balances Our contract liabilities primarily relate to franchise fees, unredeemed gift card liabilities, and loyalty program obligations, which we classify as Deferred revenue on the Consolidated Balance Sheets. During the years ended December 25, 2022 and December 26, 2021, the Company recognized $33.4 million and $36.3 million in revenue, respectively, related to deferred revenue. The following table includes a breakout of contract liability balances (in thousands): Contract Liabilities December 25, 2022 December 26, 2021 Change Franchise fees and unredeemed gift card liabilities $ 30,710 $ 20,410 $ 10,300 Customer loyalty program obligations 13,766 15,136 (1,370) Total contract liabilities $ 44,476 $ 35,546 $ 8,930 Our contract assets consist primarily of equipment incentives provided to franchisees. Equipment incentives are related to the future value of commissary revenue the Company will receive over the term of the incentive agreement. As of December 25, 2022 and December 26, 2021, the contract assets were approximately $4.5 million and $5.8 million, respectively. For the years ended December 25, 2022 and December 26, 2021, revenue was reduced approximately $3.4 million and $3.0 million, respectively, for the amortization of contract assets over the applicable contract terms. Contract assets are included in Prepaid expenses and other current assets and Other assets on the Consolidated Balance Sheets. Transaction Price Allocated to the Remaining Performance Obligations The following table (in thousands) includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period. Performance Obligations by Period Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Franchise fees $ 3,098 $ 2,927 $ 2,755 $ 2,524 $ 2,210 $ 7,120 $ 20,634 Approximately $3.2 million of area development fees related to unopened stores and International unearned royalties are included in Deferred revenue. Timing of revenue recognition is dependent upon the timing of store openings and franchisees’ revenues. Gift card liabilities of approximately $6.9 million, included in Deferred revenue, will be recognized in Company-owned restaurant revenues when gift cards are redeemed. The Company will recognize redemption fee revenue in Other revenues when cards are redeemed at franchised restaurant locations. |
Stockholders_ Deficit
Stockholders’ Deficit | 12 Months Ended |
Dec. 25, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Deficit | 6. Stockholders’ Deficit Common Stock The Company has authorized 100.0 million shares of common stock as of December 25, 2022 and December 26, 2021, respectively. The Company’s outstanding shares of common stock, net of repurchased common stock held as treasury stock, were 34.7 million shares at December 25, 2022 and 35.8 million shares at December 26, 2021. Share Repurchase Program On October 28, 2021, our Board of Directors approved a share repurchase program with an indefinite duration for up to $425.0 million of the Company’s common stock. This share repurchase program operated alongside our previous $75.0 million share repurchase authorization, which began on November 4, 2020 and expired on December 26, 2021. The following table summarizes our repurchase activity for the years ended December 25, 2022, December 26, 2021 and December 27, 2020, respectively: (In thousands, except average price per share) Year Ended Total Average Aggregate Maximum Dollar December 25, 2022 1,343 $ 93.07 $ 125,000 $ 299,800 December 26, 2021 594 $ 121.96 $ 72,499 $ 424,800 December 27, 2020 32 $ 83.90 $ 2,701 $ 72,299 Subsequent to year-end, we acquired an additional 319,307 shares at an aggregate cost of $27.6 million. Approximately $272.2 million remained available under the Company’s share repurchase program as of February 16, 2023. The timing and volume of share repurchases under the Company’s share repurchase programs may be executed at the discretion of management on an opportunistic basis, subject to market and business conditions, regulatory requirements and other factors, or pursuant to trading plans or other arrangements. Repurchases under the programs may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, at times and in such amounts as management deems appropriate. Repurchases under the Company’s share repurchase programs may be commenced or suspended from time to time at the Company’s discretion without prior notice. Funding for the share repurchase programs will be provided through our credit facility, operating cash flow, stock option exercises and cash and cash equivalents. Dividends on Common Stock The Company paid dividends of approximately $54.8 million ($1.54 per share), $40.4 million and $29.4 million to common stockholders for the years 2022, 2021 and 2020, respectively. On January 26, 2023, our Board of Directors declared a first quarter 2023 dividend of $0.42 per common share, representing a $14.6 million aggregate dividend that was paid on February 17, 2023 to stockholders of record as of the close of business on February 6, 2023. The declaration and payment of any future dividends will be at the discretion of our Board of Directors. Preferred Stock The Company has authorized 5.0 million shares of preferred stock (of which none were issued or outstanding at December 25, 2022 or December 26, 2021, respectively). On May 11, 2021, the Company entered into a Share Repurchase Agreement with certain funds affiliated with, or managed by, Starboard Value LP (collectively, “Starboard”), pursuant to which (i) the Company repurchased from Starboard 78,387 shares of the Series B Convertible Preferred Stock, par value $0.01 per share, of the Company (“Series B Preferred Stock”) and (ii) Starboard converted the remaining 171,613 shares of Series B Preferred Stock that it owned into 3,458,360 shares of the Company’s common stock pursuant to the terms of the Certificate of Designation of the Series B Preferred Stock. On June 3, 2021, the Company entered into agreements with certain franchisee investors to repurchase 1,000 shares of the outstanding Series B Preferred Stock and convert the remaining 1,530 shares of Series B Preferred Stock into 30,769 shares of common stock. The Company paid Starboard and the franchisee investors aggregate one-time cash payments of $188.6 million for the repurchase and conversion of all of the outstanding shares of Series B Preferred Stock. The excess of the cash payment over the carrying value of the respective Series B Preferred Stock redeemed resulted in $109.9 million of dividends on redemption of Series B Preferred Stock in the Consolidated Statement of Operations, which reduced net income attributable to common stockholders and also reduced diluted earnings per share by $3.10 for the year ended December 26, 2021. On August 3, 2021, the Company filed a Certificate of Elimination (the “Certificate of Elimination”) with the Secretary of State of the State of Delaware to eliminate the Series B Preferred Stock. Effective upon filing, the Certificate of Elimination eliminated from the Company’s Amended and Restated Certificate of Incorporation all matters set forth in the Certificate of Designation with respect to the Series B Preferred Stock. The shares that were designated to such series were returned to the status of authorized but unissued shares of preferred stock, par value $0.01 per share, of the Company, without designation as to series. As a result of the repurchase and conversion, there were no shares of Series B Preferred Stock authorized or outstanding at December 25, 2022 or December 26, 2021. The following table summarizes changes to our Series B Preferred Stock in 2021 (in thousands): Balance at December 27, 2020 $ 251,901 Accretion 629 Redemption (252,530) Balance at December 26, 2021 $ — Dividends on Series B Preferred Stock The Company paid common stock “pass-through” dividends on an as-converted basis to Series B Preferred Stockholders of $1.1 million and $4.6 million and preferred dividends on the Series B Preferred Stock of $3.0 million and $9.1 million, in 2021 and 2020, respectively. The Company also paid $1.5 million of common stock deemed dividend distributions in connection with the repurchase and conversion of the Series B Preferred Stock in 2021. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 25, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 7. Earnings per Share We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. The shares of Series B Preferred Stock, which were repurchased by the Company or converted into shares of common stock during the second quarter of 2021, and time-based restricted stock awards are participating securities because holders of such shares have non-forfeitable dividend rights and participate in undistributed earnings with common stock. Under the two-class method, total dividends provided to the holders of participating securities and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net income attributable to common shareholders. Additionally, any accretion to the redemption value for the Series B Preferred Stock or cash payments in excess of their respective carrying values upon redemption was treated as a deemed dividend in the two-class earnings per share calculation. Basic earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding. Diluted earnings per common share are computed by dividing the net income attributable to common shareholders by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding consist of basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities. The calculations of basic earnings per common share and diluted earnings per common share for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 are as follows (in thousands, except per share data): 2022 2021 2020 Basic earnings per common share Net income attributable to the Company $ 67,772 $ 120,016 $ 57,932 Dividends on redemption of Series B Convertible Preferred Stock — (109,852) — Dividends paid to participating securities (306) (6,091) (14,059) Net income attributable to participating securities (104) — (2,136) Net income attributable to common shareholders $ 67,362 $ 4,073 $ 41,737 Basic weighted average common shares outstanding 35,497 35,007 32,421 Basic earnings per common share $ 1.90 $ 0.12 $ 1.29 Diluted earnings per common share Net income attributable to common shareholders $ 67,362 $ 4,073 $ 41,737 Weighted average common shares outstanding 35,497 35,007 32,421 Dilutive effect of outstanding equity awards (a) 220 330 296 Diluted weighted average common shares outstanding (b) 35,717 35,337 32,717 Diluted earnings per common share $ 1.89 $ 0.12 $ 1.28 ______________________________ (a) Shares subject to options to purchase common stock with an exercise price greater than the average market price for the year were not included in the computation of diluted earnings per common share because the effect would have been antidilutive. The weighted average number of shares subject to antidilutive options was 100,000 in 2020 (none in 2022 or 2021). (b) The Company had 252,500 shares of Series B Preferred Stock outstanding as of December 27, 2020 (none as of December 25, 2022 or December 26, 2021). For the fully diluted calculation, the Series B Preferred Stock dividends were added back to net income attributable to common shareholders. The Company then applied the if-converted method to calculate dilution on the Series B Preferred Stock, which resulted in 5.0 million additional common shares. This calculation was anti-dilutive in 2020 and as such was excluded. See “Note 20. Equity Compensation” for additional information regarding our equity awards, including restricted stock. |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 12 Months Ended |
Dec. 25, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Disclosures | 8. Fair Value Measurements and Disclosures The Company determines the fair value of financial assets and liabilities based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. Certain assets and liabilities are measured at fair value on a recurring basis and are required to be classified and disclosed in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data. Fair value is a market-based measurement, not an entity specific measurement. Considerable judgment is required to interpret market data to estimate fair value; accordingly, the fair values presented do not necessarily indicate what the Company or its debtholders could realize in a current market exchange. Our financial assets and liabilities that were measured at fair value on a recurring basis as of December 25, 2022 and December 26, 2021 are as follows: Carrying Fair Value Measurements (in thousands) Level 1 Level 2 Level 3 December 25, 2022 Financial assets: Cash surrender value of life insurance policies (a) $ 30,120 $ 30,120 $ — $ — Interest rate swaps (b) $ 986 $ — $ 986 $ — December 26, 2021 Financial assets: Cash surrender value of life insurance policies (a) $ 41,904 $ 41,904 $ — $ — Financial liabilities: Interest rate swaps (b) $ 5,536 $ — $ 5,536 $ — ______________________________ (a) Represents life insurance policies held in our non-qualified deferred compensation plan. See “Note 21. Employee Benefit Plans” for additional information. (b) The fair value of our interest rate swaps is based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected London Interbank Offered Rates (“LIBOR”). There were no transfers among levels within the fair value hierarchy during fiscal 2022 or 2021. The fair value of certain assets and liabilities approximates carrying value because of the short-term nature of the accounts, including cash and cash equivalents, accounts receivable, net of allowances, and accounts payable. The carrying value of notes receivable, net of allowances, also approximates fair value. The Company’s revolving credit facilities and term debt under the Company’s credit agreement approximate carrying value due to their variable market-based interest rate. The Company’s 3.875% senior notes are classified as a Level 2 fair value measurement since the Company estimates the fair value by using recent trading transactions, and have the following estimated fair values and carrying values (excluding the impact of unamortized debt issuance costs) as of December 25, 2022 and December 26, 2021: December 25, 2022 December 26, 2021 (in thousands) Carrying Fair Carrying Fair 3.875% Senior Notes $ 400,000 $ 339,500 $ 400,000 $ 396,000 |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 25, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | 9. Noncontrolling Interests As of December 25, 2022, the Company had three joint venture arrangements comprising 98 restaurants as compared to four joint venture arrangements comprising 188 restaurants at December 26, 2021. As further described in “Note 22. Divestitures,” the Company divested its 51 percent interest in one joint venture that owned 90 restaurants in the second quarter of 2022. Net income attributable to these joint ventures for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 was as follows (in thousands): 2022 2021 2020 Papa John’s International, Inc. $ 3,136 $ 8,457 $ 5,654 Noncontrolling interests 1,577 4,939 2,682 Total net income $ 4,713 $ 13,396 $ 8,336 The following summarizes changes in our redeemable noncontrolling interests in 2022 and 2021 (in thousands): Balance at December 27, 2020 $ 6,474 Net income 2,609 Distributions (3,585) Balance at December 26, 2021 $ 5,498 Net income 574 Distributions (4,855) Balance at December 25, 2022 $ 1,217 |
Allowance For Credit Losses
Allowance For Credit Losses | 12 Months Ended |
Dec. 25, 2022 | |
Credit Loss [Abstract] | |
Allowance for Credit Losses | 10. Allowance for Credit Losses The Company adopted ASU 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ,” (“ASU 2016-13”) as of December 30, 2019 (the first day of fiscal 2020) under the modified retrospective transition method. Topic 326 requires measurement and recognition of expected versus incurred losses for financial assets held. Financial instruments subject to Topic 326 include trade accounts receivable, notes receivable and interest receivable (classified as Other assets in the Consolidated Balance Sheets) from franchisees. The impact of the adoption was not material to our consolidated financial statements. Estimates of expected credit losses, even if remote, are based upon historical account write-off trends, facts about the current financial condition of the debtor, forecasts of future operating results based upon current trends of select operating metrics, and macroeconomic factors. Credit quality is monitored through the timing of payments compared to the prescribed payment terms and known facts regarding the financial condition of the franchisee or customer. Account and note balances are charged off against the allowance after recovery efforts have ceased. The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable: (In thousands) Accounts Receivable Notes Receivable Balance at December 27, 2020 $ 3,622 $ 3,211 Current period provision (benefit) for expected credit losses 16 (583) Write-offs charged against the allowance (1,274) (843) Recoveries collected — (285) Balance at December 26, 2021 $ 2,364 $ 1,500 Current period provision for expected credit losses (a) 6,474 14,066 Write-offs charged against the allowance (2,120) (1,042) Recoveries collected — (25) Balance at December 25, 2022 $ 6,718 $ 14,499 ______________________________ |
Goodwill
Goodwill | 12 Months Ended |
Dec. 25, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 11. Goodwill The following summarizes changes in the Company’s goodwill, by reportable segment (in thousands): Domestic Company- International (a) All Others Total Balance at December 27, 2020 $ 64,254 $ 16,101 $ 436 $ 80,791 Foreign currency adjustments — (159) — (159) Balance at December 26, 2021 $ 64,254 $ 15,942 $ 436 $ 80,632 Acquisitions (b) 1,161 — — 1,161 Divestitures (c) (9,908) — — (9,908) Foreign currency adjustments — (1,269) — (1,269) Balance at December 25, 2022 $ 55,507 $ 14,673 $ 436 $ 70,616 ______________________________ (a) The International goodwill balances for all years presented are net of accumulated impairment of $2.3 million associated with our PJUK reporting unit. (b) Goodwill from acquisitions was $1.2 million in 2022, due to acquisitions of two stores. (c) In conjunction with the refranchising of our 51.0% ownership interest in a 90-restaurant consolidated joint venture in Texas, goodwill was allocated to the disposal group based on relative fair value within the Domestic Company-owned restaurants reporting group. See “Note 22. Divestitures” for further information. |
Debt
Debt | 12 Months Ended |
