RED ROBIN GOURMET BURGERS INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Recent Accounting Pronouncements

Red Robin Gourmet Burgers, Inc., a Delaware corporation, is the parent company for Red Robin International, Inc., a Nevada corporation, that together with its subsidiaries ("Red Robin," "we," "us," "our," or the "Company"), primarily operates, franchises, and develops casual dining restaurants in North America. As of July 12, 2026, the Company owned and operated 375 restaurants located in 39 states. The Company also had 90 casual dining restaurants operated by franchisees in 13 states andone Canadian province. The Company operated its business asone operating andone reportable segment.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Red Robin and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for any interim period are not necessarily indicative of results for the full year.

The accompanying Condensed Consolidated Financial Statements of Red Robin have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the Company's annual Consolidated Financial Statements on Form 10-K have been condensed or omitted. The Condensed Consolidated Balance Sheet as of December 28, 2025 has been derived from the audited Consolidated Financial Statements as of that date but does not include all disclosures required for audited annual financial statements. For further information, please refer to and read these interim Condensed Consolidated Financial Statements in conjunction with the Company's audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2025, filed with the SEC on February 25, 2026.

Our current, prior, and upcoming fiscal year periods, period end dates, and number of weeks included in each period are summarized in the table below:

Reclassifications

Certain amounts presented have been reclassified to conform with the current period presentation. The reclassifications had no effect on the Company’s consolidated results. We made adjustments to the Condensed Consolidated Statements of Cash Flows to include repayments of finance lease obligations within proceeds (uses) from other financing activities, net, and to separately disclose the following captions: to disaggregate gift card breakage from the change in unearned revenue; and to disaggregate amortization of debt issuance costs from other, net.

Recently Issued and Recently Adopted Accounting Standards

In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-12, Codification Improvements, which included amendments intended to clarify, improve, and correct various sections of the Accounting Standards Codification. The amendments addressed a variety of topics, including earnings per share, equity, leases, revenue recognition, credit losses, and other areas, and are primarily intended to improve the consistency and clarity of existing guidance without significantly changing current accounting practice. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2025-12 on the Consolidated Financial Statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements to clarify and improve the guidance in ASC 270 regarding interim reporting. ASU 2025-11 improved the navigability of the guidance, clarifying when the interim reporting guidance applies, and specifying the disclosures and form and content requirements for interim financial statements and accompanying notes under GAAP. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2025-11 on the Consolidated Financial Statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) to introduce a principles-based framework for capitalizing costs related to the development of internal-use software. ASU 2025-06 also incorporates website development costs into the internal-use software guidance and enhances related disclosure requirements. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of the adoption of ASU 2025-06 to the Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures (Subtopic 220-40), which expands disclosures about specific expense categories presented on the face of the income statement. ASU 2024-03 is effective for financial statements issued for annual periods beginning after December 15, 2026, with interim reporting requirements beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2024-03 on the Consolidated Financial Statements.

We reviewed all other recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a significant impact on the Company's Condensed Consolidated Financial Statements.

Recently Issued Tax Legislation

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for specific business provisions. The legislation has multiple effective dates, with some provisions taking effect in 2025 and others phased in through 2027. In accordance with ASC 740 - Income Taxes, the effects of changes in tax rates and laws are recognized in the period in which the legislation is enacted. The OBBBA did not have a material impact on the Consolidated Financial Statements.

2. Revenue

Disaggregation of Revenue

In the following table, revenue is disaggregated by type of good or service (in thousands):

Contract Liabilities

We recognize revenue from our customer loyalty program, Red Robin Royalty ("Royalty"), within restaurant revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when a customer redeems an earned reward. Unearned revenue associated with our Royalty program is included in unearned revenue in our Condensed Consolidated Balance Sheets.

