El Pollo Loco Holdings, Inc.

Previous wording

El Pollo Loco is a differentiated and growing restaurant concept that specializes in fire-grilling citrus-marinated chicken and operates in the limited service restaurant (“LSR”) segment. We strive to make and serve food that is both “better for you” and flavorful. Our distinctive menu features our signature product, citrus-marinated fire-grilled chicken, served in a variety of Mexican-inspired entrees, such as burritos and tostadas, healthier options, such as salads, and chicken meals, all available in a variety of sizes to feed individuals and larger groups. Our entrees include favorites such as our Guacamole Chicken Burrito, Double Chicken Tostada, Crunchy Chicken Taco, and the Original Pollo Bowl®. Our famous Creamy Cilantro dressing and salsas are prepared fresh daily, allowing our customers to create their favorite flavor profiles to enhance their culinary experience. Our distinctive menu with “better for you” and more affordable healthier alternatives appeals to consumers across a wide variety of socio-economic backgrounds and drives our balanced composition of sales throughout the day (our “day-part mix”), including at lunch and dinner.

Current wording

El Pollo Loco is a differentiated and growing restaurant concept that specializes in fire-grilling citrus-marinated chicken and operates in the limited service restaurant (“LSR”) segment. We strive to make and serve food that is both high quality and flavorful. Our distinctive menu features our signature product, citrus-marinated fire-grilled chicken, served in a variety of Mexican-inspired entrees, such as burritos and tostadas, healthier options, such as salads, and chicken meals, all available in a variety of sizes to feed individuals and larger groups. Our entrees include favorites such as our Guacamole Chicken Burrito, Double Chicken Tostada, Crunchy Chicken Taco, and the Original Pollo Bowl®. Our famous Creamy Cilantro dressing and salsas are prepared fresh daily, allowing our customers to create their favorite flavor profiles to enhance their culinary experience. Our distinctive menu of quality, flavorful food that is affordable appeals to consumers across a wide variety of socio-economic backgrounds and drives our balanced composition of sales throughout the day (our “day-part mix”), including at lunch and dinner. In 2025, El Pollo Loco launched a brand refresh, inclusive of a new advertising campaign, restaurant design, new products, and an emphasis on hospitality in our restaurants. All these elements reinforce our position in the market of “Quality Chicken, Fast & Easy.”

Previous wording

On September 28, 2023, Governor Newsom signed AB 1228 into law in California, which repealed and replaced the Fast Food Accountability and Standards Recovery Act (“FAST Act”) on January 1, 2024. Pursuant to AB 1228, the minimum wage at fast food restaurants that are part of brands which have more than 60 establishments nationwide increased to $20 an hour on April 1, 2024, and a Fast Food Council created by AB 1228 has limited power to approve annual wage increases until 2029. Under AB 1228, the Fast Food Council also retains the power to develop and propose minimum standards for fast food workers, including standards for working hours, working conditions, and health and safety. As a result of AB 1228, we experienced an increase in our labor and regulatory compliance costs in fiscal 2024 and the first quarter of fiscal 2025. Although we have been able to substantially offset these cost pressures through various actions, such as increasing menu prices, managing menu mix, and productivity improvements, we expect these cost pressures to continue into 2025 and we may not be able to offset cost increases in the future.

Current wording

On September 28, 2023, Governor Newsom signed AB 1228 into law in California, which repealed and replaced the Fast Food Accountability and Standards Recovery Act (“FAST Act”) on January 1, 2024. Pursuant to AB 1228, the minimum wage at fast food restaurants that are part of brands which have more than 60 establishments nationwide increased to $20 an hour on April 1, 2024, and a Fast Food Council created by AB 1228 has limited power to approve annual wage increases until 2029. Under AB 1228, the Fast Food Council also retains the power to develop and propose minimum standards for fast food workers, including standards for working hours, working conditions, and health and safety. As a result of AB 1228, we experienced an increase in our labor and regulatory compliance costs in fiscal 2024 and the first half of fiscal 2025. Although we have been able to substantially offset these cost pressures through various actions, such as increasing menu prices, managing menu mix, and productivity improvements, we expect these cost pressures to continue for the remainder of 2025, and we may not be able to offset cost increases in the future.

Previous wording

Additionally, we are impacted by macroeconomic challenges, such as inflationary pressures and changes in trade policies, that have in the past, and may continue in the future, to affect our operations in certain areas such as food cost, labor costs, construction costs and other restaurant operating costs. We have been able to substantially offset these inflationary and other cost pressures through various actions, such as increasing menu prices, managing menu mix, and productivity improvements. However, we expect these inflationary and other cost pressures to continue into the remainder of fiscal 2025 and we may not be able to offset cost increases in the future.

