0001606366-23-000007 | 10-K | XBRL Viewer | EL Pollo Loco Holdings INC

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 28, 2022	Mar. 03, 2023	Jun. 29, 2022
Document And Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 28, 2022
Document Transition Report	false
Entity File Number	001-36556
Entity Registrant Name	EL POLLO LOCO HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-3563182
Entity Address, Address Line One	3535 Harbor Blvd.
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Costa Mesa
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92626
City Area Code	714
Local Phone Number	599-5000
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	LOCO
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Smaller reporting company	false
Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Shell Company	false
Entity Public Float			$ 193
Entity Common Stock, Shares Outstanding		36,705,173
Auditor Name	BDO USA, LLP
Auditor Firm ID	243
Auditor Location	Costa Mesa, California
Entity Central Index Key	0001606366
Current Fiscal Year End Date	--12-28
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Current assets:
Cash and cash equivalents	$ 20,493	$ 30,046
Accounts and other receivables, net	10,084	13,407
Inventories	2,442	2,318
Prepaid expenses and other current assets	3,662	3,732
Income tax receivable	768	0
Total current assets	37,449	49,503
Property and equipment, net	78,644	75,668
Property and equipment held under finance lease, net	1,532	1,635
Property and equipment held under operating leases, net ("ROU asset")	165,584	171,981
Goodwill	248,674	248,674
Trademarks	61,888	61,888
Deferred tax assets	512	2,245
Other assets	2,935	2,192
Total assets	597,218	613,786
Current liabilities:
Current portion of obligations under finance leases	110	143
Current portion of obligations under operating leases	19,995	19,959
Accounts payable	12,741	10,626
Accrued salaries and vacation	8,873	11,539
Accrued insurance	11,120	11,193
Accrued income taxes payable	0	889
Accrued interest	291	86
Current portion of income tax receivable agreement payable	263	437
Other accrued expenses and current liabilities	15,120	19,710
Total current liabilities	68,513	74,582
Revolver loan	66,000	40,000
Obligations under finance leases, net of current portion	1,626	1,712
Obligations under operating leases, net of current portion	165,149	171,651
Deferred taxes	8,517	5,464
Income tax receivable agreement payable, net of current portion	409	1,101
Other noncurrent liabilities	5,856	8,653
Total liabilities	316,070	303,163
Commitments and contingencies (Note 13)
Stockholders' equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.01 par value, 200,000,000 shares authorized; 37,008,061 and 36,601,648 shares issued and outstanding as December 28, 2022 and December 29, 2021, respectively	370	365
Additional paid-in-capital	292,244	342,941
Accumulated deficit	(11,592)	(32,393)
Accumulated other comprehensive income (loss)	126	(290)
Total stockholders' equity	281,148	310,623
Total liabilities and stockholders' equity	$ 597,218	$ 613,786

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 28, 2022	Dec. 29, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	100,000,000	100,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	200,000,000	200,000,000
Common stock, shares issued (shares)	37,008,061	36,601,648
Common stock, shares outstanding (shares)	37,008,061	36,601,648

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Revenue
Total revenue	$ 469,959	$ 454,363	$ 426,087
Cost of operations
Food and paper cost	117,774	104,394	98,774
Labor and related expenses	130,773	120,308	114,455
Occupancy and other operating expenses	101,543	97,557	92,422
Gain on recovery of insurance proceeds, lost profits			(2,000)
Company restaurant expenses	350,090	322,259	303,651
General and administrative expenses	39,093	39,852	35,918
Legal settlements			2,566
Franchise expenses	36,169	32,831	28,761
Depreciation and amortization	14,418	15,176	16,878
Loss on disposal of assets	165	289	189
Recovery of securities lawsuits related legal expenses and other insurance claims			(123)
(Gain) loss on disposition of restaurants	(848)	1,534
Impairment and closed-store reserves	752	1,087	4,691
Total expenses	439,839	413,028	392,531
Income from operations	30,120	41,335	33,556
Interest expense, net	1,677	1,824	3,292
Income tax receivable agreement (income) expense	(436)	58	139
Income before provision for income taxes	28,879	39,453	30,125
Provision for income taxes	8,078	10,332	5,651
Net income	$ 20,801	$ 29,121	$ 24,474
Net income per share
Basic (usd per share)	$ 0.57	$ 0.81	$ 0.70
Diluted (usd per share)	$ 0.57	$ 0.80	$ 0.68
Weighted-average shares used in computing net income per share
Basic (shares)	36,350,579	35,973,892	35,193,325
Diluted (shares)	36,575,904	36,446,756	35,796,406
Company-operated restaurant revenue
Revenue
Total revenue	$ 403,218	$ 394,733	$ 374,064
Franchise revenue
Revenue
Total revenue	38,225	33,729	29,418
Franchise advertising fee revenue
Revenue
Total revenue	$ 28,516	$ 25,901	$ 22,605

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Statements of Other Comprehensive Income [Abstract]
Net income	$ 20,801	$ 29,121	$ 24,474
Unrealized net gains (losses) arising during the period from interest rate swap	862	257	(1,762)
Reclassifications of (gains) losses into net income	(296)	486	278
Income tax (expense) benefit	(150)	(200)	398
Other comprehensive income (loss), net of taxes	416	543	(1,086)
Comprehensive income	$ 21,217	$ 29,664	$ 23,388

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Beginning balance (shares) at Dec. 25, 2019	35,126,582
Beginning balance at Dec. 25, 2019	$ 351	$ 330,950	$ (85,988)	$ 253	$ 245,566
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		3,093			3,093
Issuance of common stock related to restricted shares, net	$ 4	(4)			0
Issuance of common stock related to restricted shares, net (shares)	439,061
Issuance of common stock upon exercise of stock options	$ 10	5,856			5,866
Issuance of common stock upon exercise of stock options (shares)	970,736
Shares repurchased for employee tax withholdings		(335)			(335)
Shares repurchased for employee tax withholdings (shares)	(23,407)
Forfeiture of common stock related to restricted shares	$ (1)	1			0
Forfeiture of common stock related to restricted shares (shares)	(89,467)
Other comprehensive income (loss), net of income tax				(1,086)	(1,086)
Net income			24,474		24,474
Ending balance (shares) at Dec. 30, 2020	36,423,505
Ending balance at Dec. 30, 2020	$ 364	339,561	(61,514)	(833)	277,578
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		3,220			3,220
Issuance of common stock related to restricted shares, net	$ 2	(2)			0
Issuance of common stock related to restricted shares, net (shares)	246,780
Issuance of common stock upon exercise of stock options	$ 1	865			$ 866
Issuance of common stock upon exercise of stock options (shares)	132,760				132,760
Shares repurchased for employee tax withholdings		(705)			$ (705)
Shares repurchased for employee tax withholdings (shares)	(40,384)
Forfeiture of common stock related to restricted shares	$ (2)	2			$ 0
Forfeiture of common stock related to restricted shares (shares)	(161,013)				(221,110)
Other comprehensive income (loss), net of income tax				543	$ 543
Net income			29,121		29,121
Ending balance (shares) at Dec. 29, 2021	36,601,648
Ending balance at Dec. 29, 2021	$ 365	342,941	(32,393)	(290)	310,623
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		3,491			3,491
Issuance of common stock related to restricted shares, net	$ 4	(4)			0
Issuance of common stock related to restricted shares, net (shares)	356,610
Issuance of common stock upon exercise of stock options	$ 2	1,711			$ 1,713
Issuance of common stock upon exercise of stock options (shares)	185,798				185,798
Shares repurchased for employee tax withholdings		(322)			$ (322)
Shares repurchased for employee tax withholdings (shares)	(30,128)
Forfeiture of common stock related to restricted shares	$ (1)	1			$ 0
Forfeiture of common stock related to restricted shares (shares)	(105,867)				(105,867)
Other comprehensive income (loss), net of income tax				416	$ 416
Common stock cash dividends ($1.50 per share)		(55,574)			(55,574)
Net income			20,801		20,801
Ending balance (shares) at Dec. 28, 2022	37,008,061
Ending balance at Dec. 28, 2022	$ 370	$ 292,244	$ (11,592)	$ 126	$ 281,148

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical)	12 Months Ended
	Dec. 28, 2022 $ / shares
Statement of Stockholders' Equity [Abstract]
Dividends per share	$ 1.50

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Cash flows from operating activities:
Net income	$ 20,801	$ 29,121	$ 24,474
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	14,418	15,176	16,878
Bad debt expense			190
Stock-based compensation expense	3,491	3,220	3,093
Income tax receivable agreement (income) expense	(436)	58	139
(Gain) loss on disposition of restaurants	(848)	1,534
Loss on disposal of assets	165	289	189
Impairment of property and equipment	481	711	3,498
Amortization of deferred financing costs	340	251	252
Deferred income taxes, net	4,600	957	4,008
Changes in operating assets and liabilities:
Accounts and other receivables	3,323	(3,444)	(1,155)
Inventories	(125)	(218)	(92)
Prepaid expenses and other current assets	71	133	1,853
Income taxes (receivable) payable	(1,657)	3,410	(2,145)
Other assets	(240)	(1,052)	(13)
Accounts payable	3,977	2,533	666
Accrued salaries and vacation	(2,667)	1,373	1,548
Accrued insurance	(73)	777	976
Payment related to tax receivable agreement	(430)	(1,658)	(5,237)
Other accrued expenses and liabilities	(6,642)	(1,072)	(8,575)
Net cash flows provided by operating activities	38,549	52,099	40,547
Cash flows from investing activities:
Proceeds from disposition of restaurants	1,002	4,556
Purchase of property and equipment	(19,917)	(17,041)	(6,690)
Net cash flows used in investing activities	(18,915)	(12,485)	(6,690)
Cash flows from financing activities:
Proceeds from borrowings on revolver and swingline loans	46,000		59,500
Payments on revolver and swingline loan	(20,000)	(22,800)	(93,700)
Minimum tax withholdings related to net share settlements	(322)	(705)	(335)
Proceeds from issuance of common stock upon exercise of stock options, net of expenses	1,713	866	5,866
Common stock dividends paid	(55,574)
Payment of obligations under finance leases	(162)	(148)	(39)
Deferred financing costs for revolver loan	(842)
Net cash flows used in financing activities	(29,187)	(22,787)	(28,708)
(Decrease) increase in cash and cash equivalents	(9,553)	16,827	5,149
Cash and cash equivalents, beginning of period	30,046	13,219	8,070
Cash and cash equivalents, end of period	20,493	30,046	13,219
Supplemental cash flow information
Cash paid during the period for interest	1,450	1,066	2,956
Cash paid during the period for income taxes	5,100	5,968	4,225
Unpaid purchases of property and equipment	$ 1,333	$ 2,454	$ 1,925

DESCRIPTION OF BUSINESS

12 Months Ended

Dec. 28, 2022

Accounting Policies [Abstract]

Description of Business

1. DESCRIPTION OF BUSINESS

El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware corporation headquartered in Costa Mesa, California. Holdings and its direct and indirect subsidiaries are collectively known as “we,” “us” or the “Company.” The Company’s activities are conducted principally through its indirect wholly-owned subsidiary, El Pollo Loco, Inc. (“EPL”), which develops, franchises, licenses and operates quick-service restaurants under the name El Pollo Loco ®. The restaurants, which are located principally in California but also in Arizona, Nevada, Texas, Colorado, Utah and Louisiana, specialize in fire-grilling citrus-marinated chicken in a wide variety of contemporary Mexican and LA-inspired entrees, including specialty chicken burritos, chicken quesadillas, chicken tostada salads, chicken tortilla soup, variations on our Pollo Bowl®, Pollo Salads and our Pollo Fit entrees. At December 28, 2022, the Company operated 188 (138 in the greater Los Angeles area) and franchised 302 (141 in the greater Los Angeles area) El Pollo Loco restaurants. In addition, the Company currently licenses five restaurants in the Philippines. The Company’s largest stockholder is Trimaran Pollo Partners, L.L.C. (“LLC”), which is controlled by affiliates of Trimaran Capital, L.L.C. LLC acquired Chicken Acquisition Corp. (“CAC”), a predecessor of Holdings, on November 17, 2005 (the “Acquisition”). As of December 28, 2022, LLC, FS Equity Partners V, L.P. and FS Affiliates V, L.P. own approximately 30.3%, 14.8% and 0.2%, respectively, of the Company’s outstanding common stock. FS Equity V and FS Affiliates V, which previously indirectly held shares of the Company’s common stock through LLC, received shares directly on August 31, 2022, upon LLC’s pro rata distribution in kind of shares of the Company’s common stock to FS Equity V and FS Affiliates V. LLC’s only material asset is its investment in Holdings.

On April 22, 2014, CAC, the LLC’s wholly owned subsidiary, Chicken Subsidiary Corp (“CSC”) and CSC’s wholly owned subsidiary, the former El Pollo Loco Holdings, Inc. (“Old Holdings”) entered into the following reorganization transactions: (i) Old Holdings merged with and into CSC with CSC continuing as the surviving corporation; (ii) CSC merged with and into CAC with CAC continuing as the surviving corporation and (iii) CAC renamed itself El Pollo Loco Holdings, Inc.

Holdings has no material assets or operations. Holdings and Holdings’ direct subsidiary, EPL Intermediate, Inc. (“Intermediate”), guarantee EPL’s 2022 Revolver (see Note 6 “Long-Term Debt”) on a full and unconditional basis and Intermediate has no subsidiaries other than EPL. EPL is a separate and distinct legal entity, and has no obligation to make funds available to Intermediate. EPL and Intermediate may pay dividends to Intermediate and to Holdings, respectively.

The Company operates in one operating segment. All significant revenues relate to retail sales of food and beverages through either company or franchised restaurants.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 28, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Liquidity

The Company’s principal liquidity and capital requirements are new restaurants, existing restaurant capital investments (remodel and maintenance), interest payments on its debt, lease obligations and working capital and general corporate needs. At December 28, 2022, the Company’s total debt was $66.0 million. The Company’s ability to make payments on its indebtedness and to fund planned capital expenditures depends on available cash and its ability to generate adequate cash flows in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. Based on current operations, the Company believes that its cash flows from operations, available cash of $20.5 million at December 28, 2022, and available borrowings under the 2022 Revolver (as defined in Note 6 “Long-Term Debt”) will be adequate to meet the Company’s liquidity needs for the next twelve months from the issuance of the consolidated financial statements.

Basis of Presentation

The Company uses a 52- or 53-week fiscal year ending on the last Wednesday of each calendar year. Fiscal 2022, 2021, and 2020 ended on December 28, 2022, December 29, 2021 and December 30, 2020, respectively. In a 52-week fiscal year, each quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second and third quarters

each include 13 weeks of operations and the fourth quarter includes 14 weeks of operations. Approximately every six or seven years a 53-week fiscal year occurs. Fiscal 2022 and 2021 were 52-week fiscal years. Fiscal 2020 was a 53-week fiscal year. 53-week years may cause revenues, expenses, and other results of operations to be higher due to the additional week of operations. Certain amounts in prior years have been reclassified to conform with the fiscal 2022 presentation.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and revenue and expenses during the period reported. Actual results could materially differ from those estimates. The Company’s significant estimates include estimates for impairment of goodwill, intangible assets and property and equipment, insurance reserves, lease accounting matters, stock-based compensation, tax receivable agreement (the “TRA”) liability, contingent liabilities and income tax valuation allowances.

COVID-19 and Macroeconomic Conditions

The Company may face future business disruption and related risks resulting from the ongoing COVID-19 pandemic or from another pandemic, epidemic or infectious disease outbreak, or from broader macroeconomic trends, any of which could have a significant impact on our business. During fiscal 2022, the Company incurred $3.3 million in COVID-19 related expenses, comprised of $2.3 million due to overtime primarily related to the first quarter and $1.0 million due to leaves of absence related to the remaining three quarters. During fiscal 2021, the Company incurred $3.9 million in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. During fiscal 2020, the Company incurred $4.9 million in COVID-19 related expenses, primarily due to leaves of absence and overtime pay. While all of the Company’s restaurants had dining rooms open as of December 28, 2022, the Company continues to experience staffing challenges, including higher wage inflation, overtime costs and other labor related costs. Further, the Company continues to experience inflationary pressures, which resulted in increased commodity prices and impacted the Company’s business and results of operations during the year ended December 28, 2022. The Company expects these pressures to continue during fiscal 2023.

Due to the fluidity of the COVID-19 pandemic and the current macroeconomic environment, the Company cannot determine the ultimate impact that the COVID-19 pandemic (and related economic effects) and the current macroeconomic environment will have on the Company’s consolidated financial condition, liquidity, and future results of operations, and therefore any prediction as to the ultimate materiality of the adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain.

Cash and Cash Equivalents

The Company considers all liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents.

Subsequent Events

Subsequent to year-end, the Company paid down $8.0 million on its 2022 Revolver and outstanding borrowings as of March 9, 2023 were $58.0 million.

Concentration of Risk

Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances.

The Company had one supplier for which amounts due at December 28, 2022 totaled 41.7% of the Company’s accounts payable. As of December 29, 2021, the Company had one supplier for which the amount due totaled 26.1% of the Company’s accounts payable. Purchases from the Company’s largest supplier totaled 28.5% of the Company’s purchases for fiscal 2022, 27.1% for fiscal 2021 and 26.9% for fiscal 2020 with no amounts payable at December 28, 2022 or December 29, 2021.

In fiscal 2022, 2021 and 2020, Company-operated and franchised restaurants in the greater Los Angeles area generated, in the aggregate, approximately 71.2%, 70.9%, and 71.3%, respectively, of total revenue. One franchisee accounted for 12.9% of total accounts receivable as of December 28, 2022, and one franchisee accounted for 10.6% of total accounts receivable as of December 29, 2021.

Management believes the loss of the significant supplier or franchisee could have a material adverse effect on the Company’s consolidated results of operations and financial condition.

Accounts and Other Receivables, Net

Accounts and other receivables consist primarily of royalties, advertising and sublease rent and related amounts receivable from franchisees. Such receivables are due on a monthly basis, which may differ from the Company’s fiscal month-end dates. Accounts and other receivables also include credit/debit card receivables. The need for an allowance for doubtful accounts is reviewed on a specific identification basis and takes into consideration past due balances and the financial strength of the obligor.

Inventories

Inventories consist principally of food, beverages and supplies and are valued at the lower of average cost or net realizable value.

Property and Equipment, Net

Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures for reimbursements and improvements that significantly add to the productivity capacity or extend the useful life are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements and property held under finance leases are amortized over the shorter of their estimated useful lives or the remaining lease terms. For leases with renewal periods at the Company’s option, the Company generally uses the original lease term, excluding the option periods, to determine estimated useful lives; if failure to exercise a renewal option imposes an economic penalty on the Company, such that management determines at the inception of the lease that renewal is reasonably assured, the Company may include the renewal option period in the determination of appropriate estimated useful lives.

