PAPA JOHNS INTERNATIONAL INC

Previous wording

Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark “Papa John’s”. Papa Johns began operations in 1984. At June 28, 2026, there were 5,978 Papa John’s restaurants in operation, consisting of 469 Company-owned and 5,509 franchised restaurants operating in 51 countries and territories. Our revenues are derived from retail sales of pizza and other food and beverage products to the general public by Company-owned restaurants, franchise royalties, and sales of franchise and development rights. Additionally, we derive revenues from sales to franchisees of various items including food and paper products from our North America Quality Control Centers (“QC Centers”) and operation of our International QC Center in the United Kingdom (“UK”), contributions received by Papa John’s Marketing Fund (“PJMF”) which is our national marketing fund, and fees related to the use of information systems equipment as well as software and related services. We believe that in addition to supporting profitability and growth of both Company-owned and franchised restaurants, these activities contribute to product quality and consistency throughout the Papa Johns system.

Current wording

Papa John’s International, Inc. (referred to as the “Company,” “Papa John’s,” “Papa Johns” or in the first-person notations of “we,” “us” and “our”) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark “Papa John’s”. Papa Johns began operations in 1984. At September 27, 2026, there were 5,969 Papa John’s restaurants in operation, consisting of 432 Company-owned and 5,537 franchised restaurants operating in 51 countries and territories. Our revenues are derived from retail sales of pizza and other food and beverage products to the general public by Company-owned restaurants, franchise royalties, and sales of franchise and development rights. Additionally, we derive revenues from sales to franchisees of various items including food and paper products from our North America Quality Control Centers (“QC Centers”) and operation of our International QC Center in the United Kingdom (“UK”), contributions received by Papa John’s Marketing Fund (“PJMF”) which is our national marketing fund, and fees related to the use of information systems equipment as well as software and related services. We believe that in addition to supporting profitability and growth of both Company-owned and franchised restaurants, these activities contribute to product quality and consistency throughout the Papa Johns system.

Previous wording

•Marketing strategy: We have partnered with our franchisees to re-establish our area advertising cooperative (“Co-op”) program, helping ensure a strong presence in key regional and local markets. Through our mix of national and local advertising, we continued investments in our messaging to highlight our six simple ingredients, fresh, never frozen original dough and the craftsmanship behind the products we serve, which we believe are key differentiators of our brand. We continued work to sharpen our value perception with limited-time promotional offers while continuing to emphasize our Papa Pairings mix and match platform. We also began work to refine our aggregator channel strategy, which remains an important component of our customer acquisition strategy. We believe opportunities exist to enhance both visibility and conversion through a more targeted mix of promotional offers, supported by an ongoing evaluation of our national and local third-party marketing investments. These efforts are intended to improve the efficiency of our spending and drive incremental customer trial. As a brand, we plan to maintain a compelling value proposition while staying true to our premium positioning and layering in exciting menu innovations, such as our new pan pizzas and oven-toasted sandwiches, to expand our addressable market and strengthen our barbell strategy.

Current wording

Bring our brand promise back to life: Through our mix of national and local advertising, we continue to emphasize the craftsmanship behind the products we serve and the product truths that we believe are key differentiators of our brand.

Previous wording

•Digital and loyalty strategy: Most of our sales occur through digital channels, and we are making significant investments in our technology infrastructure to deliver a more seamless experience across our owned channels, better connect with customers, and support greater efficiency across our operations. In 2025, we introduced our new omnichannel platform, releasing new mobile apps across both Android and iOS platforms as well as our refreshed website and mobile web experience, which we believe provides a streamlined ordering journey for our customers.

Current wording

Deepen our customer connection: Most of our sales occur through digital channels, and we are making significant investments in our technology infrastructure to deliver a more seamless experience across our owned channels and better connect with customers. In 2025, we introduced our new omnichannel platform, releasing new mobile apps across both Android and iOS platforms as well as our refreshed website and mobile web experience, which we believe provides a streamlined ordering journey for our customers.