Current wording

Additionally, we are impacted by macroeconomic challenges, such as inflationary pressures and changes in trade policies, that have in the past affected, and may continue in the future, to affect our operations in certain areas such as food cost, labor costs, construction costs and other restaurant operating costs. We have been able to substantially offset these inflationary and other cost pressures through various actions, such as increasing menu prices, managing menu mix, and productivity improvements. However, we expect these inflationary and other cost pressures to continue into the remainder of fiscal 2025 and we may not be able to offset cost increases in the future.

Previous wording

Increased tariff duties on goods imported into the United States may have an adverse effect on our Company. Certain of the produce, packaging materials, and other items procured by our Company are sourced from outside the United States, including from Canada, Mexico and Asia. Currently, many goods imported from countries other than Canada and Mexico are subject to a 10% tariff increase in addition to the base tariff rate, with the exception of Chinese-origin goods, which can be subject to additional tariff duties up to 145%. Certain goods from Canada and Mexico that are not USMCA-compliant can be subject to a 25% tariff rate. While we are still evaluating the potential impacts of increased tariff rates, as well as our ability to mitigate any such related impacts, we anticipate that these tariff actions will adversely impact our revenue and cost of goods sold in the United States. Any new or increased import duties, tariffs, or taxes, or other changes in U.S. trade or tax policy could result in further increases to our food and supplies costs that would adversely impact our financial results.

Current wording

There is ongoing uncertainty regarding increased tariff duties on goods imported into the United States, which if imposed, may have an adverse effect on our Company. Certain of the produce, packaging materials, and other items procured by our Company are sourced from outside the United States, including from Canada, Mexico and Asia. Current and proposed tariff rates range widely, depending on the country of origin. Certain goods from Canada and Mexico that are compliant with the United States-Mexico-Canada Agreement (USMCA) are, and may continue to be, exempt from new tariffs. While we continue to evaluate the potential impacts of increased tariff rates, as well as our ability to mitigate any such related impacts, we anticipate that the imposition of tariffs on goods we import into the United States will adversely impact our revenue and cost of goods sold in the United States. Any new or increased import duties, tariffs, or taxes, or other changes in U.S. trade or tax policy could result in further increases to our food and supplies costs that would adversely impact our financial results.

Previous wording

As of March 26, 2025, we had 499 locations in seven states. In fiscal 2024, we opened two new company-operated restaurants in Nevada, and our franchisees opened two new restaurants, one in California and one in Texas. Additionally, we completed the sale of one restaurants within California to existing franchisees during fiscal 2024. For the thirteen weeks ended March 26, 2025, our franchisees opened two new restaurants and closed one restaurant in both cases in California. Additionally, during the thirteen weeks ended March 26, 2025, we completed the acquisition of one restaurant in California from an existing franchisee. We plan to continue to expand our business, drive restaurant sales growth, and enhance our competitive positioning, by executing the following five key strategies:

Current wording

As of June 25, 2025, we had 499 locations in seven states. In fiscal 2024, we opened two new company-operated restaurants in Nevada, and our franchisees opened two new restaurants, one in California and one in Texas. Additionally, we completed the sale of one restaurant within California to existing franchisees during fiscal 2024. For the twenty-six weeks ended June 25, 2025, our franchisees opened one new restaurant in Arizona and two new restaurants in California, and they closed two restaurants in California. Additionally, during the twenty-six weeks ended June 25, 2025, we completed the acquisition of one restaurant in California from an existing franchisee. We plan to continue to expand our business, drive restaurant sales growth, and enhance our competitive positioning, by executing the following five key strategies:

Previous wording

For the thirteen weeks ended March 26, 2025, our total revenue was $119.2 million. For the thirteen weeks ended March 26, 2025, our company-operated restaurant revenue was $98.4 million, and our franchise and franchise advertising fee revenue was $20.8 million.

Current wording

For the thirteen and twenty-six weeks ended June 25, 2025, our total revenue was $125.8 million and $245.0 million, respectively. For the thirteen weeks ended June 25, 2025, our company-operated restaurant revenue was $104.3 million

Previous wording

For the thirteen weeks ended March 26, 2025, system-wide comparable restaurant sales decreased by 0.6% from the comparable period in the prior year. For company-operated restaurants, comparable restaurant sales for the thirteen weeks ended March 26, 2025 increased by 0.6%. For company-operated restaurants, the quarter’s change in comparable restaurant sales consisted of a 4.6% increase in average check size, partially offset by a 3.8% decrease in transactions. For franchised restaurants, comparable restaurant sales decreased 1.3% for the thirteen weeks ended March 26, 2025. Refer to “Comparable Restaurant Sales” definition in the section titled “Key Performance Indicators” below.