Dec. 25, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 12. Debt Long-term debt, net consists of the following (in thousands): December 25, December 26, Senior notes $ 400,000 $ 400,000 Revolving facilities 205,000 90,000 Outstanding debt 605,000 490,000 Unamortized debt issuance costs (7,931) (9,270) Total long-term debt, net $ 597,069 $ 480,730 Senior Notes On September 14, 2021, the Company issued $400.0 million of 3.875% senior notes (the “Notes”) which will mature on September 15, 2029. The Notes are guaranteed by each of the Company’s existing and future Domestic restricted subsidiaries that are guarantors or borrowers under the Amended Credit Agreement (as defined below) or other certain indebtedness. The Notes were offered and sold either to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or to persons outside the United States under Regulation S of the Securities Act. Interest on the Notes is payable semi-annually in cash in arrears on March 15 and September 15 of each year, beginning March 15, 2022, at a fixed interest rate of 3.875% per annum. In connection with the Notes, the Company recorded $7.1 million of debt issuance costs, which are being amortized into net interest expense over the term of the Notes. The net proceeds from the Notes, together with borrowings under the Amended Credit Agreement (as defined below), were used to repay outstanding revolver and term loan borrowings under the Company’s Previous Credit Agreement (as defined below). The Company may redeem the Notes, in whole or in part, at any time on or after September 15, 2024 at established redemption prices ranging from 97 to 194 basis points depending on when the Notes are redeemed. At any time prior to September 15, 2024, the Company may also redeem up to 40% of the Notes with net cash proceeds of certain equity offerings at a redemption price equal to 103.875% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, excluding the redemption date. In addition, at any time prior to September 15, 2024, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest and an applicable “make-whole” premium. The Notes also contain customary redemption provisions related to asset sales and certain change of control transactions. The Indenture governing the Notes contains customary events of default, including, among other things, payment default, failure to comply with covenants or agreements contained in the Indenture or the Notes and certain provisions related to bankruptcy events. The Indenture also contains customary negative covenants. Amended Credit Agreement Concurrently with the issuance of the Notes, the Company entered into an amended and restated credit agreement (the “Amended Credit Agreement”) replacing the previous credit agreement (“Previous Credit Agreement”). The Amended Credit Agreement provides for a senior secured revolving credit facility in an aggregate available principal amount of $600.0 million (the “PJI Revolving Facility”), of which up to $40.0 million is available as swingline loans and up to $80.0 million is available as letters of credit. The PJI Revolving Facility will mature on September 14, 2026. In connection with the Amended Credit Agreement, the Company recorded $2.1 million of debt issuance costs, which are being amortized into net interest expense over the term of the Amended Credit Agreement. The remaining availability under the PJI Revolving Facility was $395.0 million as of December 25, 2022. Up to $50.0 million of the PJI Revolving Facility may be advanced in certain agreed foreign currencies, including Euros, Pounds Sterling, Canadian Dollars, Japanese Yen, and Mexican Pesos. Additionally, the Amended Credit Agreement includes an accordion feature allowing for a future increase of the PJI Revolving Facility and/or incremental term loans in an aggregate amount of up to $500.0 million, subject to certain conditions, including obtaining commitments from one or more new or existing lenders to provide such increased amounts and ongoing compliance with financial covenants. Loans under the PJI Revolving Facility accrue interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 1.25% to 2.00% or a base rate (generally determined according to the greater of a prime rate, federal funds rate plus 0.50%, or a LIBOR rate plus 1.00%) plus a margin ranging from 0.25% to 1.00%. In each case, the actual margin is determined according to a ratio of the Company’s total indebtedness to an earnings calculation, Consolidated EBITDA (as defined in our credit agreement), for the then most recently ended four quarter period (the “Leverage Ratio”). An unused commitment fee ranging from 18 to 30 basis points per annum, determined according to the Leverage Ratio, applies to the underutilized commitments under the PJI Revolving Facility. Loans outstanding under the PJI Revolving Facility may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings for which a LIBOR rate election is in effect. The Amended Credit Agreement also contain provisions specifying alternative interest rate calculations to be used at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on floating interest rate borrowings. The Amended Credit Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, and restrict, subject to certain exceptions, the incurrence of additional indebtedness and liens, the consummation of certain mergers, consolidations, sales of assets and similar transactions, the making of investments, equity distributions and other restricted payments, and transactions with affiliates. The Company is subject to the following financial covenants: (1) a maximum Leverage Ratio of 5.25 to 1.00, subject to the Company’s election to increase the maximum Leverage Ratio by 0.50 to 1.00 in connection with material acquisitions if the Company satisfies certain requirements, and (2) a minimum interest coverage ratio defined as Consolidated EBITDA (as defined in our credit agreement) plus consolidated rental expense to consolidated interest expense plus consolidated rental expense of 2.00 to 1.00. We were in compliance with these financial covenants at December 25, 2022. Obligations under the Amended Credit Agreement are guaranteed by certain direct and indirect material Domestic subsidiaries of the Company (the “Guarantors”) and are secured by a security interest in substantially all of the capital stock and equity interests of the Company’s and the Guarantors’ Domestic and first tier material foreign subsidiaries. The Amended Credit Agreement contains customary events of default including, among other things, payment defaults, breach of covenants, cross acceleration to material indebtedness, bankruptcy-related defaults, judgment defaults, and the occurrence of certain change of control events. The occurrence of an event of default may result in the termination of the PJI Revolving Facility, acceleration of repayment obligations and the exercise of remedies by the Lenders with respect to the Guarantors. PJMF Revolving Facility PJMF has a $20.0 million revolving line of credit (the “PJMF Revolving Facility”) pursuant to a Revolving Loan Agreement, dated September 30, 2015 with U.S. Bank National Association, as lender. The PJMF Revolving Facility is secured by substantially all assets of PJMF. The PJMF Revolving Facility matures on September 30, 2023, but is subject to annual amendments. The borrowings under the PJMF Revolving Facility accrue interest at a variable rate of the one-month LIBOR plu s 1.60%. There was no debt outstanding under the PJMF Revolving Facility as of December 25, 2022 or December 26, 2021. The PJMF operating results and the related debt outstanding do not impact the financial covenants under the Amended Credit Agreement. Derivative Financial Instruments As of December 25, 2022, we have the following interest rate swap agreements with a total notional value of $125.0 million : Effective Dates Floating Rate Debt Fixed Rates April 30, 2018 through April 30, 2023 $ 55 million 2.33 % April 30, 2018 through April 30, 2023 $ 35 million 2.36 % April 30, 2018 through April 30, 2023 $ 35 million 2.34 % In 2021, ou r interest rate swaps were de-designated as cash flow hedges following the issuance of the Notes and remained undesignated as hedges through June 26, 2022. For these de-designated hedges, the portion of gains or losses on the derivative instruments previously recognized in AOCL will be reclassified into earnings as adjustments to interest expense on a straight-line basis over the remaining life of the originally hedged transactions. As of June 27, 2022, the interest rate swaps were re-designated as cash flow hedges to provide a hedge against changes in variable rate cash flows regarding fluctuations in the LIBOR rate utilized on the revolving credit facility. Therefore, beginning in the third quarter of 2022, our interest rate swaps are accounted for utilizing cash flow hedge accounting treatment. The interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in AOCL and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. We recognized income of $4.8 million ($3.7 million after tax) in 2022 and $6.8 million ($5.3 million after tax) in 2021, and a loss of $7.5 million ($5.8 million after tax) in 2020 in other comprehensive income (loss) for the net change in the fair value of our interest rate swaps. The following table provides information on the location and amounts of our swaps in the accompanying Consolidated Financial Statements (in thousands): Interest Rate Swap Derivatives Balance Sheet Location Fair Value Fair Value Other current and long-term assets $ 986 $ — Other current and long-term liabilities $ — $ 5,536 As of December 25, 2022, the portion of the aggregate $1.0 million interest rate swap liability that would be reclassified into interest expense during the next twelve months approximates $1.0 million. The effect of derivative instruments on the accompanying Consolidated Financial Statements is as follows (in thousands): Derivatives - Amount of Gain or Location of (Loss) Amount of (Loss) Total Interest Expense Interest rate swaps: 2022 $ 3,663 Interest expense $ (2,384) $ (26,653) 2021 $ 5,273 Interest expense $ (5,965) $ (19,205) 2020 $ (5,788) Interest expense $ (5,068) $ (17,022) Interest paid, including payments made or received under the swaps, was $24.4 million , $13.4 million and $15.8 million in fiscal 2022, 2021 and 2020, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 25, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 13. Property and Equipment, Net Property and equipment, net consists of the following (in thousands): December 25, December 26, Land $ 31,679 $ 31,032 Buildings and improvements 91,462 91,508 Leasehold improvements 136,095 138,016 Equipment and other 498,792 465,813 Construction in progress 32,265 23,725 Total property and equipment 790,293 750,094 Accumulated depreciation and amortization (540,500) (526,238) Property and equipment, net $ 249,793 $ 223,856 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 25, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 14. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): December 25, December 26, Marketing $ 36,858 $ 59,248 Insurance reserves, current 29,676 34,661 Salaries, benefits and bonuses 21,934 48,728 Legal settlement accrual (a) 15,000 — Purchases 13,789 13,319 Other 25,278 34,160 Total $ 142,535 $ 190,116 ______________________________ (a) See “Note 19. Litigation, Commitments and Contingencies” for additional information. |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 25, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-term Liabilities | 15. Other Long-term Liabilities Other long-term liabilities consist of the following (in thousands): December 25, December 26, Insurance reserves $ 37,624 $ 53,551 Deferred compensation plan (a) 28,285 36,170 Other 2,408 3,433 Total $ 68,317 $ 93,154 ______________________________ (a) See “Note 21. Employee Benefit Plans” for additional information on our non-qualified deferred compensation plan. |
Strategic Corporate Reorganizat
Strategic Corporate Reorganization for Long-term Growth | 12 Months Ended |
Dec. 25, 2022 | |
Strategic Corporate Reorganization for Long-term Growth | |
Strategic Corporate Reorganization for Long-term Growth | 16. Strategic Corporate Reorganization for Long-term Growth On September 17, 2020, we announced plans to open an office in Atlanta, Georgia located in Three Ballpark Center at The Battery Atlanta, which opened in October 2021. The space is designed to drive continued menu innovation and optimize integration across marketing, communications, customer experience, operations, human resources, diversity, equity and inclusion, financial planning and analysis, investor relations and development functions. Our information technology, finance, supply chain, and legal teams continue to operate in our Louisville, Kentucky office, which remains critical to our success. We also maintain an office outside of London, UK, where our International operations are managed. Employees whose positions were relocated to the new Atlanta office were either offered an opportunity to continue with the organization or were offered a severance package. As a result, we incurred one-time corporate reorganization costs of approximately $13.1 million and $6.0 million through December 26, 2021 and December 27, 2020, respectively, as detailed in the table below (in thousands). There were no additional corporate reorganization costs incurred during the year ended December 25, 2022. December 26, December 27, Employee severance and other employee transition costs $ 5,429 $ 4,775 Recruiting and professional fees 3,815 1,598 Relocation costs 3,100 267 Other costs 750 285 Total strategic corporate reorganization costs 13,094 6,925 Stock-based compensation forfeitures on unvested awards — (940) Total strategic corporate reorganization costs, net of stock forfeitures $ 13,094 $ 5,985 We record severance as a one-time termination benefit and recognize the expense ratably over the employees’ required future service period. All other costs, including employee transition costs, recruitment and relocation costs, and third-party costs, are recognized in the period incurred. All strategic corporate reorganization costs have been recorded in General and administrative expenses on the Consolidated Statement of Operations. As of December 26, 2021, the estimate of unpaid strategic corporate reorganization costs was included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. The following tables summarize the activity for the years ended December 25, 2022 and December 26, 2021, respectively (in thousands): Balance at December 26, 2021 Charges Payments Balance at December 25, 2022 Employee severance and other employee transition costs $ 2,122 $ — $ (2,122) $ — Recruiting and professional fees 92 — (92) — Relocation costs 740 — (740) — Total strategic corporate reorganization liability $ 2,954 $ — $ (2,954) $ — Balance at December 27, 2020 Charges Payments Balance at December 26, 2021 Employee severance and other employee transition costs $ 4,615 $ 5,429 $ (7,922) $ 2,122 Recruiting and professional fees 145 3,815 (3,868) 92 Relocation costs 101 3,100 (2,461) 740 Other costs — 750 (750) — Total strategic corporate reorganization liability $ 4,861 $ 13,094 $ (15,001) $ 2,954 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17. Income Taxes The following table presents the domestic and foreign components of income before income taxes for 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Domestic income $ 65,434 $ 115,221 $ 48,616 Foreign income 18,335 35,727 26,746 Total income $ 83,769 $ 150,948 $ 75,362 Included within the foreign income before income taxes above is $23.6 million, $22.4 million, and $14.7 million of foreign sourced income subject to foreign withholding taxes in 2022, 2021, and 2020, respectively. A summary of the expense (benefit) for income tax follows (in thousands): 2022 2021 2020 Current: Federal $ 3,496 $ 10,591 $ 16,400 Foreign 5,335 8,812 6,047 State and local 2,791 2,837 1,569 Deferred: Federal 4,243 2,430 (7,375) Foreign (1,152) 769 357 State and local (293) 554 (2,250) Total income tax expense $ 14,420 $ 25,993 $ 14,748 The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 is as follows in both dollars and as a percentage of income before income taxes (dollars in thousands): 2022 2021 2020 Income Tax Income Income Tax Income Income Tax Income Tax at U.S. federal statutory rate $ 17,591 21.0 % $ 31,699 21.0 % $ 15,826 21.0 % State and local income taxes 1,422 1.7 % 2,317 1.5 % 1,149 1.5 % Foreign income taxes 4,672 5.6 % 9,144 6.1 % 6,463 8.6 % Income of consolidated partnerships attributable to noncontrolling interests (355) (0.4) % (1,110) (0.7) % (603) (0.8) % Non-qualified deferred compensation plan expense (income) 1,278 1.5 % (911) (0.6) % (898) (1.2) % Excess tax (benefits) on equity awards (3,902) (4.7) % (3,697) (2.5) % (2,029) (2.7) % Tax credits (8,981) (10.7) % (8,830) (5.9) % (6,002) (8.0) % Non-deductible executive compensation 2,450 2.9 % 2,636 1.7 % 1,314 1.7 % Foreign-derived intangible income (1,452) (1.7) % (1,519) (1.0) % (924) (1.2) % US deferred offset on foreign deferreds 1,183 1.4 % 238 0.2 % — — % Other 514 0.6 % (3,974) (2.6) % 452 0.6 % Total $ 14,420 17.2 % $ 25,993 17.2 % $ 14,748 19.5 % Significant deferred tax assets (liabilities) follow (in thousands): December 25, December 26, Accrued liabilities $ 17,424 $ 14,802 Accrued bonuses 351 6,404 Other liabilities and asset reserves 14,607 14,583 Equity awards 7,905 7,323 Lease liabilities 45,646 41,999 Other 2,904 2,712 Net operating losses 11,738 8,127 Foreign tax credit carryforwards 20,198 18,611 Total deferred tax assets 120,773 114,561 Valuation allowances (32,052) (28,598) Total deferred tax assets, net of valuation allowances 88,721 85,963 Deferred expenses (5,756) (7,087) Accelerated depreciation (31,098) (23,858) Goodwill (7,690) (10,052) Right-of-use assets (41,892) (39,814) Other (365) (254) Total deferred tax liabilities (86,801) (81,065) Net deferred tax assets $ 1,920 $ 4,898 The following table summarizes changes in the Company’s valuation allowances on deferred tax (in thousands): Balance at December 27, 2020 $ 22,972 Charged to costs and expenses 5,658 Other (32) Balance at December 26, 2021 $ 28,598 Charged to costs and expenses 3,454 Balance at December 25, 2022 $ 32,052 The Company had approximately $10.2 million and $8.8 million of state deferred tax assets primarily related to state net operating loss carryforwards as of December 25, 2022 and December 26, 2021, respectively. Our ability to utilize these state deferred tax assets is dependent on our ability to generate earnings in future years in the respective state jurisdictions. The Company provided a full valuation allowance of $10.2 million and $8.8 million for these state deferred tax assets as we believe realization based on the more-likely-than-not criteria has not been met as of December 25, 2022 and December 26, 2021, respectively. The Company had approximately $2.0 million and $1.4 million of state deferred tax assets related to state income tax credit carryforwards as of December 25, 2022 and December 26, 2021, respectively. Our ability to fully utilize these deferred tax assets related to state income tax credit carryforwards is dependent on our ability to generate earnings in future years in the respective state jurisdictions. In 2022, the Company provided a partial valuation allowance of $0.5 million against these state deferred tax assets as we believe that a portion of these state income tax credit carryforwards would not be realizable before expiration. The Company had approximately $8.7 million and $4.5 million of foreign net operating loss and capital loss carryovers as of December 25, 2022 and December 26, 2021, respectively. The Company had approximately $1.2 million of valuation allowances primarily related to the foreign capital losses at both December 25, 2022 and December 26, 2021. A substantial majority of our foreign net operating losses do not have an expiration date. In addition, the Company had approximately $20.2 million and $18.6 million in foreign tax credit carryforwards as of December 25, 2022 and December 26, 2021, respectively, that expire ten years from inception in years 2026 through 2032. Our ability to utilize these foreign tax credit carryforwards is dependent on our ability to generate foreign earnings in future years sufficient to claim foreign tax credits in excess of foreign taxes paid in those years. The Company provided a full valuation allowance of $20.2 million and $18.6 million for these foreign tax credit carryforwards as we believe realization based on the more-likely-than-not criteria has not been met as of December 25, 2022 and December 26, 2021, respectively. Cash for income taxes paid were $11.7 million in 2022, $32.6 million in 2021 and $19.3 million in 2020. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company, with few exceptions, is no longer subject to U.S. federal, state and local, or non-US income tax examinations by tax authorities for years before 2018. The Company is currently undergoing examinations by various tax authorities. The Company anticipates that the finalization of these current examinations and other issues could result in a decrease in the liability for unrecognized tax benefits (and a decrease of income tax expense) of approximately $68,000 during the next 12 months. The Company had $1.2 million of unrecognized tax benefits at December 25, 2022 which, if recognized, would affect the effective tax rate. A reconciliation of the beginning and ending liability for unrecognized tax benefits excluding interest and penalties is as follows, which is recorded in Other long-term liabilities in the Consolidated Balance Sheets (in thousands): Balance at December 27, 2020 $ 1,030 Additions for tax positions of prior years 81 Reductions for tax positions of prior years (215) Balance at December 26, 2021 $ 896 Additions for tax positions of prior years 331 Reductions for tax positions of prior years (65) Balance at December 25, 2022 $ 1,162 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 25, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 18. Related Party Transactions On March 21, 2019, Shaquille O’Neal was appointed to our Board of Directors. On June 11, 2019, PJMF entered into an Endorsement Agreement (the “Original Endorsement Agreement”), effective March 15, 2019, with ABG-Shaq, LLC (“ABG-Shaq”), an entity affiliated with Mr. O’Neal, for the personal services of Mr. O’Neal. Pursuant to the Original Endorsement Agreement, the Company received the right and license to use Mr. O’Neal’s name, nickname, initials, autograph, voice, video or film portrayals, photograph, likeness and certain other intellectual property rights (individually and collectively, the “Personality Rights”), in each case, solely as approved by ABG-Shaq, in connection with the advertising, promotion and sale of Papa John’s-branded products. Mr. O’Neal also agreed to provide brand ambassador services related to appearances, social media and public relations matters, and to collaborate with us to develop one or more co-branded products using the Personality Rights. Mr. O’Neal and the Company developed a co-branded extra-large pizza product using the Personality Rights under an amendment to the Original Endorsement Agreement signed July 27, 2020 (the “First Amendment”). As consideration for the rights and services granted under the Original Endorsement Agreement, the Company agreed to pay to ABG-Shaq aggregate cash payments of $4.1 million over the three years of the Original Endorsement Agreement. The Company also paid expenses related to the marketing and personal services provided by Mr. O’Neal. In addition, the Company agreed to grant 87,136 restricted stock units to Mr. O’Neal (as agent of ABG) under our 2018 Omnibus Incentive Plan. On July 29, 2021, the Company and PJMF entered into Amendment No. 2 (the “ Second Amendment”) to the Original Endorsement Agreement with ABG-Shaq. Pursuant to the Second Amendment, the Company was granted the ability to use the Personality Rights for a limited time to promote, advertise, and sell our co-branded extra-large pizza developed under the First Amendment. ABG-Shaq did not receive any additional royalty fees from the Company beyond the cash payment already contemplated under the Original Endorsement Agreement under the Amendment. In addition, the Company donated one U.S. dollar for each unit of the pizza sold in the United States and one Canadian dollar for each unit sold in Canada to The Papa John’s Foundation for Building Community. On March 15, 2022, the Original Endorsement Agreement expired by its terms. On April 10, 2022, the Company and PJMF entered into a new Endorsement Agreement (the “New Endorsement Agreement”), effective March 15, 2022, with ABG-Shaq, LLC (“ABG-Shaq”), to replace the Original Endorsement Agreement. The terms of the New Endorsement Agreement are substantially similar to the Original Endorsement Agreement. As consideration for the rights and services granted under the New Endorsement Agreement, the Company and PJMF agreed to pay to ABG-Shaq aggregate cash payments of $5.6 million over the three years of the New Endorsement Agreement. The Company and PJMF will also pay ABG-Shaq a royalty fee for the co-branded pizza product if the total amount of royalties in a given contract year (calculated as $0.20 per co-branded pizza sold) exceeds the contractual cash payment for that year, in which case the amount of the royalty payment will be the excess of the royalties over the cash payment amount. The Company did not pay ABG-Shaq any royalties in 2022 for the co-branded pizza promotion. The Company and PJMF will also pay expenses related to the marketing and personal services provided by Mr. O’Neal. In addition, the Company agreed to grant 55,898 restricted stock units (the “RSUs”) to Mr. O’Neal (as agent of ABG) under the Company’s 2018 Omnibus Incentive Plan. The RSUs will vest into an equivalent number of shares of the Company’s common stock according to the following vesting schedule: ● 33% (18,632) of the RSUs will vest on April 12, 2023; ● 33% (18,632) of the RSUs will vest on March 15, 2024; and ● 33% (18,634) of the RSUs will vest on March 15, 2025. The initial term of the New Endorsement Agreement ends on March 15, 2025, with an option for a one-year extension upon the parties’ mutual agreement. The New Endorsement Agreement also includes customary exclusivity, termination and indemnification clauses. |
