v3.24.3
Leases
 9 Months Ended
Sep. 29, 2024
Leases [Abstract]  
Leases
3. Leases
Lessor Operating Leases
The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At September 29, 2024, we leased and subleased approximately 350 Papa Johns restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five to ten years. Rental income, primarily derived from properties leased and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. The Company recognized total sublease income of $2.7 million and $7.1 million for the three and nine months ended September 29, 2024, respectively,
and $2.3 million and $8.0 million for the three and nine months ended September 24, 2023, respectively, within Other revenues in the Condensed Consolidated Statements of Operations.
Lease Guarantees
As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of 75 Domestic leases. These leases have varying terms, the latest of which expires in 2029. As of September 29, 2024, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $6.9 million. This contingent liability is not included in the Condensed Consolidated Balance Sheets as it is not probable to occur. The fair value of the guarantee is not material.
Supplemental Cash Flow & Other Information
Supplemental cash flow information related to leases for the periods reported is as follows:
Nine Months Ended
(In thousands)September 29, 2024September 24, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$1,096 $1,128 
Financing cash flows from finance leases6,778 5,975 
Operating cash flows from operating leases (a)
30,045 28,394 
Right-of-use assets obtained in exchange for new finance lease liabilities3,809 16,518 
Right-of-use assets obtained in exchange for new operating lease liabilities60,120 17,652 
Cash received from sublease income5,287 7,160 
___________________________________
(a)    Included within the change in Other assets and liabilities within the Condensed Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion.
Leases
3. Leases
Lessor Operating Leases
The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At September 29, 2024, we leased and subleased approximately 350 Papa Johns restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five to ten years. Rental income, primarily derived from properties leased and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. The Company recognized total sublease income of $2.7 million and $7.1 million for the three and nine months ended September 29, 2024, respectively,
and $2.3 million and $8.0 million for the three and nine months ended September 24, 2023, respectively, within Other revenues in the Condensed Consolidated Statements of Operations.
Lease Guarantees
As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of 75 Domestic leases. These leases have varying terms, the latest of which expires in 2029. As of September 29, 2024, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $6.9 million. This contingent liability is not included in the Condensed Consolidated Balance Sheets as it is not probable to occur. The fair value of the guarantee is not material.
Supplemental Cash Flow & Other Information
Supplemental cash flow information related to leases for the periods reported is as follows:
Nine Months Ended
(In thousands)September 29, 2024September 24, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$1,096 $1,128 
Financing cash flows from finance leases6,778 5,975 
Operating cash flows from operating leases (a)
30,045 28,394 
Right-of-use assets obtained in exchange for new finance lease liabilities3,809 16,518 
Right-of-use assets obtained in exchange for new operating lease liabilities60,120 17,652 
Cash received from sublease income5,287 7,160 
___________________________________
(a)    Included within the change in Other assets and liabilities within the Condensed Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion.
Leases
3. Leases
Lessor Operating Leases
The Company subleases certain retail space to our franchisees in the UK, which are primarily operating leases. At September 29, 2024, we leased and subleased approximately 350 Papa Johns restaurants to franchisees in the UK. The initial lease terms on the franchised sites in the UK are generally 15 years. The Company has the option to negotiate an extension toward the end of the lease term at the landlord’s discretion. The initial lease terms of the franchisee subleases are generally five to ten years. Rental income, primarily derived from properties leased and subleased to franchisees in the UK, is recognized on a straight-line basis over the respective operating lease terms. The Company recognized total sublease income of $2.7 million and $7.1 million for the three and nine months ended September 29, 2024, respectively,
and $2.3 million and $8.0 million for the three and nine months ended September 24, 2023, respectively, within Other revenues in the Condensed Consolidated Statements of Operations.
Lease Guarantees
As a result of assigning our interest in obligations under property leases as a condition of the refranchising of certain restaurants, we are contingently liable for payment of 75 Domestic leases. These leases have varying terms, the latest of which expires in 2029. As of September 29, 2024, the estimated maximum amount of undiscounted payments the Company could be required to make in the event of nonpayment by the primary lessees was $6.9 million. This contingent liability is not included in the Condensed Consolidated Balance Sheets as it is not probable to occur. The fair value of the guarantee is not material.
Supplemental Cash Flow & Other Information
Supplemental cash flow information related to leases for the periods reported is as follows:
Nine Months Ended
(In thousands)September 29, 2024September 24, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$1,096 $1,128 
Financing cash flows from finance leases6,778 5,975 
Operating cash flows from operating leases (a)
30,045 28,394 
Right-of-use assets obtained in exchange for new finance lease liabilities3,809 16,518 
Right-of-use assets obtained in exchange for new operating lease liabilities60,120 17,652 
Cash received from sublease income5,287 7,160 
___________________________________
(a)    Included within the change in Other assets and liabilities within the Condensed Consolidated Statements of Cash Flows offset by non-cash operating lease right-of-use asset amortization and lease liability accretion.