Current wording

For the thirteen and twenty-six weeks ended June 25, 2025, system-wide comparable restaurant sales decreased by 0.3% and 0.4%, respectively, from the comparable period in the prior year. For company-operated restaurants, comparable restaurant sales for the thirteen and twenty-six weeks ended June 25, 2025 increased by 1.2% and 0.9%, respectively. For company-operated restaurants, the quarter’s change in comparable restaurant sales consisted of a 1.5% increase in average check size, partially offset by a 0.3% decrease in transactions, and the year-to-date change in comparable restaurant sales consisted of a 3.0% increase in average check size, partially offset by a 2.0% decrease in transactions. For franchised restaurants, comparable restaurant sales decreased by 1.1% and 1.2% for the thirteen and twenty-six weeks ended June 25, 2025, respectively. Refer to “Comparable Restaurant Sales” definition in the section titled “Key Performance Indicators” below.

Previous wording

Our restaurant counts at the beginning and end of each of the last three fiscal years and the thirteen weeks ended March 26, 2025, were as follows:

Current wording

Our restaurant counts at the beginning and end of each of the last three fiscal years and the twenty-six weeks ended June 25, 2025, were as follows:

Previous wording

During the thirteen weeks ended March 26, 2025, we completed a total of four company-operated restaurant and franchise remodels. Considering our efforts to finalize our new prototype design, we currently expect to complete 60-70 company-operated restaurant and franchise remodels for the remainder of fiscal 2025. The cost of our restaurant remodels varies depending on the scope of the work required, but on average the investment is $0.3 million to $0.4 million per restaurant.

Current wording

During the twenty-six weeks ended June 25, 2025, we completed a total of 20 company-operated restaurant and franchise remodels. Considering our efforts to finalize our new prototype design, we currently expect to complete 55-65 company-operated restaurant and franchise remodels for the remainder of fiscal 2025. The cost of our restaurant remodels varies depending on the scope of the work required, but on average the investment is approximately $0.4 million per restaurant.

Previous wording

Our Loco Rewards loyalty program offers rewards that incentivize customers to visit our restaurants more often each month. Customers earn points for each dollar spent, and points can be redeemed for multiple redemption options. If a customer does not earn or use points within a one-year period, their account is deactivated and all points expire. 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

Current wording

a customer does not earn or use points within a one-year period, their account is deactivated and all points expire. 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 on a pro-rata basis, based on stand-alone selling price, as determined by menu pricing and loyalty point’s terms.

Previous wording

In addition, customers can earn additional points and free entrées for a variety of engagement activities. As points are available for redemption past the quarter earned, a portion of the revenue associated with the earned points will be deferred until redemption or expiration. As of March 26, 2025 and December 25, 2024, the revenue allocated to loyalty points that had not been redeemed was $0.9 million and $0.8 million, respectively, which is reflected in our accompanying condensed consolidated balance sheets within other accrued expenses and current liabilities. We had over 4.4 million loyalty program members as of March 26, 2025.

Current wording

In addition, customers can earn additional points and free entrées for a variety of engagement activities. As points are available for redemption past the quarter earned, a portion of the revenue associated with the earned points will be deferred until redemption or expiration. As of June 25, 2025 and December 25, 2024, the revenue allocated to loyalty points that had not been redeemed was $1.0 million and $0.8 million, respectively, which is reflected in our accompanying condensed consolidated balance sheets within other accrued expenses and current liabilities. We had over 4.5 million loyalty program members as of June 25, 2025.

Previous wording

Labor and related expenses include wages, payroll taxes, workers’ compensation expense, benefits, and bonuses paid to our restaurant management teams. Like other expense items, we expect labor costs to grow proportionately as our restaurant revenue grows. Factors that influence labor costs include minimum wage and payroll tax legislation, state labor laws (which, in California, includes AB 1228), overtime, wage inflation, the frequency and severity of workers’ compensation claims, health care costs, and the performance of our restaurants.