Components of unearned revenue in the Condensed Consolidated Balance Sheets are as follows (in thousands):

Revenue recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the redemption and breakage of gift cards that were included in the liability balance at the beginning of the fiscal year was as follows (in thousands):

Changes in our unearned revenue balance related to our Royalty program (in thousands):

3. Significant Transactions

Pending Refranchising Transactions

During the second quarter of fiscal 2026, the Company entered into three separate asset purchase agreements ("APA") with unrelated franchisees for the sale of certain assets associated with 116 Company-owned restaurants.

On May 27, 2026, Red Robin International, Inc. ("RRI"), a wholly owned subsidiary of the Company, entered into an APA with Evergreen Dining LLC to sell certain restaurant assets associated with 30 Company-owned restaurants located in Washington and Western Idaho for aggregate consideration of $23.5 million.

On June 11, 2026, RRI entered into an APA with Op Burgers, LLC to sell certain restaurant assets associated with 69 Company-owned restaurants located in Indiana, Kentucky, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina and Virginia for aggregate consideration of $62.5 million.

Also on June 11, 2026, RRI entered into an APA with Kuber Oregon, LLC and Kuber Washington, LLC to sell certain restaurant assets associated with 17 Company-owned restaurants located in Oregon and Washington for aggregate consideration of $10.0 million.

The transactions are subject to customary closing conditions, including, as applicable, required landlord consents, lease assignments, regulatory and licensing approvals, the receipt of any required lender consent, and other restaurant-specific closing requirements. Each transaction is subject to separate closing conditions and may close independently or in phases. The Company expects the transactions to close during fiscal 2026; however, there can be no assurance that any or all of the transactions will be completed on the anticipated terms or within the anticipated timeframe. The aggregate gross cash proceeds from each of thethree transactions are subject to customary purchase-price and closing adjustments. The Company intends to use the net proceeds primarily to repay outstanding borrowings and for general corporate purposes. Upon closing, the restaurants will continue to operate as Red Robin restaurants pursuant to long-term franchise agreements with the respective purchasers, and the Company expects to receive ongoing royalty and advertising fund contributions under those franchise agreements. The Company may retain certain obligations associated with assigned or subleased restaurant leases, including potential secondary lease or guarantee obligations. The estimated amount of any liabilities to be recognized for such continuing obligations has not yet been determined. As of July 12, 2026, none of the transactions had closed.

In connection with the execution of the APAs described above, the Company evaluated the related restaurant disposal groups under the held-for-sale guidance in ASC 360, Property, Plant and Equipment. As of July 12, 2026, management concluded that the restaurant disposal groups met the criteria for classification as held for sale. Accordingly, $53.8 million of assets and $0.0 million of liabilities were classified as held for sale in the accompanying Condensed Consolidated Balance Sheet. The Company evaluated the restaurant disposal groups at the lower of carrying amount or fair value less costs to sell in accordance with ASC 360. Operating lease right-of-use assets and related lease liabilities were not classified as held for sale because the related lease assignment negotiations had not been completed as of July 12, 2026.

The Company continues to evaluate certain accounting effects of the transactions, including purchase price adjustments, transaction costs, lease-related balances and retained obligations. The Company does not expect the transactions to qualify for discontinued operations presentation because they are not expected to represent a strategic shift that qualifies for discontinued operations presentation.

Sale-Leaseback Transactions

During the second quarter of fiscal 2026, the Company completed sale-leaseback transactions oftwo owned restaurant properties as part of its ongoing real estate optimization strategy. Prior to closing, the Company evaluated the properties under the held-for-sale guidance in ASC 360, Property, Plant and Equipment, and measured each property at the lower of its carrying amount or fair value less costs to sell.

The Company determined that the transaction prices for both sales represented market value. The Company recognized an impairment charge of $1.1 million related to one of the properties prior to closing, which had a carrying value of $3.2 million and generated gross proceeds of $2.1 million. The second transaction had a carrying value of $2.3 million, generated gross proceeds of approximately $3.2 million, and resulted in a gain on sale, net of expenses, of $0.9 million.