Litigation, Commitments and Con
Litigation, Commitments and Contingencies | 12 Months Ended |
Dec. 25, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Commitments and Contingencies | 19. Litigation, Commitments and Contingencies Litigation The Company is involved in a number of lawsuits, claims, investigations and proceedings, including those specifically identified below, consisting of intellectual property, employment, consumer, commercial and other matters arising in the ordinary course of business. In accordance with ASC 450, “ Contingencies ,” the Company has made accruals with respect to these matters, where appropriate, which are reflected in the Company’s consolidated financial statements. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Durling et al v. Papa John’s International, Inc., is a conditionally certified collective action filed in May 2016 in the United States District Court for the Southern District of New York, alleging that corporate restaurant delivery drivers were not properly reimbursed for vehicle mileage and expenses in accordance with the Fair Labor Standards Act. In July 2018, the District Court granted a motion to certify a conditional corporate collective class and the opt-in notice process has been completed. As of the close of the opt-in period on October 29, 2018, 9,571 drivers opted into the collective class. On September 30, 2022, the parties reached a settlement in principle to resolve the case. Pursuant to the terms of the proposed settlement, in exchange for the Company’s payment of a total aggregate settlement amount of no more than $20.0 million subject to a claims-made process, all claims in the action will be dismissed, the litigation will be terminated, and the Company will receive a release. The proposed settlement also includes resolution of a companion case, Hubbard, et al. v. Papa John’s International, Inc. , pending in the United States District Court for the Western District of Kentucky. The proposed settlement is subject to a claims-made process whereby unclaimed funds revert to the Company, and the Company is only responsible for payments to class and collective action members who timely submit a claim form. Although the return rate for timely claims is unknown and not within the Company’s control, the Company estimates its actual exposure resulting from the settlement to be approximately $10.0 million and this amount was recorded in General and administrative expenses in the Consolidated Statements of Operations. On December 19, 2022, the District Court granted preliminary approval of the proposed settlement; however, the settlement remains subject to final approval by the District Court and contains certain customary contingencies. Subsequent to year end, the Company remitted $5.0 million to the settlement administrator as partial funding of the settlement in accordance with the terms of the applicable settlement agreement. The Company continues to deny any liability or wrongdoing in this matter. |
Equity Compensation
Equity Compensation | 12 Months Ended |
Dec. 25, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Equity Compensation | 20. Equity Compensation We award stock options, time-based restricted stock and performance-based restricted stock units from time to time under the Papa John’s International, Inc. 2018 Omnibus Incentive Plan. There were approximately 3.6 million shares of common stock authorized for issuance and remaining available under the 2018 Omnibus Incentive Plan as of December 25, 2022, which includes 5.9 million shares transferred from the Papa John’s International 2011 Omnibus Incentive Plan. We recorded stock-based employee compensation expense of $18.4 million in 2022, $16.9 million in 2021 and $16.3 million in 2020. At December 25, 2022, there was $22.2 million of unrecognized compensation cost related to nonvested awards, of which the Company expects to recognize $14.6 million in 2023, $6.5 million in 2024 and $1.1 million in 2025. Stock Options Options exercised, which were issued from authorized shares, included 82,000 shares in 2022, 212,000 shares in 2021 and 541,000 shares in 2020. The total intrinsic value of the options exercised during 2022, 2021 and 2020 was $3.4 million, $10.1 million and $13.8 million, respectively. There were no options granted in 2022, 2021 or 2020. Information pertaining to option activity during 2022 is as follows (number of options and aggregate intrinsic value in thousands): Number Weighted Weighted Aggregate Outstanding at December 26, 2021 319 $ 54.65 Exercised (82) 49.48 Cancelled (2) 45.29 Outstanding at December 25, 2022 235 $ 56.53 4.47 $ 6,452 Exercisable at December 25, 2022 235 $ 56.53 4.47 $ 6,452 Restricted Stock We granted shares of restricted stock that are time-based and generally vest in equal installments over three years (165,000 in 2022, 130,000 in 2021 and 207,000 in 2020). Upon vesting, the shares are issued from treasury stock. These restricted shares are intended to focus participants on our long-range objectives, while at the same time serving as a retention mechanism. We consider time-based restricted stock awards to be participating securities because holders of such shares have non-forfeitable dividend rights. We declared dividends totaling $467,000 ($1.54 per share) in 2022, $410,000 ($1.15 per share) in 2021 and $366,000 ($0.90 per share) in 2020 to holders of time-based restricted stock. We granted 69,000, 11,000 and 15,000 restricted stock units that are time-based and vest over a period of one Additionally, we granted stock settled performance-based restricted stock units to executive management (64,000 units in 2022, 61,000 units in 2021, and 92,000 units in 2020). The performance-based restricted stock units require the achievement of certain performance and market factors, which consist of the Company’s Total Shareholder Return (“TSR”) relative to a predetermined peer group. The grant-date fair value of the performance-based restricted stock units was determined through the use of a Monte Carlo simulation model. The following is a summary of the significant assumptions used in estimating the fair value of the performance-based restricted stock units granted in 2022, 2021 and 2020: Assumptions: 2022 2021 2020 Risk-free interest rate 1.5 % 0.2 % 0.9 % Expected volatility 45.0 % 48.3 % 36.3 % The risk-free interest rate for the periods within the contractual life of the performance-based restricted stock unit is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility was estimated using the Company’s historical share price volatility for a period similar to the expected life of the performance-based restricted stock unit. The performance-based restricted stock units granted vest over three years (cliff vest) and are expensed over the performance period. The weighted average grant-date fair value of performance-based restricted stock units granted during 2022, 2021 and 2020 was $113.90, $103.14 and $59.52, respectively. The fair value of time-based restricted stock and performance-based restricted stock units is based on the market price of the Company’s shares on the grant date. Information pertaining to these awards during 2022 is as follows (shares in thousands): Shares Weighted Total as of December 26, 2021 582 $ 68.06 Granted 298 103.18 Forfeited (82) 89.87 Vested (280) 57.40 Total as of December 25, 2022 518 $ 91.23 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 25, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 21. Employee Benefit Plans We have established the Papa John’s International, Inc. 401(k) Plan (the “401(k) Plan”), as a defined contribution benefit plan, in accordance with Section 401(k) of the Internal Revenue Code. The 401(k) Plan is open to employees who meet certain eligibility requirements and allows participating employees to defer receipt of a portion of their compensation and contribute such amount to one or more investment funds. In late 2021, the Company adopted a Safe Harbor 401k Plan effective for the 2022 benefit year. In addition, we maintain a non-qualified deferred compensation plan available to certain employees and directors. Under this plan, the participants may defer a certain amount of their compensation, which is credited to the participants’ accounts. The participant-directed investments associated with this plan are included in Other assets ($30.1 million and $41.9 million at December 25, 2022 and December 26, 2021, respectively) and the associated liabilities ($28.3 million and $36.2 million at December 25, 2022 and December 26, 2021, respectively) are included in Other long-term liabilities in the accompanying Consolidated Balance Sheets. We contributed a matching payment of 4.0% in 2022, up to a maximum of 6.0% of a participating employee’s earnings deferred into the 401(k) Plan. At our discretion, the Company contributed 4.0% in 2021 and 2.1% in 2020, up to a maximum of 6.0% of a participating employee’s earnings deferred into both the 401(k) Plan and the non-qualified deferred compensation plan. Such costs were $4.4 million in 2022, $3.5 million in 2021 and $1.8 million in 2020. |
Divestitures
Divestitures | 12 Months Ended |
Dec. 25, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | 22. Divestitures Refranchising Loss On March 28, 2022, we refranchised our 51.0% ownership interest in a 90-restaurant consolidated joint venture in Texas for $14.0 million, net of transaction costs. In connection with the divestiture, we recorded a one-time, non-cash charge of $8.4 million as a Refranchising Loss in the Consolidated Statement of Operations, which reflects net sale proceeds of $14.0 million, the noncontrolling interest of $4.2 million, and the recognition of an unearned royalty stream of $12.2 million to be recognized as revenue over the 10-year term of the franchise agreement executed concurrent with the disposition in accordance with ASC 810, “ Consolidation .” Goodwill of $9.9 million was allocated to the disposal group based on relative fair value within the Domestic Company-owned restaurants reporting group. The $8.4 million of the one-time, non-cash refranchising loss was recorded in the first quarter of 2022 and realized upon consummation of the sale in the second quarter. Impairment of Reacquired Master Franchise Rights In the first quarter of 2022, the Company recorded an impairment of $2.8 million for reacquired franchise rights due to the financial and operational impact of the conflict in Ukraine and government actions taken in response to that conflict, including, but not limited to, international sanctions. The reacquired franchise rights were previously acquired from a former master franchisee and capitalized by the Company. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 25, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 23. Segment Information We have four reportable segments: Domestic Company-owned restaurants, North America franchising, North America commissaries, and International operations. The Domestic Company-owned restaurant segment consists of the operations of all Domestic Company-owned restaurants and derives its revenues principally from retail sales of pizza, Papadias, which are flatbread-style sandwiches, and side items, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and collection of royalties from our franchisees located in the United States and Canada. The North America commissary segment consists of the operations of our regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to Domestic Company-owned and franchised restaurants in the United States and Canada. The International segment principally consists of distribution sales to franchised Papa Johns restaurants located in the UK and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our International franchisees. International franchisees are defined as all franchise operations outside of the United States and Canada. All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as “all other,” which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, franchise contributions to marketing funds and information systems and related services used in restaurant operations, including our point-of-sale system, online and other technology-based ordering platforms. Generally, we evaluate performance and allocate resources based on operating income. Certain administrative and capital costs are allocated to segments based upon predetermined rates or estimated resource usage. We account for intercompany sales and transfers as if the sales or transfers were to third parties and eliminate the activity in consolidation. Our reportable segments are business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. No single external customer accounted for 10% or more of our total revenues. The following tables present our segment information. (In thousands) 2022 2021 2020 Revenues: Domestic Company-owned restaurants $ 708,389 $ 778,323 $ 700,757 North America franchising 137,399 129,310 96,732 North America commissaries 869,634 761,305 680,793 International 158,682 184,099 150,939 All others 227,999 215,384 184,013 Total revenues $ 2,102,103 $ 2,068,421 $ 1,813,234 Intersegment revenues: North America franchising $ 4,122 $ 4,179 $ 3,229 North America commissaries 217,570 215,393 192,332 All others 70,283 75,366 83,635 Total intersegment revenues $ 291,975 $ 294,938 $ 279,196 Depreciation and amortization: Domestic Company-owned restaurants $ 11,495 $ 11,728 $ 11,905 North America commissaries 13,299 11,974 9,660 International 1,774 2,326 1,975 All others 12,681 9,928 10,254 Unallocated corporate expenses 12,783 12,860 15,911 Total depreciation and amortization $ 52,032 $ 48,816 $ 49,705 Operating income: Domestic Company-owned restaurants (a) $ 15,966 $ 49,628 $ 37,049 North America franchising 127,882 120,949 89,801 North America commissaries 42,531 39,873 33,185 International (b) 17,891 34,896 24,034 All others 10,084 17,704 7,043 Unallocated corporate expenses (c) (104,419) (94,114) (100,069) Elimination of intersegment (profits) (905) (695) (790) Total operating income $ 109,030 $ 168,241 $ 90,253 ______________________________ (a) Includes a one-time, non-cash charge of $8.4 million associated with the refranchising of the Company’s ownership interest in a 90-restaurant joint venture, recorded as Refranchising and impairment loss for the year ended December 25, 2022. See “Note 22. Divestitures” for additional information. (b) Includes charges of $3.5 million related to one-time, non-cash reserves for certain accounts receivable and impairments of reacquired franchise rights due to the financial and operational impact of the conflict in Ukraine and $6.1 million of costs associated with the termination of significant franchisees in the UK, including the reserve of certain accounts and notes receivable and operating lease right-of-use assets impairment. See “Note 22. Divestitures” and “Note 10. Allowance for Credit Losses” for additional information. (c) For the year ended December 25, 2022, Unallocated corporate expenses includes $15.0 million for certain legal settlements, $13.9 million of one-time, non-cash reserves of certain notes receivable, and $1.5 million of advisory fees and severance costs associated with the transition of certain executives. For the year ended December 26, 2021, Unallocated corporate expense includes $13.1 million of reorganization costs. See “Note 16. Strategic Corporate Reorganization for Long-term Growth” for additional information. (In thousands) 2022 2021 2020 Property and equipment, net: Domestic Company-owned restaurants $ 238,658 $ 241,050 $ 228,077 North America commissaries 149,920 149,218 145,282 International 16,080 14,642 13,604 All others 131,210 109,052 91,724 Unallocated corporate assets 254,425 236,132 213,828 Accumulated depreciation and amortization (540,500) (526,238) (491,620) Property and equipment, net $ 249,793 $ 223,856 $ 200,895 Expenditures for property and equipment: Domestic Company-owned restaurants $ 23,057 $ 16,108 $ 12,848 North America commissaries 5,729 4,007 4,447 International 5,175 1,979 1,065 All others 18,296 18,645 11,700 Unallocated corporate 26,134 27,820 5,592 Total expenditures for property and equipment (a) $ 78,391 $ 68,559 $ 35,652 ______________________________ (a) Increases of $9.8 million and $32.9 million in expenditures for property and equipment in 2022 and 2021, respectively, were primarily driven by investment in growth, including technology and development initiatives. Disaggregation of Revenue In the following tables, revenues are disaggregated by major product line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment: Reportable Segments (In thousands) Year Ended December 25, 2022 Major Products/Services Lines Domestic Company-owned North America franchising North America International All others Total Company-owned restaurant sales $ 708,389 $ — $ — $ — $ — $ 708,389 Franchise royalties and fees — 141,521 — 49,422 — 190,943 Commissary sales — — 1,087,204 80,481 — 1,167,685 Other revenues — — — 28,779 298,282 327,061 Eliminations — (4,122) (217,570) — (70,283) (291,975) Total segment revenues 708,389 137,399 869,634 158,682 227,999 2,102,103 International other revenues (a) — — — (28,779) 28,779 — Total revenues $ 708,389 $ 137,399 $ 869,634 $ 129,903 $ 256,778 $ 2,102,103 Reportable Segments (In thousands) Year Ended December 26, 2021 Major Products/Services Lines Domestic Company-owned North America franchising North America International All others Total Company-owned restaurant sales $ 778,323 $ — $ — $ — $ — $ 778,323 Franchise royalties and fees — 133,489 — 53,148 — 186,637 Commissary sales — — 976,698 97,623 — 1,074,321 Other revenues — — — 33,328 290,750 324,078 Eliminations — (4,179) (215,393) — (75,366) (294,938) Total segment revenues 778,323 129,310 761,305 184,099 215,384 2,068,421 International other revenues (a) — — — (33,328) 33,328 — Total revenues $ 778,323 $ 129,310 $ 761,305 $ 150,771 $ 248,712 $ 2,068,421 Reportable Segments (In thousands) Year Ended December 27, 2020 Major Products/Services Lines Domestic Company-owned North America franchising North America International All others Total Company-owned restaurant sales $ 700,757 $ — $ — $ — $ — $ 700,757 Franchise royalties and fees — 99,961 — 39,920 — 139,881 Commissary sales — — 873,125 84,043 — 957,168 Other revenues — — — 26,976 267,648 294,624 Eliminations — (3,229) (192,332) — (83,635) (279,196) Total segment revenues 700,757 96,732 680,793 150,939 184,013 1,813,234 International other revenues (a) — — — (26,976) 26,976 — Total revenues $ 700,757 $ 96,732 $ 680,793 $ 123,963 $ 210,989 $ 1,813,234 ______________________________ (a) Other revenues as reported in the Consolidated Statements of Operations include $28.8 million, $33.3 million and $27.0 million of revenue for the years ended December 25, 2022, December 26, 2021, and December 27, 2020 respectively, that are part of the International reporting segment. These amounts include marketing fund contributions and sublease rental income from International franchisees in the UK that provide no significant contribution to income before income taxes but must be reported on a gross basis under accounting requirements. The related expenses for these Other revenues are reported in Other expenses in the Consolidated Statements of Operations. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 25, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of Papa John’s International, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. |