Previous wording

We have also initiated a multi-year transition to a new point-of-sale system across all U.S. Company-owned and franchised restaurants that, if successful, will replace our existing point-of-sale system. We currently expect to fully deploy the new system by the end of 2027, at which point we will retire our current point-of-sale system. During the second quarter of 2026, we began pilot testing our new point-of-sale system; consequently, we began accelerating the remaining useful lives of our existing point-of-sale software assets. We anticipate that we may incur an incremental $5 million to $10 million of accelerated depreciation expense related to these initiatives.

Current wording

Deliver on every promise: We have initiated a multi-year transition to a new point-of-sale system across all U.S. Company-owned and franchised restaurants that we expect to replace our existing system. We currently expect to fully deploy the new system by the end of 2027. During the second quarter of 2026, we began pilot testing and, consequently, began accelerating the remaining useful lives of our existing point-of-sale software assets. Following the accelerated technological and digital development over 2025 and 2026, we are reducing our digital fee from 1.75% to 1.50%, effective in 2027, to balance supporting our franchisees and continued long-term development of our platform.

Previous wording

•Optimizing our supply chain: As part of our efforts to reduce the overall cost to serve our Domestic Company-owned and franchised restaurants, we are realizing benefits from productivity and cost reduction initiatives designed to optimize our commissary business while maintaining our commitment to product quality. We expect to achieve at least $60 million in North America systemwide supply chain savings over the next two years, equating to meaningful restaurant-level margin improvement. We have captured approximately $16 million of cumulative benefits from these initiatives and are on track to realize at least $25 million of savings by the end of 2026.

Current wording

Build a system where operators thrive: We are focused on the financial health of our franchisees. We expect to achieve at least $60 million in North America systemwide supply chain savings by the end of 2028, equating to meaningful restaurant-level margin improvement, while maintaining our commitment to product quality. We have captured approximately $23 million of cumulative benefits from these initiatives and are on track to realize at least $25 million of savings by the end of 2026. We also began franchisee incentive programs during the second quarter of 2026 tied to operational excellence and restaurant image improvements.

Previous wording

•Transforming our cost structure: In December 2025 our Board of Directors approved a business transformation program (the “Enterprise Transformation Plan”), with the goal of creating capacity to invest in our next phase of growth by reducing non-consumer-facing spending and optimizing our restaurant portfolio to improve unit economics. The execution of actions approved under the Enterprise Transformation Plan resulted in the closure of 101 restaurants in North America during the six months ended June 28, 2026 as well as the reduction of our corporate workforce by approximately 7%. As of June 28, 2026, the Company had approved the closure of 17 additional Company-owned restaurants, most of which we expect to close by the end of 2026. We incurred restructuring expenses of $4.4 million during the second quarter of 2026 under the Enterprise Transformation Plan, which consisted primarily of professional services fees and non-cash charges related to Company-owned restaurant closures. We currently estimate that we will incur aggregate restructuring charges of approximately $24 million to $31 million under the Enterprise Transformation Plan related to actions approved thus far, inclusive of the $16.4 million recognized during 2025 and the six months ended June 28, 2026 to date. We expect to recognize the remainder of the restructuring charges during 2026 and 2027. We believe that these initiatives will improve systemwide health and facilitate future growth, and we have identified at least $30 million of general and administrative expense savings, exclusive of marketing spend, to be captured across fiscal years 2026 and 2027.

Current wording

In December 2025, our Board of Directors approved a business transformation program (the “Enterprise Transformation Plan”) to create capacity to invest in our next phase of growth by reducing non-consumer-facing spending and optimizing our restaurant portfolio to improve unit economics. Actions under the plan resulted in the closure of 146 restaurants in North America during the nine months ended September 27, 2026, and a reduction of our corporate workforce by approximately 7%. As of September 27, 2026, we had also approved the closure of nine additional Company-owned restaurants, the majority of which we expect to close by the end of 2026.

Previous wording

The implementation of the Enterprise Transformation Plan remains ongoing and may result in additional restructuring charges, although the amounts and nature of future expenses relating to any actions yet to be determined or approved by management or our Board of Directors are currently not estimable. Potential future actions likely to be approved are expected to include elevated levels of restaurant closures in North America during 2026 and 2027, as we focus on improving the health of our restaurant portfolio by closing underperforming restaurants that lack a path to sustainable financial improvement, allowing our franchisees to invest resources in their remaining restaurants to accelerate growth.