The estimated useful service lives are as follows:


Buildings		20 years
Land improvements		3—30 years
Building improvements		3—10 years
Restaurant equipment		3—10 years
Other equipment		2—10 years
Property/equipment held under finance leases		Shorter of useful life or lease term
Leasehold improvements		Shorter of useful life or lease term

The Company capitalizes certain directly attributable internal costs in conjunction with the acquisition, development and construction of future restaurants. The Company also capitalizes certain directly attributable costs, including interest, in conjunction with constructing new restaurants. These costs are included in property and amortized over the shorter of the life of the related buildings and leasehold improvements or the lease term. Costs related to abandoned sites and other site selection costs that cannot be identified with specific restaurants are charged to general and administrative expenses in the accompanying consolidated statements of income, and were less than $0.1 million for each of the years ended December 28, 2022, December 29, 2021 and December 30, 2020. The Company capitalized internal costs related to site selection and construction activities of $1.5 million, $1.4 million and $1.0 million for the years ended December 28, 2022, December 29, 2021 and December 30, 2020, respectively.

Impairment of Long-Lived and ROU Assets

The Company reviews its long-lived and right-of-use assets (“ROU assets”) for impairment on a restaurant-by-restaurant basis whenever events or changes in circumstances indicate that the carrying value of certain long-lived and ROU assets may not be recoverable. The Company considers a triggering event, related to long-lived assets or ROU assets in a net asset position, to have occurred related to a specific restaurant if the restaurant’s Average Unit Volume (“AUV”) for the last twelve months are less than a minimum threshold or if consistent levels of undiscounted cash flows for the remaining lease period are less than the carrying value of the restaurant’s assets. Additionally, the Company considers a triggering event, related to ROU assets, to have occurred related to a specific lease if the location has been closed or subleased and future estimated sublease income is less than current lease payments. As of December 28, 2022 and December 29, 2021, ROU assets related to closed or subleased restaurant locations totaled $30.7 million and $21.9 million, respectively. If the Company concludes that the carrying value of certain long-lived and ROU assets will not be recovered based on expected undiscounted future cash flows, an impairment loss is recorded to reduce the long-lived or ROU assets to their estimated fair value. The fair value is measured on a nonrecurring basis using unobservable (Level 3) inputs. There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review analysis, which requires the use of estimates and assumptions. If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material. The Company determined that triggering events occurred for certain stores during the year ended December 28, 2022 that required an impairment review of the Company’s long-lived and ROU assets. Based on the results of this analysis, the Company recorded non-cash impairment charges of $0.5 million for the year ended December 28, 2022, primarily related to the carrying value of the ROU assets of one restaurant in California that closed in 2021 and the long-lived assets of two restaurants in California.

In fiscal 2021, the Company recorded non-cash impairment charges of $0.7 million primarily related to the carrying value of the ROU assets of one restaurant in Texas that closed in 2019, the carrying value of one restaurant in California that closed in 2021 and the long-lived assets of three restaurants in California. In fiscal 2020, the Company recorded a non-cash impairment charge of $3.5 million primarily related to the carrying value of the ROU assets of one restaurant in Texas and the long-lived assets of four restaurants in California. Given the inherent uncertainty in projecting results for newer restaurants in newer markets, as well as the impact of the COVID-19 pandemic (and related economic effects), the Company is monitoring the recoverability of the carrying value of the assets of several restaurants on an ongoing basis. For these restaurants, if expected performance is not realized, an impairment charge may be recognized in future periods, and such charge could be material.

Closed-Store Reserves

When a restaurant is closed, the Company will evaluate the ROU asset for impairment, based on anticipated sublease recoveries. The remaining value of the ROU asset is amortized on a straight-line basis, with the expense recognized in closed-store reserve expense. Additionally, any property tax and common area maintenance (“CAM”) payments relating to closed restaurants are included within closed-store expense.

During fiscal 2022, the Company recognized $0.3 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations.

During fiscal 2021, the Company recognized $0.4 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations. During fiscal 2020, the Company recognized

$1.2 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations.

Goodwill and Indefinite-Lived Intangible Assets

The Company’s indefinite-lived intangible assets consist of trademarks. Goodwill represents the excess of cost over fair value of net identified assets acquired in business combinations accounted for under the purchase method. The Company does not amortize its goodwill and indefinite-lived intangible assets. Goodwill resulted from the Acquisition and from the acquisition of certain franchise locations.

Upon the sale or refranchising of a restaurant, the Company evaluates whether there is a decrement of goodwill. The amount of goodwill included in the cost basis of the asset sold is determined based on the relative fair value of the portion of the reporting unit disposed of compared to the fair value of the reporting unit retained. The fair value of the portion of the reporting unit disposed of in a refranchising is determined by reference to the discounted value of the future cash flows expected to be generated by the restaurant and retained by the franchisee, which includes a deduction for the anticipated, future royalties the franchisee will pay the Company associated with the franchise agreement entered into simultaneously with the refranchising transition. The fair value of the reporting unit retained is based on the price a willing buyer would pay for the reporting unit and includes the value of franchise agreements. As such, the fair value of the reporting unit retained can include expected cash flows from future royalties from those restaurants currently being refranchised, future royalties from existing franchise businesses and company restaurant operations. The Company did not record any decrement to goodwill related to the disposition of restaurants in fiscal 2022, 2021 and 2020.

The Company performs annual impairment tests for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise.

The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of a reporting unit with its carrying amount. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the Company performs the fair value test, the Company will compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.

The Company performs annual impairment tests for indefinite-lived intangible assets during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise. An impairment test consists of either a qualitative assessment or a comparison of the fair value of an intangible asset with its carrying amount. The excess of the carrying amount of an intangible asset over its fair value is its impairment loss.

The assumptions used in the estimate of fair value are generally consistent with the past performance of the Company’s reporting segment and are also consistent with the projections and assumptions that are used in current operating plans. These assumptions are subject to change as a result of changing economic and competitive conditions.

The Company determined that there were no indicators of potential impairment of its goodwill and indefinite-lived intangible assets during fiscal 2022. Accordingly, the Company did not record any impairment to its goodwill or indefinite-lived intangible assets during the year ended December 28, 2022.

Deferred Financing Costs

Deferred financing costs are capitalized and amortized over the period of the loan on a straight-line basis, which approximates the effective interest method. Included in other assets are deferred financing costs (net of accumulated amortization), related to the revolver, of $0.9 million and $0.4 million as of December 28, 2022 and December 29, 2021, respectively. Amortization expense for deferred financing costs was approximately $0.3 million for each of the

three years ended December 28, 2022, December 29, 2021, and December 30, 2020, and is reflected as a component of interest expense in the accompanying consolidated statements of income.

Insurance Reserves

The Company is responsible for workers’ compensation, general and health insurance claims up to a specified aggregate stop loss amount. The Company maintains a reserve for estimated claims both reported and incurred but not reported, based on historical claims experience and other assumptions. At December 28, 2022 and December 29, 2021, the Company had accrued $11.1 million and $11.2 million, respectively, and such amounts are reflected as accrued insurance in the accompanying consolidated balance sheets. The expense for such reserves for the years ended December 28, 2022, December 29, 2021 and December 30, 2020, totaled $8.7 million, $9.0 million, and $8.4 million, respectively. These amounts are included in labor and related expenses and general and administrative expenses on the accompanying consolidated statements of income.

Restaurant Revenue

Revenues from the operation of company-operated restaurants are recognized as food and beverage products are delivered to customers and payment is tendered at the time of sale. The Company presents sales net of sales-related taxes and promotional allowances. Promotional allowances amounted to approximately $7.5 million, $7.7 million and $7.5 million during the years ended December 28, 2022, December 29, 2021, and December 30, 2020, respectively.

The Company offers a loyalty rewards program, which awards a customer points for dollars spent. Customers earn points for each dollar spent and, as of August 4, 2020, 50 points can be redeemed for a $5 reward to be used for a future purchase. Prior to August 4, 2020, 100 points could be redeemed for a $10 reward. If a customer does not earn or use points within a one-year period, their account is deactivated and all points expire. Additionally, if a reward is not used within six months, it expires. When a customer is part of the rewards program, the obligation to provide future discounts related to points earned is considered a separate performance obligation, to which a portion of the transaction price is allocated. The performance obligation related to loyalty points is deemed to have been satisfied, and the amount deferred in the balance sheet is recognized as revenue, when the points are transferred to a reward and redeemed, the reward or points have expired, or the likelihood of redemption is remote. A portion of the transaction price is allocated to loyalty points, if necessary, on a pro-rata basis, based on stand-alone selling price, as determined by menu pricing and loyalty points terms. As of December 28, 2022 and December 29, 2021, the revenue allocated to loyalty points that have not been redeemed was $0.5 million and $0.7 million, respectively, which is reflected in the Company’s accompanying consolidated balance sheets within other accrued expenses and current liabilities. The Company expects the loyalty points to be redeemed and recognized over a one-year period.

The Company sells gift cards to its customers in the restaurants and through selected third parties. The gift cards sold to customers have no stated expiration dates and are subject to actual and/or potential escheatment rights in several of the jurisdictions in which the Company operates. Furthermore, due to these escheatment rights, the Company does not recognize breakage related to the sale of gift cards due to the immateriality of the amount remaining after escheatment. The Company recognizes income from gift cards when redeemed by the customer. Unredeemed gift card balances are deferred and recorded as other accrued expenses on the accompanying consolidated balance sheets.

Franchise Revenue

Franchise revenue consists of franchise royalties, initial franchise fees, license fees due from franchisees and IT support services. Rental income for subleases to franchisees are outside of the scope of the revenue standard and are within the scope of lease guidance. Under Topic 842, sublease income is recorded on a net basis within the consolidated statements of income. Franchise royalties are based upon a percentage of net sales of the franchisee and are recorded as income as such sales are earned by the franchisees.

For franchise and development agreement fees, the initial franchise services, or exclusivity of the development agreements, are not distinct from the continuing rights or services offered during the term of the franchise agreement and are, therefore, treated as a single performance obligation. As such, initial franchise and development fees received, and

subsequent renewal fees, are recognized over the franchise or renewal term, which is typically twenty years. As of December 28, 2022, the Company had executed development agreements that represent commitments to open 72 franchised restaurants at various dates through 2032.

This revenue stream is made up of the following performance obligations:

●

Franchise License – inclusive of advertising services, development agreements, training, access to plans and help desk services;

●

Discounted renewal option; and

●

Hardware services.

The Company satisfies the performance obligation related to the franchise license over the term of the franchise agreement, which is typically 20 years. Payment for the franchise license consists of three components, a fixed-fee related to the franchise/development agreement, a sales-based royalty fee and a sales-based advertising fee. The fixed fee, as determined by the signed development and/or franchise agreement, is due at the time the development agreement is entered into, and/or when the franchise agreement is signed, and does not include a finance component.

The sales-based royalty fee and sales-based advertising fee are considered variable consideration and are recognized as revenue as such sales are earned by the franchisees. Both sales-based fees qualify under the royalty constraint exception, and do not require an estimate of future transaction price. Additionally, the Company is utilizing the practical expedient available under ASC Topic 606, “Revenue from Contracts with Customers” (“Topic 606”) regarding disclosure of the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied for sales-based royalties.

In certain franchise agreements, the Company offers a discounted renewal to incentivize future renewals after the end of the initial franchise term. As this is considered a separate performance obligation, the Company allocated a portion of the initial franchise fee to this discounted renewal, on a pro-rata basis, assuming a 20 year renewal. This performance obligation is satisfied over the renewal term, which is typically 10 or 20 years, while payment is fixed and due at the time the renewal is signed.

The Company purchases hardware, such as scanners, printers, cash registers and tablets, from third-party vendors, which it then sells to franchisees. As the Company is considered the principal in this relationship, payment received for the hardware is considered revenue, and is received upon transfer of the goods from the Company to the franchisee. As of December 28, 2022, there were no performance obligations, related to hardware services that were unsatisfied or partially satisfied.

Franchise Advertising Fee Revenue

The Company presents advertising contributions received from franchisees as franchise advertising fee revenue and records all expenses of the advertising fund within franchise expenses.

Advertising Costs

Advertising expense is recorded as the obligation to contribute to the advertising fund and is accrued, generally when the associated revenue is recognized. Advertising expense, which is a component of occupancy and other operating expenses, was $16.4 million, $16.1 million and $15.3 million for the years ended December 28, 2022, December 29, 2021 and December 30, 2020, respectively. In addition, there was $28.5 million, $25.9 million and $22.6 million for the years ended December 28, 2022, December 29, 2021 and December 30, 2020, respectively, funded by the franchisees’ advertising fees.

Franchisees pay a monthly fee to the Company that ranges from 4% to 5% of their restaurants’ net sales as reimbursement for advertising, public relations and promotional services the Company provides, which is included

within franchise advertising fee revenue. Fees received in advance of provided services are included in other accrued expenses and current liabilities and were $0.8 million and $3.6 million at December 28, 2022 and December 29, 2021, respectively. Company-operated restaurants contribute to the advertising fund on the same basis as franchised restaurants. At December 28, 2022, the Company was obligated to spend $0.8 million more in future periods to comply with this requirement.

Production costs of commercials, programming and other marketing activities are charged to the advertising funds when the advertising is first used for its intended purpose. Total contributions and other marketing expenses are included in general and administrative expenses in the accompanying consolidated statements of income.

Preopening Costs

Preopening costs incurred in connection with the opening of new restaurants are expensed as incurred. Preopening costs, which are included in general and administrative expenses on the accompanying consolidated statements of income, were $0.3 million, $0.3 million and $0.1 million for the years ended December 28, 2022, December 29, 2021, and December 30, 2020, respectively.

Leases

The Company’s operations utilize property, facilities, equipment and vehicles. Buildings and facilities leased from others are primarily for restaurants and support facilities. Restaurants are operated under lease arrangements that generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues more than a defined amount. Initial terms of land and restaurant building leases generally have terms of 20 years, exclusive of options to renew. ROU assets and operating and finance lease liabilities are recognized at the lease commencement date, which is the date the Company takes possession of the property. Operating and finance lease liabilities represent the present value of lease payments not yet paid. ROU assets represent the Company’s right to use an underlying asset and are based upon the operating and finance lease liabilities adjusted for prepayments or accrued lease payments, lease incentives, and impairment of ROU assets. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates corresponding to the lease term including reasonably certain renewal periods.

The Company’s leases generally have escalating rents over the term of the lease, and are recorded on a straight-line basis over the expected lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the right-of-use asset related to the lease. These are amortized through the operating lease asset as reductions of expense over the lease term.

Operating and finance lease liabilities that are based on an index or rate are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Leases of equipment primarily consist of restaurant equipment, computer systems and vehicles. The Company subleases facilities to certain franchisees and other non-related parties which are recorded on a straight-line basis.

Gain on Recovery of Insurance Proceeds, Lost Profits

During the year ended December 30, 2020, the Company received business interruption insurance proceeds of $2.0 million, primarily related to restaurant sales losses and expenses related to the COVID-19 pandemic and resulting dining room closures.

Recovery of Securities Class Action Legal Expense and Other Insurance Claims

During fiscal 2020 the Company received insurance proceeds of $0.1 million related to a property claim. See Note 13 “Commitments and Contingencies—Legal Matters.”

Gain (Loss) on Disposition of Restaurants

During fiscal 2022, the Company completed the sale of three company-operated restaurants within the Orange County area to an existing franchisee. During fiscal 2021, the Company completed the sale of eight restaurants within the Sacramento area to an existing franchisee. The Company has determined that these restaurant dispositions represent multiple element arrangements, and as a result, the cash consideration received was allocated to the separate elements based on their relative standalone selling price. Cash proceeds included upfront consideration for the sale of the restaurants and franchise fees, as well as future cash consideration for royalties. The cash consideration per restaurant related to franchise fees is consistent with the amounts stated in the related franchise agreements, which are charged for separate standalone arrangements. The Company initially defers and subsequently recognizes the franchise fees over the term of the franchise agreement. Future royalty income is also recognized in revenue as earned. The Orange County sale during 2022 resulted in cash proceeds of $1.0 million and a net gain on sale of restaurants of $0.8 million for the year ended December 28, 2022. The Sacramento sale resulted in cash proceeds of $4.6 million and a net loss on sale of restaurants of $1.5 million for the year ended December 29, 2021. Since the date of their sale, these restaurants are now included in the total number of franchised El Pollo Loco restaurants.

Derivative Financial Instruments

The Company used an interest rate swap, a derivative instrument, to hedge interest rate risk and not for trading purposes. The derivative contract was entered into with a financial institution. In connection with the Company’s entry into the 2022 Credit Agreement (as defined in Note 6 “Long-Term Debt”), it terminated the interest rate swap on July 28, 2022. The Company recorded the derivative instrument on its consolidated balance sheets at fair value. The derivative instrument qualified as a hedging instrument in a qualifying cash flow hedge relationship, and the gain or loss on the derivative instrument was reported as a component of accumulated other comprehensive (loss) income (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For any derivative instruments not designated as hedging instruments, the gain or loss will be recognized in earnings immediately. If a derivative previously designated as a hedge is terminated, or no longer meets the qualifications for hedge accounting, any balances in AOCI will be reclassified to earnings immediately.

Income Taxes

The provision for income taxes, income taxes payable and deferred income taxes is determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If, after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by charging to tax expense a reserve for the portion of deferred tax assets which are not expected to be realized.

The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where it is required to file.

When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position the Company takes has to have at least a “more likely than not” chance of being sustained (based on the position’s technical merits) upon challenge by the respective authorities. The term “more likely than not” means a likelihood of more than 50%. Otherwise, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the “more likely than not” criterion as the largest amount of tax benefit that is greater than 50% likely of being realized upon its effective resolution. Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial position and cash flows.

The Company’s policy is to recognize interest or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at December 28, 2022 or December 29, 2021. During fiscal 2020, the

Company recognized interest of $0.1 million related to the Notice of Proposed Adjustment (“NOPA”), discussed below. During fiscal 2022, fiscal 2021 and fiscal 2020, there were no material unrecognized tax benefits. Management believes no significant change to the amount of unrecognized tax benefits will occur within the next twelve months.

On July 30, 2014, the Company entered into a TRA, which calls for the Company to pay to its pre-IPO stockholders 85% of the savings in cash that the Company realizes in its income taxes as a result of utilizing its net operating losses (“NOLs”) and other tax attributes attributable to preceding periods. As of December 28, 2022 and December 29, 2021, the Company had accrued $0.7 million and $1.5 million, respectively relating to expected TRA payments. In fiscal 2022, 2021 and 2020, the Company paid $0.4 million, $1.7 million and $5.2 million, respectively, to its pre-IPO stockholders under the TRA.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law as a stimulus package, and contained several tax provisions, including a correction of a previous drafting error related to quality improvement property (“QIP”) and immediate refundability of all remaining alternative minimum tax (“AMT”) credits. The new provisions did not have a material impact on the Company’s consolidated financial statements.

During fiscal 2020, the Company received a NOPA for the years ended December 27, 2017 and December 28, 2016, related to the Company’s methodology regarding its ordering of utilization of AMT NOLs. Resolution of this NOPA resulted in a payment of $0.4 million, and the audit is closed. As a result of the CARES Act, this amount was immediately refundable upon filing of a Form 1139. The Company filed the Form 1139 during the year ended December 30, 2020 and received a refund totaling $0.5 million.

The CARES Act also provides for the deferral of employer Social Security taxes that are otherwise owed for wage payment and the creation of refundable employee retention credits. The total amount deferred as of December 30, 2020 was $4.9 million, of which 50% was due by December 31, 2021 and another 50% was due by December 31, 2022. As of December 28, 2022, the Company made all deferred payroll tax payments and did not have any corresponding balances included in other non-current liabilities on the Company’s consolidated balance sheet.