Upon completion of the transactions, the Company derecognized the related assets and accounted for the resulting sale-leaseback transactions in accordance with ASC 842, Leases. The net proceeds were included within cash flows from investing activities in the Condensed Consolidated Statements of Cash Flows and were used primarily for general corporate purposes.

4. Leases

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in occupancy on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as follows (in thousands):

(1) Amortization of finance lease right of use assets is recorded to depreciation and amortization in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

(2) Interest on finance lease liabilities is recorded to interest expense in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Finance lease assets are recorded in other assets, net, and the net balances as of July 12, 2026 and July 13, 2025 were $4.0 million and $4.8 million, respectively.

5. Earnings (Loss) Per Share

Basic earnings (loss) per share amounts are calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share amounts are calculated based upon the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares are excluded from the computation in periods in which they have an anti-dilutive effect. Diluted earnings per share amounts reflect the potential dilution that could occur if holders of unvested equity-classified awards vest and exercise their awards into common stock. As the Company was in a net loss position for the twenty-eight weeks ended July 12, 2026, all potentially dilutive common shares for the year to date period are considered anti-dilutive.

The Company uses the treasury stock method to calculate the effect of outstanding stock options and awards. Basic weighted-average shares outstanding are reconciled to diluted weighted-average shares outstanding as follows (in thousands):

6. Other (Gains) Charges, net

Other (gains) charges, net consisted of the following (in thousands):

(1) Severance and executive transition included $0 and $(3,868) of stock-based compensation (benefit) expense in the twelve weeks ended July 12, 2026 and July 13, 2025, respectively, and $0 and $(4,093) of stock-based compensation (benefit) expense in the twenty-eight weeks ended July 12, 2026 and July 13, 2025, respectively.

Asset Impairment and Restaurant Closure Costs, net

Asset impairment and restaurant closure costs, net consisted of the following (in thousands, except for location data):

Gain on Sale of Restaurant Property

During the second quarter and year to date period of fiscal 2026, the Company completed sale-leaseback transactions fortwo restaurant properties. One transaction resulted in an impairment of $1.1 million, and the other transaction resulted in a gain, net of expenses, of $0.9 million. The net proceeds are included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows and were used for general corporate purposes and to repay long-term debt. See Note 3. Significant Transactions for additional information regarding these sale-leaseback transactions.

During the second quarter of fiscal 2025, the Company did not sell any restaurant properties. During the year to date period of fiscal 2025, the Company sold three restaurant properties for total proceeds of $5.8 million that resulted in a gain, net of expenses, of $1.1 million. The net proceeds were included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows for the year to date period of fiscal 2025 and were used to repay long-term debt.

Severance and Executive Transition

Severance and executive transition consisted of the following (in thousands):

(1) For the twelve and twenty-eight weeks ended July 13, 2025, the Stock-based compensation benefit relates primarily to the forfeiture of unvested stock-based compensation by executive leadership.

(2)During the twenty-eight weeks ended July 12, 2026 and July 13, 2025, team member severance is primarily associated with a reduction in force, which occurred during the second quarter of fiscal 2026 and 2025.

For the twenty-eight weeks ended July 12, 2026 and July 13, 2025, $1.9 million and $4.3 million, respectively, were included in accrued payroll and payroll related liabilities in the Condensed Consolidated Balance Sheet related to the executive transition costs described above.

Litigation Contingencies

For the twenty-eight weeks ended July 12, 2026 and July 13, 2025, the Company recorded certain accruals associated with litigation contingencies. See Note 10. Commitments and Contingencies, for further discussion.

Asset Disposal and Other

Asset disposal and other primarily related to asset disposals, strategic projects and other non-recurring items.

On February 23, 2026, the Company voluntarily terminated its $40.0 million at-the-market equity offering program, which had been established on November 10, 2025. No shares were issued or sold under the program. The Company incurred $0.5 million of related stock issuance costs, which were initially recorded within paid-in capital on the December 28, 2025 Consolidated Balance Sheet, and subsequently reclassified to other (gains) charges, net within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) upon termination of the offering.