Variable Interest Entity | Variable Interest Entity Papa John’s Domestic restaurants, both Company-owned and franchised, participate in Papa John’s Marketing Fund, Inc. (“PJMF”), a nonstock corporation designed to operate at break-even as it spends all annual contributions received from the system. PJMF collects a percentage of revenues from Company-owned and franchised restaurants in the United States for the purpose of designing and administering advertising and promotional programs. PJMF is a variable interest entity (“VIE”) that funds its operations with ongoing financial support and contributions from the Domestic restaurants, of which approximately 85 percent are franchised, and does not have sufficient equity to fund its operations without these ongoing financial contributions. Based on an assessment of the governance structure and operating procedures of PJMF, the Company determined it has the power to control certain significant activities of PJMF, and therefore, is the primary beneficiary. The Company has consolidated PJMF in its financial results in accordance with Accounting Standards Codification (“ASC”) 810, “ Consolidation .” |
Fiscal Year | Fiscal Year Our fiscal year ends on the last Sunday in December of each year. All fiscal years presented consist of 52 weeks. |
Use of Estimates | Use of Estimates The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Significant items that are subject to such estimates and assumptions include the allowance for credit losses on accounts and notes receivable, intangible assets, contract assets and contract liabilities including the customer loyalty program obligation, right-of-use assets and lease liabilities, gift card breakage, insurance reserves and tax reserves. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates. |
Revenue Recognition | Revenue Recognition Revenue is measured based on consideration specified in contracts with customers and excludes waivers or incentives and amounts collected on behalf of third parties, primarily sales tax. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Delivery costs, including freight associated with our Domestic commissary and other sales, are accounted for as fulfillment costs and are included in operating costs. The following describes principal activities, separated by major product or service, from which the Company generates its revenues: Domestic Company-owned Restaurant Sales The Domestic Company-owned restaurants principally generate revenue from retail sales of high-quality pizza, Papadias, which are flatbread-style sandwiches, and side items including breadsticks, Papa Bites, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages. Revenues from Company-owned restaurants are recognized when the products are delivered to or carried out by customers. Our North American customer loyalty program, Papa Rewards, is a spend-based program that rewards customers with points for each purchase. Papa Rewards points are accumulated and redeemed for dollar off discounts (“Papa Dough”) to be used on future purchases within a six-month expiration window. The accrued liability in the Consolidated Balance Sheets, and corresponding reduction of Company-owned restaurant sales in the Consolidated Statements of Operations, is for the estimated reward redemptions at Domestic Company-owned restaurants based upon estimated redemption patterns. The liability related to Papa Rewards is calculated using the estimated redemption value for which the points and accumulated rewards are expected to be redeemed. Revenue is recognized when the customer redeems the Papa Dough reward and when the points or Papa Dough reward expires. Franchise Royalties and Fees Franchise royalties, which are based on a percentage of franchise restaurant sales, are recognized as sales occur. Incentives offered from time to time, including new store incentives, will reduce the contractual royalty rate paid. Any royalty reductions, including waivers or those offered as part of a new store development incentive or as incentive for other behaviors, including acceleration of restaurant remodels or equipment upgrades, are recognized at the same time as the related royalty, as they are not separately distinguishable from the full royalty rate. Our current standard franchise agreement requires the franchisee to pay a royalty fee of 5% of sales, and the majority of our existing franchised restaurants have a 5% contractual royalty rate in effect. Franchise royalties are billed on a monthly basis. The majority of initial franchise license fees and area development exclusivity fees are from International locations. Initial franchise license fees are billed at the store opening date. The pre-opening services provided to franchisees do not contain separate and distinct performance obligations from the franchise right; thus, the fees collected will be deferred and amortized on a straight-line basis beginning at the store opening date through the term of the franchise agreement, which is typically 10 years. Franchise license renewal fees for both Domestic and International locations, which generally occur every 10 years, are billed before the renewal date. Fees received for future license renewal periods are deferred and amortized over the life of the renewal period. Area development exclusivity fees are billed upon execution of the development agreements which grant the right to develop franchised restaurants in future periods in specific geographic areas. Area development exclusivity fees are allocated on a pro rata basis to all restaurants opened under that specific development agreement. These fees are deferred and amortized over the term of the related franchise agreements, which is typically 10 years. Commissary Revenues Commissary revenues are comprised of food and supplies sold to franchised restaurants and are recognized as revenue upon shipment of the related products to the franchisees. Payments are generally due within 30 days. There are various incentive programs available to franchisees related to new restaurant openings including discounts on initial commissary orders and new store equipment incentives, at substantially no cost to franchisees. Commissary revenues are reduced to reflect incentives in the form of direct discounts on initial commissary orders. The new store equipment incentive is also recorded as a reduction of commissary sales over the term of the incentive agreement, which is generally three Other Revenues Franchise Marketing Fund revenues represent a required established percentage of monthly restaurant sales collected by PJMF, which is our national marketing fund, and various other international and Domestic marketing funds (“Co-op” or “Co-operative” Funds) where we have determined for purposes of accounting that we have control over the significant activities of the funds. PJMF funds its operations with ongoing financial support and contributions from Domestic Papa John’s restaurants, of which approximately 85% are franchised restaurant members. Contributions are based on a percentage of monthly restaurant sales and are billed monthly. When we are determined to be the principal in these arrangements, advertising fund contributions and expenditures are reported on a gross basis in the Consolidated Statements of Operations. Our obligation related to these funds is to develop and conduct advertising activities in a specific country, region, or market, including the placement of electronic and print materials. There are no expiration dates and we do not deduct non-usage fees from outstanding gift cards. While the Company and the franchisees continue to honor all gift cards presented for payment, the likelihood of redemption may be determined to be remote for certain cards due to long periods of inactivity. In these circumstances, the Company recognizes breakage revenue for amounts not subject to unclaimed property laws. Based upon our analysis of historical gift card redemption patterns, we can reasonably estimate the amount of gift cards for which redemption is remote. Breakage revenue is recognized over time in proportion to estimated redemption patterns as Other revenues. Commissions on gift cards sold by third parties are recorded as a reduction to Deferred revenue and a reduction to Other revenues based upon estimated redemption patterns. Fees for information services, including software maintenance fees, help desk fees, centralized call center fees, and online ordering fees are recognized as revenue as such services are provided and are included in Other revenues. Revenues for printing, promotional items, and direct mail marketing services are recognized upon shipment of the related products to franchisees and other customers. Direct mail advertising discounts are also periodically offered by our Preferred Marketing Solutions subsidiary. Other revenues are reduced to reflect these advertising discounts. Rental income, primarily derived from properties leased by the Company and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. |
Advertising and Related Costs | Advertising and Related Costs Domestic Company-owned advertising and related costs of $55.2 million, $61.7 million and $56.7 million in 2022, 2021, and 2020, respectively, include the costs of Domestic Company-owned local restaurant activities such as mail coupons, door hangers and promotional items and advertising activities administered through PJMF and various local market cooperative advertising funds. PJMF is responsible for developing and conducting marketing and advertising for the Domestic Papa John’s system. The Co-op Funds are responsible for developing and conducting advertising activities in a specific market, including the placement of electronic and print materials developed by PJMF. During 2020 the Company recorded additional amounts of $15.0 million to PJMF, representing incremental discretionary marketing fund investments in excess of contractual Company-owned restaurant-level contributions as part of our temporary financial support package to our franchisees. The marketing fund investments are included in General and administrative expenses within the accompanying Consolidated Statements of Operations. |
Leases | Leases Lease expense is recognized on a straight-line basis over the expected life of the lease term for operating leases, whereas lease expense follows an accelerated expense recognition for finance leases. A lease term often includes option periods, available at the inception of the lease. Lease expense is comprised of operating and finance lease costs, short-term lease costs, and variable lease costs, which primarily include common area maintenance, real estate taxes, and insurance for the Company’s real estate leases. Lease costs also include variable rent, which is primarily related to the Company’s supply chain tractor and trailer leases that are based on a rate per mile. |
Stock-Based Compensation | Stock-Based Compensation Compensation expense for equity grants is estimated on the grant date, net of projected forfeitures, and is recognized over the vesting period (graded vesting over three years). Restricted stock is valued based on the market price of the Company’s shares on the date of grant. Management evaluates its award grants and modifications and will adjust the fair value if any are determined to be spring-loaded. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of highly liquid investments with maturity of three months or less at date of purchase. These investments are carried at cost, which approximates fair value. |
Accounts Receivable | Accounts Receivable Substantially all accounts receivable is due from franchisees for purchases of food, paper products, point of sale equipment, printing and promotional items, information systems and related services, marketing and royalties. Credit is extended based |
Notes Receivable | Notes Receivable The Company has provided financing to select Domestic and International franchisees principally for use in the construction and development of their restaurants and for the purchase of restaurants from the Company or other franchisees. Most notes receivable bear interest at fixed or floating rates and are generally secured by the assets of each restaurant and the ownership interests in the franchise. The Company has provided long-term financing to certain franchisees with royalty payment plans. We establish an allowance for credit losses for franchisee notes receivables to reduce the outstanding notes receivable to their net realizable values based on a review of each franchisee’s economic performance and market conditions after consideration of the fair value of our underlying collateral rights (e.g., underlying franchisee business, property and equipment) and any guarantees. Note balances are charged off against the allowance after recovery efforts have ceased. Interest income recorded on franchisee loans was approximately $1.3 million in 2022, $1.9 million in 2021 and $2.1 million in 2020 and is reported in Net interest expense in the accompanying Consolidated Statements of Operations. |
Inventories | Inventories Inventories, which consist of food products, paper goods and supplies, smallwares, and printing and promotional items, are stated at the lower of cost, determined under the first-in, first-out (FIFO) method, or net realizable value. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets (generally five twenty five |
Deferred Costs | Deferred CostsWe capitalize certain information systems development and related costs that meet established criteria. Amounts capitalized, which are included in property and equipment, are amortized principally over periods not exceeding five years upon completion of the related information systems project. |
Intangible Assets - Goodwill | Intangible Assets — Goodwill We evaluate goodwill annually in the fourth quarter or whenever we identify certain triggering events or circumstances that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Such tests are completed separately with respect to the goodwill of each of our reporting units, which includes our Domestic Company-owned restaurants, United Kingdom (“PJUK”), China, and Preferred Marketing Solutions operations. We may perform a qualitative assessment or move directly to the quantitative assessment for any reporting unit in any period if we believe that it is more efficient or if impairment indicators exist. We elected to perform a quantitative assessment for our Domestic Company-owned restaurants, PJUK, China, and Preferred Marketing Solutions operations in the fourth quarter of 2022. Our Domestic Company-owned restaurants, PJUK, China and Preferred Marketing Solutions fair value calculations considered both an income approach and a market approach. The income approach used projected net cash flows, with various growth assumptions, over a ten-year discrete period and a terminal value, which were discounted using appropriate rates. The selected discount rate considered the risk and nature of each reporting unit’s cash flow and the rates of return market participants would require to invest their capital in the reporting unit. In determining the fair value from a market approach, we considered sales multiples and earnings |
Deferred Income Tax Accounts and Tax Reserves | Deferred Income Tax Accounts and Tax Reserves We are subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable and those deferred. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets and liabilities are netted by tax jurisdiction. Deferred tax assets are also recognized for the estimated future effects of tax attribute carryforwards (e.g., net operating losses, capital losses, and foreign tax credits). The effect on deferred taxes of changes in tax rates is recognized in the period in which the new tax rate is enacted. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts we expect to realize. |
Insurance Reserves | Insurance Reserves Our insurance programs for workers’ compensation, owned and non-owned automobiles, general liability and property insurance coverage provided to our employees are funded by the Company up to certain retention limits which range up to $0.5 million. Losses are accrued based upon undiscounted estimates of the liability for claims incurred and for events that have occurred but have not been reported using certain third-party actuarial projections and our claims loss experience. The determination of the recorded insurance reserves is highly judgmental and complex due to the significant uncertainty in the potential value of reported claims and the number and potential value of incurred but not reported claims, the application of significant judgment in making those estimates and the use of various actuarial valuation methods. The estimated insurance claims losses could be significantly affected should the frequency or ultimate cost of claims differ significantly from historical trends used to estimate the insurance reserves recorded by the Company. The Company records estimated losses above retention within its reserve with a corresponding receivable for expected amounts due from insurance carriers. As of December 25, 2022, our insurance reserve was $67.3 million as compared to $88.1 million as of December 26, 2021 primarily related to auto liability and workers’ compensation claims. Of these amounts, approximately $29.7 million and $34.7 million were recorded in Accrued expenses and other current liabilities and $37.6 million and $53.6 million were recorded in Other long-term liabilities on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021, respectively. Our reserves include claim costs above our retention that have a corresponding receivable. Our insurance receivable for claims above retention totaled $38.4 million and $48.1 million as of December 25, 2022 and December 26, 2021, respectively. Of these amounts, approximately $17.0 million and $18.7 million were recorded in Prepaid expenses and other current assets, and $21.4 million and $29.4 million were recorded in Other assets on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021, respectively. |
Derivative Financial Instruments | Derivative Financial Instruments We recognize all derivatives on the balance sheet at fair value. At inception and on an ongoing basis, we assess whether each derivative that qualifies for hedge accounting continues to be highly effective in offsetting changes in the cash flows of the hedged item. If the derivative meets the hedge criteria as defined by certain accounting standards, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of assets, liabilities or firm commitments through earnings or recognized in accumulated other comprehensive income/(loss) until the hedged item is recognized in earnings. In 2021, ou r interest rate swaps were de-designated as cash flow hedges following the issuance of the Notes (as defined in “Note 12. Debt”) and remained undesignated as hedges through June 26, 2022. For these de-designated hedges, the portion of gains or losses on the derivative instruments previously recognized in accumulated other comprehensive loss (“AOCL”) will be reclassified into earnings as adjustments to interest expense on a straight-line basis over the remaining life of the originally hedged transactions. As of June 27, 2022, the interest rate swaps were re-designated as cash flow hedges to provide a hedge against changes in variable rate cash flows regarding fluctuations in the London Interbank Offered Rates (“LIBOR”) rate utilized on the revolving credit facility. Therefore, beginning in the third quarter of 2022, our interest rate swaps are accounted for utilizing cash flow hedge accounting treatment. The interest rate swaps are marked to market at each reporting date and any unrealized gains or losses are included in AOCL and reclassified to interest expense in the same period or periods during which the hedged transactions affect earnings. |
Noncontrolling Interests | Noncontrolling Interests Papa John’s has joint venture arrangements in which there are noncontrolling interests held by third parties that included 98 and 188 restaurants at December 25, 2022 and December 26, 2021, respectively. As further described in “Note 22. Divestitures,” the Company divested its 51 percent interest in one joint venture that owned 90 restaurants in the second quarter of 2022. Consolidated net income is required to be reported separately at amounts attributable to both the Company and the noncontrolling interests. Additionally, disclosures are required to clearly identify and distinguish between the interests of the Company and the interests of the noncontrolling owners, including a disclosure on the face of the Consolidated Statements of Operations of income attributable to the noncontrolling interest holder. |
Foreign Currency Translation | Foreign Currency TranslationThe local currency is the functional currency for each of our foreign subsidiaries. Revenues and expenses are translated into United States (“U.S.”) dollars using monthly average exchange rates, while assets and liabilities are translated using year-end exchange rates and historical rates. The resulting translation adjustments are included as a component of AOCL, net of income taxes. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Reference Rate Reform – Hedging In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “ Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ” The ASU provides optional expedients and exceptions for applying guidance on contract modifications and hedge accounting related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates if certain criteria are met. This guidance was effective beginning on March 12, 2020, and amendments could be applied prospectively through December 31, 2022. The hedge accounting expedients may be applied, on an individual hedging relationship basis, to eligible hedge accounting relationships that existed as of the beginning of the effective date of this guidance, and to new eligible hedging relationships entered into after the effective date of this guidance; however, those expedients generally could not be applied to hedging relationships for periods after December 31, 2022. The FASB issued ASU 2022-06, “Deferral of the Sunset Date of Topic 848,” |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Accounting Policies [Abstract] | |