Additionally, the Company assessed its eligibility for the business relief provision under the CARES Act known as the Employee Retention Credit (“ERC”), a refundable payroll tax credit for 50% of qualified wages paid during 2020. The American Rescue Plan passed into law on March 11, 2021 extended the ERC through September 30, 2021, and the credit was increased to 70% of qualified wages paid from January 1, 2021 through September 30, 2021. During fiscal 2021, the Company recognized the ERC credit in the amount of $3.4 million as income as it is probable that it will comply with the ERC eligibility requirements. The Company has elected an accounting policy to present government assistance as a reduction of the related expense. The ERC credit was initially recorded as a receivable as part of the accounts and other receivable on the consolidated balance sheet for the year ended December 29, 2021 and as an offset to the corresponding payroll expense which is classified as part of the labor and other operating expenses on the consolidated statements of income for the year ended December 29, 2021. During fiscal 2022, we received $3.1 million in ERC and the remaining $0.3 million continues to be recorded as a receivable as part of the accounts and other receivable on the consolidated balance sheet for the year ended December 28, 2022.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

●

Level 1: Quoted prices for identical instruments in active markets.

●

Level 2: Observable prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable.

●

Level 3: Unobservable inputs used when little or no market data is available.

During fiscal 2019, the Company entered into an interest rate swap (used to hedge interest rate risk), which is required to be measured at fair value on a recurring basis. The fair value was determined based on Level 2 inputs, which include valuation models, as reported by the Company’s counterparty. These valuation models use a discounted cash flow analysis on the cash flows of the derivative based on the terms of the contract and the forward yield curves adjusted for the Company’s credit risk. The key inputs for the valuation models are observable market prices, discount rates, and forward yield curves. In connection with the Company’s entry into the 2022 Credit Agreement (as defined in Note 6 “Long-Term Debt”), it terminated the interest rate swap in July 2022. In settlement of this swap, the Company received approximately $0.6 million. See Note 6 “Long-Term Debt” for further discussion regarding the Company’s interest rate swaps.

The following table presents fair value for the interest rate swap at December 29, 2021 (in thousands):


			Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Level 3
Other non-current liabilities - Interest rate swap	$	396	$	—	$	396	$	—

Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).

The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 28, 2022 reflecting certain property and equipment and ROU assets, for which an impairment loss was recognized during the corresponding periods, as discussed above under Impairment of Long-Lived and ROU Assets (in thousands):


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	442
Certain ROU assets, net	$	327	$	—	$	—	$	327	$	39

The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 29, 2021 reflecting certain property and equipment and ROU assets for which an impairment loss was recognized during the corresponding periods, as discussed above under "Impairment of Long-Lived and ROU Assets" (in thousands):


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	304
Certain ROU assets, net	$	411	$	—	$	—	$	411	$	407

The following non-financial assets were measured at fair value, on a nonrecurring basis, as of and for the year ended December 30, 2020 for which an impairment loss was recognized during the corresponding periods, as discussed above under "Impairment of Long-Lived and ROU Assets" (in thousands):


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	2,955
Certain ROU assets, net	$	902	$	—	$	—	$	902	$	543

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and certain accrued expenses approximate fair value due to their short-term maturities. The recorded value of the TRA approximates fair value, based on borrowing rates currently available to the Company for debts with similar terms and remaining maturities (Level 3 measurement).

Stock-Based Compensation

Stock-based compensation expense is recognized using a fair-value based method for costs related to all share-based payments including stock options and restricted stock issued under the Company’s employee stock plans. The fair value of stock option awards is estimated on the date of grant using an option pricing model, which require the input of subjective assumptions. The Company is required to use judgment in estimating the amount of stock-based awards that are expected to be forfeited. If actual forfeitures differ significantly from the original estimate, stock-based compensation expense and the results of operations could be affected. The cost is recognized on a straight-line basis over the period during which an employee is required to provide service, usually the vesting period. For options or restricted shares that are based on a performance requirement, the cost is recognized on an accelerated basis over the period to which the performance criteria relate.

Earnings per Share

Earnings per share (“EPS”) is calculated using the weighted average number of common shares outstanding during each period. Diluted EPS assumes the conversion, exercise or issuance of all potential common stock equivalents unless the effect is to reduce a loss or increase the income per share. For purposes of this calculation, options and restricted stock awards are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. The shares used to compute basic and diluted net income per share represent the weighted-average common shares outstanding.

Franchise Development Option Agreement with Related Party

On July 11, 2014, EPL and LLC entered into a Franchise Development Option Agreement relating to development of restaurants in the New York–Newark, NY–NJ–CT–PA Combined Statistical Area (the “Territory”). EPL granted LLC the exclusive option to develop and open 15 restaurants in the Territory over five years (the “Initial Option”), and, provided that the Initial Option is exercised, the exclusive option to develop and open up to an additional 100 restaurants in the Territory over ten years. The Franchise Development Option Agreement terminates (i) ten years after execution, or (ii) if the Initial Option is exercised, five years after that exercise. LLC may only exercise the Initial Option if EPL first determines to begin development of company-operated restaurants in the Territory or support the development of the Territory. The Company has no current intention to begin development in the Territory and as of December 28, 2022, no stores have been opened in the Territory.

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 28, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment

3. PROPERTY AND EQUIPMENT

The costs and related accumulated depreciation and amortization of major classes of property are as follows (in thousands):


	December 28, 2022		December 29, 2021
Land	$	12,323	$	12,323
Buildings and improvements		153,377		144,631
Other property and equipment		83,035		78,383
Construction in progress		3,196		5,333
		251,931		240,670
Less: accumulated depreciation and amortization		(173,287)		(165,002)
	$	78,644	$	75,668

Depreciation and amortization expense was $14.4 million, $15.2 million and $16.9 million for the years ended December 28, 2022, December 29, 2021, and December 30, 2020, respectively.

Based on the Company’s review of its long-lived assets for impairment, the Company recorded non-cash impairment charges of $0.4 million, $0.3 million and $3.0 million for the years ended December 28, 2022, December 29, 2021, and December 30, 2020, respectively. See “Impairment of Long-Lived and ROU Assets” in Note 2 “Summary of Significant Accounting Policies” for additional information.

TRADEMARKS, OTHER INTANGIBLE ASSETS AND LIABILITIES

12 Months Ended

Dec. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Trademarks, Other Intangible Assets and Liabilities

4. TRADEMARKS, OTHER INTANGIBLE ASSETS AND LIABILITIES

Domestic trademarks consist of the following (in thousands):


	December 28,		December 29,
	2022		2021
Cost	$	120,700	$	120,700
Accumulated impairment charges		(58,812)		(58,812)
Trademarks, net	$	61,888	$	61,888

LEASES

12 Months Ended

Dec. 28, 2022

Leases [Abstract]

Leases

5. LEASES

Nature of leases

The Company’s operations utilize property, facilities, equipment and vehicles leased from others. Additionally, the Company has various contracts with vendors that have been determined to contain an embedded lease in accordance with Topic 842.

As of December 28, 2022, the Company had no leases that it had entered into, but had not yet commenced. The Company does not have control of the property until lease commencement.

Building and facility leases

The majority of the Company’s building and facilities leases are classified as operating leases; however, the Company currently has one facility and ten equipment leases that are classified as finance leases.

Restaurants are operated under lease arrangements that generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues in excess of a defined amount. Additionally, a number of the Company’s leases have payments, which increase at pre-determined dates based on the change in the consumer price index. For all leases, the Company also reimburses the landlord for non-lease components, or items that are not considered components of a contract, such as common area maintenance, property tax and insurance costs. While the Company determined not to separate lease and non-lease components, these payments are based on actual costs, making them variable consideration and excluding them from the calculations of the ROU asset and lease liability.

The initial terms of land and restaurant building leases are generally 20 years, exclusive of options to renew. These leases typically have four 5-year renewal options, which have generally been excluded in the calculation of the ROU asset and lease liability, as they are not considered reasonably certain to be exercised, unless (1) the renewal had already occurred as of the time of adoption of Topic 842, or (2) there have been significant leasehold improvements that have a useful life that extend past the original lease term. Furthermore, there are no residual value guarantees and no restrictions imposed by the lease.

During the year ended December 28, 2022, the Company reassessed the lease terms on 22 restaurants due to certain triggering events, such as the addition of significant leasehold improvements, the decision to terminate a lease, or the decision to renew. As a result of the reassessment, an additional $13.0 million of ROU assets and lease liabilities for the year ended December 28, 2022 were recognized, and will be amortized over the new lease term.

During the year ended December 29, 2021, the Company reassessed the lease terms on 22 restaurants due to certain triggering events, such as the addition of significant leasehold improvements, the decision to terminate a lease, or the decision to renew. As a result of the reassessment, an additional $17.8 million of ROU assets and lease liabilities for the year ended December 29, 2021 were recognized, and will be amortized over the new lease term.

The reassessments had an impact on the original lease classification of one property during the year ended December 28, 2022 which represented $0.7 million of the $13.0 million total additional ROU asset and lease liabilities for fiscal 2022. There were no reassessments that impacted the original lease classification during the year ended December 29, 2021. Additionally, as the Company adopted all practical expedients available under Topic 842, no reallocation between lease and non-lease components was necessary.

The Company also subleases facilities to certain franchisees and other non-related parties which are also considered operating leases. Sublease income also includes contingent rental income based on net revenues. The vast majority of these leases have rights to extend terms via fixed rental increases. However, none of these leases have early termination rights, the right to purchase the premises or any residual value guarantees. The Company does not have any related party leases.

During fiscal 2022, the Company determined that the carrying value of an ROU assets at one restaurant was not recoverable. As a result, the Company recorded a less than $0.1 million non-cash impairment charge for the year ended December 28, 2022 related to one restaurant closed in California. During fiscal 2021, the Company determined that the carrying value of ROU assets at two restaurants were not recoverable. As a result, the Company recorded a $0.4 million non-cash impairment charge for the year ended December 29, 2021 related to one restaurant closed in Texas in 2019 and one restaurant closed in California. During fiscal 2020, the Company determined that the carrying value of ROU assets at one restaurant was not recoverable. As a result, the Company recorded a $0.5 million non-cash impairment charge for the year ended December 30, 2020 related to one restaurant in Texas, which was sold to a franchisee in the prior year.

Equipment

Leases of equipment primarily consist of restaurant equipment, copiers and vehicles. These leases are fixed payments with no variable component. Additionally, no optional renewal periods have been included in the calculation of the ROU Asset, there are no residual value guarantees and no restrictions imposed.

Significant Assumptions and Judgments

In applying the requirements of Topic 842, the Company made significant assumptions and judgments related to determination of whether a contract contains a lease and the discount rate used for the lease.

In determining if any of the Company’s contracts contain a lease the Company made assumptions and judgments related to its ability to direct the use of any assets stated in the contract and the likelihood of renewing any short-term contracts for a period extending past twelve months.

The Company also made significant assumptions and judgments in determining an appropriate discount rate for property leases. These included using a consistent discount rate for a portfolio of leases entered into at varying dates, using the full 20-year term of the lease, excluding any options, and using the total minimum lease payments. For all other leases, the Company uses the discount rate implicit in the lease, or the Company’s incremental borrowing rate.

As the Company has adopted the practical expedient not to separate lease and non-lease components, no significant assumptions or judgments were necessary in allocating consideration between these components, for all classes of underlying assets.

The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands):


	December 28, 2022						December 29, 2021						December 30, 2020
	Property		Equipment				Property		Equipment				Property		Equipment
	Leases		Leases		Total		Leases		Leases		Total		Leases		Leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	73	$	2	$	75	$	78	$	2	$	80	$	11	$	—	$	11
Interest on lease liabilities		42		3		45		58		1		59		27		—		27
Operating lease cost		26,537		1,005		27,542		26,501		1,122		27,623		26,578		1,227		27,805
Short-term lease cost		—		18		18		—		21		21		—		23		23
Variable lease cost		597		677		1,274		539		354		893		444		191		635
Sublease income		(4,555)		—		(4,555)		(3,823)		—		(3,823)		(3,251)		—		(3,251)
Total lease cost	$	22,694	$	1,705	$	24,399	$	23,353	$	1,500	$	24,853	$	23,809	$	1,441	$	25,250

The following table presents the Company’s total lease cost on the consolidated statement of income (in thousands):


	December 28, 2022		December 29, 2021		December 30, 2020
Lease cost – Occupancy and other operating expenses	$	23,730	$	24,020	$	23,972
Lease cost – General & administrative		465		413		464
Lease cost – Depreciation and amortization		73		78		11
Lease cost – Interest expense		45		59		27
Lease cost – Closed-store reserve		86		283		776
Total lease cost	$	24,399	$	24,853	$	25,250

The Company had the following cash and non-cash activities associated with its leases (in thousands):


	December 28, 2022								December 29, 2021								December 30, 2020
	Property			Equipment					Property			Equipment					Property			Equipment
	Leases			Leases			Total		Leases			Leases			Total		Leases			Leases			Total
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases	$	27,221		$	953		$	28,174	$	26,414		$	1,084		$	27,498	$	23,683		$	1,230		$	24,913
Financing cash flows used for finance leases	$	106		$	56		$	162	$	102		$	46		$	148	$	34		$	5		$	39

Non-cash investing and financing activities:
Operating lease ROU assets obtained in exchange for lease liabilities:
Operating lease ROU assets	$	12,978		$	92		$	13,070	$	17,763		$	—		$	17,763	$	5,850		$	13		$	5,863
Finance lease ROU assets obtained in exchange for lease liabilities:
Finance lease ROU assets	$	—		$	28		$	28	$	—		$	196		$	196	$	1,623		$	54		$	1,677
Derecognition of ROU assets due to terminations, impairment or modifications	$	(39)		$	(35)		$	(74)	$	(4,513)		$	(99)		$	(4,612)	$	(543)		$	(26)		$	(569)

Other Information
Weighted-average remaining years in lease term—finance leases		17.87			3.19					18.42			4.02					18.98			4.52
Weighted-average remaining years in lease term—operating leases		10.73			1.73					11.27			1.44					11.45			2.31
Weighted-average discount rate—finance leases		2.57	%		1.53	%				2.78	%		1.54	%				2.50	%		1.68	%
Weighted-average discount rate—operating leases		4.54	%		3.80	%				4.45	%		3.89	%				4.29	%		3.93	%

Information regarding the Company’s minimum future lease obligations at December 28, 2022 is as follows (in thousands):


	Finance		Operating Leases
	Minimum		Minimum		Minimum
	Lease		Lease		Sublease
For the Years Ending	Payments		Payments		Income
December 27, 2023	$	151	$	27,876	$	4,040
December 25, 2024		151		25,887		3,685
December 31, 2025		147		23,729		3,207
December 30, 2026		114		21,595		2,881
December 29, 2027		104		19,806		2,829
Thereafter		1,479		117,566		20,403
Total	$	2,146	$	236,459	$	37,045
Less: imputed interest (1.53% - 4.54%)		(410)		(51,315)
Present value of lease obligations		1,736		185,144
Less: current maturities		(110)		(19,995)
Noncurrent portion	$	1,626	$	165,149

Short-Term Leases

The Company has multiple short-term leases, which have terms of less than 12 months, and thus were excluded from the recognition requirements of Topic 842. The Company has recognized these lease payments in its consolidated statement

of income on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Lessor

The Company is a lessor for certain property, facilities and equipment owned by the Company and leased to others, principally franchisees, under non-cancelable leases with initial terms ranging from 3 to 20 years. These lease agreements generally provide for a fixed base rent and, in some instances, contingent rent based on a percentage of gross operating profit or net revenues. All leases are considered operating leases.

For the leases in which the Company is the lessor, there are options to extend the lease. However, there are no terms and conditions to terminate the lease, no right to purchase premises and no residual value guarantees. Additionally, there are no related party leases.

For the years ended December 28, 2022, December 29, 2021, and December 30, 2020, the Company received $0.4 million, $0.4 million and $0.6 million, respectively, of lease income from company-owned locations.

LONG-TERM DEBT

12 Months Ended

Dec. 28, 2022

Debt Disclosure [Abstract]

Long-Term Debt

6. LONG-TERM DEBT

On July 27, 2022, the Company refinanced and terminated its credit agreement (the “2018 Credit Agreement”) among EPL, as borrower, the Company and Intermediate, as guarantors, Bank of America, N.A., as administrative agent, swingline lender, and letter of credit issuer, the lenders party thereto, and the other parties thereto, which provided for a $150.0 million five-year senior secured revolving credit facility (the “2018 Revolver”). The 2018 Revolver was refinanced pursuant to a credit agreement (the “2022 Credit Agreement”) among EPL, as borrower, the Company and Intermediate, as guarantors, Bank of America, N.A., as administrative agent, swingline lender, and letter of credit issuer, the lenders party thereto, and the other parties thereto, which provides for a $150.0 million five-year senior secured revolving credit facility (the “2022 Revolver”). In connection with the refinancing, the 2018 Credit Agreement was terminated.

The 2022 Revolver includes a sub limit of $15.0 million for letters of credit and a sub limit of $15.0 million for swingline loans. The 2022 Revolver and 2022 Credit Agreement will mature on July 27, 2027. The obligations under the 2022 Credit Agreement and related loan documents are guaranteed by Holdings and Intermediate. The obligations of Holdings, EPL and Intermediate under the 2022 Credit Agreement and related loan documents are secured by a first priority lien on substantially all of their respective assets.

The 2018 Revolver included a sub limit of $15.0 million for letters of credit and a sub limit of $15.0 million for swingline loans. The obligations under the 2018 Credit Agreement and related loan documents were guaranteed by the Company and Intermediate. The obligations of the Company, EPL and Intermediate under the 2018 Credit Agreement and related loan documents were secured by a first priority lien on substantially all of their respective assets.

The special dividend announced by the Company’s Board of Directors on October 11, 2022 is permitted under the terms of 2022 Revolver pursuant to both subclause (iii)(d) and (iii)(e) of the following sentence. Under the 2022 Revolver, Holdings is restricted from making certain payments such as cash dividends, except that it may, inter alia, (i) pay up to $1.0 million per year to repurchase or redeem qualified equity interests of Holdings held by past or present officers, directors, or employees (or their estates) of the Company upon death, disability, or termination of employment, (ii) pay under its TRA, and (iii) so long as no default or event of default has occurred and is continuing, (a) make non-cash repurchases of equity interests in connection with the exercise of stock options by directors, officers and management, provided that those equity interests represent a portion of the consideration of the exercise price of those stock options, (b) pay up to $0.5 million in any 12 month consecutive period to redeem, repurchase or otherwise acquire equity interests of any subsidiary that is not a wholly-owned subsidiary from any holder of equity interest in such subsidiary, (c) pay up to $2.5 million per year pursuant to stock option plans, employment agreements, or incentive plans, (d) make up to $5.0 million in other restricted payments per year, and (e) make other restricted payments, subject to its compliance, on a pro forma basis, with (x) a lease-adjusted consolidated leverage ratio not to exceed 4.25 times and (y) the financial covenants applicable to the 2022 Revolver.