7. Borrowings

Borrowings as of July 12, 2026 and December 28, 2025 are summarized below (in thousands):

(1) Unamortized debt issuance costs associated with the Company's Credit Facility were included as deferred costs in other assets, net for financing charges allocated to the revolving line of credit, and long-term debt for financing charges associated with the term loan in the accompanying Condensed Consolidated Balance Sheets.

Credit Facility

As of July 12, 2026, the Company's credit facility allowed for up to $225.0 million of borrowings and is comprised of a $25.0 million revolving line of credit and a $200.0 million term loan (collectively, the "Credit Facility"). As of July 12, 2026 and December 28, 2025, the Company had outstanding borrowings of $167.2 million and $170.2 million, respectively, inclusive of $0.0 million and $3.0 million drawn on its revolving line of credit, respectively, under its Credit Facility. In addition, the Company had amounts issued under letters of credit of $9.3 million and $9.3 million as of July 12, 2026 and December 28, 2025, respectively.

The Credit Facility will mature on September 3, 2027. The term loan requires quarterly principal payments in an aggregate annual amount equal to 1.0% of its original principal amount. As of July 12, 2026, the Company has fulfilled this obligation for the duration of the Credit Facility via previous principal payments. The Credit Facility's interest rate references the Secured Overnight Financing Rate ("SOFR"), which is an index calculated by short-term repurchase agreements and backed by U.S. Treasury securities, or the Alternate Base Rate ("ABR"), which represents the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5% per annum, or (c) one-month term SOFR plus 1.0% per annum.

On March 4, 2022, the Company replaced its prior amended and restated credit agreement (the "Prior Credit Agreement") with a new credit agreement (the "Credit Agreement") by and among the Company, Red Robin International, Inc., as the borrower, the lenders from time to time party thereto, the issuing banks from time to time party thereto, Fortress Credit Corp., as administrative agent (the "Administrative Agent") and as collateral agent and JPMorgan Chase Bank, N.A., as Sole Lead Arranger and Sole Bookrunner.

Red Robin International, Inc., is the borrower under the Credit Agreement, and certain of its subsidiaries and the Company are guarantors of the borrower’s obligations under the Credit Agreement. Borrowings under the Credit Agreement are secured by substantially all of the assets of the borrower and the guarantors, including the Company, and are available to: (i) refinance certain existing indebtedness of the borrower and its subsidiaries, (ii) pay any fees and expenses in connection with the Credit Agreement, and (iii) provide for the working capital and general corporate requirements of the Company, the borrower and its subsidiaries, including permitted acquisitions and capital expenditures, but excluding restricted payments.

On March 4, 2022, Red Robin International, Inc., the Company, and the guarantors also entered into a Pledge and Security Agreement (the "Security Agreement") granting to the Administrative Agent a first priority security interest in substantially all of the assets of the borrower and the guarantors to secure the obligations under the Credit Agreement.

Red Robin International, Inc. as the borrower is obligated to pay customary fees to the agents, lenders and issuing banks under the Credit Agreement with respect to providing, maintaining, or administering, as applicable, the credit facilities.

On July 17, 2023, the Company amended the Credit Agreement (the "First Amendment") to, among other things, remove the previously included $50.0 million aggregate cap on sale-leasebacks of Company-owned real property that are permitted under the Credit Agreement, subject to certain conditions set forth in the Credit Agreement.

On August 21, 2024, the Company entered into the second amendment to the Credit Agreement (the "Second Amendment"). The Second Amendment, among other things, provided certain relief from the financial covenant by increasing the required maximum net total leverage ratio beginning in the third quarter of 2024 through the end of the third quarter of 2025; increased the aggregate revolving commitments by $15.0 million to $40.0 million through the end of the third quarter of 2025; removed the variable pricing grid and increased the applicable margin on all term loans and revolving loans that are SOFR-based loans to 7.50% per annum and that are ABR-based loans to 6.50% per annum; and added certain additional reporting requirements.