Schedule of joint ventures | The following summarizes the redemption feature, location and related accounting within the Consolidated Balance Sheets for these joint venture arrangements: Type of Joint Venture Arrangement Location within the Consolidated Balance Sheets Recorded Value Joint ventures with no redemption feature Permanent equity Carrying value Joint venture with option to require the Company to purchase the noncontrolling interest - not currently redeemable or redemption not probable Temporary equity Carrying value |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Leases [Abstract] | |
Schedule of lease terms | The Company’s leases have terms as follows: Average lease term Domestic Company-owned restaurants Five years, plus at least one renewal UK franchise-owned restaurants 15 years Domestic commissary locations 10 years, plus at least one renewal Domestic and International tractors and trailers Five Domestic and International commissary and office equipment Three |
Schedule of lease assets and liabilities | The following schedule details the total right-of-use assets and lease liabilities on the Consolidated Balance Sheets as of December 25, 2022 and December 26, 2021 (in thousands): Leases Classification December 25, December 26, Assets Finance lease assets, net Finance lease right-of-use assets, net $ 24,941 $ 20,907 Operating lease assets, net Operating lease right-of-use assets 172,425 176,256 Total lease assets $ 197,366 $ 197,163 Liabilities Current finance lease liabilities Current finance lease liabilities $ 6,850 $ 4,977 Current operating lease liabilities Current operating lease liabilities 23,418 22,543 Noncurrent finance lease liabilities Long-term finance lease liabilities 19,022 16,580 Noncurrent operating lease liabilities Long-term operating lease liabilities 160,905 160,672 Total lease liabilities $ 210,195 $ 204,772 |
Schedule of components of lease expense | Lease costs for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 were as follows (in thousands): Year Ended Year Ended Year Ended Finance lease: Amortization of right-of-use assets $ 5,704 $ 4,980 $ 2,342 Interest on lease liabilities 1,029 1,140 606 Operating lease: Operating lease cost 42,815 43,072 40,026 Short-term lease cost 4,171 2,032 3,960 Variable lease cost 9,129 8,572 6,503 Total lease costs 62,848 59,796 53,437 Sublease income (11,654) (12,039) (10,407) Total lease costs, net of sublease income $ 51,194 $ 47,757 $ 43,030 |
Schedule of future minimum lease payments and sublease income under contractually-obligated leases | Future minimum lease payments under contractually-obligated leases and associated sublease income as of December 25, 2022 were as follows (in thousands): Fiscal Year Finance Operating Expected 2023 $ 7,849 $ 32,860 $ 10,303 2024 6,801 32,267 10,371 2025 5,171 30,695 9,952 2026 4,125 26,973 9,251 2027 2,971 21,568 8,523 Thereafter 1,440 92,002 42,089 Total future minimum lease payments 28,357 236,365 90,489 Less imputed interest (2,485) (52,042) — Total present value of lease liabilities $ 25,872 $ 184,323 $ 90,489 |
Schedule of supplemental cash flow information | The following table presents supplemental cash flow information related to leases for the years ended December 25, 2022, December 26, 2021 and December 27, 2020: (Dollars in thousands) Year Ended December 25, 2022 December 26, 2021 December 27, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,029 $ 1,140 $ 606 Financing cash flows from finance leases $ 5,416 $ 4,566 $ 2,139 Operating cash flows from operating leases (a) $ 35,573 $ 38,530 $ 37,113 Right-of-use assets obtained in exchange for new finance lease liabilities $ 9,875 $ 9,486 $ 9,152 Right-of-use assets obtained in exchange for new operating lease liabilities (b) $ 53,869 $ 64,420 $ 30,266 Cash received from sublease income $ 10,847 $ 11,597 $ 10,545 Weighted-average remaining lease term (in years): Finance leases 4.43 4.51 4.71 Operating leases 8.44 8.30 7.00 Weighted-average discount rate: Finance leases 4.59% 5.08% 5.34% Operating leases 5.63% 6.20% 6.65% ______________________________ (a) Included within the change in Other assets and liabilities within the Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion. (b) Includes right-of-use assets of approximately $21.8 million for the year ended December 25, 2021 associated with the lease commencement of our Atlanta, Georgia corporate office. |
Papa John's Marketing Fund, I_2
Papa John's Marketing Fund, Inc. (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of assets and liabilities of PJMF | Assets and liabilities of PJMF, which are utilized solely for the Company’s advertising and promotional programs, were as follows in the Consolidated Balance Sheets (in thousands): December 25, December 26, Assets Current assets: Cash and cash equivalents $ 17,174 $ 24,481 Accounts receivable, net 14,780 14,150 Income tax receivable — 300 Prepaid expenses and other current assets 1,815 1,718 Total current assets 33,769 40,649 Deferred income taxes 655 614 Total assets $ 34,424 $ 41,263 Liabilities Current liabilities: Accounts payable $ 12,428 $ 140 Income and other taxes payable 8 2 Accrued expenses and other current liabilities 17,928 40,154 Current deferred revenue 4,395 4,317 Total current liabilities 34,759 44,613 Deferred revenue 2,503 2,478 Total liabilities $ 37,262 $ 47,091 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of contract liability balances | The following table includes a breakout of contract liability balances (in thousands): Contract Liabilities December 25, 2022 December 26, 2021 Change Franchise fees and unredeemed gift card liabilities $ 30,710 $ 20,410 $ 10,300 Customer loyalty program obligations 13,766 15,136 (1,370) Total contract liabilities $ 44,476 $ 35,546 $ 8,930 |
Schedule of estimated revenue expected to be recognized in the future | The following table (in thousands) includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period. Performance Obligations by Period Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Franchise fees $ 3,098 $ 2,927 $ 2,755 $ 2,524 $ 2,210 $ 7,120 $ 20,634 |
Stockholders_ Deficit (Tables)
Stockholders’ Deficit (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of repurchase activity | The following table summarizes our repurchase activity for the years ended December 25, 2022, December 26, 2021 and December 27, 2020, respectively: (In thousands, except average price per share) Year Ended Total Average Aggregate Maximum Dollar December 25, 2022 1,343 $ 93.07 $ 125,000 $ 299,800 December 26, 2021 594 $ 121.96 $ 72,499 $ 424,800 December 27, 2020 32 $ 83.90 $ 2,701 $ 72,299 |
Schedule of Series B Preferred Stock | The following table summarizes changes to our Series B Preferred Stock in 2021 (in thousands): Balance at December 27, 2020 $ 251,901 Accretion 629 Redemption (252,530) Balance at December 26, 2021 $ — |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per common share | The calculations of basic earnings per common share and diluted earnings per common share for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 are as follows (in thousands, except per share data): 2022 2021 2020 Basic earnings per common share Net income attributable to the Company $ 67,772 $ 120,016 $ 57,932 Dividends on redemption of Series B Convertible Preferred Stock — (109,852) — Dividends paid to participating securities (306) (6,091) (14,059) Net income attributable to participating securities (104) — (2,136) Net income attributable to common shareholders $ 67,362 $ 4,073 $ 41,737 Basic weighted average common shares outstanding 35,497 35,007 32,421 Basic earnings per common share $ 1.90 $ 0.12 $ 1.29 Diluted earnings per common share Net income attributable to common shareholders $ 67,362 $ 4,073 $ 41,737 Weighted average common shares outstanding 35,497 35,007 32,421 Dilutive effect of outstanding equity awards (a) 220 330 296 Diluted weighted average common shares outstanding (b) 35,717 35,337 32,717 Diluted earnings per common share $ 1.89 $ 0.12 $ 1.28 ______________________________ (a) Shares subject to options to purchase common stock with an exercise price greater than the average market price for the year were not included in the computation of diluted earnings per common share because the effect would have been antidilutive. The weighted average number of shares subject to antidilutive options was 100,000 in 2020 (none in 2022 or 2021). (b) The Company had 252,500 shares of Series B Preferred Stock outstanding as of December 27, 2020 (none as of December 25, 2022 or December 26, 2021). For the fully diluted calculation, the Series B Preferred Stock dividends were added back to net income attributable to common shareholders. The Company then applied the if-converted method to calculate dilution on the Series B Preferred Stock, which resulted in 5.0 million additional common shares. This calculation was anti-dilutive in 2020 and as such was excluded. |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Our financial assets and liabilities that were measured at fair value on a recurring basis as of December 25, 2022 and December 26, 2021 are as follows: Carrying Fair Value Measurements (in thousands) Level 1 Level 2 Level 3 December 25, 2022 Financial assets: Cash surrender value of life insurance policies (a) $ 30,120 $ 30,120 $ — $ — Interest rate swaps (b) $ 986 $ — $ 986 $ — December 26, 2021 Financial assets: Cash surrender value of life insurance policies (a) $ 41,904 $ 41,904 $ — $ — Financial liabilities: Interest rate swaps (b) $ 5,536 $ — $ 5,536 $ — ______________________________ (a) Represents life insurance policies held in our non-qualified deferred compensation plan. See “Note 21. Employee Benefit Plans” for additional information. (b) The fair value of our interest rate swaps is based on the sum of all future net present value cash flows. The future cash flows are derived based on the terms of our interest rate swaps, as well as considering published discount factors, and projected London Interbank Offered Rates (“LIBOR”). December 25, 2022 December 26, 2021 (in thousands) Carrying Fair Carrying Fair 3.875% Senior Notes $ 400,000 $ 339,500 $ 400,000 $ 396,000 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Noncontrolling Interest [Abstract] | |
Schedule of net income attributable to joint ventures | Net income attributable to these joint ventures for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 was as follows (in thousands): 2022 2021 2020 Papa John’s International, Inc. $ 3,136 $ 8,457 $ 5,654 Noncontrolling interests 1,577 4,939 2,682 Total net income $ 4,713 $ 13,396 $ 8,336 |
Schedule of changes in redeemable noncontrolling interests | The following summarizes changes in our redeemable noncontrolling interests in 2022 and 2021 (in thousands): Balance at December 27, 2020 $ 6,474 Net income 2,609 Distributions (3,585) Balance at December 26, 2021 $ 5,498 Net income 574 Distributions (4,855) Balance at December 25, 2022 $ 1,217 |
Allowance For Credit Losses (Ta
Allowance For Credit Losses (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Credit Loss [Abstract] | |
Schedule of changes of the allowance for credit losses | The following table summarizes changes in our allowances for credit losses for accounts receivable and notes receivable: (In thousands) Accounts Receivable Notes Receivable Balance at December 27, 2020 $ 3,622 $ 3,211 Current period provision (benefit) for expected credit losses 16 (583) Write-offs charged against the allowance (1,274) (843) Recoveries collected — (285) Balance at December 26, 2021 $ 2,364 $ 1,500 Current period provision for expected credit losses (a) 6,474 14,066 Write-offs charged against the allowance (2,120) (1,042) Recoveries collected — (25) Balance at December 25, 2022 $ 6,718 $ 14,499 ______________________________ |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill by reportable segment | The following summarizes changes in the Company’s goodwill, by reportable segment (in thousands): Domestic Company- International (a) All Others Total Balance at December 27, 2020 $ 64,254 $ 16,101 $ 436 $ 80,791 Foreign currency adjustments — (159) — (159) Balance at December 26, 2021 $ 64,254 $ 15,942 $ 436 $ 80,632 Acquisitions (b) 1,161 — — 1,161 Divestitures (c) (9,908) — — (9,908) Foreign currency adjustments — (1,269) — (1,269) Balance at December 25, 2022 $ 55,507 $ 14,673 $ 436 $ 70,616 ______________________________ (a) The International goodwill balances for all years presented are net of accumulated impairment of $2.3 million associated with our PJUK reporting unit. (b) Goodwill from acquisitions was $1.2 million in 2022, due to acquisitions of two stores. (c) In conjunction with the refranchising of our 51.0% ownership interest in a 90-restaurant consolidated joint venture in Texas, goodwill was allocated to the disposal group based on relative fair value within the Domestic Company-owned restaurants reporting group. See “Note 22. Divestitures” for further information. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt, net | Long-term debt, net consists of the following (in thousands): December 25, December 26, Senior notes $ 400,000 $ 400,000 Revolving facilities 205,000 90,000 Outstanding debt 605,000 490,000 Unamortized debt issuance costs (7,931) (9,270) Total long-term debt, net $ 597,069 $ 480,730 |
Schedule of notional value of derivatives | As of December 25, 2022, we have the following interest rate swap agreements with a total notional value of $125.0 million : Effective Dates Floating Rate Debt Fixed Rates April 30, 2018 through April 30, 2023 $ 55 million 2.33 % April 30, 2018 through April 30, 2023 $ 35 million 2.36 % April 30, 2018 through April 30, 2023 $ 35 million 2.34 % |
Schedule of location and amounts of derivatives in the Financial statements | The following table provides information on the location and amounts of our swaps in the accompanying Consolidated Financial Statements (in thousands): Interest Rate Swap Derivatives Balance Sheet Location Fair Value Fair Value Other current and long-term assets $ 986 $ — Other current and long-term liabilities $ — $ 5,536 |
Schedule of effect of derivative instruments financial statements | The effect of derivative instruments on the accompanying Consolidated Financial Statements is as follows (in thousands): Derivatives - Amount of Gain or Location of (Loss) Amount of (Loss) Total Interest Expense Interest rate swaps: 2022 $ 3,663 Interest expense $ (2,384) $ (26,653) 2021 $ 5,273 Interest expense $ (5,965) $ (19,205) 2020 $ (5,788) Interest expense $ (5,068) $ (17,022) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consists of the following (in thousands): December 25, December 26, Land $ 31,679 $ 31,032 Buildings and improvements 91,462 91,508 Leasehold improvements 136,095 138,016 Equipment and other 498,792 465,813 Construction in progress 32,265 23,725 Total property and equipment 790,293 750,094 Accumulated depreciation and amortization (540,500) (526,238) Property and equipment, net $ 249,793 $ 223,856 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): December 25, December 26, Marketing $ 36,858 $ 59,248 Insurance reserves, current 29,676 34,661 Salaries, benefits and bonuses 21,934 48,728 Legal settlement accrual (a) 15,000 — Purchases 13,789 13,319 Other 25,278 34,160 Total $ 142,535 $ 190,116 ______________________________ (a) See “Note 19. Litigation, Commitments and Contingencies” for additional information. |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other long-term liabilities | Other long-term liabilities consist of the following (in thousands): December 25, December 26, Insurance reserves $ 37,624 $ 53,551 Deferred compensation plan (a) 28,285 36,170 Other 2,408 3,433 Total $ 68,317 $ 93,154 ______________________________ (a) See “Note 21. Employee Benefit Plans” for additional information on our non-qualified deferred compensation plan. |
Strategic Corporate Reorganiz_2
Strategic Corporate Reorganization for Long-term Growth (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Strategic Corporate Reorganization for Long-term Growth | |
Schedule of corporate reorganization costs | As a result, we incurred one-time corporate reorganization costs of approximately $13.1 million and $6.0 million through December 26, 2021 and December 27, 2020, respectively, as detailed in the table below (in thousands). There were no additional corporate reorganization costs incurred during the year ended December 25, 2022. December 26, December 27, Employee severance and other employee transition costs $ 5,429 $ 4,775 Recruiting and professional fees 3,815 1,598 Relocation costs 3,100 267 Other costs 750 285 Total strategic corporate reorganization costs 13,094 6,925 Stock-based compensation forfeitures on unvested awards — (940) Total strategic corporate reorganization costs, net of stock forfeitures $ 13,094 $ 5,985 |
Schedule of activity in the reorganization liability | The following tables summarize the activity for the years ended December 25, 2022 and December 26, 2021, respectively (in thousands): Balance at December 26, 2021 Charges Payments Balance at December 25, 2022 Employee severance and other employee transition costs $ 2,122 $ — $ (2,122) $ — Recruiting and professional fees 92 — (92) — Relocation costs 740 — (740) — Total strategic corporate reorganization liability $ 2,954 $ — $ (2,954) $ — Balance at December 27, 2020 Charges Payments Balance at December 26, 2021 Employee severance and other employee transition costs $ 4,615 $ 5,429 $ (7,922) $ 2,122 Recruiting and professional fees 145 3,815 (3,868) 92 Relocation costs 101 3,100 (2,461) 740 Other costs — 750 (750) — Total strategic corporate reorganization liability $ 4,861 $ 13,094 $ (15,001) $ 2,954 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of domestic and foreign components of income before income taxes | The following table presents the domestic and foreign components of income before income taxes for 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Domestic income $ 65,434 $ 115,221 $ 48,616 Foreign income 18,335 35,727 26,746 Total income $ 83,769 $ 150,948 $ 75,362 |
Schedule of the provision for income taxes | A summary of the expense (benefit) for income tax follows (in thousands): 2022 2021 2020 Current: Federal $ 3,496 $ 10,591 $ 16,400 Foreign 5,335 8,812 6,047 State and local 2,791 2,837 1,569 Deferred: Federal 4,243 2,430 (7,375) Foreign (1,152) 769 357 State and local (293) 554 (2,250) Total income tax expense $ 14,420 $ 25,993 $ 14,748 |
Schedule of reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense | The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense for the years ended December 25, 2022, December 26, 2021 and December 27, 2020 is as follows in both dollars and as a percentage of income before income taxes (dollars in thousands): 2022 2021 2020 Income Tax Income Income Tax Income Income Tax Income Tax at U.S. federal statutory rate $ 17,591 21.0 % $ 31,699 21.0 % $ 15,826 21.0 % State and local income taxes 1,422 1.7 % 2,317 1.5 % 1,149 1.5 % Foreign income taxes 4,672 5.6 % 9,144 6.1 % 6,463 8.6 % Income of consolidated partnerships attributable to noncontrolling interests (355) (0.4) % (1,110) (0.7) % (603) (0.8) % Non-qualified deferred compensation plan expense (income) 1,278 1.5 % (911) (0.6) % (898) (1.2) % Excess tax (benefits) on equity awards (3,902) (4.7) % (3,697) (2.5) % (2,029) (2.7) % Tax credits (8,981) (10.7) % (8,830) (5.9) % (6,002) (8.0) % Non-deductible executive compensation 2,450 2.9 % 2,636 1.7 % 1,314 1.7 % Foreign-derived intangible income (1,452) (1.7) % (1,519) (1.0) % (924) (1.2) % US deferred offset on foreign deferreds 1,183 1.4 % 238 0.2 % — — % Other 514 0.6 % (3,974) (2.6) % 452 0.6 % Total $ 14,420 17.2 % $ 25,993 17.2 % $ 14,748 19.5 % |
Schedule of significant deferred tax assets (liabilities) | Significant deferred tax assets (liabilities) follow (in thousands): December 25, December 26, Accrued liabilities $ 17,424 $ 14,802 Accrued bonuses 351 6,404 Other liabilities and asset reserves 14,607 14,583 Equity awards 7,905 7,323 Lease liabilities 45,646 41,999 Other 2,904 2,712 Net operating losses 11,738 8,127 Foreign tax credit carryforwards 20,198 18,611 Total deferred tax assets 120,773 114,561 Valuation allowances (32,052) (28,598) Total deferred tax assets, net of valuation allowances 88,721 85,963 Deferred expenses (5,756) (7,087) Accelerated depreciation (31,098) (23,858) Goodwill (7,690) (10,052) Right-of-use assets (41,892) (39,814) Other (365) (254) Total deferred tax liabilities (86,801) (81,065) Net deferred tax assets $ 1,920 $ 4,898 |
Schedule of changes in valuation allowance on deferred tax | The following table summarizes changes in the Company’s valuation allowances on deferred tax (in thousands): Balance at December 27, 2020 $ 22,972 Charged to costs and expenses 5,658 Other (32) Balance at December 26, 2021 $ 28,598 Charged to costs and expenses 3,454 Balance at December 25, 2022 $ 32,052 |