Current wording

Labor and related expenses include wages, payroll taxes, workers’ compensation expense, benefits, and bonuses paid to our restaurant management teams. Like other expense items, we expect labor costs to grow proportionately as our restaurant revenue grows. Factors that influence labor costs include minimum wage and payroll tax legislation, state

Previous wording

Our operating results for the thirteen weeks ended March 26, 2025 and March 27, 2024 are expressed as percentages of total revenue, with the exception of cost of operations and company restaurant expenses, which are expressed as percentages of company-operated restaurant revenue, and are compared in the tables below.

Current wording

Our operating results for the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024 are expressed as percentages of total revenue, with the exception of cost of operations and company restaurant expenses, which are expressed as percentages of company-operated restaurant revenue, and are compared in the tables below.

Previous wording

For the quarter ended March 26, 2025, company-operated restaurant revenue increased $1.2 million, or 1.2%, from the comparable period in the prior year. The increase in company-operated restaurant revenue was mainly due to an increase in company-operated comparable restaurant revenue of $0.6 million, or 0.6% as well as $0.9 million of additional sales from the opening of two restaurants during or after the first quarter of 2024. This company-operated restaurant revenue increase was partially offset by a $0.4 million decrease related tothe one company-operated restaurant sold by us to our existing franchisee during or subsequent to the first quarter of 2024. The company-operated comparable restaurant sales increase consisted of a 4.6% increase in average check size due to increases in menu prices, partially offset by a 3.8% decrease in transactions.

Current wording

Year-to-date, company-operated restaurant revenue increased $3.2 million, or 1.6%, from the comparable period in the prior year. The increase in company-operated restaurant revenue was mainly due to an increase in company-operated comparable restaurant revenue of $1.8 million, or 0.9%, as well as $1.8 million of additional sales from the opening of two restaurants during or after the first quarter of 2024. The company-operated comparable restaurant sales increase consisted of a 3.0% increase in average check size due to increases in menu prices, partially offset by a 2.0% decrease in transactions. This company-operated restaurant revenue increase was partially offsetby a $0.2 million decrease related to the one company-operated restaurant sold by us to our existing franchisee during or subsequent to the first quarter of 2024.

Previous wording

For the quarter ended March 26, 2025, franchise revenue increased $1.8 million, or 16.2%, from the comparable period in the prior year. This increase was primarily due to the franchisee IT pass through revenue related to the franchisee rollout of the new Point of Sale (POS) system which is offset by a corresponding expense in franchise expenses. In addition, the increase in franchise revenue was due to the four franchise-operated restaurant openings during or subsequent to the first quarter of 2024. The increase in franchise revenue was partially offset bya franchise comparable restaurant sales decrease of 1.3%.

Current wording

For the quarter ended June 25, 2025, franchise revenue increased $1.7 million, or 14.8%, from the comparable period in the prior year. This increase was primarily due to the $1.6 million in franchisee IT pass through revenue related to the franchisee rollout of the new Point of Sale (POS) system which is offset by a corresponding increase in franchise expenses. In addition, the increase in franchise revenue was due to the five franchise-operated restaurant openings during or subsequent to the second quarter of 2024. The increase in franchise revenue was partially offset bya franchise comparable restaurant sales decrease of 1.1%.

Previous wording

For the quarter ended March 26, 2025, franchise advertising fee revenue decreased less than $0.1 million, or 0.3%, from the comparable period in the prior year. As advertising fee revenue is a percentage of franchisees’ revenue, the fluctuations for the quarter were due to the increases and decreases noted in franchise revenue above.

Current wording

For the quarter ended June 25, 2025, franchise advertising fee revenue decreased less than $0.1 million, or 0.9%, from the comparable period in the prior year. Year-to-date, franchise advertising fee revenue decreased $0.1 million, or 0.6%, from the comparable period in the prior year. As advertising fee revenue is a percentage of franchisees’ revenue, the fluctuations for the quarter were due to the increases and decreases noted in franchise revenue above.

Previous wording

For the quarter ended March 26, 2025, food and paper costs decreased $0.9 million, or 3.4%, from the comparable period in the prior year. The decrease in food and paper costs for the quarter was primarily due to a lower number of transactions combined with cost management initiatives, partially offset by commodity inflation. For the quarter, food and paper costs as a percentage of company-operated restaurant revenue were 25.2%, down from 26.4% in the comparable period of the prior year. The percentage change for the quarter was primarily dueto an increase in menu pricing combined with cost management initiatives, partially offset by commodity inflation.