On November 4, 2024, the Company entered into the third amendment to the Credit Agreement (the "Third Amendment"). The Third Amendment extended the provisions of the Second Amendment through the end of the first fiscal quarter of 2026.

On November 7, 2025, the Company entered into the fourth amendment to our Credit Agreement (the "Fourth Amendment"). The Fourth Amendment extended the maturity date of the Credit Agreement bysix months to September 3, 2027.

The summary descriptions of the Credit Agreement, the Security Agreement, the First Amendment, the Second Amendment, the Third Amendment, and the Fourth Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, which are listed as exhibits to the Annual Report on Form 10-K filed February 25, 2026.

8. Stock Incentive Plans

The Company maintains the 2024 Performance Incentive Plan (the "2024 Stock Plan"), under which it may grant restricted stock units ("RSUs"), performance stock units ("PSUs"), phantom restricted stock units ("PRSUs"), phantom performance stock units ("PPSUs"), stock appreciation rights ("SARs"), and other stock-based awards to employees, non-employee directors and consultants. Additional information regarding the Company's stock incentive plans is included in Note 14. Stock Incentive Plans, in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

Awards Granted

The following table summarizes stock-based awards granted during the first and second quarters of fiscal 2026:

During the first and second quarters of fiscal 2026, the Company granted equity-classified awards under the 2024 Stock Plan. The RSUs vest overone tothree years and have a service-based vesting condition. The PSUs vest over three years and have performance-based and service-based vesting conditions. Equity-classified awards are included within paid-in capital on the Company's Condensed Consolidated Balance Sheets.

During the first and second quarters of fiscal 2026, the Company also granted liability-classified awards under the 2024 Stock Plan. The PRSUs vest overtwo tothree years and have a service-based vesting condition. The PPSUs vest over three years and have performance-based and service-based vesting conditions. Cash-settled SARs vest overone year and have performance-based and service-based vesting conditions. Liability-classified awards are included within accrued liabilities and other and other non-current liabilities on the Company's Condensed Consolidated Balance Sheets.

9. Fair Value Measurements

Fair value measurements are made under a three-tier fair value hierarchy, which prioritizes the inputs used in the measuring of fair value:

Level 1: Observable inputs that reflect unadjusted quote prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The carrying amounts of the Company's cash and cash equivalents, accounts receivable, restricted cash, accounts payable, and current accrued expenses and other liabilities approximate fair value due to the short-term nature or maturity of the instruments.

The Company maintains a rabbi trust to fund obligations under a deferred compensation plan, which are designated as trading securities and carried at fair value. The Company terminated its deferred compensation plan effective October 23, 2025, with no new deferral elections allowed. All assets will be fully distributed by the end of fiscal 2026. Given the termination of the deferred compensation plan and scheduled distribution within this current fiscal year, the plan's assets and liabilities have been classified as current in the July 12, 2026 Condensed Consolidated Balance Sheets within prepaid expenses and other current assets and accrued liabilities and other, respectively. The fair market value of the mutual funds is measured using Level 1 inputs (quoted prices for identical assets in active markets) and was $1.8 million and $1.9 million as of the second quarter of fiscal 2026 and the fourth quarter of fiscal 2025, respectively.

The Company also has liability-classified stock compensation awards that are measured at fair value on a recurring basis and are included in accrued liabilities and other and other non-current liabilities in the Condensed Consolidated Balance Sheets. PRSUs are measured using Level 1 inputs, and PPSUs and SARs are measured using Level 3 inputs. The aggregate fair value of these liabilities was approximately $2.1 million and $0.3 million as of July 12, 2026 and December 28, 2025, respectively. Refer to Note 8. Stock Incentive Plans, for additional information regarding these awards and the related fair value measurements.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and liabilities recognized or disclosed at fair value in the Condensed Consolidated Financial Statements on a nonrecurring basis include items such as property, plant and equipment, right of use assets, and other intangible assets. These assets are measured at fair value if determined to be impaired.