Borrowings under the 2022 Credit Agreement (other than any swingline loans) bear interest, at the borrower’s option, at rates based upon either the secured overnight financing rate (“SOFR”) or a base rate, plus, for each rate, a margin determined in accordance with a lease-adjusted consolidated leverage ratio-based pricing grid. The base rate is calculated as the highest of (a) the federal funds rate plus 0.50%, (b) the published Bank of America prime rate, or (c) Term SOFR with a term of one-month SOFR plus 1.00%. For Term SOFR loans, the margin is in the range of 1.25% to 2.25%, and for base rate loans the margin is in a range of 0.25% to 1.25%. Borrowings under the 2022 Revolver may be repaid and reborrowed. For borrowings under the 2022 Revolver and 2018 Revolver during fiscal 2022, the interest rate range was 1.4% to 6.0%. For borrowings under the 2018 Revolver during fiscal 2021, the interest rate range was 1.3% to 1.6%. The interest rate under the 2022 Revolver was 5.7% at December 28, 2022 and 1.4% under the 2018 Revolver at December 29, 2021. For the year ended December 28, 2022, the Company had interest expense of $0.9 million under the 2022 Revolver and 2018 Revolver. For the years ended December 29, 2021 and December 30, 2020, the Company had interest expense of $1.2 million and $2.7 million, respectively, under the 2018 Revolver.

The 2022 Credit Agreement contains certain financial covenants. The Company was in compliance with all such covenants at December 28, 2022.

At December 28, 2022, $9.8 million of letters of credit and $66.0 million of borrowings were outstanding under the 2022 Revolver. The amount available under the 2022 Revolver was $74.2 million at December 28, 2022. At December 29, 2021, $10.0 million of letters of credit and $40.0 million of borrowings were outstanding under the 2018 Revolver. The amount available under the 2018 Revolver was $100.0 million at December 29, 2021.

Maturities

On July 27, 2022, the Company refinanced and terminated the 2018 Revolver pursuant to the 2022 Credit Agreement. The 2022 Revolver and 2022 Credit Agreement will mature on July 27, 2027. During the year ended December 28, 2022, the Company borrowed $26.0 million net of pay downs of $20.0 million on its 2022 Revolver. During the year ended December 29, 2021, the Company paid down $22.8 million on the 2018 Revolver. There are no required principal payments prior to maturity for the 2022 Revolver.

Interest Rate Swap

During the year ended December 25, 2019, the Company entered into a variable-to-fixed interest rate swap agreement with a notional amount of $40.0 million that matures in June 2023. The objective of the interest rate swap was to reduce the Company’s exposure to interest rate risk for a portion of its variable-rate interest payments on its borrowings under the 2018 Revolver. The interest rate swap was designated as a cash flow hedge, as the changes in the future cash flows of the swap were expected to offset changes in expected future interest payments on the related variable-rate debt, in accordance with Accounting Standards Codification (“ASC”) 815 “Derivatives and Hedging.”

In connection with the Company’s entry into the 2022 Credit Agreement, on July 28, 2022, the Company terminated the interest rate swap, which was previously used to hedge interest rate risk. Prior to the interest rate swap termination, the swap was a highly effective cash flow hedge. In settlement of this swap, the Company received approximately $0.6 million and derecognized the corresponding interest rate swap asset. The remaining amount in AOCI related to the hedging relationship will be reclassified into earnings when the hedged forecasted transaction is reported in earnings. As of December 28, 2022, the estimated net gains included in AOCI related to the Company’s cash flow hedge that will be reclassified into earnings in the next 12 months is $0.2 million, based on current Term SOFR interest rates.

The following table shows the financial statement line item and amount of the Company’s cash flow hedge accounting on the consolidated balance sheet (in thousands):


	December 28, 2022				December 29, 2021
	Notional		Fair value		Notional		Fair value
Other liabilities - Interest rate swap	$	—	$	—	$	40,000	$	396

The following table summarizes the effect of the Company’s cash flow hedge accounting on the consolidated statements of income (in thousands):


	December 28, 2022		December 29, 2021		December 30, 2020
Interest expense on hedged portion of debt	$	439	$	568	$	979
Interest (income) expense on interest rate swap		(296)		486		278
Interest (income) expense on debt and derivatives, net	$	143	$	1,054	$	1,257

The following table summarizes the effect of the Company’s cash flow hedge accounting on AOCI for the years ended December 28, 2022, December 29, 2021 and December 30, 2020 (in thousands):


							(Gain) Loss Reclassified from
	Net Gain (Loss) Recognized in OCI						AOCI into Interest (Income) Expense
	December 28, 2022		December 29, 2021		December 30, 2020		December 28, 2022		December 29, 2021		December 30, 2020
Interest rate swap	$	862	$	257	$	(1,762)	$	(296)	$	486	$	278

See Note 2 “Summary of Significant Accounting Policies” for the fair value of the Company’s derivative asset.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
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-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

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+ Details

OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES

12 Months Ended

Dec. 28, 2022

Payables And Accruals [Abstract]

Other Accrued Expenses and Current Liabilities

7. OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES

Other accrued expenses and current liabilities consist of the following (in thousands):


	December 28, 2022		December 29, 2021
Accrued sales and property taxes	$	5,270	$	4,726
Gift card liability		4,667		4,622
Loyalty rewards program liability		526		687
Accrued advertising		831		3,635
Accrued legal settlements and professional fees		1,303		771
Deferred franchise and development fees		610		637
Other		1,913		4,632
Total other accrued expenses and current liabilities	$	15,120	$	19,710

OTHER NONCURRENT LIABILITIES

12 Months Ended

Dec. 28, 2022

Payables And Accruals [Abstract]

Other Noncurrent Liabilities

8. OTHER NONCURRENT LIABILITIES

Other noncurrent liabilities consist of the following (in thousands):


	December 28, 2022		December 29, 2021
Deferred franchise and development fees	$	5,767	$	5,691
Derivative liability		—		396
Employer social security tax deferral		—		2,426
Other		89		140
Total other noncurrent liabilities	$	5,856	$	8,653

INCOME TAXES

12 Months Ended

Dec. 28, 2022

Income Tax Disclosure [Abstract]

Income Taxes

9. INCOME TAXES

The provision for income taxes is based on the following components (in thousands):


	December 28,		December 29,		December 30,
For the Years Ended	2022		2021		2020
Current income taxes:
Federal	$	2,366	$	7,163	$	520
State		1,112		2,158		1,123
Total current		3,478		9,321		1,643
Deferred income taxes:
Federal		2,958		93		3,350
State		1,642		918		658
Total deferred		4,600		1,011		4,008
Tax provision for income taxes	$	8,078	$	10,332	$	5,651

The provision for income taxes differs from the amount computed by applying the federal income tax rate of 21.0% for fiscal 2022, 2021 and 2020 as follows:


	December 28,		December 29,		December 30,
For the Years Ended	2022		2021		2020
Statutory federal income tax rate applied to earnings before income taxes and extraordinary items	21.0	%	21.0	%	21.0	%
State income tax expense (net of federal benefit)	7.7		5.9		4.3
Change in valuation allowance	—		0.1		0.4
TRA (income) expense	(0.3)		—		—
162(m)	0.5		0.8		0.2
WOTC Credit	(0.9)		(0.5)		(0.9)
Stock option exercises	0.3		(1.4)		(6.6)
Other	(0.3)		0.3		0.4
Total	28.0	%	26.2	%	18.8	%

As of December 28, 2022, the Company had no federal and less than $0.1 million state NOL carryforwards. These State NOLs expire beginning 2029. The Company also has state enterprise zone credits of approximately $9.2 million, which expire in 2023. The utilization of NOL carryforwards and state enterprise zone credits may be subject to limitation under section 382 of the Internal Revenue Code of 1986 (the “Code”) and similar state law provisions.

Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets. After evaluating all of the positive and negative evidence, including the Company’s continued income from operations, the Company concluded that it is more likely than not that its deferred tax assets except from certain state credits will be realized. In both fiscal 2021 and 2020, the Company recorded a valuation allowance of approximately $0.1 million against its deferred tax asset resulting from certain tax credits that may not be realizable prior to the time the credits expire. In fiscal 2022, the Company recorded an additional $0.5 million to the valuation allowance. As of December 28, 2022, the total valuation allowance was $6.7 million.

On July 30, 2014, the Company entered into the TRA. The TRA calls for the Company to pay its pre-IPO stockholders 85% of the cash savings that the Company realizes in its taxes as a result of utilizing its NOLs and other tax attributes attributable to preceding periods. The TRA charge expense (benefit) is a permanent add-back to the Company’s taxable income. TRA resulted in $0.4 million of income in fiscal 2022 as a result of the amortization of interest expense related

to the total expected TRA payments and changes in estimates for actual tax returns filed and future forecasted taxable income, less than $0.1 million of expense in fiscal 2021 as a result of the amortization of interest expense related to the total expected TRA payments and changes in estimates for actual tax returns filed and future forecasted taxable income and $0.1 million of expense in fiscal 2020 as a result of changes to future forecasted results and deduction on 2018 legal settlement accrual. In fiscal 2022, 2021 and 2020, the Company paid $0.4 million, $1.7 million and $5.2 million, respectively, to its pre-IPO stockholders under the TRA.

As of December 28, 2022 and December 29, 2021, the deferred tax assets related to California Enterprise Zone credits, net of valuation allowances are $0.5 million and $1.3 million, respectively.

The Company’s deferred tax assets and liabilities as of December 28, 2022 and December 29, 2021 are summarized below.


	December 28,		December 29,
	2022		2021
Deferred assets:
Capital leases	$	55	$	60
Accrued vacation		508		503
Accrued workers’ compensation		2,201		2,616
Enterprise zone and other credits		7,258		7,524
Net operating losses		5		5
Fixed assets		2,392		4,393
ROU assets		50,112		51,864
Other		4,397		5,694
Total deferred tax assets		66,928		72,659
Valuation allowance		(6,727)		(6,181)
Net deferred tax assets		60,201		66,478
Deferred liabilities:
Goodwill		(6,420)		(6,349)
Trademark		(16,721)		(16,727)
Prepaid expense		(595)		(498)
ROU liabilities		(44,737)		(46,484)
Other		267		361
Deferred tax liabilities		(68,206)		(69,697)
Net deferred tax liability	$	(8,005)	$	(3,219)

The net deferred tax asset amounts above as of December 28, 2022 and December 29, 2021 have been classified in the accompanying consolidated balance sheets as noncurrent assets and are as follows (in thousands):


	December 28,		December 29,
	2022		2021
Noncurrent:
Assets - state	$	512	$	2,245
Liabilities - federal		(8,517)		(5,464)
Net deferred tax liability	$	(8,005)	$	(3,219)

As of December 28, 2022 and December 29, 2021, the Company had no accrual for unrecognized tax benefits. Consequently, no interest or penalties have been accrued by the Company. The Company believes that no significant changes to the amount of unrecognized tax benefits will occur within the next twelve months. The Company is subject to taxation in the United States and in various state jurisdictions.

The Company is no longer subject to U.S. examination for years before 2019 by the federal taxing authority, and for years before 2018 by state taxing authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-SubTopic 10
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 28, 2022

Postemployment Benefits [Abstract]

Employee Benefit Plans

10. EMPLOYEE BENEFIT PLANS

The Company sponsors a defined contribution employee benefit plan that permits its employees, subject to certain eligibility requirements, to contribute up to 25% of their qualified compensation to the plan. The Company matches 100% of the employees’ contributions of the first 3% of the employees’ annual qualified compensation, and 50% of the employees’ contributions of the next 2% of the employees’ annual qualified compensation. The Company’s matching contribution immediately fully vests. The Company’s contributions to the plan were $0.8 million for the years ended December 28, 2022, December 29, 2021 and December 30, 2020.

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 28, 2022

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

11. STOCK-BASED COMPENSATION

Pursuant to the 2018 Omnibus Equity Incentive Plan the Company grants stock options (“options”), restricted stock units, performance-based stock units and restricted stock. The Company has authorized 5,652,240 shares of common stock for issuance in connection with stock awards. On June 8, 2021, our stockholders approved amending the Equity Incentive Plan, formerly the 2018 Omnibus Equity Incentive Plan, under which the new aggregate share limit was increased to be 2,000,000 shares. As of December 28, 2022, 945,282 shares were available for grant.

During the years ended December 28, 2022, December 29, 2021 and December 30, 2020, the Company recognized stock-based compensation expense of $3.5 million, $3.2 million and $3.1 million, respectively. These expenses were included in general and administrative expenses consistent with the salary expense for the related optionees in the accompanying consolidated statements of income.

Stock Options

At December 28, 2022, options to purchase 1,068,179 shares of common stock of the Company were outstanding, including 625,436 vested and 442,743 unvested. Unvested options vest over time, or upon our achieving annual financial goals. However, the compensation committee of the board of directors, as administrator of the Company’s Equity Incentive Plan, has the power to accelerate the vesting schedule of stock-based compensation, and, generally, in the event of an employee termination in connection with a change in control of the Company, any unvested portion of an award under the plan shall become fully vested. At December 28, 2022, 180,020 premium options, options granted above the stock price at date of grant, remained outstanding. In fiscal 2022, the Company granted 372,958 options, with an exercise price equal to the fair market value of the common stock on the date of grant. The options granted in fiscal 2022 had a four year vesting period. Stock options generally expire ten years from the date of grant. In fiscal 2021, the Company granted 256,172 options, with an exercise price equal to the fair market value of the common stock on the date of grant. The options granted in fiscal 2021 had a four year vesting period. Stock options generally expire 10 years from the date of grant. Changes in options for the years ended December 28, 2022 and December 29, 2021, are as follows:


				Weighted-Average		Aggregate
		Weighted-Average		Contractual Life		Intrinsic Value
	Shares	Exercise Price		Life (Years)		(in thousands)
Outstanding - December 30, 2020	1,030,866	$	9.82
Grants	256,172		17.55
Exercised	(132,760)		6.52
Forfeited, cancelled or expired	(176,200)		14.48
Outstanding - December 29, 2021	978,078	$	11.45
Grants	372,958		10.54
Exercised	(185,798)		9.22
Forfeited, cancelled or expired	(97,059)	$	12.06
Outstanding - December 28, 2022	1,068,179	$	9.92		5.68	$	1,368
Vested and expected to vest at December 28, 2022	1,060,880	$	9.92		5.66	$	1,362
Exercisable at December 28, 2022	625,436	$	9.50		3.37	$	1,033

The intrinsic value of options exercised, calculated as the difference between the market value on the date of exercise and the exercise price, was $0.8 million, $1.6 million and $9.9 million for fiscal years 2022, 2021 and 2020, respectively.

The Company measures and recognizes compensation expense for the estimated fair value of stock options for employees and non-employee directors and similar awards based on the grant-date fair value of the award. For options that are based on a service requirement, the cost is recognized on a straight-line basis over the requisite service period, usually the vesting period. For options that were based on performance requirements, costs were recognized over periods to which the performance criteria related. In order to calculate our stock options’ fair values and the associated compensation costs for share-based awards, the Company utilizes the Black–Scholes option pricing model and has developed estimates of various inputs including forfeiture rate, expected term, expected volatility, and risk-free interest rate. The forfeiture rate is based on historical rates and reduces the compensation expense recognized. The expected term for options granted is derived using the “simplified” method, in accordance with SEC guidance. The Company calculates the risk-free interest rate using the implied yield for a U.S. Treasury security with constant maturity and a remaining term equal to the expected term of the Company’s employee stock options. The Company does not anticipate paying any cash dividends for the foreseeable future and therefore uses an expected dividend yield of zero for option valuation purposes. Expected volatility is based on the Company’s historical data. Volatility is calculated by taking the historical daily closing equity prices of the Company, prior to the grant date, over a period equal to the expected term.

The weighted-average estimated fair value of employee stock options granted in fiscal 2022 and 2021 was $4.89 and $8.10 per share, respectively, using the Black–Scholes model with the following weighted-average assumptions used to value the option grants:


	December 28, 2022		December 29, 2021
Expected volatility	43.0	%	46.9	%
Risk-free interest rate	2.9	%	1.1	%
Expected term (years)	6.25		6.25
Expected dividends	—		—

As of December 28, 2022, the Company had total unrecognized compensation expense of $2.1 million related to unvested stock options, which the Company expects to recognize over a weighted average period of 3.0 years.

The above assumptions generally require significant judgment. If in the future the Company determines that another method is more reasonable, or if another method for calculating these input assumptions is prescribed by authoritative guidance, and, therefore, should be used to estimate volatility or expected term, the fair value calculated for our stock options could change significantly. Higher volatility and longer expected lives result in an increase to stock-based compensation expense determined at the date of grant.

The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and will continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior, and other factors. Changes in the estimated forfeiture rate can have a significant effect on reported stock-based compensation expense, as the cumulative effect of adjusting the rate for all expense amortization is recognized in the period the forfeiture estimate is changed. If a revised forfeiture rate is higher than the previously-estimated forfeiture rate, an adjustment is made that will result in a decrease to the stock-based compensation expense recognized in the financial statements. If a revised forfeiture rate is lower than the previously-estimated forfeiture rate, an adjustment is made that will result in an increase to the stock-based compensation expense recognized in the financial statements. The effect of forfeiture adjustments was insignificant in fiscal 2022, 2021 and 2020. The Company will continue to use significant judgment in evaluating the expected term, volatility, and forfeiture rate related to its stock-based compensation.

Restricted Shares

In fiscal 2022 and 2021, 356,610 and 222,741 restricted share awards were granted, respectively, at the fair market value on the date of grant. These grants vest based on continued service over three years for directors and four years for employees.

Changes in restricted shares for the years ended December 28, 2022 and December 29, 2021, are as follows:


		Weighted-Average
	Shares	Fair Value
Unvested shares at December 30, 2020	742,404	$	11.68
Granted	222,741	$	17.13
Released	(248,255)	$	11.99
Forfeited, cancelled, or expired	(221,110)	$	11.80
Unvested shares at December 29, 2021	495,780	$	13.92
Granted	356,610	$	10.37
Released	(201,043)	$	13.32
Forfeited, cancelled, or expired	(105,867)	$	12.91
Unvested shares at December 28, 2022	545,480	$	12.02

As of December 28, 2022, there was total unrecognized compensation expense of $5.0 million related to unvested restricted share awards, which the Company expects to recognize over a weighted-average period of 2.62 years. As of December 28, 2022, all remaining performance stock units and restricted units were forfeited, cancelled, expired, or released.

EARNINGS PER SHARE

12 Months Ended

Dec. 28, 2022

Earnings Per Share [Abstract]

Earnings Per Share

12. EARNINGS PER SHARE

Basic EPS is calculated using the weighted-average number of shares of common stock outstanding during the years ended December 28, 2022, December 29, 2021, and December 30, 2020. Diluted EPS is calculated using the weighted-average number of shares of common stock outstanding and potentially dilutive during the period, using the treasury stock method.

On October 11, 2022, the Company’s Board of Directors approved a share repurchase program (the “2022 Stock Repurchase Plan”) under which the Company is authorized to repurchase up to $20.0 million of shares of our common stock. The 2022 Stock Repurchase Plan will terminate on March 28, 2024, may be modified, suspended or discontinued at any time, and does not obligate the Company to acquire any particular number of shares.