Current wording

The decrease in food and paper costs for both the quarter and year-to-date periods was primarily due to a lower number of transactions combined with cost-management initiatives and commodity deflation. For the quarter, food and paper costs as a percentage of company-operated restaurant revenue were 24.5%, down from 25.2% in the comparable period of the prior year. Year-to-date, food and paper costs as a percentage of company-operated restaurant revenue were 24.8%, down from 25.7% in the comparable period of the prior year. The percentage decrease for both the quarter and year-to-date periods was primarily due to menu price increases andthe cost decreases highlighted above.

Previous wording

For the quarter ended March 26, 2025, labor and related expenses increased $1.6 million, or 5.2%, from the comparable period in the prior year. The increase in labor and related expenses for the quarter was primarily due to a$2.8 million increase in wage rates during fiscal 2025 as a result of legislative increases in the California state minimum wage, which became effective April 1, 2024, and a $0.2 million increase in other labor related expenses primarily related to training. The increase in labor and related expenses for the quarter was partially offset by a $1.5 million reduction in costs related to improved labor efficiencies.

Current wording

For the quarter ended June 25, 2025, labor and related expenses decreased $0.7 million, or 2.2%, from the comparable period in the prior year. The decrease in labor and related expenses for the quarter was primarily due toa $1.0 million reduction in costs related to improved labor efficiencies as part of our cost-management initiatives, partially offset by a$0.3 million increase in other labor-related expenses primarily related to higher wage rates. Year-to-date, labor and related expenses increased $0.9 million, or 1.4%, from the comparable period in the prior year. The increase for the year-to-date period was due primarily to a $3.0 million increase due to higher wage rates during fiscal 2025 as a result of legislative increases in the California state minimum wage, which became effective April 1, 2024, as well as a $0.4 million increase in other labor-related expenses. The increase in labor and related expenses for the year was partially offset by $2.5 million reduction in costs related to the improved labor efficiencies discussed above.

Previous wording

For the quarter ended March 26, 2025, labor and related expenses as a percentage of company-operated restaurant revenue were 32.7%, up from 31.5% in the comparable period in the prior year. The percentage change for the quarterwas driven by the higher wage rates, partially offset by higher menu prices andimproved labor efficiencies.

Current wording

For the quarter ended June 25, 2025, labor and related expenses as a percentage of company-operated restaurant revenue were 30.8%, down from 32.1% in the comparable period in the prior year. Year-to-date labor and related expenses as a percentage of company-operated restaurant revenue were 31.7%, down from 31.8% in the comparable period in the prior year primarily. The percentage change for both the quarter and year-to-date periodswas driven by higher menu prices and theimproved labor efficiencies, partially offset by the higher wage rates and higher labor-related costs.

Previous wording

For the quarter ended March 26, 2025, occupancy and other operating expenses increased $1.8 million, or 7.6%, from the comparable period in the prior year. The increase was primarily due to a $1.8 million increase in occupancy, utilities, marketplace delivery fees, software maintenance, general liability insurance, and other operating expenses.

Current wording

For the quarter ended June 25, 2025, occupancy and other operating expenses increased $2.1 million, or 8.5%, from the comparable period in the prior year. The increase was primarily due to increases of $0.4 million in occupancy, $0.4 million in utilities, $0.4 million in marketplace delivery fees, $0.2 million in software maintenance, $0.2 million in repairs and maintenance, and $0.5 million in other operating expenses.

Previous wording

For the quarter ended March 26, 2025, occupancy and other operating expenses as a percentage of company-operated restaurant revenue were 26.1%, up from 24.6% in the comparable period in the prior year. The increases resulted from the cost increases highlighted above.

Current wording

For the quarter ended June 25, 2025, occupancy and other operating expenses as a percentage of company-operated restaurant revenue were 25.6%, up from 24.1% in the comparable period in the prior year. Year-to-date, occupancy and other operating expenses as a percentage of company-operated restaurant revenue were 25.9%, up from 24.3% in the comparable period of the prior year. Both the quarter and year-to-date period increases resulted from the cost increases highlighted above.

Previous wording

For the quarter ended March 26, 2025, general and administrative expenses decreased $0.7 million, or 5.6%, from the comparable period in the prior year. The decrease for the quarter was primarily due toa $1.2 million decrease in restructuring and executive transition cost and a $0.6 million received from a legal settlement, net of legal expenses. The general and administrative expenses decrease was partially offset by a $0.6 million in legal and professional fee costs related to shareholder activism and a $0.5 million increase in other general and administrative expenses.