Schedule of reconciliation of the liability for unrecognized tax benefits | A reconciliation of the beginning and ending liability for unrecognized tax benefits excluding interest and penalties is as follows, which is recorded in Other long-term liabilities in the Consolidated Balance Sheets (in thousands): Balance at December 27, 2020 $ 1,030 Additions for tax positions of prior years 81 Reductions for tax positions of prior years (215) Balance at December 26, 2021 $ 896 Additions for tax positions of prior years 331 Reductions for tax positions of prior years (65) Balance at December 25, 2022 $ 1,162 |
Equity Compensation (Tables)
Equity Compensation (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of information pertaining to option activity | Information pertaining to option activity during 2022 is as follows (number of options and aggregate intrinsic value in thousands): Number Weighted Weighted Aggregate Outstanding at December 26, 2021 319 $ 54.65 Exercised (82) 49.48 Cancelled (2) 45.29 Outstanding at December 25, 2022 235 $ 56.53 4.47 $ 6,452 Exercisable at December 25, 2022 235 $ 56.53 4.47 $ 6,452 |
Summary of the significant assumptions used in estimating the fair value of performance based restricted stock units granted | The following is a summary of the significant assumptions used in estimating the fair value of the performance-based restricted stock units granted in 2022, 2021 and 2020: Assumptions: 2022 2021 2020 Risk-free interest rate 1.5 % 0.2 % 0.9 % Expected volatility 45.0 % 48.3 % 36.3 % |
Schedule of information pertaining to restricted stock activity | Information pertaining to these awards during 2022 is as follows (shares in thousands): Shares Weighted Total as of December 26, 2021 582 $ 68.06 Granted 298 103.18 Forfeited (82) 89.87 Vested (280) 57.40 Total as of December 25, 2022 518 $ 91.23 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 25, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following tables present our segment information. (In thousands) 2022 2021 2020 Revenues: Domestic Company-owned restaurants $ 708,389 $ 778,323 $ 700,757 North America franchising 137,399 129,310 96,732 North America commissaries 869,634 761,305 680,793 International 158,682 184,099 150,939 All others 227,999 215,384 184,013 Total revenues $ 2,102,103 $ 2,068,421 $ 1,813,234 Intersegment revenues: North America franchising $ 4,122 $ 4,179 $ 3,229 North America commissaries 217,570 215,393 192,332 All others 70,283 75,366 83,635 Total intersegment revenues $ 291,975 $ 294,938 $ 279,196 Depreciation and amortization: Domestic Company-owned restaurants $ 11,495 $ 11,728 $ 11,905 North America commissaries 13,299 11,974 9,660 International 1,774 2,326 1,975 All others 12,681 9,928 10,254 Unallocated corporate expenses 12,783 12,860 15,911 Total depreciation and amortization $ 52,032 $ 48,816 $ 49,705 Operating income: Domestic Company-owned restaurants (a) $ 15,966 $ 49,628 $ 37,049 North America franchising 127,882 120,949 89,801 North America commissaries 42,531 39,873 33,185 International (b) 17,891 34,896 24,034 All others 10,084 17,704 7,043 Unallocated corporate expenses (c) (104,419) (94,114) (100,069) Elimination of intersegment (profits) (905) (695) (790) Total operating income $ 109,030 $ 168,241 $ 90,253 ______________________________ (a) Includes a one-time, non-cash charge of $8.4 million associated with the refranchising of the Company’s ownership interest in a 90-restaurant joint venture, recorded as Refranchising and impairment loss for the year ended December 25, 2022. See “Note 22. Divestitures” for additional information. (b) Includes charges of $3.5 million related to one-time, non-cash reserves for certain accounts receivable and impairments of reacquired franchise rights due to the financial and operational impact of the conflict in Ukraine and $6.1 million of costs associated with the termination of significant franchisees in the UK, including the reserve of certain accounts and notes receivable and operating lease right-of-use assets impairment. See “Note 22. Divestitures” and “Note 10. Allowance for Credit Losses” for additional information. (c) For the year ended December 25, 2022, Unallocated corporate expenses includes $15.0 million for certain legal settlements, $13.9 million of one-time, non-cash reserves of certain notes receivable, and $1.5 million of advisory fees and severance costs associated with the transition of certain executives. For the year ended December 26, 2021, Unallocated corporate expense includes $13.1 million of reorganization costs. See “Note 16. Strategic Corporate Reorganization for Long-term Growth” for additional information. (In thousands) 2022 2021 2020 Property and equipment, net: Domestic Company-owned restaurants $ 238,658 $ 241,050 $ 228,077 North America commissaries 149,920 149,218 145,282 International 16,080 14,642 13,604 All others 131,210 109,052 91,724 Unallocated corporate assets 254,425 236,132 213,828 Accumulated depreciation and amortization (540,500) (526,238) (491,620) Property and equipment, net $ 249,793 $ 223,856 $ 200,895 Expenditures for property and equipment: Domestic Company-owned restaurants $ 23,057 $ 16,108 $ 12,848 North America commissaries 5,729 4,007 4,447 International 5,175 1,979 1,065 All others 18,296 18,645 11,700 Unallocated corporate 26,134 27,820 5,592 Total expenditures for property and equipment (a) $ 78,391 $ 68,559 $ 35,652 ______________________________ (a) Increases of $9.8 million and $32.9 million in expenditures for property and equipment in 2022 and 2021, respectively, were primarily driven by investment in growth, including technology and development initiatives. |
Schedule of revenue disaggregated by major product line | In the following tables, revenues are disaggregated by major product line. The tables also include a reconciliation of the disaggregated revenues by the reportable segment: Reportable Segments (In thousands) Year Ended December 25, 2022 Major Products/Services Lines Domestic Company-owned North America franchising North America International All others Total Company-owned restaurant sales $ 708,389 $ — $ — $ — $ — $ 708,389 Franchise royalties and fees — 141,521 — 49,422 — 190,943 Commissary sales — — 1,087,204 80,481 — 1,167,685 Other revenues — — — 28,779 298,282 327,061 Eliminations — (4,122) (217,570) — (70,283) (291,975) Total segment revenues 708,389 137,399 869,634 158,682 227,999 2,102,103 International other revenues (a) — — — (28,779) 28,779 — Total revenues $ 708,389 $ 137,399 $ 869,634 $ 129,903 $ 256,778 $ 2,102,103 Reportable Segments (In thousands) Year Ended December 26, 2021 Major Products/Services Lines Domestic Company-owned North America franchising North America International All others Total Company-owned restaurant sales $ 778,323 $ — $ — $ — $ — $ 778,323 Franchise royalties and fees — 133,489 — 53,148 — 186,637 Commissary sales — — 976,698 97,623 — 1,074,321 Other revenues — — — 33,328 290,750 324,078 Eliminations — (4,179) (215,393) — (75,366) (294,938) Total segment revenues 778,323 129,310 761,305 184,099 215,384 2,068,421 International other revenues (a) — — — (33,328) 33,328 — Total revenues $ 778,323 $ 129,310 $ 761,305 $ 150,771 $ 248,712 $ 2,068,421 Reportable Segments (In thousands) Year Ended December 27, 2020 Major Products/Services Lines Domestic Company-owned North America franchising North America International All others Total Company-owned restaurant sales $ 700,757 $ — $ — $ — $ — $ 700,757 Franchise royalties and fees — 99,961 — 39,920 — 139,881 Commissary sales — — 873,125 84,043 — 957,168 Other revenues — — — 26,976 267,648 294,624 Eliminations — (3,229) (192,332) — (83,635) (279,196) Total segment revenues 700,757 96,732 680,793 150,939 184,013 1,813,234 International other revenues (a) — — — (26,976) 26,976 — Total revenues $ 700,757 $ 96,732 $ 680,793 $ 123,963 $ 210,989 $ 1,813,234 ______________________________ (a) Other revenues as reported in the Consolidated Statements of Operations include $28.8 million, $33.3 million and $27.0 million of revenue for the years ended December 25, 2022, December 26, 2021, and December 27, 2020 respectively, that are part of the International reporting segment. These amounts include marketing fund contributions and sublease rental income from International franchisees in the UK that provide no significant contribution to income before income taxes but must be reported on a gross basis under accounting requirements. The related expenses for these Other revenues are reported in Other expenses in the Consolidated Statements of Operations. |
Description of Business (Detail
Description of Business (Details) | Dec. 25, 2022 country |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries in which the entity operates | 48 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | |||
Mar. 28, 2022 restaurant entity | Dec. 25, 2022 USD ($) restaurant | Dec. 26, 2021 USD ($) restaurant | Dec. 27, 2020 USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Percentage of domestic restaurants franchised | 85% | |||
Length of fiscal year | 364 days | 364 days | 364 days | |
Franchisee royalty fee percentage for new and existing franchised restaurants | 5% | |||
Term of franchise agreement | 10 years | |||
Advertising and related costs | $ 55,200 | $ 61,700 | $ 56,700 | |
Award vesting period | 3 years | |||
Interest income on franchisee loans | $ 1,300 | 1,900 | 2,100 | |
Depreciation expense | $ 45,600 | 43,000 | 46,600 | |
Deferred costs, maximum amortization period | 5 years | |||
Deferred costs | $ 4,100 | 4,100 | 3,300 | |
Unamortized systems development costs | 9,600 | 10,500 | ||
Employee insurance retention limit per occurrence | 500 | |||
Insurance reserve | 67,300 | 88,100 | ||
Insurance reserves recorded in Accrued expenses and other current liabilities | 29,676 | 34,661 | ||
Insurance reserves recorded in Other long-term liabilities | 37,624 | 53,551 | ||
Insurance receivable | $ 38,400 | 48,100 | ||
Number of joint ventures divested | entity | 1 | |||
North America commissaries | ||||
Significant Accounting Policies [Line Items] | ||||
Accounts receivable threshold past due | 30 days | |||
Prepaid expenses and other current assets | ||||
Significant Accounting Policies [Line Items] | ||||
Insurance receivable | $ 17,000 | 18,700 | ||
Other assets | ||||
Significant Accounting Policies [Line Items] | ||||
Insurance receivable | $ 21,400 | $ 29,400 | ||
Income approach | ||||
Significant Accounting Policies [Line Items] | ||||
Period for projected net cash flow used in goodwill impairment assessment | 10 years | |||
Technology and communication | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Corporate joint venture | ||||
Significant Accounting Policies [Line Items] | ||||
Number of restaurants | restaurant | 98 | 188 | ||
Corporate joint venture | Disposal group, disposed of by sale, not discontinued operations | ||||
Significant Accounting Policies [Line Items] | ||||
Ownership percentage in divested joint venture | 51% | |||
Number of restaurants divested | restaurant | 90 | 90 | ||
Papa John's Marketing Fund Inc. | ||||
Significant Accounting Policies [Line Items] | ||||
Incremental marketing fund investments | $ 15,000 | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Amortization term of equipment incentives | 3 years | |||
Minimum | Restaurant, commissary and other equipment | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Minimum | Buildings and improvements | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 20 years | |||
Minimum | Leasehold improvements | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Amortization term of equipment incentives | 5 years | |||
Maximum | Restaurant, commissary and other equipment | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 10 years | |||
Maximum | Buildings and improvements | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 40 years | |||
Maximum | Leasehold improvements | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 10 years | |||
Papa Dough Rewards | ||||
Significant Accounting Policies [Line Items] | ||||
Expiration window of rewards program | 6 months | |||
Area development fees | ||||
Significant Accounting Policies [Line Items] | ||||
Term of franchise agreement | 10 years |
Leases - Lease Terms (Details)
Leases - Lease Terms (Details) | 12 Months Ended |
Dec. 25, 2022 renewal_option | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 15 years |
Domestic Company-owned restaurants | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 5 years |
Number of operating lease renewals | 1 |
UK franchise-owned restaurants | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 15 years |
Domestic commissary locations | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 10 years |
Number of operating lease renewals | 1 |
Domestic and International tractors and trailers | Minimum | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 5 years |
Domestic and International tractors and trailers | Maximum | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 7 years |
Domestic and International commissary and office equipment | Minimum | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 3 years |
Domestic and International commissary and office equipment | Maximum | |
Lessee, Lease, Description [Line Items] | |
Average lease term on owned restaurants | 5 years |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Assets | ||
Finance lease assets, net | $ 24,941 | $ 20,907 |
Operating lease assets, net | 172,425 | 176,256 |
Total lease assets | 197,366 | 197,163 |
Liabilities | ||
Current finance lease liabilities | 6,850 | 4,977 |
Current operating lease liabilities | 23,418 | 22,543 |
Noncurrent finance lease liabilities | 19,022 | 16,580 |
Noncurrent operating lease liabilities | 160,905 | 160,672 |
Total lease liabilities | $ 210,195 | $ 204,772 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Finance lease: | |||
Amortization of right-of-use assets | $ 5,704 | $ 4,980 | $ 2,342 |
Interest on lease liabilities | 1,029 | 1,140 | 606 |
Operating lease: | |||
Operating lease cost | 42,815 | 43,072 | 40,026 |
Short-term lease cost | 4,171 | 2,032 | 3,960 |
Variable lease cost | 9,129 | 8,572 | 6,503 |
Total lease costs | 62,848 | 59,796 | 53,437 |
Sublease income | (11,654) | (12,039) | (10,407) |
Total lease costs, net of sublease income | $ 51,194 | $ 47,757 | $ 43,030 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 25, 2022 USD ($) |
Finance Lease Costs | |
2023 | $ 7,849 |
2024 | 6,801 |
2025 | 5,171 |
2026 | 4,125 |
2027 | 2,971 |
Thereafter | 1,440 |
Total future minimum lease payments | 28,357 |
Less imputed interest | (2,485) |
Total present value of lease liabilities | 25,872 |
Operating Lease Costs | |
2023 | 32,860 |
2024 | 32,267 |
2025 | 30,695 |
2026 | 26,973 |
2027 | 21,568 |
Thereafter | 92,002 |
Total future minimum lease payments | 236,365 |
Less imputed interest | (52,042) |
Total present value of lease liabilities | 184,323 |
Expected Sublease Income | |
2023 | 10,303 |
2024 | 10,371 |
2025 | 9,952 |
2026 | 9,251 |
2027 | 8,523 |
Thereafter | 42,089 |
Total future minimum lease payments | $ 90,489 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 USD ($) restaurant lease | Dec. 26, 2021 USD ($) | Dec. 27, 2020 USD ($) | |
Lessor, Lease, Description [Line Items] | |||
Number of units leased and subleased | restaurant | 442 | ||
Initial lease terms on franchised sites | 15 years | ||
Sublease income | $ 11,654 | $ 12,039 | $ 10,407 |
Number of domestic leases for which the Company is contingently liable | lease | 53 | ||
Estimated maximum amount of undiscounted payments in the event of nonpayment by primary lessees | $ 9,200 | ||
Minimum | |||
Lessor, Lease, Description [Line Items] | |||
Initial term of franchise subleases | 5 years | ||
Maximum | |||
Lessor, Lease, Description [Line Items] | |||
Initial term of franchise subleases | 10 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from finance leases | $ 1,029 | $ 1,140 | $ 606 |
Financing cash flows from finance leases | 5,416 | 4,566 | 2,139 |
Operating cash flows from operating leases | 35,573 | 38,530 | 37,113 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 9,875 | 9,486 | 9,152 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 53,869 | 64,420 | 30,266 |
Cash received from sublease income | $ 10,847 | $ 11,597 | $ 10,545 |
Weighted-average remaining lease term (in years): | |||
Finance leases | 4 years 5 months 4 days | 4 years 6 months 3 days | 4 years 8 months 15 days |
Operating leases | 8 years 5 months 8 days | 8 years 3 months 18 days | 7 years |
Weighted-average discount rate: | |||
Finance leases | 4.59% | 5.08% | 5.34% |
Operating leases | 5.63% | 6.20% | 6.65% |
Corporate office in Atlanta, Georgia | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 21,800 |
Papa John's Marketing Fund, I_3
Papa John's Marketing Fund, Inc. (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 47,373 | $ 70,610 |
Accounts receivable, net | 102,533 | 81,370 |
Income tax receivable | 8,780 | 9,386 |
Prepaid expenses and other current assets | 44,123 | 46,310 |
Total current assets | 251,039 | 255,009 |
Deferred income taxes | 1,920 | 5,156 |
Total assets | 864,227 | 885,704 |
Current liabilities: | ||
Accounts payable | 62,316 | 28,092 |
Income and other taxes payable | 8,766 | 19,996 |
Accrued expenses and other current liabilities | 142,535 | 190,116 |
Current deferred revenue | 21,272 | 21,700 |
Total current liabilities | 265,157 | 287,424 |
Deferred revenue | 23,204 | 13,846 |
Total liabilities | 1,133,674 | 1,052,664 |
Papa John's Marketing Fund Inc. | ||
Current assets: | ||
Cash and cash equivalents | 17,174 | 24,481 |
Accounts receivable, net | 14,780 | 14,150 |
Income tax receivable | 0 | 300 |
Prepaid expenses and other current assets | 1,815 | 1,718 |
Total current assets | 33,769 | 40,649 |
Deferred income taxes | 655 | 614 |
Total assets | 34,424 | 41,263 |
Current liabilities: | ||
Accounts payable | 12,428 | 140 |
Income and other taxes payable | 8 | 2 |
Accrued expenses and other current liabilities | 17,928 | 40,154 |
Current deferred revenue | 4,395 | 4,317 |
Total current liabilities | 34,759 | 44,613 |
Deferred revenue | 2,503 | 2,478 |
Total liabilities | $ 37,262 | $ 47,091 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue recognized related to deferred revenue | $ 33,400 | $ 36,300 |
Contract Liabilities | ||
Beginning balance | 35,546 | |
Ending balance | 44,476 | 35,546 |
Change | 8,930 | |
Contract assets | 4,500 | 5,800 |
Amortization expense related to contract assets | 3,400 | 3,000 |
Franchise fees and unredeemed gift card liabilities | ||
Contract Liabilities | ||
Beginning balance | 20,410 | |
Ending balance | 30,710 | 20,410 |
Change | 10,300 | |
Customer loyalty program obligations | ||
Contract Liabilities | ||
Beginning balance | 15,136 | |
Ending balance | 13,766 | $ 15,136 |
Change | $ (1,370) |
Revenue Recognition - Transacti
Revenue Recognition - Transaction Price Allocated to Remaining Performance Obligations (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract liabilities | $ 44,476 | $ 35,546 |
Franchise fees | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | 20,634 | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-26 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 3,098 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,927 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,755 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-12-29 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,524 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-12-28 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 2,210 | |
Remaining performance obligation period | 1 year | |
Franchise fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-12-27 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 7,120 | |
Remaining performance obligation period | ||
Area development fees | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract liabilities | $ 3,200 | |
Gift card | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract liabilities | $ 6,900 |
Stockholders_ Deficit - Narrati
Stockholders’ Deficit - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 12 Months Ended | ||||||||||
Feb. 17, 2023 | Jan. 26, 2023 | Jun. 03, 2021 | May 11, 2021 | Feb. 16, 2023 | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | Oct. 28, 2021 | Aug. 03, 2021 | Nov. 04, 2020 | Dec. 29, 2019 | |
Class of Stock [Line Items] | ||||||||||||
Common stock authorized (in shares) | 100,000,000 | 100,000,000 | ||||||||||
Common stock outstanding (in shares) | 34,700,000 | 35,800,000 | ||||||||||
Stock repurchased (in shares) | 1,343,000 | 594,000 | 32,000 | |||||||||
Cost of stock repurchased | $ 125,000 | $ 72,499 | $ 2,701 | |||||||||
Stock repurchase program, remaining authorized amount | 299,800 | 424,800 | 72,299 | |||||||||
Common stock dividends paid | $ 54,767 | $ 40,356 | $ 29,362 | |||||||||
Dividends declared per common share (in dollars per share) | $ 1.54 | $ 1.15 | $ 0.90 | |||||||||
Dividends declared | $ 54,767 | $ 40,356 | $ 29,362 | |||||||||
Preferred stock authorized (in shares) | 5,000,000 | 5,000,000 | ||||||||||
Preferred stock shares issued (in shares) | 0 | 0 | ||||||||||
Preferred stock outstanding (in shares) | 0 | 0 | ||||||||||
Series B Convertible Preferred Stock, par value (in dollars per share) | $ 0.01 | |||||||||||
Dividends on redemption of Series B Convertible Preferred Stock | $ 0 | $ 109,852 | 0 | |||||||||
Series B Preferred Stock authorized (in shares) | 0 | 0 | ||||||||||
Starboard share repurchase agreement | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Series B Preferred stock repurchased during period (in shares) | 78,387 | |||||||||||
Series B Convertible Preferred Stock, par value (in dollars per share) | $ 0.01 | |||||||||||
Series B preferred stock converted into common stock (in shares) | 171,613 | |||||||||||
Shares issued (in shares) | 3,458,360 | |||||||||||