Under the 2022 Stock Repurchase Plan, the Company is permitted to repurchase its common stock from time to time, in amounts and at prices that the Company deemed appropriate, subject to market conditions and other considerations. The Company’s repurchases will be executed using open market purchases, including pursuant to Rule 10b5-1 trading plans, and/or through privately negotiated transactions.

For the year ended December 28, 2022, the Company did not repurchase any shares of common stock under the 2022 Stock Repurchase Plan.

Below are basic and diluted EPS data for the periods indicated, which are in thousands except for per share data.


	For the Years Ended
	December 28,		December 29,		December 30,
	2022		2021		2020
Numerator:
Net income	$	20,801	$	29,121	$	24,474
Denominator:
Weighted-average shares outstanding—basic		36,350,579		35,973,892		35,193,325
Weighted-average shares outstanding—diluted		36,575,904		36,446,756		35,796,406
Net income per share—basic	$	0.57	$	0.81	$	0.70
Net income per share—diluted	$	0.57	$	0.80	$	0.68
Anti-dilutive securities not considered in diluted EPS calculation		535,574		136,397		81,041

Below is a reconciliation of basic and diluted share counts.


	For the Years Ended
	December 28,	December 29,	December 30,
	2022	2021	2020
Weighted-average shares outstanding—basic	36,350,579	35,973,892	35,193,325
Dilutive effect of stock options and restricted shares	225,325	472,864	603,081
Weighted-average shares outstanding—diluted	36,575,904	36,446,756	35,796,406

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 28, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. COMMITMENTS AND CONTINGENCIES

Legal Matters

On or about November 5, 2015, a purported Holdings shareholder filed a derivative complaint on behalf of Holdings in the Court of Chancery of the State of Delaware against certain Holdings officers, directors and LLC, under the caption Armen Galustyan v. Sather, et al. (Case No. 11676-VCL). The derivative complaint alleges that these defendants breached their fiduciary duties to Holdings and were unjustly enriched when they sold shares of Holdings at artificially inflated prices due to alleged misrepresentations and omissions regarding EPL’s comparable store sales in the second quarter of 2015. The Holdings shareholder’s requested remedies include an award of compensatory damages to Holdings, as well as a court order to improve corporate governance by putting forward for stockholder vote certain resolutions for amendments to Holdings’ Bylaws or Certificate of Incorporation. The Holdings shareholder voluntarily dismissed the action on October 7, 2020. A second purported Holdings shareholder filed a derivative complaint on or about September 23, 2016, under the caption Diep v. Sather, CA 12760-VCL in the Delaware Court of Chancery. The Diep action is also purportedly brought on behalf of Holdings, names the same defendants and asserts substantially the same claims on substantially the same alleged facts as does Galustyan. Defendants moved to stay or dismiss the Diep action.

On March 17, 2017, the Delaware court granted in part, and denied in part, the motion to stay the Diep action. The court denied defendants’ motion to dismiss the complaint for failure to state a claim. On January 17, 2018, the court entered an order granting the parties’ stipulation staying all proceedings in the Diep action for five months or until the completion of an investigation of the allegations in the action by a special litigation committee of the Holdings board of directors (the “SLC”). On September 25, 2020, after concluding its investigation, the SLC filed a motion to dismiss the Diep action and filed its investigative report under seal as an exhibit to the motion to dismiss.

On May 21, 2021, while the SLC’s motion to dismiss the Diep action was pending, the Company filed a notice of proposed partial settlement of the Diep action with respect to defendants Kay Bogeajis, Laurance Roberts, Stephen J. Sather, Edward J. Valle, Douglas K. Ammerman, and Samuel N. Borgese (collectively, the “Settling Defendants”). Defendant Trimaran Pollo Partners, LLC (“Trimaran”) was not a party to the settlement. The court approved the settlement of $625,000, less Plaintiffs’ fees of $156,250, on September 10, 2021, and dismissed all claims brought, or that could have been brought, against Settling Defendants. In connection with this settlement, the Company received $469,000 in insurance proceeds, which was recorded within general and administrative expenses in the Company’s statement of income for the year ended December 29, 2021.

On July 30, 2021, the court granted the SLC’s motion to dismiss with respect to the claims asserted against remaining defendant Trimaran. On October 4, 2021, Plaintiffs filed a notice of appeal of the court’s granting of the motion to dismiss against defendant Trimaran. Plaintiff filed its opening brief on December 6, 2021. SLC filed its answering brief on December 20, 2021 and the public version of the brief was filed on January 7, 2022. Plaintiffs filed the reply brief on January 4, 2022. The hearing on the appeal took place on March 30, 2022. On June 28, 2022, the court’s granting of the motion to dismiss against Trimaran was affirmed.

Janice P. Handlers-Bryman and Michael D. Bryman v. El Pollo Loco, Inc., Los Angeles Superior Court (Case No. MC026045) (the “Lancaster Lawsuit”) was filed on February 9, 2016. Existing El Pollo Loco franchisees, Janice P. Handlers-Bryman and Michael D. Bryman, as individuals and in their capacities as trustees of the Handlers Bryman Trust (collectively, “Plaintiffs”), filed suit against us alleging, among other things, that we “imposed unreasonable time limitations” on their development of additional restaurant locations in Lancaster, California, and that we thereafter

developed company-operated El Pollo Loco restaurants in the “market area” of Plaintiffs’ existing El Pollo Loco restaurant in Lancaster.

During fiscal 2020, the Company reached an agreement with the Plaintiffs to resolve the lawsuit for a payment by the Company of $2.5 million, which was recorded within operating expenses in the Company’s statement of income for the fiscal year ended December 30, 2020. Additionally, during fiscal 2020, the matter was formally resolved. On September 2, 2020, the California Court of Appeals entered an order, following a motion for stipulated reversal of the trial court’s judgment jointly filed by the parties, reversing the trial court’s judgment in the case and instructing the trial court to dismiss the matter with prejudice. On September 10, 2020, the trial court entered an order reversing its judgment and dismissing the case with prejudice. The settlement payment of $2.5 million has been made in the third quarter of 2020.

The Company is also involved in various other claims such as wage and hour and other legal actions that arise in the ordinary course of business. The outcomes of these actions are not predictable but the Company does not believe that the ultimate resolution of these other actions will have a material adverse effect on its financial position, results of operations, liquidity, or capital resources. A significant increase in the number of claims, or an increase in amounts owing under successful claims, could materially and adversely affect its business, consolidated financial condition, results of operations, and cash flows.

Purchase Commitments

The Company has long-term beverage supply agreements with certain major beverage vendors. Pursuant to the terms of these arrangements, marketing rebates are provided to the Company and its franchisees from the beverage vendors based upon the dollar volume of purchases for system-wide restaurants which will vary according to their demand for beverage syrup and fluctuations in the market rates for beverage syrup. These contracts have terms extending through the end of 2024.

At December 28, 2022, the Company’s total estimated commitment to purchase chicken was $40.9 million.

Contingent Lease Obligations

As a result of assigning the Company’s interest in obligations under real estate leases in connection with the sale of company-operated restaurants to some of the Company’s franchisees, the Company is contingently liable on three lease agreements. These leases have various terms, the latest of which expires in 2036. As of December 28, 2022, the potential amount of undiscounted payments the Company could be required to make in the event of non-payment by the primary lessee was $2.3 million. The present value of these potential payments discounted at the Company’s estimated pre-tax cost of debt at December 28, 2022 was $1.7 million. The Company’s franchisees are primarily liable on the leases. The Company has cross-default provisions with these franchisees that would put them in default of their franchise agreements in the event of non-payment under the leases. The Company believes that these cross-default provisions reduce the risk that payments will be required to be made under these leases.

Employment Agreements

As of December 28, 2022, the Company had employment agreements with three of the officers of the Company. These agreements provide for minimum salary levels, possible annual adjustments for cost-of-living changes, and incentive bonuses that are payable under certain business conditions.

Indemnification Agreements

The Company has entered into indemnification agreements with each of its current directors and officers. These agreements require the Company to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the Company and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. The Company also intends to enter into indemnification agreements with future directors and officers.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 28, 2022

Related Party Transactions

14. RELATED PARTY TRANSACTIONS

As of December 28, 2022, LLC, FS Equity Partners V, L.P. and FS Affiliates V, L.P. own approximately 30.3%, 14.8% and 0.2%, respectively, of our outstanding common stock. FS Equity V and FS Affiliates V, which previously indirectly held shares of our common stock through LLC, received shares directly on August 31, 2022, upon LLC’s pro rata distribution in kind of shares of our common stock to FS Equity V and FS Affiliates V.

REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Dec. 28, 2022

Revenue From Contract With Customers [Abstract]

Revenue From Contract With Customers

15. REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

Nature of products and services

The Company has two revenue streams, company-operated restaurant revenue and franchise related revenue. See Note 2 “Summary of Significant Accounting Policies” for a description of the revenue recognition policies.

Franchise and franchise advertising revenue

Franchise revenue consists of franchise royalties, initial franchise fees, license fees due from franchisees, IT support services, and rental income for subleases to franchisees. Franchise advertising revenue consists of advertising contributions received from franchisees.

Disaggregated revenue

The following table presents the Company’s revenues for the years ended December 28, 2022, December 29, 2021 and December 30, 2020 disaggregated by revenue source and market (in thousands):


		December 28,		December 29,	December 30,
		2022		2021	2020
Core Market⁽¹⁾:
Company-operated restaurant revenue	$	384,504	$	371,067	$	346,662
Franchise revenue		17,953		16,062		14,216
Franchise advertising fee revenue		13,223		12,017		10,632
Total core market	$	415,680	$	399,146	$	371,510
Non-Core Market⁽²⁾:
Company-operated restaurant revenue	$	18,714	$	23,666	$	27,402
Franchise revenue		20,272		17,667		15,202
Franchise advertising fee revenue		15,293		13,884		11,973
Total non-core market	$	54,279	$	55,217	$	54,577
Total revenue	$	469,959	$	454,363	$	426,087

(1)	Core Market includes markets with existing company-operated restaurants at the time of the Company’s Initial Public Offering ("IPO") on July 28, 2014.

(2)	Non-Core Market includes markets entered into by the Company subsequent to the IPO date.

The following table presents the Company’s revenues disaggregated by geographic market for the years ended December 28, 2022, December 29, 2021 and December 30, 2020:


	December 28, 2022		December 29, 2021		December 30, 2020
Greater Los Angeles area market	71.2	%	70.9	%	71.3	%
Other markets	28.8	%	29.1	%	28.7	%
Total	100	%	100	%	100	%

Contract balances

The following table provides information about the change in the franchise contract liability balances during the year ended December 28, 2022 and December 29, 2021 (in thousands):


December 30, 2020	$	5,628
Revenue recognized - beginning balance		(680)
Additional contract liability		1,380
December 29, 2021	$	6,328
Revenue recognized - beginning balance		(744)
Additional contract liability		793
December 28, 2022	$	6,377

The Company’s franchise contract liability includes development fees, initial franchise and license fees, franchise renewal fees, lease subsidies and royalty discounts and is included within other accrued expenses and current liabilities and other noncurrent liabilities within the accompanying consolidated balance sheets. The Company receives area development fees from franchisees when they execute multi-unit area development agreements. Initial franchise and license fees, or franchise renewal fees, are received from franchisees upon the execution of, or renewal of, a franchise agreement. Revenue is recognized from these agreements as the underlying performance obligation is satisfied, which is over the term of the agreement.

For the year ended December 28, 2022, there was an increase to the contract liability balance due to the Company’s completion of the sale of three company-operated restaurants within the Orange County area to an existing franchisee. This resulted in an additional contract liability of $0.8 million, relating to allocation of the transaction price to various performance obligations under the applicable contracts of the sale. For the year ended December 29, 2021, there was an increase to the contract liability balance due to the Company’s completion of the sale of eight company-operated restaurants within the Sacramento area to an existing franchisee which resulted in an additional contract liability of $0.7 million, relating to allocation of the transaction price to various performance obligations under the applicable contracts of the sale.

The following table illustrates the estimated revenue to be recognized in the future related to performance obligations that are unsatisfied as of December 28, 2022:


Franchise revenues:
2023	$	615
2024		522
2025		474
2026		451
2027		428
Thereafter		3,887
Total	$	6,377

Changes in the loyalty rewards program liability included in other accrued expenses and current liabilities on the consolidated balance sheets were as follows (in thousands):


	December 28,		December 29,		December 30,
	2022		2021		2020
Loyalty rewards liability, beginning balance	$	687	$	900	$	1,084
Revenue deferred		2,754		2,677		2,463
Revenue recognized		(2,915)		(2,890)		(2,647)
Loyalty rewards liability, ending balance	$	526	$	687	$	900

The Company expects all loyalty points revenue related to performance obligations unsatisfied as of December 28, 2022 to be recognized within one year.

Gift Cards

The gift card liability included in other accrued expenses and current liabilities on the consolidated balance sheets was as follows (in thousands):


	December 28,		December 29,
	2022		2021
Gift card liability	$	4,667	$	4,622

Revenue recognized from the redemption of gift cards that was included in other accrued expenses and current liabilities at the beginning of the year was as follows (in thousands):



	December 28,		December 29,		December 30,
	2022		2021		2020
Revenue recognized from gift card liability balance at the beginning of the year	$	1,145	$	1,218	$	1,028

Contract Costs

The Company does not currently incur costs to obtain or fulfill a contract that would be considered contract assets under Topic 606.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 28, 2022

Accounting Policies [Abstract]

Liquidity

Basis of Presentation

Principles of Consolidation

Use of Estimates

COVID-19 and Macroeconomic Conditions

COVID-19 and Macroeconomic Conditions

Cash and Cash Equivalents

The Company considers all liquid instruments with a maturity of three months or less at the date of purchase to be cash equivalents.

Subsequent Events

Subsequent to year-end, the Company paid down $8.0 million on its 2022 Revolver and outstanding borrowings as of March 9, 2023 were $58.0 million.

Concentration of Risk

Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally-insured limits. The Company has never experienced any losses related to these balances.

Management believes the loss of the significant supplier or franchisee could have a material adverse effect on the Company’s consolidated results of operations and financial condition.

Accounts and Other Receivables, Net

Inventories

Inventories consist principally of food, beverages and supplies and are valued at the lower of average cost or net realizable value.

Property and Equipment, Net

The estimated useful service lives are as follows:


Buildings		20 years
Land improvements		3—30 years
Building improvements		3—10 years
Restaurant equipment		3—10 years
Other equipment		2—10 years
Property/equipment held under finance leases		Shorter of useful life or lease term
Leasehold improvements		Shorter of useful life or lease term

Impairment of Long-Lived and ROU Assets

Closed-Store Reserves

During fiscal 2022, the Company recognized $0.3 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations.

$1.2 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for its closed locations.

Goodwill and Indefinite-Lived Intangible Assets

The Company performs annual impairment tests for goodwill during the fourth fiscal quarter of each year, or more frequently if impairment indicators arise.

Deferred Financing Costs

three years ended December 28, 2022, December 29, 2021, and December 30, 2020, and is reflected as a component of interest expense in the accompanying consolidated statements of income.

Insurance Reserves

Restaurant and Franchise Revenue

Restaurant Revenue

Franchise Revenue

This revenue stream is made up of the following performance obligations:

●

Franchise License – inclusive of advertising services, development agreements, training, access to plans and help desk services;

●

Discounted renewal option; and

●

Hardware services.

Franchise Advertising Fee Revenue

The Company presents advertising contributions received from franchisees as franchise advertising fee revenue and records all expenses of the advertising fund within franchise expenses.

Advertising Costs

Preopening Costs

Leases

Gain on Recovery of Insurance Proceeds, Lost Profits

Gain on Recovery of Insurance Proceeds, Lost Profits

Recovery of Securities Class Action Legal Expense and Other Insurance Claims

During fiscal 2020 the Company received insurance proceeds of $0.1 million related to a property claim. See Note 13 “Commitments and Contingencies—Legal Matters.”

Gain (Loss) on Disposition of Restaurants

Derivative Financial Instruments

Income Taxes

The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where it is required to file.

Fair Value Measurements

●

Level 1: Quoted prices for identical instruments in active markets.

●

Level 3: Unobservable inputs used when little or no market data is available.

The following table presents fair value for the interest rate swap at December 29, 2021 (in thousands):


			Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Level 3
Other non-current liabilities - Interest rate swap	$	396	$	—	$	396	$	—


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	442
Certain ROU assets, net	$	327	$	—	$	—	$	327	$	39


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	304
Certain ROU assets, net	$	411	$	—	$	—	$	411	$	407


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	2,955
Certain ROU assets, net	$	902	$	—	$	—	$	902	$	543

Fair Value of Financial Instruments

Stock Based Compensation

Stock-Based Compensation

Earnings per Share

Franchise Development Option Agreement with Related Party

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 28, 2022

Accounting Policies [Abstract]

Summary of estimated useful service lives

The estimated useful service lives are as follows:


Buildings		20 years
Land improvements		3—30 years
Building improvements		3—10 years
Restaurant equipment		3—10 years
Other equipment		2—10 years
Property/equipment held under finance leases		Shorter of useful life or lease term
Leasehold improvements		Shorter of useful life or lease term

Schedule of fair value measurement

The following table presents fair value for the interest rate swap at December 29, 2021 (in thousands):


			Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Level 3
Other non-current liabilities - Interest rate swap	$	396	$	—	$	396	$	—

Summary of Non-Financial Instruments Measured at Fair Value on Nonrecurring Basis


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	442
Certain ROU assets, net	$	327	$	—	$	—	$	327	$	39


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	304
Certain ROU assets, net	$	411	$	—	$	—	$	411	$	407


	Total		Level 1		Level 2		Level 3		Impairment Losses
Certain property and equipment, net	$	—	$	—	$	—	$	—	$	2,955
Certain ROU assets, net	$	902	$	—	$	—	$	902	$	543

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 28, 2022

Property, Plant and Equipment [Abstract]

Schedule of Costs and Related Accumulated Depreciation and Amortization of Major Classes of Property and Equipment

The costs and related accumulated depreciation and amortization of major classes of property are as follows (in thousands):


	December 28, 2022		December 29, 2021
Land	$	12,323	$	12,323
Buildings and improvements		153,377		144,631
Other property and equipment		83,035		78,383
Construction in progress		3,196		5,333
		251,931		240,670
Less: accumulated depreciation and amortization		(173,287)		(165,002)
	$	78,644	$	75,668

TRADEMARKS, OTHER INTANGIBLE ASSETS AND LIABILITIES (Tables)

12 Months Ended

Dec. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Domestic Trademarks

Domestic trademarks consist of the following (in thousands):


	December 28,		December 29,
	2022		2021
Cost	$	120,700	$	120,700
Accumulated impairment charges		(58,812)		(58,812)
Trademarks, net	$	61,888	$	61,888

LEASES (Tables)

12 Months Ended

Dec. 28, 2022

Leases [Abstract]

Schedule of lease cost

The following table presents the Company’s total lease cost, disaggregated by underlying asset (in thousands):