Current wording

For the quarter ended June 25, 2025, general and administrative expenses increased $1.7 million, or 14.8%, from the comparable period in the prior year. The increase for the quarter was primarily due toa $0.8 million increase in stock compensation expenses, a $0.8 million increase in legal and professional fee costs related to shareholder activism and related matters and a $0.7 million increase in restructuring and executive transition costs. The general and administrative expenses increase was partially offset by a $0.6 million decrease in other general and administrative expenses.

Previous wording

For the quarter ended March 26, 2025, general and administrative expenses as a percentage of total revenue were 9.5%, down from 10.3% in the comparable period of the prior year. The percentage decrease is primarily due to the cost decreases discussed above.

Current wording

For the quarter ended June 25, 2025, general and administrative expenses as a percentage of total revenue were 10.8%, up from 9.6% in the comparable period of the prior year. Year-to-date, general and administrative expenses as a percentage of total revenue were 10.1%, up from 9.9% in the comparable period of the prior year. The percentage increase forboth the quarter and year-to-date periods is primarily due to the cost increases discussed above.

Previous wording

For the quarter ended March 26, 2025, franchise expenses increased $1.8 million, or 17.4%, from the comparable period in the prior year. The increase was due to the $1.8 million in IT pass through expense primarily due to the franchisees rolling out the new POS system.

Current wording

For the quarter ended June 25, 2025, franchise expenses increased $1.8 million, or 16.2%, from the comparable period in the prior year. Year-to-date, franchise expenses increased $3.6 million, or 16.7%, from the comparable period in the prior year. The increase for both quarterly and year-to-date periods was due to the $1.6 million and $3.4 million in IT pass-through expenses, respectively, primarily resulting from franchisees rolling out the new POS system.

Previous wording

During the thirteen weeks ended March 26, 2025 and March 27, 2024, we did not record any non-cash impairment charges. Given the inherent uncertainty in projecting results for newer restaurants in newer markets, we are 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.

Current wording

During the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024, we did not record any non-cash impairment charges. Given the inherent uncertainty in projecting results for newer restaurants in newer markets, we are 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.

Previous wording

When a restaurant is closed, we 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 CAM payments relating to closed restaurants are included within closed-store expense. During both the thirteen weeks ended March 26, 2025 and March 27, 2024, we recognized less than$0.1 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for our closed locations.

Current wording

When a restaurant is closed, we 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 CAM payments relating to closed restaurants are included within closed-store expense. During both the thirteen and twenty-six weeks ended June 25, 2025 and June 26, 2024, we recognized less than$0.1 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for our closed locations.

Previous wording

For the quarter ended March 26, 2025, interest expense, net, decreased $0.4 million from the comparable period in the prior year. The decrease in interest expense was primarily related to the lower interest rates in the fiscal 2025 and lower outstanding balances on our 2022 Revolver (as defined below) versus the comparable periods in the prior year.

Current wording

For the quarter ended June 25, 2025, interest expense, net, decreased $0.3 million from the comparable period in the prior year. For the year-to-date period, interest expense, net, decreased $0.7 million from the comparable period in the prior year. Both the quarter and year-to-date period decrease in interest expense was primarily related to the lower interest rates in the fiscal 2025 and lower outstanding balances on our 2022 Revolver (as defined below) versus the comparable periods in the prior year.

Previous wording

On May 29, 2024, we terminated most of the obligations under the TRA, with respect to any payments or obligations owed to the FS Equity Partners V, L.P. and FS Affiliates V, L.P. (together, the “Sellers”) thereunder in exchange for a payment to the Sellers of $398,896. As of March 26, 2025, there was no remaining obligation owed on our condensed consolidated balance sheets.

Current wording

On May 29, 2024, we terminated most of the obligations under the Tax Receivable Agreement (“TRA”), with respect to any payments or obligations owed to the FS Equity Partners V, L.P. and FS Affiliates V, L.P. (together, the “Sellers”) thereunder in exchange for a payment to the Sellers of $398,896. As of June 25, 2025, there was no remaining obligation owed on our condensed consolidated balance sheets.

Previous wording

For the quarter ended March 26, 2025, we recorded an income tax provision of $2.3 million, reflecting an estimated effective tax rate of 29.7%. For the quarter ended March 27, 2024, we recorded an income tax provision of $2.2 million, reflecting an estimated effective tax rate of approximately 27.1%.

Current wording

For the quarter ended June 25, 2025, we recorded an income tax provision of $3.0 million, reflecting an estimated effective tax rate of 29.6%. For the quarter ended June 26, 2024, we recorded an income tax provision of $3.2 million, reflecting an estimated effective tax rate of approximately 29.3%.