Franchisee Investors repurchase program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Series B preferred stock converted into common stock (in shares) | 1,530 | |||||||||||
Shares issued (in shares) | 30,769 | |||||||||||
Starboard and Franchisee share repurchase program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Cash payment for repurchase and conversion process | $ 188,600 | |||||||||||
Dividends on redemption of Series B Convertible Preferred Stock | $ 109,900 | |||||||||||
Dividends on redemption of Series B Preferred Stock (in dollars per share) | $ 3.10 | |||||||||||
Common stock deemed dividend distribution | $ 1,500 | |||||||||||
Common stock repurchase program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock repurchase program, authorized amount | $ 425,000 | $ 75,000 | ||||||||||
Series B Preferred Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock "pass-through" dividends paid | 1,100 | 4,600 | ||||||||||
Preferred stock dividends paid | $ 3,000 | $ 9,100 | ||||||||||
Series B Preferred Stock | Franchisee Investors repurchase program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock repurchased (in shares) | 1,000 | |||||||||||
Common Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock outstanding (in shares) | 34,736,000 | 35,797,000 | 32,545,000 | 31,894,000 | ||||||||
Common stock dividends paid | $ 40,400 | $ 29,400 | ||||||||||
Subsequent event | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock dividends paid | $ 14,600 | |||||||||||
Dividends declared per common share (in dollars per share) | $ 0.42 | |||||||||||
Dividends declared | $ 14,600 | |||||||||||
Subsequent event | Common stock repurchase program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock repurchased (in shares) | 319,307 | |||||||||||
Cost of stock repurchased | $ 27,600 | |||||||||||
Stock repurchase program, remaining authorized amount | $ 272,200 |
Stockholders_ Deficit - Repurch
Stockholders’ Deficit - Repurchase activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Stockholders' Equity Note [Abstract] | |||
Total Number of Shares Purchased (in shares) | 1,343 | 594 | 32 |
Average Price Paid per Share (in dollars per share) | $ 93.07 | $ 121.96 | $ 83.90 |
Aggregate Cost of Shares Purchased | $ 125,000 | $ 72,499 | $ 2,701 |
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | $ 299,800 | $ 424,800 | $ 72,299 |
Stockholders_ Deficit - Changes
Stockholders’ Deficit - Changes to Series B Preferred Stock (Details) - Series B Preferred Stock $ in Thousands | 12 Months Ended |
Dec. 26, 2021 USD ($) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Beginning balance | $ 251,901 |
Accretion | 629 |
Redemption | (252,530) |
Ending balance | $ 0 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Basic earnings per common share | |||
Net income attributable to the Company | $ 67,772 | $ 120,016 | $ 57,932 |
Dividends on redemption of Series B Convertible Preferred Stock | 0 | (109,852) | 0 |
Dividends paid to participating securities | (306) | (6,091) | (14,059) |
Net income attributable to participating securities | (104) | 0 | (2,136) |
Net income attributable to common shareholders | $ 67,362 | $ 4,073 | $ 41,737 |
Basic weighted average common shares outstanding (in shares) | 35,497,000 | 35,007,000 | 32,421,000 |
Basic earnings per common share (in dollars per share) | $ 1.90 | $ 0.12 | $ 1.29 |
Diluted earnings per common share | |||
Net income attributable to common shareholders | $ 67,362 | $ 4,073 | $ 41,737 |
Weighted average common shares outstanding (in shares) | 35,497,000 | 35,007,000 | 32,421,000 |
Dilutive effect of outstanding equity awards (in shares) | 220,000 | 330,000 | 296,000 |
Diluted weighted average common shares outstanding (in shares) | 35,717,000 | 35,337,000 | 32,717,000 |
Diluted earnings per common share (in dollars per share) | $ 1.89 | $ 0.12 | $ 1.28 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average antidilutive awards excluded from computation of earnings per share (in shares) | 0 | 0 | 100,000 |
Series B Preferred Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average antidilutive awards excluded from computation of earnings per share (in shares) | 0 | 0 | 252,500 |
Weighted average antidilutive awards if converted (in shares) | 5,000,000 |
Fair Value Measurements and D_3
Fair Value Measurements and Disclosures - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair value, recurring - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Level 1 | ||
Financial assets: | ||
Cash surrender value of life insurance policies | $ 30,120 | $ 41,904 |
Interest rate swaps | 0 | |
Financial liabilities: | ||
Interest rate swap liabilities | 0 | |
Level 2 | ||
Financial assets: | ||
Cash surrender value of life insurance policies | 0 | 0 |
Interest rate swaps | 986 | |
Financial liabilities: | ||
Interest rate swap liabilities | 5,536 | |
Level 3 | ||
Financial assets: | ||
Cash surrender value of life insurance policies | 0 | 0 |
Interest rate swaps | 0 | |
Financial liabilities: | ||
Interest rate swap liabilities | 0 | |
Carrying Value | ||
Financial assets: | ||
Cash surrender value of life insurance policies | 30,120 | 41,904 |
Interest rate swaps | $ 986 | |
Financial liabilities: | ||
Interest rate swap liabilities | $ 5,536 |
Fair Value Measurements and D_4
Fair Value Measurements and Disclosures - Fair Value Disclosures (Details) - USD ($) | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Sep. 14, 2021 | |
Measurement of financial assets and liabilities at fair value on a recurring basis | |||
Transfers among levels within the fair value hierarchy | $ 0 | $ 0 | |
Senior notes | |||
Measurement of financial assets and liabilities at fair value on a recurring basis | |||
Interest rate | 3.875% | 3.875% | |
Senior notes | Carrying Value | |||
Measurement of financial assets and liabilities at fair value on a recurring basis | |||
3.875% Senior Notes | $ 400,000,000 | 400,000,000 | |
Senior notes | Fair value, recurring | Level 2 | |||
Measurement of financial assets and liabilities at fair value on a recurring basis | |||
3.875% Senior Notes | $ 339,500,000 | $ 396,000,000 |
Noncontrolling Interests - Narr
Noncontrolling Interests - Narrative (Details) | 12 Months Ended | ||
Mar. 28, 2022 restaurant entity | Dec. 25, 2022 restaurant entity | Dec. 26, 2021 restaurant entity | |
Noncontrolling Interest [Line Items] | |||
Number of joint ventures | entity | 3 | 4 | |
Number of joint ventures divested | entity | 1 | ||
Corporate joint venture | |||
Noncontrolling Interest [Line Items] | |||
Number of restaurants | restaurant | 98 | 188 | |
Corporate joint venture | Disposal group, disposed of by sale, not discontinued operations | |||
Noncontrolling Interest [Line Items] | |||
Ownership percentage in divested joint venture | 51% | ||
Number of restaurants divested | restaurant | 90 | 90 |
Noncontrolling Interests - Inco
Noncontrolling Interests - Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Noncontrolling Interest [Line Items] | |||
Noncontrolling interests | $ 1,577 | $ 4,939 | $ 2,682 |
Net income attributable to the Company | 67,772 | 120,016 | 57,932 |
Corporate joint venture | |||
Noncontrolling Interest [Line Items] | |||
Papa John’s International, Inc. | 3,136 | 8,457 | 5,654 |
Noncontrolling interests | 1,577 | 4,939 | 2,682 |
Net income attributable to the Company | $ 4,713 | $ 13,396 | $ 8,336 |
Noncontrolling Interests - Chan
Noncontrolling Interests - Changes in Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | $ 5,498 | ||
Ending balance | 1,217 | $ 5,498 | |
Corporate joint venture | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | 5,498 | 6,474 | |
Net income | 574 | 2,609 | $ 824 |
Distributions | (4,855) | (3,585) | |
Ending balance | $ 1,217 | $ 5,498 | $ 6,474 |
Allowance For Credit Losses (De
Allowance For Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 27, 2022 | Dec. 25, 2022 | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Accounts Receivable | |||||
Current period provision (benefit) for expected credit losses | $ 20,539 | $ (852) | $ (4,734) | ||
Russia | |||||
Notes Receivable | |||||
Non-cash reserves | $ 14,600 | ||||
UK | |||||
Notes Receivable | |||||
Non-cash reserves | $ 3,700 | ||||
Accounts Receivable | |||||
Accounts Receivable | |||||
Balance at beginning of period | 2,364 | 2,364 | 3,622 | ||
Current period provision (benefit) for expected credit losses | 6,474 | 16 | |||
Write-offs charged against the allowance | (2,120) | (1,274) | |||
Recoveries collected | 0 | 0 | |||
Balance at end of period | 6,718 | 6,718 | 2,364 | 3,622 | |
Notes Receivable | |||||
Notes Receivable | |||||
Balance at beginning of period | $ 1,500 | 1,500 | 3,211 | ||
Current period provision (benefit) for expected credit losses | 14,066 | (583) | |||
Write-offs charged against the allowance | (1,042) | (843) | |||
Recoveries collected | (25) | (285) | |||
Balance at end of period | $ 14,499 | $ 14,499 | $ 1,500 | $ 3,211 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 12 Months Ended | |||
Mar. 28, 2022 USD ($) restaurant | Dec. 25, 2022 USD ($) restaurant store | Dec. 26, 2021 USD ($) | Dec. 27, 2020 USD ($) | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 80,632 | $ 80,791 | ||
Acquisitions | 1,161 | |||
Divestitures | $ (9,900) | (9,908) | ||
Foreign currency adjustments | (1,269) | (159) | ||
Ending balance | $ 70,616 | 80,632 | ||
Number of stores acquired | store | 2 | |||
Disposal group, disposed of by sale, not discontinued operations | Corporate joint venture | ||||
Goodwill [Roll Forward] | ||||
Ownership percentage in divested joint venture | 51% | |||
Number of restaurants divested | restaurant | 90 | 90 | ||
Domestic Company-owned restaurants | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | $ 64,254 | 64,254 | ||
Acquisitions | 1,161 | |||
Divestitures | (9,908) | |||
Foreign currency adjustments | 0 | 0 | ||
Ending balance | 55,507 | 64,254 | ||
International | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 15,942 | 16,101 | ||
Acquisitions | 0 | |||
Divestitures | 0 | |||
Foreign currency adjustments | (1,269) | (159) | ||
Ending balance | 14,673 | 15,942 | ||
Goodwill accumulated impairment | 2,300 | 2,300 | $ 2,300 | |
All others | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 436 | 436 | ||
Acquisitions | 0 | |||
Divestitures | 0 | |||
Foreign currency adjustments | 0 | 0 | ||
Ending balance | $ 436 | $ 436 |
Debt - Summary of Long Term Deb
Debt - Summary of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Debt Instrument [Line Items] | ||
Outstanding debt | $ 605,000 | $ 490,000 |
Unamortized debt issuance costs | (7,931) | (9,270) |
Total long-term debt, net | 597,069 | 480,730 |
Revolving facilities | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 205,000 | 90,000 |
Senior notes | ||
Debt Instrument [Line Items] | ||
Outstanding debt | $ 400,000 | $ 400,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 12 Months Ended | ||||
Sep. 14, 2021 USD ($) qtr | Dec. 25, 2022 USD ($) | Dec. 26, 2021 USD ($) | Dec. 27, 2020 USD ($) | ||
Line of Credit Facility [Line Items] | |||||
Debt issuance costs | $ 2,100,000 | ||||
Outstanding debt | $ 605,000,000 | $ 490,000,000 | |||
Other comprehensive income (loss) before tax recognized for interest rate swaps | [1] | 4,757,000 | 6,848,000 | $ (7,517,000) | |
Other comprehensive income (loss) after tax recognized for interest rate swaps | 3,700,000 | 5,300,000 | (5,800,000) | ||
Interest paid, including payments made or received under the swaps | 24,400,000 | 13,400,000 | $ 15,800,000 | ||
Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Portion of derivative liability that would be reclassified into earnings | 1,000,000 | ||||
Interest Rate Swap | Interest Expense | |||||
Line of Credit Facility [Line Items] | |||||
Portion of derivative liability that would be reclassified into earnings | $ 1,000,000 | ||||
Estimate of period of time over which portion of derivative liability would be reclassified into earnings | 12 months | ||||
Letter of credit | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 80,000,000 | ||||
Revolving facilities | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding debt | $ 205,000,000 | 90,000,000 | |||
Senior notes | |||||
Line of Credit Facility [Line Items] | |||||
Face amount | $ 400,000,000 | ||||
Interest rate | 3.875% | 3.875% | |||
Unamortized debt issuance costs | $ 7,100,000 | ||||
Outstanding debt | $ 400,000,000 | 400,000,000 | |||
Senior notes | Redemption up to 40% at any time prior to September 15, 2024 with net cash proceeds from certain equity offerings | |||||
Line of Credit Facility [Line Items] | |||||
Redemption price percentage | 103.875% | ||||
Senior notes | Redemption at any time prior to September 15, 2024 | |||||
Line of Credit Facility [Line Items] | |||||
Redemption price percentage | 100% | ||||
Senior notes | Minimum | Redemption at any time on or after September 15, 2024 | |||||
Line of Credit Facility [Line Items] | |||||
Redemption price percentage | 0.97% | ||||
Senior notes | Maximum | Redemption at any time on or after September 15, 2024 | |||||
Line of Credit Facility [Line Items] | |||||
Redemption price percentage | 1.94% | ||||
Senior notes | Maximum | Redemption up to 40% at any time prior to September 15, 2024 with net cash proceeds from certain equity offerings | |||||
Line of Credit Facility [Line Items] | |||||
Redemption percentage | 40% | ||||
PJI Facilities | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 600,000,000 | ||||
Line of credit facility, remaining availability | 395,000,000 | ||||
Additional amount that company has option to increase borrowing capacity | 500,000,000 | ||||
Number of quarters in interest margin period | qtr | 4 | ||||
PJI Facilities | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Interest margin rate on debt | 1% | ||||
PJI Facilities | Federal funds rate | |||||
Line of Credit Facility [Line Items] | |||||
Interest margin rate on debt | 0.50% | ||||
PJI Facilities | Revolving facilities | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 50,000,000 | ||||
PJI Facilities | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Percentage of commitment fee on unused credit facility | 0.18% | ||||
PJI Facilities | Minimum | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Interest margin rate on debt | 1.25% | ||||
PJI Facilities | Minimum | Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Interest margin rate on debt | 0.25% | ||||
PJI Facilities | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Percentage of commitment fee on unused credit facility | 0.30% | ||||
PJI Facilities | Maximum | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Interest margin rate on debt | 2% | ||||
PJI Facilities | Maximum | Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Interest margin rate on debt | 1% | ||||
Swingline loans | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | ||||
Amendment to Credit Agreement | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Interest coverage ratio | 2 | ||||
Amendment to Credit Agreement | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Leverage Ratio | 5.25 | ||||
Increase to leverage ratio | 0.50 | ||||
PJMF Revolving Facility | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 20,000,000 | ||||
Outstanding debt | $ 0 | $ 0 | |||
PJMF Revolving Facility | One-month LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Interest margin rate on debt | 1.60% | ||||
[1]Amounts reclassified out of accumulated other comprehensive loss into interest expense included ($2,384), ($5,965) and ($5,068) for the years ended December 25, 2022, December 26, 2021 and December 27, 2020, respectively. |
Debt - Notional Amounts of Deri
Debt - Notional Amounts of Derivatives (Details) - Designated as Hedging Instrument $ in Millions | Dec. 25, 2022 USD ($) |
Interest Rate Swap | |
Debt Instrument [Line Items] | |
Notional value | $ 125 |
April 30, 2018 through April 30, 2023, 2.33% | |
Debt Instrument [Line Items] | |
Notional value | $ 55 |
Fixed Rates | 2.33% |
April 30, 2018 through April 30, 2023, 2.36% | |
Debt Instrument [Line Items] | |
Notional value | $ 35 |
Fixed Rates | 2.36% |
April 30, 2018 through April 30, 2023, 2.34% | |
Debt Instrument [Line Items] | |
Notional value | $ 35 |
Fixed Rates | 2.34% |
Debt - Location and Amount of D
Debt - Location and Amount of Derivatives in the Financial Statements (Details) - Interest Rate Swap - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Other current and long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 986 | $ 0 |
Other current and long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ 5,536 |
Debt - Effect of Derivatives on
Debt - Effect of Derivatives on the Financial Statements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total Interest Expense on Consolidated Statements of Operations | $ (26,653) | $ (19,205) | $ (17,022) |
Interest Expense | Interest Rate Swap | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in AOCL on Derivative | 3,663 | 5,273 | (5,788) |
Interest Expense | Interest Rate Swap | Reclassification out of Accumulated Other Comprehensive Loss | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of (Loss) or Gain Reclassified from AOCL into Income | $ (2,384) | $ (5,965) | $ (5,068) |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 |
Property, Plant and Equipment | |||
Property and equipment, gross | $ 790,293 | $ 750,094 | |
Accumulated depreciation and amortization | (540,500) | (526,238) | $ (491,620) |
Property and equipment, net | 249,793 | 223,856 | $ 200,895 |
Land | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 31,679 | 31,032 | |
Buildings and improvements | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 91,462 | 91,508 | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 136,095 | 138,016 | |
Equipment and other | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 498,792 | 465,813 | |
Construction in progress | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $ 32,265 | $ 23,725 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Payables and Accruals [Abstract] | ||
Marketing | $ 36,858 | $ 59,248 |
Insurance reserves, current | 29,676 | 34,661 |
Salaries, benefits and bonuses | 21,934 | 48,728 |
Legal settlement accrual | 15,000 | 0 |
Purchases | 13,789 | 13,319 |
Other | 25,278 | 34,160 |
Total | $ 142,535 | $ 190,116 |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Insurance reserves | $ 37,624 | $ 53,551 |
Deferred compensation plan | 28,285 | 36,170 |
Other | 2,408 | 3,433 |
Total | $ 68,317 | $ 93,154 |
Strategic Corporate Reorganiz_3
Strategic Corporate Reorganization for Long-term Growth - Reorganization Costs (Details) - USD ($) | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Total strategic corporate reorganization costs, net of stock forfeitures | $ 0 | $ 13,094,000 | $ 5,985,000 |
Total strategic corporate reorganization costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total strategic corporate reorganization costs, net of stock forfeitures | 13,094,000 | 6,925,000 | |
Employee severance and other employee transition costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total strategic corporate reorganization costs, net of stock forfeitures | 5,429,000 | 4,775,000 | |
Recruiting and professional fees | |||
Restructuring Cost and Reserve [Line Items] | |||
Total strategic corporate reorganization costs, net of stock forfeitures | 3,815,000 | 1,598,000 | |
Relocation costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total strategic corporate reorganization costs, net of stock forfeitures | 3,100,000 | 267,000 | |
Other costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total strategic corporate reorganization costs, net of stock forfeitures | 750,000 | 285,000 | |
Stock-based compensation forfeitures on unvested awards | |||
Restructuring Cost and Reserve [Line Items] | |||
Total strategic corporate reorganization costs, net of stock forfeitures | $ 0 | $ (940,000) |
Strategic Corporate Reorganiz_4
Strategic Corporate Reorganization for Long-term Growth - Activity in the Reorganization Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 2,954 | $ 4,861 |
Charges | 0 | 13,094 |
Payments | (2,954) | (15,001) |
Ending balance | 0 | 2,954 |
Employee severance and other employee transition costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 2,122 | 4,615 |
Charges | 0 | 5,429 |
Payments | (2,122) | (7,922) |
Ending balance | 0 | 2,122 |
Recruiting and professional fees | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 92 | 145 |
Charges | 0 | 3,815 |
Payments | (92) | (3,868) |
Ending balance | 0 | 92 |
Relocation costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 740 | 101 |
Charges | 0 | 3,100 |
Payments | (740) | (2,461) |
Ending balance | 0 | 740 |
Other costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 0 | 0 |
Charges | 750 | |
Payments | (750) | |
Ending balance | $ 0 |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic income | $ 65,434 | $ 115,221 | $ 48,616 |
Foreign income | 18,335 | 35,727 | 26,746 |
Income before income taxes | $ 83,769 | $ 150,948 | $ 75,362 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Foreign income subject to foreign withholding taxes | $ 23,600 | $ 22,400 | $ 14,700 |
Net operating loss carryovers | 10,200 | 8,800 | |
Valuation allowance related to net operating losses | 10,200 | 8,800 | |
Foreign tax credit carryforwards | $ 20,198 | 18,611 | |
Expiration term of foreign tax credit carryforwards | 10 years | ||
Valuation allowance | $ 32,052 | 28,598 | 22,972 |
Cash paid for income taxes | 11,700 | 32,600 | $ 19,300 |