	December 28, 2022						December 29, 2021						December 30, 2020
	Property		Equipment				Property		Equipment				Property		Equipment
	Leases		Leases		Total		Leases		Leases		Total		Leases		Leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	73	$	2	$	75	$	78	$	2	$	80	$	11	$	—	$	11
Interest on lease liabilities		42		3		45		58		1		59		27		—		27
Operating lease cost		26,537		1,005		27,542		26,501		1,122		27,623		26,578		1,227		27,805
Short-term lease cost		—		18		18		—		21		21		—		23		23
Variable lease cost		597		677		1,274		539		354		893		444		191		635
Sublease income		(4,555)		—		(4,555)		(3,823)		—		(3,823)		(3,251)		—		(3,251)
Total lease cost	$	22,694	$	1,705	$	24,399	$	23,353	$	1,500	$	24,853	$	23,809	$	1,441	$	25,250

The following table presents the Company’s total lease cost on the consolidated statement of income (in thousands):


	December 28, 2022		December 29, 2021		December 30, 2020
Lease cost – Occupancy and other operating expenses	$	23,730	$	24,020	$	23,972
Lease cost – General & administrative		465		413		464
Lease cost – Depreciation and amortization		73		78		11
Lease cost – Interest expense		45		59		27
Lease cost – Closed-store reserve		86		283		776
Total lease cost	$	24,399	$	24,853	$	25,250

The Company had the following cash and non-cash activities associated with its leases (in thousands):


	December 28, 2022								December 29, 2021								December 30, 2020
	Property			Equipment					Property			Equipment					Property			Equipment
	Leases			Leases			Total		Leases			Leases			Total		Leases			Leases			Total
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases	$	27,221		$	953		$	28,174	$	26,414		$	1,084		$	27,498	$	23,683		$	1,230		$	24,913
Financing cash flows used for finance leases	$	106		$	56		$	162	$	102		$	46		$	148	$	34		$	5		$	39

Non-cash investing and financing activities:
Operating lease ROU assets obtained in exchange for lease liabilities:
Operating lease ROU assets	$	12,978		$	92		$	13,070	$	17,763		$	—		$	17,763	$	5,850		$	13		$	5,863
Finance lease ROU assets obtained in exchange for lease liabilities:
Finance lease ROU assets	$	—		$	28		$	28	$	—		$	196		$	196	$	1,623		$	54		$	1,677
Derecognition of ROU assets due to terminations, impairment or modifications	$	(39)		$	(35)		$	(74)	$	(4,513)		$	(99)		$	(4,612)	$	(543)		$	(26)		$	(569)

Other Information
Weighted-average remaining years in lease term—finance leases		17.87			3.19					18.42			4.02					18.98			4.52
Weighted-average remaining years in lease term—operating leases		10.73			1.73					11.27			1.44					11.45			2.31
Weighted-average discount rate—finance leases		2.57	%		1.53	%				2.78	%		1.54	%				2.50	%		1.68	%
Weighted-average discount rate—operating leases		4.54	%		3.80	%				4.45	%		3.89	%				4.29	%		3.93	%

Schedule of Financing Leases

Information regarding the Company’s minimum future lease obligations at December 28, 2022 is as follows (in thousands):


	Finance		Operating Leases
	Minimum		Minimum		Minimum
	Lease		Lease		Sublease
For the Years Ending	Payments		Payments		Income
December 27, 2023	$	151	$	27,876	$	4,040
December 25, 2024		151		25,887		3,685
December 31, 2025		147		23,729		3,207
December 30, 2026		114		21,595		2,881
December 29, 2027		104		19,806		2,829
Thereafter		1,479		117,566		20,403
Total	$	2,146	$	236,459	$	37,045
Less: imputed interest (1.53% - 4.54%)		(410)		(51,315)
Present value of lease obligations		1,736		185,144
Less: current maturities		(110)		(19,995)
Noncurrent portion	$	1,626	$	165,149

Schedule of Operating Leases

Information regarding the Company’s minimum future lease obligations at December 28, 2022 is as follows (in thousands):


	Finance		Operating Leases
	Minimum		Minimum		Minimum
	Lease		Lease		Sublease
For the Years Ending	Payments		Payments		Income
December 27, 2023	$	151	$	27,876	$	4,040
December 25, 2024		151		25,887		3,685
December 31, 2025		147		23,729		3,207
December 30, 2026		114		21,595		2,881
December 29, 2027		104		19,806		2,829
Thereafter		1,479		117,566		20,403
Total	$	2,146	$	236,459	$	37,045
Less: imputed interest (1.53% - 4.54%)		(410)		(51,315)
Present value of lease obligations		1,736		185,144
Less: current maturities		(110)		(19,995)
Noncurrent portion	$	1,626	$	165,149

LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 28, 2022

Debt Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table shows the financial statement line item and amount of the Company’s cash flow hedge accounting on the consolidated balance sheet (in thousands):


	December 28, 2022				December 29, 2021
	Notional		Fair value		Notional		Fair value
Other liabilities - Interest rate swap	$	—	$	—	$	40,000	$	396

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following table summarizes the effect of the Company’s cash flow hedge accounting on the consolidated statements of income (in thousands):


	December 28, 2022		December 29, 2021		December 30, 2020
Interest expense on hedged portion of debt	$	439	$	568	$	979
Interest (income) expense on interest rate swap		(296)		486		278
Interest (income) expense on debt and derivatives, net	$	143	$	1,054	$	1,257

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The following table summarizes the effect of the Company’s cash flow hedge accounting on AOCI for the years ended December 28, 2022, December 29, 2021 and December 30, 2020 (in thousands):


							(Gain) Loss Reclassified from
	Net Gain (Loss) Recognized in OCI						AOCI into Interest (Income) Expense
	December 28, 2022		December 29, 2021		December 30, 2020		December 28, 2022		December 29, 2021		December 30, 2020
Interest rate swap	$	862	$	257	$	(1,762)	$	(296)	$	486	$	278

OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 28, 2022

Payables And Accruals [Abstract]

Schedule of Other Accrued Expenses and Current Liabilities

Other accrued expenses and current liabilities consist of the following (in thousands):


	December 28, 2022		December 29, 2021
Accrued sales and property taxes	$	5,270	$	4,726
Gift card liability		4,667		4,622
Loyalty rewards program liability		526		687
Accrued advertising		831		3,635
Accrued legal settlements and professional fees		1,303		771
Deferred franchise and development fees		610		637
Other		1,913		4,632
Total other accrued expenses and current liabilities	$	15,120	$	19,710

OTHER NONCURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 28, 2022

Payables And Accruals [Abstract]

Schedule of Other Noncurrent Liabilities

Other noncurrent liabilities consist of the following (in thousands):


	December 28, 2022		December 29, 2021
Deferred franchise and development fees	$	5,767	$	5,691
Derivative liability		—		396
Employer social security tax deferral		—		2,426
Other		89		140
Total other noncurrent liabilities	$	5,856	$	8,653

INCOME TAXES (Tables)

12 Months Ended

Dec. 28, 2022

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

The provision for income taxes is based on the following components (in thousands):


	December 28,		December 29,		December 30,
For the Years Ended	2022		2021		2020
Current income taxes:
Federal	$	2,366	$	7,163	$	520
State		1,112		2,158		1,123
Total current		3,478		9,321		1,643
Deferred income taxes:
Federal		2,958		93		3,350
State		1,642		918		658
Total deferred		4,600		1,011		4,008
Tax provision for income taxes	$	8,078	$	10,332	$	5,651

Schedule of Effective Income Tax rate

The provision for income taxes differs from the amount computed by applying the federal income tax rate of 21.0% for fiscal 2022, 2021 and 2020 as follows:


	December 28,		December 29,		December 30,
For the Years Ended	2022		2021		2020
Statutory federal income tax rate applied to earnings before income taxes and extraordinary items	21.0	%	21.0	%	21.0	%
State income tax expense (net of federal benefit)	7.7		5.9		4.3
Change in valuation allowance	—		0.1		0.4
TRA (income) expense	(0.3)		—		—
162(m)	0.5		0.8		0.2
WOTC Credit	(0.9)		(0.5)		(0.9)
Stock option exercises	0.3		(1.4)		(6.6)
Other	(0.3)		0.3		0.4
Total	28.0	%	26.2	%	18.8	%

Schedule of Deferred Tax Assets and Liabilities

The Company’s deferred tax assets and liabilities as of December 28, 2022 and December 29, 2021 are summarized below.


	December 28,		December 29,
	2022		2021
Deferred assets:
Capital leases	$	55	$	60
Accrued vacation		508		503
Accrued workers’ compensation		2,201		2,616
Enterprise zone and other credits		7,258		7,524
Net operating losses		5		5
Fixed assets		2,392		4,393
ROU assets		50,112		51,864
Other		4,397		5,694
Total deferred tax assets		66,928		72,659
Valuation allowance		(6,727)		(6,181)
Net deferred tax assets		60,201		66,478
Deferred liabilities:
Goodwill		(6,420)		(6,349)
Trademark		(16,721)		(16,727)
Prepaid expense		(595)		(498)
ROU liabilities		(44,737)		(46,484)
Other		267		361
Deferred tax liabilities		(68,206)		(69,697)
Net deferred tax liability	$	(8,005)	$	(3,219)

Schedule of Deferred Tax Assets Classification


	December 28,		December 29,
	2022		2021
Noncurrent:
Assets - state	$	512	$	2,245
Liabilities - federal		(8,517)		(5,464)
Net deferred tax liability	$	(8,005)	$	(3,219)

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 28, 2022

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Changes in Stock Options


				Weighted-Average		Aggregate
		Weighted-Average		Contractual Life		Intrinsic Value
	Shares	Exercise Price		Life (Years)		(in thousands)
Outstanding - December 30, 2020	1,030,866	$	9.82
Grants	256,172		17.55
Exercised	(132,760)		6.52
Forfeited, cancelled or expired	(176,200)		14.48
Outstanding - December 29, 2021	978,078	$	11.45
Grants	372,958		10.54
Exercised	(185,798)		9.22
Forfeited, cancelled or expired	(97,059)	$	12.06
Outstanding - December 28, 2022	1,068,179	$	9.92		5.68	$	1,368
Vested and expected to vest at December 28, 2022	1,060,880	$	9.92		5.66	$	1,362
Exercisable at December 28, 2022	625,436	$	9.50		3.37	$	1,033

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions


	December 28, 2022		December 29, 2021
Expected volatility	43.0	%	46.9	%
Risk-free interest rate	2.9	%	1.1	%
Expected term (years)	6.25		6.25
Expected dividends	—		—

Schedule of Changes in Restricted Shares

Changes in restricted shares for the years ended December 28, 2022 and December 29, 2021, are as follows:


		Weighted-Average
	Shares	Fair Value
Unvested shares at December 30, 2020	742,404	$	11.68
Granted	222,741	$	17.13
Released	(248,255)	$	11.99
Forfeited, cancelled, or expired	(221,110)	$	11.80
Unvested shares at December 29, 2021	495,780	$	13.92
Granted	356,610	$	10.37
Released	(201,043)	$	13.32
Forfeited, cancelled, or expired	(105,867)	$	12.91
Unvested shares at December 28, 2022	545,480	$	12.02

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 28, 2022

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income per Share

Below are basic and diluted EPS data for the periods indicated, which are in thousands except for per share data.


	For the Years Ended
	December 28,		December 29,		December 30,
	2022		2021		2020
Numerator:
Net income	$	20,801	$	29,121	$	24,474
Denominator:
Weighted-average shares outstanding—basic		36,350,579		35,973,892		35,193,325
Weighted-average shares outstanding—diluted		36,575,904		36,446,756		35,796,406
Net income per share—basic	$	0.57	$	0.81	$	0.70
Net income per share—diluted	$	0.57	$	0.80	$	0.68
Anti-dilutive securities not considered in diluted EPS calculation		535,574		136,397		81,041

Schedule of Reconciliation of Basic and Diluted Share Counts

Below is a reconciliation of basic and diluted share counts.


	For the Years Ended
	December 28,	December 29,	December 30,
	2022	2021	2020
Weighted-average shares outstanding—basic	36,350,579	35,973,892	35,193,325
Dilutive effect of stock options and restricted shares	225,325	472,864	603,081
Weighted-average shares outstanding—diluted	36,575,904	36,446,756	35,796,406

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

12 Months Ended

Dec. 28, 2022

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue

The following table presents the Company’s revenues for the years ended December 28, 2022, December 29, 2021 and December 30, 2020 disaggregated by revenue source and market (in thousands):


		December 28,		December 29,	December 30,
		2022		2021	2020
Core Market⁽¹⁾:
Company-operated restaurant revenue	$	384,504	$	371,067	$	346,662
Franchise revenue		17,953		16,062		14,216
Franchise advertising fee revenue		13,223		12,017		10,632
Total core market	$	415,680	$	399,146	$	371,510
Non-Core Market⁽²⁾:
Company-operated restaurant revenue	$	18,714	$	23,666	$	27,402
Franchise revenue		20,272		17,667		15,202
Franchise advertising fee revenue		15,293		13,884		11,973
Total non-core market	$	54,279	$	55,217	$	54,577
Total revenue	$	469,959	$	454,363	$	426,087

(1)	Core Market includes markets with existing company-operated restaurants at the time of the Company’s Initial Public Offering ("IPO") on July 28, 2014.

(2)	Non-Core Market includes markets entered into by the Company subsequent to the IPO date.

The following table presents the Company’s revenues disaggregated by geographic market for the years ended December 28, 2022, December 29, 2021 and December 30, 2020:


	December 28, 2022		December 29, 2021		December 30, 2020
Greater Los Angeles area market	71.2	%	70.9	%	71.3	%
Other markets	28.8	%	29.1	%	28.7	%
Total	100	%	100	%	100	%

Schedule of Estimated Revenue to be Recognized Related to Performance Obligations

The following table illustrates the estimated revenue to be recognized in the future related to performance obligations that are unsatisfied as of December 28, 2022:


Franchise revenues:
2023	$	615
2024		522
2025		474
2026		451
2027		428
Thereafter		3,887
Total	$	6,377

Loyalty reward program

Disaggregation of Revenue [Line Items]

Schedule of Change in Franchise Contract Liability Balances

Changes in the loyalty rewards program liability included in other accrued expenses and current liabilities on the consolidated balance sheets were as follows (in thousands):


	December 28,		December 29,		December 30,
	2022		2021		2020
Loyalty rewards liability, beginning balance	$	687	$	900	$	1,084
Revenue deferred		2,754		2,677		2,463
Revenue recognized		(2,915)		(2,890)		(2,647)
Loyalty rewards liability, ending balance	$	526	$	687	$	900

Gift card liability

Disaggregation of Revenue [Line Items]

Schedule of Change in Franchise Contract Liability Balances

The gift card liability included in other accrued expenses and current liabilities on the consolidated balance sheets was as follows (in thousands):


	December 28,		December 29,
	2022		2021
Gift card liability	$	4,667	$	4,622

Revenue recognized from the redemption of gift cards that was included in other accrued expenses and current liabilities at the beginning of the year was as follows (in thousands):



	December 28,		December 29,		December 30,
	2022		2021		2020
Revenue recognized from gift card liability balance at the beginning of the year	$	1,145	$	1,218	$	1,028

Franchise revenue

Disaggregation of Revenue [Line Items]

Schedule of Change in Franchise Contract Liability Balances

The following table provides information about the change in the franchise contract liability balances during the year ended December 28, 2022 and December 29, 2021 (in thousands):


December 30, 2020	$	5,628
Revenue recognized - beginning balance		(680)
Additional contract liability		1,380
December 29, 2021	$	6,328
Revenue recognized - beginning balance		(744)
Additional contract liability		793
December 28, 2022	$	6,377

DESCRIPTION OF BUSINESS - Additional Information (Details)	12 Months Ended
	Dec. 28, 2022 segment restaurant
Debt Instrument [Line Items]
Number of operating segments \| segment	1
El Pollo Loco Holdings, Inc \| Trimaran Pollo Partners, LLC
Debt Instrument [Line Items]
Noncontrolling ownership percentage	30.30%
El Pollo Loco Holdings, Inc \| FS Equity Partners V, L.P
Debt Instrument [Line Items]
Noncontrolling ownership percentage	14.80%
El Pollo Loco Holdings, Inc \| FS Affiliates V, L.P
Debt Instrument [Line Items]
Noncontrolling ownership percentage	0.20%
Philippines
Debt Instrument [Line Items]
Number of restaurants	5
Company-operated
Debt Instrument [Line Items]
Number of restaurants	188
Company-operated \| Greater Los Angeles area market
Debt Instrument [Line Items]
Number of restaurants	138
Franchised
Debt Instrument [Line Items]
Number of restaurants	302
Franchised \| Greater Los Angeles area market
Debt Instrument [Line Items]
Number of restaurants	141