During fiscal 2026 and fiscal 2025, the Company measured non-financial assets for impairment using either (i) projected future cash flows for assets held and used or (ii) the negotiated purchase price in executed asset purchase agreements with unrelated market participants, adjusted for estimated costs to sell, for assets classified as held for sale. These valuation techniques incorporated significant unobservable inputs and therefore represented Level 3 fair value measurements.

During the second quarter of fiscal 2026, the Company recorded an impairment charge related to the sale ofone restaurant location. The carrying value of the restaurant's long-lived assets was approximately $3.2 million. The net proceeds for this transaction were $2.1 million, resulting in a $1.1 million impairment charge.

During the second quarter of fiscal 2025, the Company impaired long-lived assets atone restaurant location with a carrying value of approximately $0.7 million. The fair value of these long-lived assets was determined to be $0.0 million, resulting in a $0.7 million impairment charge.

Disclosures of Fair Value of Other Assets and Liabilities

The carrying value of our variable rate Credit Facility, which utilizes Level 2 fair value inputs, approximated fair value as of July 12, 2026 and December 28, 2025, as such debt bears interest at floating rates which approximate market rates.

10. Commitments and Contingencies

Because litigation is inherently unpredictable, assessing contingencies related to litigation is a complex process involving highly subjective judgment about potential outcomes of future events. When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matter. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure. Accordingly, we review the adequacy of accruals and disclosures each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Condensed Consolidated Financial Statements. However, the ultimate resolution of litigated claims may differ from our current estimates.

As of July 12, 2026, we had reserves of $5.6 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet. We increased our estimate of loss contingency liabilities by approximately $0.1 million in the year to date period of fiscal 2026 related to ongoing legal matters. In the normal course of business, there are various claims in process, matters in litigation, administrative proceedings, and other contingencies. These include employment related claims and class action lawsuits, claims from guests or team members alleging illness, injury, food quality, health, or operational concerns, and lease and other commercial disputes. While it is not possible to predict the outcome of these suits, legal proceedings, and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these matters has been made in the financial statements and that the ultimate resolution of pending or threatened matters will not have a material adverse effect on our financial position and results of operations. However, a significant increase in the number of these claims, or one or more successful claims resulting in greater liabilities than we currently anticipate, could materially and adversely impact our business, financial condition, results of operations, and cash flows. We ultimately may be subject to greater or less than the accrued amount for this and other matters.

As of July 12, 2026, we had non-cancellable purchase commitments primarily related to certain vendors who provide food and beverage and other supplies to our restaurants, for an aggregate of $194.2 million. We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded.

The Company has a potential contingent lease liability for lease payments related to certain current franchisees’ lease arrangements. The maximum amount of potential future payments under the potential contingent lease liability was $2.6 million and $3.0 million as of July 12, 2026 and December 28, 2025, respectively. The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues or expenses, capital expenditures or liquidity.

11. Segment Reporting

In accordance with ASC 280 - Segment Reporting, the Company uses the management approach for determining its reportable segments. The management approach is based upon the way that management reviews performance and allocates resources.

The Company hasone operating andone reportable segment: restaurants. We manage our business activities on a consolidated basis, as Red Robin restaurants all have similar customers, sell similar products, and have a similar process to sell those products. We primarily derive our revenue in the United States through the sale of food and beverage through our Company-owned locations as well as earn royalties and fees from franchise restaurants. There have been no material changes to the accounting policies of the restaurant segment, which can be found in the filing of the Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

Our Chief Operating Decision Maker ("CODM") is our Chief Executive Officer. The Company measures segment profit using consolidated net income (loss). The CODM uses consolidated net income (loss), as reported on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), in deciding whether to reinvest excess cash flow into the restaurant segment or into other parts of the Company. The CODM does not review assets in evaluating the results of the restaurant segment, and therefore, such information is not presented.

As Red Robin operated inone reportable operating segment, all required financial segment information is included in the Condensed Consolidated Financial Statements.