Previous wording

The difference between the 21.0% statutory rate and our effective tax rate of 29.7% for thequarter ended March 26, 2025 is primarily a resultof state taxes and the impact of non-tax deductible executive compensation expense, partially offset by a Work Opportunity Tax Credit benefit.

Current wording

The difference between the 21.0% statutory rate and our effective tax rate of 29.7% for theyear-to-date period ended June 25, 2025 is primarily a resultof state taxes and the impact of non-tax deductible executive compensation expense, and the impact of lower stock compensation expense related to vesting of restricted stock awards deductible for tax as compared to the cumulative amount recorded as stock-based compensation expense, partially offset by a Work Opportunity Tax Credit benefit.

Previous wording

System-wide sales are neither required by, nor presented in accordance with GAAP. System-wide sales are the sum of company-operated restaurant revenue and sales from franchised restaurants. Our total revenue in our condensed consolidated statements of income is limited to company-operated restaurant revenue and franchise revenue from our franchisees. Accordingly, system-wide sales should not be considered in isolation or as a substitute for our results as reported under GAAP. Management believes that system-wide sales are an important figure for investors, because they are widely used in the restaurant industry, including by our management, to evaluate brand scale and market penetration. System-wide sales does not include the 8 licensed stores in the Philippines. Two licensed restaurants in the Philippines were closed during the thirteen weeks ended March 26, 2025.

Current wording

System-wide sales are neither required by, nor presented in accordance with GAAP. System-wide sales are the sum of company-operated restaurant revenue and sales from franchised restaurants. Our total revenue in our condensed consolidated statements of income is limited to company-operated restaurant revenue and franchise revenue from our franchisees. Accordingly, system-wide sales should not be considered in isolation or as a substitute for our results as reported under GAAP. Management believes that system-wide sales are an important figure for investors, because they are widely used in the restaurant industry, including by our management, to evaluate brand scale and market penetration. System-wide sales do not include the 8 licensed stores in the Philippines. The total number of currently licensed stores reflects the closure of two licensed restaurants during the twenty-six weeks ended June 25, 2025.

Previous wording

Comparable restaurant sales reflect year-over-year sales changes for comparable company-operated, franchised, and system-wide restaurants. A restaurant enters our comparable restaurant base the first full week after it has operated for fifteen months. Comparable restaurant sales exclude restaurants closed during the applicable period. At March 26, 2025 and March 27, 2024, there were 484 and 478 comparable restaurants, 170 and 168 company-operated restaurants, and 314 and 310 franchised restaurants, respectively. Comparable restaurant sales indicate the performance of existing restaurants, since new restaurants are excluded. Comparable restaurant sales growth can be generated by an increase in the number of meals sold and/or by increases in the average check amount, resulting from a shift in menu mix and/or higher prices resulting from new products or price increases. Because other companies may calculate this measure differently than we do, comparable restaurant sales as presented herein may not be comparable to similarly titled measures reported by other companies. Management believes that comparable restaurant sales is a valuable metric for investors to evaluate the performance of our store base, excluding the impact of new stores and closed stores.

Current wording

Comparable restaurant sales reflect year-over-year sales changes for comparable company-operated, franchised, and system-wide restaurants. A restaurant enters our comparable restaurant base the first full week after it has operated for fifteen months. Comparable restaurant sales exclude restaurants closed during the applicable period. At June 25, 2025 and June 26, 2024, there were 485 and 482 comparable restaurants, 171 and 168 company-operated restaurants, and 314 and 314 franchised restaurants, respectively. Comparable restaurant sales indicate the performance of existing restaurants, since new restaurants are excluded. Comparable restaurant sales growth can be generated by an increase in the number of meals sold and/or by increases in the average check amount, resulting from a shift in menu mix and/or higher prices resulting from new products or price increases. Because other companies may calculate this measure differently than we do, comparable restaurant sales as presented herein may not be comparable to similarly titled measures reported by other companies. Management believes that comparable restaurant sales is a valuable metric for investors to evaluate the performance of our store base, excluding the impact of new stores and closed stores.