Decrease in liability for unrecognized tax benefits resulting from finalization of current examinations and other issues in the next 12 months | 68 | ||
Accrued interest and penalties related to unrecognized tax benefits | 146 | 132 | |
Foreign tax credit carryforwards | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | 20,200 | 18,600 | |
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryovers | 8,700 | 4,500 | |
Valuation allowance related to net operating losses | 1,200 | 1,200 | |
State | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets related to income tax credit carryforwards | 2,000 | $ 1,400 | |
Valuation allowance against deferred tax asset related to income tax credit carryforwards | $ 500 |
Income Taxes - Summary of Expen
Income Taxes - Summary of Expense (Benefit) for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Current: | |||
Federal | $ 3,496 | $ 10,591 | $ 16,400 |
Foreign | 5,335 | 8,812 | 6,047 |
State and local | 2,791 | 2,837 | 1,569 |
Deferred: | |||
Federal | 4,243 | 2,430 | (7,375) |
Foreign | (1,152) | 769 | 357 |
State and local | (293) | 554 | (2,250) |
Total income tax expense | $ 14,420 | $ 25,993 | $ 14,748 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Income Tax Expense (Benefit) | |||
Tax at U.S. federal statutory rate | $ 17,591 | $ 31,699 | $ 15,826 |
State and local income taxes | 1,422 | 2,317 | 1,149 |
Foreign income taxes | 4,672 | 9,144 | 6,463 |
Income of consolidated partnerships attributable to noncontrolling interests | (355) | (1,110) | (603) |
Non-qualified deferred compensation plan expense (income) | 1,278 | (911) | (898) |
Excess tax (benefits) on equity awards | (3,902) | (3,697) | (2,029) |
Tax credits | (8,981) | (8,830) | (6,002) |
Non-deductible executive compensation | 2,450 | 2,636 | 1,314 |
Foreign-derived intangible income | (1,452) | (1,519) | (924) |
US deferred offset on foreign deferreds | 1,183 | 238 | 0 |
Other | 514 | (3,974) | 452 |
Total income tax expense | $ 14,420 | $ 25,993 | $ 14,748 |
Income Tax Rate | |||
Tax at U.S. federal statutory rate | 21% | 21% | 21% |
State and local income taxes | 1.70% | 1.50% | 1.50% |
Foreign income taxes | 5.60% | 6.10% | 8.60% |
Income of consolidated partnerships attributable to noncontrolling interests | (0.40%) | (0.70%) | (0.80%) |
Non-qualified deferred compensation plan expense (income) | 1.50% | (0.60%) | (1.20%) |
Excess tax (benefits) on equity awards | (4.70%) | (2.50%) | (2.70%) |
Tax credits | (10.70%) | (5.90%) | (8.00%) |
Non-deductible executive compensation | 2.90% | 1.70% | 1.70% |
Foreign-derived intangible income | (1.70%) | (1.00%) | (1.20%) |
US deferred offset on foreign deferreds | 1.40% | 0.20% | 0% |
Other | 0.60% | (2.60%) | 0.60% |
Total | 17.20% | 17.20% | 19.50% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 |
Deferred tax assets | |||
Accrued liabilities | $ 17,424 | $ 14,802 | |
Accrued bonuses | 351 | 6,404 | |
Other liabilities and asset reserves | 14,607 | 14,583 | |
Equity awards | 7,905 | 7,323 | |
Lease liabilities | 45,646 | 41,999 | |
Other | 2,904 | 2,712 | |
Net operating losses | 11,738 | 8,127 | |
Foreign tax credit carryforwards | 20,198 | 18,611 | |
Total deferred tax assets | 120,773 | 114,561 | |
Valuation allowances | (32,052) | (28,598) | $ (22,972) |
Total deferred tax assets, net of valuation allowances | 88,721 | 85,963 | |
Deferred tax liabilities | |||
Deferred expenses | (5,756) | (7,087) | |
Accelerated depreciation | (31,098) | (23,858) | |
Goodwill | (7,690) | (10,052) | |
Right-of-use assets | (41,892) | (39,814) | |
Other | (365) | (254) | |
Total deferred tax liabilities | (86,801) | (81,065) | |
Net deferred tax assets | $ 1,920 | $ 4,898 |
Income Taxes - Changes in Valua
Income Taxes - Changes in Valuation Allowance on Deferred Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Valuation Allowance on Deferred Tax Rollforward [Roll Forward] | ||
Beginning balance | $ 28,598 | $ 22,972 |
Charged to costs and expenses | 3,454 | 5,658 |
Other | (32) | |
Ending balance | $ 32,052 | $ 28,598 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2022 | Dec. 26, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 896 | $ 1,030 |
Additions for tax positions of prior years | 331 | 81 |
Reductions for tax positions of prior years | (65) | (215) |
Ending balance | $ 1,162 | $ 896 |
Related Party Transactions (Det
Related Party Transactions (Details) | 36 Months Ended | |||||
Mar. 15, 2022 USD ($) shares | Jul. 29, 2021 USD ($) | Jul. 29, 2021 CAD ($) | Mar. 15, 2019 shares | Mar. 14, 2025 USD ($) | Mar. 14, 2022 USD ($) | |
Mr. Shaquille O'Neal | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payments | $ 4,100,000 | |||||
Period of related party agreement | 3 years | 3 years | ||||
Related party restricted stock units granted (in shares) | shares | 55,898 | 87,136 | ||||
Royalty fee payable per each co-branded pizza sold | $ 0.20 | |||||
Period of extension of related party agreement | 1 year | |||||
Mr. Shaquille O'Neal | Vest on April 12, 2023 | ||||||
Related Party Transaction [Line Items] | ||||||
Related party restricted stock units vesting percentage | 33% | |||||
Related party restricted stock units vesting number (in shares) | shares | 18,632 | |||||
Mr. Shaquille O'Neal | Vest on March 15, 2024 | ||||||
Related Party Transaction [Line Items] | ||||||
Related party restricted stock units vesting percentage | 33% | |||||
Related party restricted stock units vesting number (in shares) | shares | 18,632 | |||||
Mr. Shaquille O'Neal | Vest on March 15, 2025 | ||||||
Related Party Transaction [Line Items] | ||||||
Related party restricted stock units vesting percentage | 33% | |||||
Related party restricted stock units vesting number (in shares) | shares | 18,634 | |||||
Mr. Shaquille O'Neal | Forecast | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payments | $ 5,600,000 | |||||
Papa John's Foundation for Building Community | ||||||
Related Party Transaction [Line Items] | ||||||
Donation for every pizza sold in the United States | $ 1 | |||||
Donation for every pizza sold in Canada | $ 1 |
Litigation, Commitments and C_2
Litigation, Commitments and Contingencies (Details) $ in Millions | 2 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 USD ($) | Apr. 14, 2022 USD ($) | Feb. 23, 2023 USD ($) | Dec. 25, 2022 USD ($) | Oct. 29, 2018 employee | |
Pending litigation | Durling et al v. Papa John's International, Inc. | |||||
Loss Contingencies [Line Items] | |||||
Number of employees who opted into the class action | employee | 9,571 | ||||
Exposure from settlement recorded | $ 10 | ||||
Pending litigation | Durling et al v. Papa John's International, Inc. | Subsequent event | |||||
Loss Contingencies [Line Items] | |||||
Payments for legal settlement | $ 5 | ||||
Pending litigation | Durling et al v. Papa John's International, Inc. | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Settlement amount | $ 20 | ||||
Settled Litigation | Papa John’s Employee & Franchise Employee Antitrust Litigation | |||||
Loss Contingencies [Line Items] | |||||
Settlement amount | $ 5 |
Equity Compensation - Narrative
Equity Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based employee compensation expense | $ 18,400 | $ 16,900 | $ 16,300 |
Unrecognized compensation cost related to nonvested option awards and restricted stock | 22,200 | ||
Unrecognized compensation cost related to nonvested option awards and restricted stock expected to recognize this fiscal year | 14,600 | ||
Unrecognized compensation cost related to nonvested option awards and restricted stock expected to recognize next fiscal year | 6,500 | ||
Unrecognized compensation cost related to nonvested option awards and restricted stock expected to recognize in three years | $ 1,100 | ||
Options exercised (in shares) | 82,000 | 212,000 | 541,000 |
Total intrinsic value of options exercised | $ 3,400 | $ 10,100 | $ 13,800 |
Options granted (in shares) | 0 | 0 | 0 |
Award vesting period | 3 years | ||
Time based restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | 3 years | 3 years |
Awards granted (in shares) | 165,000 | 130,000 | 207,000 |
Dividends declared | $ 467 | $ 410 | $ 366 |
Dividends declared (in dollars per share) | $ 1.54 | $ 1.15 | $ 0.90 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards granted (in shares) | 69,000 | 11,000 | 15,000 |
Restricted Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | 1 year | 1 year |
Restricted Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | 3 years | 3 years |
Performance based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Weighted average grant-date fair value (in dollars per share) | $ 113.90 | $ 103.14 | $ 59.52 |
Performance based restricted stock units | Executive management | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards granted (in shares) | 64,000 | 61,000 | 92,000 |
Omnibus Incentive 2018 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock authorized for issuance (in shares) | 3,600,000 | ||
Common stock available for future issuance (in shares) | 3,600,000 | ||
Omnibus Incentive 2011 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock available for future issuance (in shares) | 5,900,000 |
Equity Compensation - Option Ac
Equity Compensation - Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Number of Options | |||
Beginning balance (in shares) | 319 | ||
Exercised (in shares) | (82) | (212) | (541) |
Cancelled (in shares) | (2) | ||
Ending balance (in shares) | 235 | 319 | |
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 54.65 | ||
Exercised (in dollars per share) | 49.48 | ||
Cancelled (in dollars per share) | 45.29 | ||
Ending balance (in dollars per share) | $ 56.53 | $ 54.65 | |
Additional Disclosures | |||
Number of Options, Exercisable (in shares) | 235 | ||
Weighted Average Exercise Price, Exercisable (in dollars per share) | $ 56.53 | ||
Weighted Average Remaining Contractual Term, Outstanding | 4 years 5 months 19 days | ||
Weighted Average Remaining Contractual Term, Exercisable | 4 years 5 months 19 days | ||
Aggregate Intrinsic Value, Outstanding | $ 6,452 | ||
Aggregate Intrinsic Value, Exercisable | $ 6,452 |
Equity Compensation - Significa
Equity Compensation - Significant Assumptions Used in Estimating the Fair Value of Performance based Restricted Stock Units Granted (Details) - Performance based restricted stock units | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.50% | 0.20% | 0.90% |
Expected volatility | 45% | 48.30% | 36.30% |
Equity Compensation - Restricte
Equity Compensation - Restricted Stock Unit Activity (Details) - Restricted stock shares in Thousands | 12 Months Ended |
Dec. 25, 2022 $ / shares shares | |
Shares | |
Beginning balance (in shares) | shares | 582 |
Granted (in shares) | shares | 298 |
Forfeited (in shares) | shares | (82) |
Vested (in shares) | shares | (280) |
Ending balance (in shares) | shares | 518 |
Weighted Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 68.06 |
Granted (in dollars per share) | $ / shares | 103.18 |
Forfeited (in dollars per share) | $ / shares | 89.87 |
Vested (in dollars per share) | $ / shares | 57.40 |
Ending balance (in dollars per share) | $ / shares | $ 91.23 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Retirement Benefits [Abstract] | |||
Deferred compensation assets | $ 30,100 | $ 41,900 | |
Deferred compensation liabilities | $ 28,285 | $ 36,170 | |
Employer discretionary matching contribution percentage to 401(k) plan and non-qualified deferred compensation plan | 4% | 4% | 2.10% |
Maximum employee contribution percentage eligible for employer match | 6% | 6% | 6% |
Costs of 401(k) plan and non-qualified deferred compensation plan | $ 4,400 | $ 3,500 | $ 1,800 |
Divestitures (Details)
Divestitures (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 28, 2022 USD ($) restaurant | Mar. 27, 2022 USD ($) | Dec. 25, 2022 USD ($) restaurant | |
Assets Held for Sale | |||
Goodwill allocated to the disposal group | $ 9,900 | $ 9,908 | |
Impairment of franchise rights | $ 2,800 | ||
Disposal group, disposed of by sale, not discontinued operations | |||
Assets Held for Sale | |||
Net sale proceeds | 14,000 | ||
Non-cash charge | $ 8,400 | ||
Noncontrolling interest | 4,200 | ||
Unearned royalty stream | $ 12,200 | ||
unearned royalty stream recognition period | 10 years | ||
Disposal group, disposed of by sale, not discontinued operations | Corporate joint venture | |||
Assets Held for Sale | |||
Ownership percentage in divested joint venture | 51% | ||
Number of restaurants divested | restaurant | 90 | 90 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 25, 2022 segment entity | |
Revenue, Major Customer [Line Items] | |
Number of reportable segments | segment | 4 |
Sales | |
Revenue, Major Customer [Line Items] | |
Concentration risk, number | entity | 0 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) $ in Thousands | 12 Months Ended | |||
Mar. 28, 2022 restaurant | Dec. 25, 2022 USD ($) restaurant | Dec. 26, 2021 USD ($) | Dec. 27, 2020 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 2,102,103 | $ 2,068,421 | $ 1,813,234 | |
Depreciation and amortization | 52,032 | 48,816 | 49,705 | |
Operating income | 109,030 | 168,241 | 90,253 | |
Property and equipment, gross | 790,293 | 750,094 | ||
Accumulated depreciation and amortization | (540,500) | (526,238) | (491,620) | |
Property and equipment, net | 249,793 | 223,856 | 200,895 | |
Expenditures for property and equipment | 78,391 | 68,559 | 35,652 | |
Refranchising loss | 8,400 | |||
Expense for non-cash reserves and impairments of reacquired franchise rights | 12,065 | 0 | 0 | |
Increase in expenditures for property and equipment primarily driven by investment in growth, including technology and development initiatives | $ 9,800 | 32,900 | ||
Disposal group, disposed of by sale, not discontinued operations | Corporate joint venture | ||||
Segment Reporting Information [Line Items] | ||||
Number of restaurants divested | restaurant | 90 | 90 | ||
Domestic Company-owned restaurants | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 708,389 | 778,323 | 700,757 | |
North America franchising | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 137,399 | 129,310 | 96,732 | |
North America commissaries | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 869,634 | 761,305 | 680,793 | |
International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 129,903 | 150,771 | 123,963 | |
All others | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 256,778 | 248,712 | 210,989 | |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 2,102,103 | 2,068,421 | 1,813,234 | |
Operating segments | Domestic Company-owned restaurants | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 708,389 | 778,323 | 700,757 | |
Depreciation and amortization | 11,495 | 11,728 | 11,905 | |
Operating income | 15,966 | 49,628 | 37,049 | |
Property and equipment, gross | 238,658 | 241,050 | 228,077 | |
Expenditures for property and equipment | 23,057 | 16,108 | 12,848 | |
Operating segments | North America franchising | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 137,399 | 129,310 | 96,732 | |
Operating income | 127,882 | 120,949 | 89,801 | |
Operating segments | North America commissaries | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 869,634 | 761,305 | 680,793 | |
Depreciation and amortization | 13,299 | 11,974 | 9,660 | |
Operating income | 42,531 | 39,873 | 33,185 | |
Property and equipment, gross | 149,920 | 149,218 | 145,282 | |
Expenditures for property and equipment | 5,729 | 4,007 | 4,447 | |
Operating segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 158,682 | 184,099 | 150,939 | |
Depreciation and amortization | 1,774 | 2,326 | 1,975 | |
Operating income | 17,891 | 34,896 | 24,034 | |
Property and equipment, gross | 16,080 | 14,642 | 13,604 | |
Expenditures for property and equipment | 5,175 | 1,979 | 1,065 | |
Expense for non-cash reserves and impairments of reacquired franchise rights | 3,500 | |||
Charge related to the reserve of certain accounts and notes receivable and operating lease right-of-use assets impairment | 6,100 | |||
Operating segments | All others | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 227,999 | 215,384 | 184,013 | |
Depreciation and amortization | 12,681 | 9,928 | 10,254 | |
Operating income | 10,084 | 17,704 | 7,043 | |
Property and equipment, gross | 131,210 | 109,052 | 91,724 | |
Expenditures for property and equipment | 18,296 | 18,645 | 11,700 | |
Intersegment eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | (291,975) | (294,938) | (279,196) | |
Operating income | (905) | (695) | (790) | |
Intersegment eliminations | North America franchising | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | (4,122) | (4,179) | (3,229) | |
Intersegment eliminations | North America commissaries | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | (217,570) | (215,393) | (192,332) | |
Intersegment eliminations | All others | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | (70,283) | (75,366) | (83,635) | |
Unallocated corporate expenses | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 12,783 | 12,860 | 15,911 | |
Operating income | (104,419) | (94,114) | (100,069) | |
Property and equipment, gross | 254,425 | 236,132 | 213,828 | |
Expenditures for property and equipment | 26,134 | 27,820 | $ 5,592 | |
Legal settlement expense | 15,000 | |||
Advisory fees and severance costs | 1,500 | |||
Reorganization costs | $ 13,100 | |||
Unallocated corporate expenses | Notes Receivable | ||||
Segment Reporting Information [Line Items] | ||||
Expense for non-cash reserves and impairments of reacquired franchise rights | $ 13,900 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2022 | Dec. 26, 2021 | Dec. 27, 2020 | |
Revenue, Major Customer [Line Items] | |||
Total revenues | $ 2,102,103 | $ 2,068,421 | $ 1,813,234 |
Domestic Company-owned restaurants | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 708,389 | 778,323 | 700,757 |
North America franchising | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 137,399 | 129,310 | 96,732 |
North America commissaries | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 869,634 | 761,305 | 680,793 |
International | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 129,903 | 150,771 | 123,963 |
International | International other revenue | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | (28,779) | (33,328) | (26,976) |
All others | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 256,778 | 248,712 | 210,989 |
All others | International other revenue | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 28,779 | 33,328 | 26,976 |
Operating segments | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 2,102,103 | 2,068,421 | 1,813,234 |
Operating segments | Company-owned Restaurants | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 708,389 | 778,323 | 700,757 |
Operating segments | Franchise fees | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 190,943 | 186,637 | 139,881 |
Operating segments | Commissary Sales | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 1,167,685 | 1,074,321 | 957,168 |
Operating segments | Other Sales | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 327,061 | 324,078 | 294,624 |
Operating segments | Domestic Company-owned restaurants | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 708,389 | 778,323 | 700,757 |
Operating segments | Domestic Company-owned restaurants | Company-owned Restaurants | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 708,389 | 778,323 | 700,757 |
Operating segments | North America franchising | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 137,399 | 129,310 | 96,732 |
Operating segments | North America franchising | Franchise fees | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 141,521 | 133,489 | 99,961 |
Operating segments | North America commissaries | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 869,634 | 761,305 | 680,793 |
Operating segments | North America commissaries | Commissary Sales | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 1,087,204 | 976,698 | 873,125 |
Operating segments | International | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 158,682 | 184,099 | 150,939 |
Operating segments | International | Franchise fees | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 49,422 | 53,148 | 39,920 |
Operating segments | International | Commissary Sales | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 80,481 | 97,623 | 84,043 |
Operating segments | International | Other Sales | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 28,779 | 33,328 | 26,976 |
Operating segments | All others | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 227,999 | 215,384 | 184,013 |
Operating segments | All others | Other Sales | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 298,282 | 290,750 | 267,648 |
Intersegment eliminations | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | (291,975) | (294,938) | (279,196) |
Intersegment eliminations | North America franchising | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | (4,122) | (4,179) | (3,229) |
Intersegment eliminations | North America commissaries | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | (217,570) | (215,393) | (192,332) |
Intersegment eliminations | All others | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | $ (70,283) | $ (75,366) | $ (83,635) |
Uncategorized Items - pzza-2022
Label | Element | Value | |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] | [1] |
[1] (2) As of December 30, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .” See “Note 10. Allowance for Credit Losses” of “Notes to Consolidated Financial Statements” for additional information. |