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details)							3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 09, 2023 USD ($)	Jul. 27, 2022 USD ($)	Aug. 04, 2020 USD ($) item	Aug. 03, 2020 USD ($) item	Jul. 30, 2014	Jul. 11, 2014 restaurant	Mar. 30, 2022 USD ($)	Dec. 28, 2022 USD ($) restaurant $ / shares	Dec. 28, 2022 USD ($) segment item restaurant $ / shares	Dec. 29, 2021 USD ($) item	Dec. 30, 2020 USD ($) restaurant	Dec. 29, 2021	Dec. 29, 2021 item	Dec. 29, 2021 restaurant	Dec. 29, 2021 $ / shares
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Total amount of outstanding debt								$ 66,000,000.0	$ 66,000,000.0
Cash available								20,493,000	20,493,000	$ 30,046,000
Leaves of absence and overtime pay due to COVID 19							$ 2,300,000	$ 1,000,000.0	$ 3,300,000	3,900,000	$ 4,900,000
Loyalty Rewards Program, Award Earned			$ 5	$ 10
Loyalty Rewards Program, Points Needed For One Reward \| item			50	100
Loyalty Rewards Program, Expiration Period For Inactivity			1 year
Loyalty Reward Program, unused reward expiration period			6 months
Loyalty Rewards Program, Expected Loyalty Points Redemption Period									1 year
Initial lease term								20 years	20 years
Insurance proceeds											100,000
Number of franchised restaurants committed to open \| restaurant								72	72
Number of operating segments \| segment									1
Bad debt expense											190,000
Revolver loan								$ 66,000,000	$ 66,000,000	40,000,000
Common stock, par value (usd per share) \| $ / shares								$ 0.01	$ 0.01						$ 0.01
Gain on recovery of insurance proceeds											$ 2,000,000
Gain on Business Interruption Insurance Recovery, Statement of Income or Comprehensive Income [Extensible Enumeration]											Company Restaurant Expenses
Goodwill and intangible asset impairment									$ 0
Proceeds from swap									600,000
Impairment of property and equipment									481,000	711,000	$ 3,498,000
Accounts payable								$ 12,741,000	12,741,000	10,626,000
Unrecognized tax benefits, accrual of interest or penalties								$ 0	0	0
Interest related to NOPA											100,000
TRA tax expense (benefit)											(100,000)
Percentage of cash savings in taxes realized as a result of utilizing net operating losses payable to pre-IPO stockholders					85.00%
Income tax receivable agreement (income) expense									$ (436,000)	58,000	139,000
AMT Credits, CARES Act											400,000
Proceeds from Income Tax Refunds											500,000
Total deferred amount											4,900,000
Percentage of deferred amount due by current fiscal year												50.00%
Percentage of deferred amount due by next fiscal year								50.00%	50.00%
Percentage of qualified wages paid for refundable payroll tax credit								70.00%	70.00%
Employee retention tax credit										3,400,000
Capitalized internal cost									$ 1,500,000	1,400,000	1,000,000.0
Amortization of deferred financing costs									340,000	251,000	252,000
Expense for payroll and benefits reserves									8,700,000	9,000,000.0	8,400,000
Promotional allowances amount									7,500,000	7,700,000	7,500,000
Advertising expense									16,400,000	16,100,000	15,300,000
Accrued loyalty rewards program liability								$ 500,000	500,000	700,000
Asset impairment charges									500,000		3,500,000
Accrued advertising								800,000	800,000	3,600,000
Accrued insurance								11,120,000	11,120,000	11,193,000
Recovery of securities lawsuits related legal expenses and other insurance claims											(123,000)
Proceeds from disposition of restaurants									1,002,000	4,556,000
Gain (loss) on sale of restaurants									848,000	(1,534,000)
Charge relating to present value of total expected TRA payments								700,000	700,000	1,500,000
Payments to pre-IPO stockholders under TRA									430,000	1,658,000	$ 5,237,000
Operating Lease ROU assets								165,584,000	165,584,000	171,981,000
Employee retention credit receivable								$ 300,000	300,000
Proceeds from employee retention credit									$ 3,100,000
Franchise Rights
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Renewal period									20 years
Minimum
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of monthly franchise fee									4.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period								10 years	10 years
Maximum
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
TRA tax expense (benefit)									$ 400,000	100,000
Percentage of monthly franchise fee									5.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period								20 years	20 years
Other Assets
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Deferred financing fees net of accumulated amortization								$ 900,000	$ 900,000	400,000
Franchise Development Initial Option Agreement
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant								0	0
Franchise Development Initial Option Agreement \| Limited Liability Company
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant						15
Number of years available under plan						5 years
Franchise Development Additional Option Agreement
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of years available under plan						10 years
Franchise Development Additional Option Agreement \| Limited Liability Company
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant						100
Number of years available under plan						5 years
Franchise Development Agreement \| Limited Liability Company
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Related party agreement, termination period						10 years
Closed Or Subleased Restaurant Locations
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Operating Lease ROU assets								$ 30,700,000	$ 30,700,000	$ 21,900,000
Accounts Receivable
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of Franchisees \| item									1
Supplier Concentration Risk \| Accounts Payable
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number Of Suppliers \| item									1	1
Supplier Concentration Risk \| Supplier One \| Accounts Payable
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration									41.70%	26.10%
Supplier Concentration Risk \| Largest Supplier One \| Purchased
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration									28.50%	27.10%	26.90%
Geographic Concentration Risk \| Revenue
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration									100.00%	100.00%	100.00%
Hardware Services
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Unsatisfied performance obligations								0	$ 0
2018 Credit Agreement \| Revolving Credit Facility
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
maximum borrowing capacity		$ 150,000,000.0
Senior secured revolving facility term		5 years
Revolver loan										$ 40,000,000.0
Repayment for long-term line of credit										22,800,000
2018 Credit Agreement \| Letter of Credit
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
maximum borrowing capacity		$ 15,000,000.0
2018 Credit Agreement \| Swing Line Loans
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
maximum borrowing capacity		15,000,000.0
2022 Credit Agreement \| Minimum \| SOFR
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Debt instrument basis percentage									1.25%
2022 Credit Agreement \| Minimum \| Base Rate
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Debt instrument basis percentage									0.25%
2022 Credit Agreement \| Maximum \| SOFR
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Debt instrument basis percentage									2.25%
2022 Credit Agreement \| Maximum \| Base Rate
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Debt instrument basis percentage									1.25%
2022 Credit Agreement \| Revolving Credit Facility
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Proceeds from Lines of Credit									$ 26,000,000.0
maximum borrowing capacity		$ 150,000,000.0
Senior secured revolving facility term		5 years
Revolver loan								66,000,000.0	66,000,000.0
Repayment for long-term line of credit									$ 20,000,000.0
2022 Credit Agreement \| Revolving Credit Facility \| Federal Funds Rate
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Debt instrument basis percentage									0.50%
2022 Credit Agreement \| Revolving Credit Facility \| Subsequent Event
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Revolver loan	$ 58,000,000.0
Repayment for long-term line of credit	$ 8,000,000.0
2022 Credit Agreement \| Letter of Credit
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
maximum borrowing capacity								15,000,000.0	$ 15,000,000.0
2022 Credit Agreement \| Swing Line Loans
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
maximum borrowing capacity								$ 15,000,000.0	$ 15,000,000.0
Texas
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants with ROU asset impairment charges \| restaurant											1			1
Restaurants sold \| restaurant											1
Number of restaurants closed \| restaurant														1
Asset impairment charges										$ 700,000
California
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant								2	2
Number of restaurants with ROU asset impairment charges \| restaurant														1
Number of restaurants with long-lived assets impairment charges \| restaurant											4			3
Number of restaurants closed													1	1
Greater Los Angeles area market \| Geographic Concentration Risk \| Revenue
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration									71.20%	70.90%	71.30%
Sacramento Area \| Disposed of by Sale \| Restaurant Sales
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants sold \| restaurant														8
Proceeds from disposition of restaurants										$ 4,600,000
Gain (loss) on sale of restaurants										(1,500,000)
Orange County \| Restaurant Sales
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants sold \| restaurant								3	3
Orange County \| Disposed of by Sale \| Restaurant Sales
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Proceeds from disposition of restaurants									$ 1,000,000.0
Gain (loss) on sale of restaurants									800,000
Interest Expense
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Amortization of deferred financing costs									300,000	300,000	$ 300,000
General and Administrative Expense
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Preopening costs									300,000	300,000	100,000
General and Administrative Expense \| Maximum
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Abandoned site and other site selection costs									100,000	100,000	100,000
Closed Store
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Closed-store reserve expense									$ 300,000	400,000	1,200,000
Company-operated
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant								188	188
Company-operated \| Greater Los Angeles area market
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant								138	138
Franchised
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant								302	302
Advertising fees									$ 28,500,000	$ 25,900,000	$ 22,600,000
Franchised \| Accounts Receivable
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of Franchisees \| item										1
Franchised \| Geographic Concentration Risk \| Accounts Receivable
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration									12.90%	10.60%
Franchised \| Greater Los Angeles area market
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of restaurants \| restaurant								141	141

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment Owned, Net (Details)	12 Months Ended
	Dec. 28, 2022
Buildings
Property, Plant and Equipment [Line Items]
Estimated useful service lives	20 years
Land improvements \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	3 years
Land improvements \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	30 years
Building improvements \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	3 years
Building improvements \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	10 years
Restaurant equipment \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	3 years
Restaurant equipment \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	10 years
Other equipment \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	2 years
Other equipment \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful service lives	10 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Property and equipment, net	$ 78,644	$ 75,668
Proceeds from swap	600
Impairment of property and equipment	$ 400	300	$ 3,000
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration]	Restructuring Costs and Asset Impairment Charges
Impairment of Right-of-Use Assets		400
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Fair Value, Gross Liability		396
Fair Value, Measurements, Recurring [Member] \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Fair Value, Gross Liability		0
Fair Value, Measurements, Recurring [Member] \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Fair Value, Gross Liability		396
Fair Value, Measurements, Recurring [Member] \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Fair Value, Gross Liability		0
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Property and equipment, net	$ 0	0	0
Right-of-Use Assets, Net	327	411	902
Impairment of property and equipment	442	304	2,955
Impairment of Right-of-Use Assets	39	407	543
Fair Value, Measurements, Nonrecurring \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Property and equipment, net	0	0	0
Right-of-Use Assets, Net	0	0
Fair Value, Measurements, Nonrecurring \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Property and equipment, net	0	0	0
Right-of-Use Assets, Net	0	0
Fair Value, Measurements, Nonrecurring \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Property and equipment, net	0	0	0
Right-of-Use Assets, Net	$ 327	$ 411	$ 902

PROPERTY AND EQUIPMENT - Schedule of Costs and Related Accumulated Depreciation and Amortization of Major Classes of Property (Details) - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 251,931	$ 240,670
Less: accumulated depreciation and amortization	(173,287)	(165,002)
Property and equipment, net	78,644	75,668
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	12,323	12,323
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	153,377	144,631
Other property and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	83,035	78,383
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,196	$ 5,333

PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 14.4	$ 15.2	$ 16.9
Impairment of property and equipment	$ 0.4	$ 0.3	$ 3.0

TRADEMARKS, OTHER INTANGIBLE ASSETS AND LIABILITIES - Schedule of Domestic Trademarks (Details) - Trademarks - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Indefinite-lived Intangible Assets [Line Items]
Cost	$ 120,700	$ 120,700
Accumulated impairment charges	(58,812)	(58,812)
Trademarks, net	$ 61,888	$ 61,888

LEASES (Details) $ in Thousands	12 Months Ended
LEASES (Details) $ in Thousands	Dec. 28, 2022 USD ($) item lease restaurant property	Dec. 29, 2021 USD ($) item restaurant	Dec. 30, 2020 USD ($) restaurant	Dec. 29, 2021 restaurant
Lessee, Lease, Description [Line Items]
Initial lease term	20 years
Number of renewable options \| item	4
Renewal term	5 years
Lessee, Operating Lease, Existence of Option to Extend [true false]	true
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 13,070	$ 17,763	$ 5,863
Original impact of original lease classification		0
Number of restaurants primarily responsible for impairment \| restaurant	1
Impairment of Right-of-Use Assets		$ 400
Texas
Lessee, Lease, Description [Line Items]
Number of restaurants primarily responsible for impairment \| restaurant	1	2	1
Impairment of Right-of-Use Assets			$ 500
Restaurants sold \| restaurant			1
Number of restaurants closed \| restaurant				1
Texas \| Maximum
Lessee, Lease, Description [Line Items]
Operating Lease, Impairment Loss	$ 100
California
Lessee, Lease, Description [Line Items]
Number of restaurants closed		1		1
Lease Not Yet Commenced
Lessee, Lease, Description [Line Items]
Number Of Leases \| lease	0
Property Lease
Lessee, Lease, Description [Line Items]
Number Of Finance Leases	1
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 12,978	$ 17,763	$ 5,850
Equipment Lease
Lessee, Lease, Description [Line Items]
Number Of Finance Leases \| lease	10
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 92		$ 13
Property lease modification
Lessee, Lease, Description [Line Items]
Number of Restaurants with lease modification \| restaurant	22	22
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 13,000	$ 17,800
Number of properties impacted on original lease classification \| property	1
Original impact of original lease classification	$ 700

LEASES - Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
LEASES - Lease Cost (Details) - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Lessee, Lease, Description [Line Items]
Amortization of right-to-use assets	$ 75	$ 80	$ 11
Interest on lease liabilities	45	59	27
Operating Lease, Cost	27,542	27,623	27,805
Short-term Lease, Cost	18	21	23
Variable Lease, Cost	1,274	893	635
Sublease Income	(4,555)	(3,823)	(3,251)
Total lease cost	24,399	24,853	25,250
Operating Expense [Member]
Lessee, Lease, Description [Line Items]
Total lease cost	23,730	24,020	23,972
General and Administrative Expense
Lessee, Lease, Description [Line Items]
Total lease cost	465	413	464
Depreciation and amortization [Member]
Lessee, Lease, Description [Line Items]
Total lease cost	73	78	11
Interest Expense
Lessee, Lease, Description [Line Items]
Total lease cost	45	59	27
Restructuring Charges [Member]
Lessee, Lease, Description [Line Items]
Total lease cost	86	283	776
Property Lease [Member]
Lessee, Lease, Description [Line Items]
Amortization of right-to-use assets	73	78	11
Interest on lease liabilities	42	58	27
Operating Lease, Cost	26,537	26,501	26,578
Variable Lease, Cost	597	539	444
Sublease Income	(4,555)	(3,823)	(3,251)
Total lease cost	22,694	23,353	23,809
Equipment Lease
Lessee, Lease, Description [Line Items]
Amortization of right-to-use assets	2	2
Interest on lease liabilities	3	1
Operating Lease, Cost	1,005	1,122	1,227
Short-term Lease, Cost	18	21	23
Variable Lease, Cost	677	354	191
Total lease cost	$ 1,705	$ 1,500	$ 1,441

LEASES - Cash and Non-cash Lease Activities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Lessee, Lease, Description [Line Items]
Operating Lease, Payments	$ 28,174	$ 27,498	$ 24,913
Finance Lease, Principal Payments	162	148	39
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	13,070	17,763	5,863
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	28	196	1,677
Derecognition of ROU assets due to terminations, impairment or modifications	(74)	(4,612)	(569)
Operating Lease ROU assets	165,584	171,981
Operating lease liabilities	185,144
Property Lease [Member]
Lessee, Lease, Description [Line Items]
Operating Lease, Payments	27,221	26,414	23,683
Finance Lease, Principal Payments	106	102	34
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	12,978	17,763	5,850
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	0	0	1,623
Derecognition of ROU assets due to terminations, impairment or modifications	$ (39)	$ (4,513)	$ (543)
Finance Lease, Weighted-average remaining years in lease term	17 years 10 months 13 days	18 years 5 months 1 day	18 years 11 months 23 days
Operating Lease, Weighted-average remaining years in lease term	10 years 8 months 23 days	11 years 3 months 7 days	11 years 5 months 12 days
Finance Lease, Weighted Average Discount Rate, Percent	2.57%	2.78%	2.50%
Operating Lease, Weighted Average Discount Rate, Percent	4.54%	4.45%	4.29%
Equipment Lease
Lessee, Lease, Description [Line Items]
Operating Lease, Payments	$ 953	$ 1,084	$ 1,230
Finance Lease, Principal Payments	56	46	5
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	92		13
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	28	196	54
Derecognition of ROU assets due to terminations, impairment or modifications	$ (35)	$ (99)	$ (26)
Finance Lease, Weighted-average remaining years in lease term	3 years 2 months 8 days	4 years 7 days	4 years 6 months 7 days
Operating Lease, Weighted-average remaining years in lease term	1 year 8 months 23 days	1 year 5 months 8 days	2 years 3 months 21 days
Finance Lease, Weighted Average Discount Rate, Percent	1.53%	1.54%	1.68%
Operating Lease, Weighted Average Discount Rate, Percent	3.80%	3.89%	3.93%

LEASES - Minimum Future Lease Obligations (Details) - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Finance Minimum Lease Payments
For the Years Ending December 27, 2023	$ 151
For the Years Ending December 25, 2024	151
For the Years Ending December 31, 2025	147
For the Years Ending December 30, 2026	114
For the Years Ending December 29, 2027	104
Thereafter	1,479
Total	2,146
Less: imputed interest	(410)
Present value of lease obligations	1,736
Less: current maturities	(110)	$ (143)
Noncurrent portion	1,626	1,712
Operating Leases Minimum Lease Payments
For the Years Ending December 27, 2023	27,876
For the Years Ending December 25, 2024	25,887
For the Years Ending December 31, 2025	23,729
For the Years Ending December 30, 2026	21,595
For the Years Ending December 29, 2027	19,806
Thereafter	117,566
Total	236,459
Less: imputed interest	(51,315)
Present value of lease obligations	185,144
Less: current maturities	(19,995)	(19,959)
Noncurrent portion	165,149	$ 171,651
Operating Leases Minimum Sublease Payments
For the Years Ending December 27, 2023	4,040
For the Years Ending December 25, 2024	3,685
For the Years Ending December 31, 2025	3,207
For the Years Ending December 30, 2026	2,881
For the Years Ending December 29, 2027	2,829
Thereafter	20,403
Total	$ 37,045
Minimum
Operating Leases Minimum Sublease Payments
Imputed interest rate	1.53%
Maximum
Operating Leases Minimum Sublease Payments
Imputed interest rate	4.54%

LEASES - Lessor (Details) - USD ($) $ in Millions	12 Months Ended
LEASES - Lessor (Details) - USD ($) $ in Millions	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Lessor, Lease, Description [Line Items]
Operating Lease, Lease Income	$ 0.4	$ 0.4	$ 0.6
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]	Revenue from Contract with Customer, Excluding Assessed Tax	Revenue from Contract with Customer, Excluding Assessed Tax	Revenue from Contract with Customer, Excluding Assessed Tax
Minimum
Lessor, Lease, Description [Line Items]
Lessor, Operating Lease, Term of Contract	3 years
Maximum
Lessor, Lease, Description [Line Items]
Lessor, Operating Lease, Term of Contract	20 years

LONG-TERM DEBT - Additional Information (Details) $ in Thousands			12 Months Ended
	Mar. 09, 2023 USD ($)	Jul. 27, 2022 USD ($)	Dec. 28, 2022 USD ($)	Dec. 29, 2021 USD ($)	Dec. 30, 2020 USD ($)	Dec. 25, 2019 USD ($)
Debt Instrument [Line Items]
Revolving line of credit			$ 66,000	$ 40,000
Repayments of Lines of Credit			20,000	22,800	$ 93,700
Proceeds from swap			600
Net Gain (Loss) recognized in OCI			862	257	(1,762)
Interest expense (income) on interest rate swap			143	1,054	1,257
Gain (Loss) Reclassified from AOCI into Interest expense			$ 296	(486)	(278)
Derivative liabilities fair value				$ 396
2022 Credit Agreement \| SOFR \| Minimum
Debt Instrument [Line Items]
Debt instrument basis percentage			1.25%
2022 Credit Agreement \| SOFR \| Maximum
Debt Instrument [Line Items]
Debt instrument basis percentage			2.25%
2022 Credit Agreement \| Base Rate \| Minimum
Debt Instrument [Line Items]
Debt instrument basis percentage			0.25%
2022 Credit Agreement \| Base Rate \| Maximum
Debt Instrument [Line Items]
Debt instrument basis percentage			1.25%
Revolving Credit Facility \| 2022 Credit Agreement
Debt Instrument [Line Items]
maximum borrowing capacity		$ 150,000
Senior secured revolving facility term		5 years
Debt instrument, interest rate			5.70%
Revolving line of credit			$ 66,000
Amount of borrowings available			74,200
Repayment for long-term line of credit			20,000
Proceeds from lines of credit			26,000
Principal payments prior to maturity			$ 0
Debt Instrument, Restrictive Covenants, Maximum Annual Repurchase or Redemption of Qualified Entity Interests		$ 1,000
Debt Instrument, Restrictive Covenants, Maximum Annual Redemption, Repurchase, Acquired Equity Interests		500
Debt Instrument, Restrictive Covenants, Maximum Annual Payment For Stock Option Plans, Employment Agreements and Incentive Plans		2,500
Debt Instrument, Restrictive Covenants, Maximum Annual Payment For Other Restricted Payments		$ 5,000
Debt Instrument, Covenant Description, Maximum Leverage Ratio		4.25
Revolving Credit Facility \| 2022 Credit Agreement \| Subsequent Event
Debt Instrument [Line Items]
Revolving line of credit	$ 58,000
Repayment for long-term line of credit	$ 8,000
Revolving Credit Facility \| 2022 Credit Agreement \| Federal Funds Rate
Debt Instrument [Line Items]
Debt instrument basis percentage			0.50%
Revolving Credit Facility \| 2022 Credit Agreement \| One Month SOFR
Debt Instrument [Line Items]
Debt instrument basis percentage			1.00%
Revolving Credit Facility \| 2018 Credit Agreement
Debt Instrument [Line Items]
maximum borrowing capacity		$ 150,000
Senior secured revolving facility term		5 years
Debt instrument, interest rate				1.40%
Revolving line of credit				$ 40,000
Amount of borrowings available				100,000
Repayment for long-term line of credit				22,800
Interest expense				$ 1,200	2,700
Revolving Credit Facility \| 2018 Credit Agreement \| Minimum
Debt Instrument [Line Items]
Debt instrument, interest rate			1.40%	1.30%
Revolving Credit Facility \| 2018 Credit Agreement \| Maximum
Debt Instrument [Line Items]
Debt instrument, interest rate			6.00%	1.60%
Revolving Credit Facility \| 2022 and 2018 Credit Agreements
Debt Instrument [Line Items]
Interest expense			$ 900
Letter of Credit \| 2022 Credit Agreement
Debt Instrument [Line Items]
maximum borrowing capacity			15,000
Letters of credit outstanding			9,800
Letter of Credit \| 2018 Credit Agreement
Debt Instrument [Line Items]
maximum borrowing capacity		$ 15,000
Letters of credit outstanding				$ 10,000
Swing Line Loans \| 2022 Credit Agreement
Debt Instrument [Line Items]
maximum borrowing capacity			15,000
Swing Line Loans \| 2018 Credit Agreement
Debt Instrument [Line Items]
maximum borrowing capacity		$ 15,000
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Net Gain (Loss) recognized in OCI			862	257	(1,762)
Interest expense (income) on interest rate swap			(296)	486	278
Gain (Loss) Reclassified from AOCI into Interest expense			(296)	486	278
Derivative Asset, Notional Amount						$ 40,000
Derivative Liability, Notional Amount				40,000
Derivative liabilities fair value				396
Interest Rate Swap [Member] \| 2022 Credit Agreement
Debt Instrument [Line Items]
Proceeds from swap			600
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months			200
Hedged Debt Instrument [Member]
Debt Instrument [Line Items]
Interest expense (income) on interest rate swap			$ 439	$ 568	$ 979

OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES - Schedule of Other Accrued Expenses and Current Liabilities (Detail) - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Payables And Accruals [Abstract]
Accrued sales and property taxes	$ 5,270	$ 4,726
Gift card liability	4,667	4,622
Loyalty rewards program liability	526	687
Accrued advertising	831	3,635
Accrued legal settlements and professional fees	1,303	771
Deferred franchise and development fees	610	637
Other	1,913	4,632
Total other accrued expenses and current liabilities	$ 15,120	$ 19,710

OTHER NONCURRENT LIABILITIES - Schedule of Other Noncurrent Liabilities (Detail) - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Payables And Accruals [Abstract]
Deferred franchise and development fees	$ 5,767	$ 5,691
Derivative liability		396
Employer social security tax deferral		2,426
Other	89	140
Total other noncurrent liabilities	$ 5,856	$ 8,653

INCOME TAXES - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Current income taxes:
Federal	$ 2,366	$ 7,163	$ 520
State	1,112	2,158	1,123
Total current	3,478	9,321	1,643
Deferred income taxes:
Federal	2,958	93	3,350
State	1,642	918	658
Total deferred	4,600	1,011	4,008
Tax provision for income taxes	$ 8,078	$ 10,332	$ 5,651

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

INCOME TAXES - Schedule of Effective Income Tax Rate (Details)	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Income Tax Disclosure [Abstract]
Statutory federal income tax rate applied to earnings before income taxes and extraordinary items	21.00%	21.00%	21.00%
State income tax expense (net of federal benefit)	7.70%	5.90%	4.30%
Change in valuation allowance		0.10%	0.40%
TRA (income) expense	(0.30%)
162(m)	0.50%	0.80%	0.20%
WOTC Credit	(0.90%)	(0.50%)	(0.90%)
Stock option exercises	0.30%	(1.40%)	(6.60%)
Other	(0.30%)	0.30%	0.40%
Total	28.00%	26.20%	18.80%

INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands		12 Months Ended
	Jul. 30, 2014	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Investments, Owned, Federal Income Tax Note [Line Items]
Increase in valuation allowance			$ 100	$ 100
Valuation allowance		$ 6,727	6,181
Percentage of cash savings in taxes realized as a result of utilizing net operating losses payable to pre-IPO stockholders	85.00%
TRA tax expense (benefit)				(100)
AMT Credits, CARES Act				400
Deferred tax asset credit		7,258	7,524
Unrecognized Tax Benefits, Interest on Income Taxes Accrued		0	0
Unrecognized Tax Benefits, Income Tax Penalties Accrued		0	0
Proceeds from Income Tax Refunds				500
Payment to Stockholders Under Tax Receivable Agreement		400	1,700	$ 5,200
Maximum
Investments, Owned, Federal Income Tax Note [Line Items]
Increase in valuation allowance		500
TRA tax expense (benefit)		400	100
Federal
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating loss carryforwards		0
State
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating loss carryforwards		100
Enterprise Zone
Investments, Owned, Federal Income Tax Note [Line Items]
Tax credits carry forward		9,200
California \| Enterprise Zone
Investments, Owned, Federal Income Tax Note [Line Items]
Deferred tax asset credit		$ 500	$ 1,300

INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Deferred assets:
Capital leases	$ 55	$ 60
Accrued vacation	508	503
Accrued workers' compensation	2,201	2,616
Enterprise zone and other credits	7,258	7,524
Net operating losses	5	5
Fixed assets	2,392	4,393
ROU assets	50,112	51,864
Other	4,397	5,694
Total deferred tax assets	66,928	72,659
Valuation allowance	(6,727)	(6,181)
Net deferred tax assets	60,201	66,478
Deferred liabilities:
Goodwill	(6,420)	(6,349)
Trademark	(16,721)	(16,727)
Prepaid expense	(595)	(498)
ROU liabilities	(44,737)	(46,484)
Other	267	361
Deferred tax liabilities	(68,206)	(69,697)
Net deferred tax liability	$ (8,005)	$ (3,219)

INCOME TAXES - Schedule of Net Deferred Tax Asset Classification (Details) - USD ($) $ in Thousands	Dec. 28, 2022	Dec. 29, 2021
Income Tax [Line Items]
Assets	$ 60,201	$ 66,478
Liabilities	(68,206)	(69,697)
Net deferred tax liability	(8,005)	(3,219)
State
Income Tax [Line Items]
Assets	512	2,245
Federal
Income Tax [Line Items]
Liabilities	$ (8,517)	$ (5,464)

EMPLOYEE BENEFIT PLANS - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Defined Contribution Plan Disclosure [Line Items]
Qualified compensation of employees that may be contributed, maximum	25.00%
Benefit contribution	$ 0.8	$ 0.8	$ 0.8
First 3% of Annual Qualified Compensation
Defined Contribution Plan Disclosure [Line Items]
Employer's matching contribution	100.00%
Percentage of employees' annual qualified compensation matched	3.00%
Next 2 % of Annual Qualified Compensation
Defined Contribution Plan Disclosure [Line Items]
Employer's matching contribution	50.00%
Percentage of employees' annual qualified compensation matched	2.00%

STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020	Jun. 08, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested, Number of Shares	625,436
Authorized number of common stock for issuance (shares)	5,652,240
Number of share available for grant (shares)	945,282
Stock-based compensation expense	$ 3,500	$ 3,200	$ 3,100
Common stock, options outstanding (shares)	1,068,179	978,078	1,030,866
Common stock, options unvested (shares)	442,743
Option vesting period		4 years
Options expiration period	10 years	10 years
Intrinsic value of options exercised	$ 800	$ 1,600	$ 9,900
Weighted average grant date fair value (usd per share)	$ 4.89	$ 8.10
Unrecognized compensation expense, recognition period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	372,958	256,172
Granted (shares)	356,610	222,741
Stock-based compensation expense	$ 3,491	$ 3,220	$ 3,093
Unrecognized compensation expense	$ 2,100
Omnibus Equity Incentive Plan 2018 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized number of common stock for issuance (shares)				2,000,000
Exercise price equal to the fair market value of the common stock on the date of grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option vesting period	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	372,958
Premium Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options outstanding (shares)	180,020
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	43.00%	46.90%
Risk-free interest rate	2.90%	1.10%
Expected term (years)	6 years 3 months	6 years 3 months
Expected dividends	0.00%	0.00%
Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, recognition period	2 years 7 months 13 days
Granted (shares)	356,610	222,741
Unrecognized compensation expense	$ 5,000
Restricted Shares \| Nonemployee Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option vesting period	3 years
Restricted Shares \| Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option vesting period	4 years

STOCK-BASED COMPENSATION - Changes in Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021
Shares
Outstanding-beginning balance (shares)	978,078	1,030,866
Grants (shares)	372,958	256,172
Exercised (shares)	(185,798)	(132,760)
Forfeited, cancelled or expired (shares)	(97,059)	(176,200)
Outstanding-ending balance (shares)	1,068,179	978,078
Vested and expected to vest at end of period (shares)	1,060,880
Exercisable at end of period (shares)	625,436
Weighted-Average Exercise Price
Outstanding-beginning balance (usd per share)	$ 11.45	$ 9.82
Grants (usd per share)	10.54	17.55
Exercised (usd per share)	9.22	6.52
Forfeited, cancelled or expired (usd per share)	12.06	14.48
Outstanding-ending balance (usd per share)	9.92	$ 11.45
Vested and expected to vest at end of period (usd per share)	9.92
Exercisable at end of period (usd per share)	$ 9.50
Weighted-Average Contractual Life (Years)
Outstanding contractual life (years)	5 years 8 months 4 days
Vested and expected to vest contractual life (years)	5 years 7 months 28 days
Exercisable contractual life (years)	3 years 4 months 13 days
Aggregate Intrinsic Value
Outstanding	$ 1,368
Vested and expected to vest	1,362
Exercisable	$ 1,033

STOCK-BASED COMPENSATION - Schedule of Changes in Restricted Shares (Details) - $ / shares	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021
Shares
Unvested shares, beginning balance (shares)	495,780	742,404
Granted (shares)	356,610	222,741
Released (shares)	(201,043)	(248,255)
Forfeited, cancelled, or expired (shares)	(105,867)	(221,110)
Unvested shares, ending balance (shares)	545,480	495,780
Weighted-Average Fair Value
Unvested shares Weighted-Average Fair Value, beginning balance (usd per share)	$ 13.92	$ 11.68
Granted, Weighted-Average Fair Value (usd per share)	10.37	17.13
Released, Weighted-Average Fair Value (usd per share)	13.32	11.99
Forfeited, cancelled, or expired, Weighted-Average Fair Value (usd per share)	12.91	11.80
Unvested shares Weighted-Average Fair Value, ending balance (usd per share)	$ 12.02	$ 13.92

EARNINGS PER SHARE - Computation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Numerator:
Net income	$ 20,801	$ 29,121	$ 24,474
Denominator:
Weighted-average shares outstanding-Basic (shares)	36,350,579	35,973,892	35,193,325
Weighted-average shares outstanding-Diluted (shares)	36,575,904	36,446,756	35,796,406
Net income per share-Basic (usd per share)	$ 0.57	$ 0.81	$ 0.70
Net income per share-Diluted (usd per share)	$ 0.57	$ 0.80	$ 0.68
Anti-dilutive securities not considered in diluted EPS calculation (shares)	535,574	136,397	81,041

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

EARNINGS PER SHARE- Schedule of Reconciliation of Basic and Diluted Share Counts (Details) - shares	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Earnings Per Share [Abstract]
Weighted-average shares outstanding-Basic (shares)	36,350,579	35,973,892	35,193,325
Dilutive effect of stock options and restricted shares (shares)	225,325	472,864	603,081
Weighted-average shares outstanding-Diluted (shares)	36,575,904	36,446,756	35,796,406

EARNINGS PER SHARE - Narrative (Details) - 2022 Stock Repurchase Plan - USD ($) $ in Millions	12 Months Ended
	Dec. 28, 2022	Oct. 11, 2022
Equity, Class of Treasury Stock [Line Items]
Authorized amount under share repurchase agreement		$ 20.0
Repurchase of shares	0

COMMITMENTS AND CONTINGENCIES - Additional Information (Details)			3 Months Ended	12 Months Ended
	May 21, 2021 USD ($)	Mar. 17, 2017	Sep. 23, 2020 USD ($)	Dec. 28, 2022 USD ($) agreement lease	Dec. 29, 2021 USD ($)	Dec. 30, 2020 USD ($)
Other Commitments [Line Items]
Litigation Settlement, Expense						$ 2,566,000
Insurance proceeds						100,000
Officers
Other Commitments [Line Items]
Number of at-will employment agreements \| agreement				3
Property Lease Guarantee
Other Commitments [Line Items]
Number of leases assigned to franchisees \| lease				3
Latest lease expiration year				2036
Contingent lease obligations, maximum exposure				$ 2,300,000
Contingent lease obligations, maximum exposure, if discounted at estimated pre-tax cost of debt				1,700,000
Chicken Acquisition Corp
Other Commitments [Line Items]
Purchase commitments, estimated obligations				$ 40,900,000
Diep v. Sather
Other Commitments [Line Items]
Litigation amount awarded	$ 625,000
Stay order length		5 months
Litigation Settlement, Expense	$ 156,250
Insurance proceeds					$ 469,000
Janice P. Handlers-Bryman and Michael D. Bryman v. El Pollo Loco, Inc
Other Commitments [Line Items]
Damages paid			$ 2,500,000
Litigation Settlement, Expense						$ 2,500,000

RELATED PARTY TRANSACTIONS - Additional Information (Details) - El Pollo Loco Holdings, Inc	Dec. 28, 2022
Trimaran Pollo Partners, LLC
Related Party Transaction [Line Items]
Noncontrolling ownership percentage	30.30%
FS Equity Partners V, L.P
Related Party Transaction [Line Items]
Noncontrolling ownership percentage	14.80%
FS Affiliates V, L.P
Related Party Transaction [Line Items]
Noncontrolling ownership percentage	0.20%

REVENUE FROM CONTRACTS WITH CUSTOMERS - Additional Information (Details)			12 Months Ended
	Aug. 04, 2020 USD ($) item	Aug. 03, 2020 USD ($) item	Dec. 28, 2022 USD ($) item restaurant	Dec. 29, 2021 USD ($) restaurant
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Number of revenue streams \| item			2
Accrued Loyalty Rewards Program Liability, Current			$ 500,000	$ 700,000
Loyalty Rewards Program, Expected Loyalty Points Redemption Period			1 year
Loyalty Rewards Program, Award Earned	$ 5	$ 10
Loyalty Rewards Program, Expiration Period For Inactivity	1 year
Loyalty Rewards Program, Points Needed For One Reward \| item	50	100
Loyalty Reward Program, unused reward expiration period	6 months
Franchise Rights
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Renewal period			20 years
Franchise agreement term			20 years
Restaurant Sale \| Disposed of by Sale \| Orange Country
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Number of Restaurants \| restaurant			3
Additional contract liability			$ 800,000
Restaurant Sale \| Disposed of by Sale \| Sacramento Area
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Number of Restaurants \| restaurant				8
Additional contract liability				$ 700,000

REVENUE FROM CONTRACTS WITH CUSTOMERS - Revenues Disaggregated by Revenue Source and Market (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Disaggregation of Revenue [Line Items]
Total revenue	$ 469,959	$ 454,363	$ 426,087
Core Market
Disaggregation of Revenue [Line Items]
Total revenue	415,680	399,146	371,510
Non-Core Market
Disaggregation of Revenue [Line Items]
Total revenue	54,279	55,217	54,577
Company-operated restaurant revenue
Disaggregation of Revenue [Line Items]
Total revenue	403,218	394,733	374,064
Company-operated restaurant revenue \| Core Market
Disaggregation of Revenue [Line Items]
Total revenue	384,504	371,067	346,662
Company-operated restaurant revenue \| Non-Core Market
Disaggregation of Revenue [Line Items]
Total revenue	18,714	23,666	27,402
Franchise revenue
Disaggregation of Revenue [Line Items]
Total revenue	38,225	33,729	29,418
Franchise revenue \| Core Market
Disaggregation of Revenue [Line Items]
Total revenue	17,953	16,062	14,216
Franchise revenue \| Non-Core Market
Disaggregation of Revenue [Line Items]
Total revenue	20,272	17,667	15,202
Franchise advertising fee revenue
Disaggregation of Revenue [Line Items]
Total revenue	28,516	25,901	22,605
Franchise advertising fee revenue \| Core Market
Disaggregation of Revenue [Line Items]
Total revenue	13,223	12,017	10,632
Franchise advertising fee revenue \| Non-Core Market
Disaggregation of Revenue [Line Items]
Total revenue	$ 15,293	$ 13,884	$ 11,973

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

REVENUE FROM CONTRACTS WITH CUSTOMERS - Revenues Disaggregated by Geographic Market (Details) - Revenue - Geographic Concentration Risk	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Disaggregation of Revenue [Line Items]
Percentage of concentration	100.00%	100.00%	100.00%
Greater Los Angeles area market
Disaggregation of Revenue [Line Items]
Percentage of concentration	71.20%	70.90%	71.30%
Other markets
Disaggregation of Revenue [Line Items]
Percentage of concentration	28.80%	29.10%	28.70%

REVENUE FROM CONTRACTS WITH CUSTOMERS - Unsatisfied Performance Obligation (Details)	Dec. 28, 2022 USD ($)
Hardware Services
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligations	$ 0
Franchise revenue
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligations	$ 6,377,000
Franchise revenue \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-29
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Unsatisfied performance obligations	$ 615,000
Franchise revenue \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-28
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Unsatisfied performance obligations	$ 522,000
Franchise revenue \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-26
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Unsatisfied performance obligations	$ 474,000
Franchise revenue \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-12-25
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Unsatisfied performance obligations	$ 451,000
Franchise revenue \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-12-24
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Unsatisfied performance obligations	$ 428,000
Franchise revenue \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-12-23
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Unsatisfied performance obligations	$ 3,887,000
Loyalty reward program \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-29
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year

REVENUE FROM CONTRACTS WITH CUSTOMERS - Loyalty Reward Liability and Gift Card Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021	Dec. 30, 2020
Change in Contract with Customer, Liability [Roll Forward]
Gift card liability	$ 4,667	$ 4,622
Gift card liability
Change in Contract with Customer, Liability [Roll Forward]
Gift card liability	4,667	4,622
Revenue recognized from gift card liability balance at the beginning of the year	1,145	1,218	$ 1,028
Loyalty reward program
Change in Contract with Customer, Liability [Roll Forward]
Loyalty rewards liability, beginning balance	687	900	1,084
Revenue deferred	2,754	2,677	2,463
Revenue recognized	(2,915)	(2,890)	(2,647)
Loyalty rewards liability, ending balance	$ 526	$ 687	$ 900

REVENUE FROM CONTRACTS WITH CUSTOMERS - Change in Contract Liabilities (Details) - Franchise revenue - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2022	Dec. 29, 2021
Change in Contract with Customer, Liability [Roll Forward]
Loyalty rewards liability, beginning balance	$ 6,328	$ 5,628
Revenue recognized - beginning balance	(744)	(680)
Additional contract liability	793	1,380
Loyalty rewards liability, ending balance	$ 6,377	$ 6,328