Previous wording

Restaurant contribution and restaurant contribution margin are supplemental measures of operating performance of our restaurants, and our calculations thereof may not be comparable to those reported by other companies. Restaurant contribution and restaurant contribution margin have limitations as analytical tools, and you should not consider them in isolation, or superior to, or as substitutes for the analysis of our results as reported under GAAP. Management uses restaurant contribution and restaurant contribution margin as key metrics to evaluate the profitability of incremental sales at our restaurants, to evaluate our restaurant performance across periods, and to evaluate our restaurant financial performance compared with our competitors. Management believes that restaurant contribution and restaurant contribution margin are important tools for investors, because they are widely-used metrics within the restaurant industry to evaluate restaurant-level productivity, efficiency, and performance. Management further believes restaurant level

Current wording

Restaurant contribution and restaurant contribution margin are supplemental measures of operating performance of our restaurants, and our calculations thereof may not be comparable to those reported by other companies. Restaurant contribution and restaurant contribution margin have limitations as analytical tools, and you should not consider them in isolation, or superior to, or as substitutes for the analysis of our results as reported under GAAP. Management uses restaurant contribution and restaurant contribution margin as key metrics to evaluate the profitability of incremental sales at our restaurants, to evaluate our restaurant performance across periods, and to evaluate our restaurant financial performance compared with our competitors. Management believes that restaurant contribution and restaurant contribution margin are important tools for investors, because they are widely-used metrics within the restaurant industry

Previous wording

operating margin is useful to investors to highlight trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures.

Current wording

to evaluate restaurant-level productivity, efficiency, and performance. Management further believes restaurant level operating margin is useful to investors to highlight trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures.

Previous wording

EBITDA and Adjusted EBITDA as presented in this report are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, operating income, or any other performance measures derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. In addition, in evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses or charges such as those added back to calculate EBITDA and Adjusted EBITDA. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

Current wording

EBITDA and Adjusted EBITDA as presented in this report are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, operating income, or any other performance measures derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. In addition, in evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we will incur expenses or charges such as those added back to calculate EBITDA and Adjusted

Previous wording

During both the thirteen weeks ended March 26, 2025 and March 27, 2024, we recognized less than $0.1 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for our closed locations.

Current wording

recognized less than $0.1 million of closed-store reserve expense related to the amortization of ROU assets, property taxes and CAM payments for our closed locations.

Previous wording

For the thirteen weeks ended March 26, 2025, net cash from operating activities decreased by approximately $6.4 million from the comparable period of the prior year. This change was due to unfavorable working capital fluctuations and lower profitability compared to the same period in the prior year.

Current wording

For the twenty-six weeks ended June 25, 2025, net cash from operating activities decreased by $9.2 million from the comparable period of the prior year. This change was due to unfavorable working capital fluctuations compared to the same period in the prior year.

Previous wording

For the thirteen weeks ended March 26, 2025, net cash used in investing activities increased by $0.7 million from the comparable period of the prior year. This change was primarily due to an increase in purchase of property and equipment mostly related to restaurant remodeling during the thirteen weeks ended March 26, 2025 when compared to the prior quarter.

Current wording

For the twenty-six weeks ended June 25, 2025, net cash used in investing activities decreased by $2.1 million from the comparable period of the prior year. This change was primarily due to a decrease in purchase of property and equipment mostly related to restaurant remodeling during the twenty-six weeks ended June 25, 2025 when compared to the prior year.

Previous wording

For the thirteen weeks ended March 26, 2025, net cash used in financing activities changed by $5.7 million from the comparable period of the prior year. The change was primarily due to repurchases of shares of our common stock of $1.8 million during the thirteen weeks ended March 26, 2025 compared to repurchases of shares of our common stock of $1.2 million during the thirteen weeks ended March 27, 2024. The change was offset by a $2.0 million in net borrowings on

Current wording

For the twenty-six weeks ended June 25, 2025, net cash used in financing activities changed by $10.5 million from the comparable period of the prior year. The change was primarily due to repurchases of shares of our common stock of $1.8 million during the twenty-six weeks ended June 25, 2025 compared to repurchases of shares of our common stock of $18.2 million during the twenty-six weeks ended June 26, 2024. The change was offset by a $2.0 million in net paydown on the 2022 Revolver during the twenty-six weeks ended June 25, 2025 compared to a $3.0 million net borrowings during the twenty-six weeks ended June 26, 2024.

Previous wording

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. The interest rate range under the 2022 Revolver was 5.65% to 7.75% for the thirteen weeks ended March 26, 2025, and 6.92% to 6.96% for the thirteen weeks ended March 27, 2024.

Current wording

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. The interest rate range under the 2022 Revolver was 5.67% to 5.93% and 5.65% to 7.75% for the thirteen and twenty-six weeks ended June 25, 2025, respectively, and 6.67% to 6.94% and 6.67% to 6.96% for the thirteen and twenty-six weeks ended June 26, 2024, respectively.