Current wording

The plan remains ongoing and may result in additional restructuring charges, although the amounts and nature of expenses related to actions not yet approved are currently not estimable. We expect elevated levels of restaurant closures in North America during 2026 and 2027 as we close underperforming restaurants that lack a path to sustainable financial improvement, allowing our franchisees to invest in their remaining restaurants to accelerate growth.

Previous wording

We believe Domestic Company-owned, North America franchised, and International Comparable sales growth (decline) and Global system-wide restaurant sales information is useful in analyzing our results since our franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Comparable sales and Global system-wide restaurant sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation. Franchise sales also generate commissary revenue in the United States and in certain international markets. Comparable sales growth (decline) and Global system-wide restaurant sales information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of Global system-wide restaurant sales growth (decline), excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit growth without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the Company’s revenues.

Current wording

We believe Domestic Company-owned, North America franchised, and International Comparable sales growth (decline) and Global system-wide restaurant sales information is useful in analyzing our results since our franchisees pay royalties and marketing fund contributions that are based on a percentage of franchise sales. Comparable sales and Global system-wide restaurant sales results for restaurants operating outside of the United States are reported on a constant dollar basis, which excludes the impact of foreign currency translation. Franchise sales also generate commissary revenue in the United States and in certain international markets. Comparable sales growth (decline) and Global system-wide restaurant sales information is also useful for comparison to industry trends and evaluating the strength of our brand. Management believes the presentation of Global system-wide restaurant sales growth (decline), excluding the impact of foreign currency, provides investors with useful information regarding underlying sales trends and the impact of new unit changes without being impacted by swings in the external factor of foreign currency. Franchise restaurant sales are not included in the Company’s revenues.

Previous wording

(a)For the three and six months ended June 28, 2026, comparable sales decline and system-wide restaurant sales decline for Domestic Company-owned restaurants and North America franchised restaurants were adjusted to exclude the impact of refranchising 85 restaurants during the fourth quarter of 2025. See “Note 11. Divestitures” of “Notes to Condensed Consolidated Financial Statements” for additional information.

Current wording

(a)For the three and nine months ended September 27, 2026, comparable sales decline and system-wide restaurant sales decline for Domestic Company-owned restaurants and North America franchised restaurants were adjusted to exclude the impact of refranchising transactions that occurred in the fourth quarter of 2025 and the third quarter of 2026. See “Note 11. Divestitures” of “Notes to Condensed Consolidated Financial Statements” for additional information.

Previous wording

(b)Comparable sales and system-wide restaurant sales for the six months ended June 28, 2026 have been adjusted to remove $1.0 million of Domestic Company-owned restaurant sales that were erroneously overstated in the first quarter of 2026.

Current wording

(b)System-wide restaurant sales for the nine months ended September 28, 2025 have been adjusted to remove $11.8 million of North America franchised restaurant sales that were erroneously overstated.

Previous wording

The comparability of 2026 and 2025 results is impacted by a transaction that has changed the composition of our Domestic Company-owned restaurants and Domestic franchised restaurants. On November 24, 2025, the Company completed the refranchising of 85 Domestic Company-owned restaurants previously owned and operated by Colonel’s Limited, LLC, a consolidated joint venture (the “2025 refranchising transaction”). Upon closing of the transaction, the restaurants formerly owned by the Company converted to franchised locations. See “Note 21. Divestitures” of the “Notes to Consolidated Financial Statements” of our 2025 Annual Report on Form 10-K for additional information on this transaction.

Current wording

The comparability of 2026 and 2025 results is impacted by transactions that have changed the composition of our Domestic Company-owned restaurants and Domestic franchised restaurants. On November 24, 2025, the Company completed the refranchising of 85 Domestic Company-owned restaurants previously owned and operated by Colonel’s Limited, LLC, a consolidated joint venture. See “Note 21. Divestitures” of the “Notes to Consolidated Financial Statements” of our 2025

Previous wording

Total revenues decreased $46.8 million, or 8.8%, to $482.4 million for the three months ended June 28, 2026 and decreased $86.5 million, or 8.3%, to $961.0 million for the six months ended June 28, 2026, as compared to the prior year comparable periods. Changes in total revenues were impacted by the transaction noted above and are detailed in the discussions below.

Current wording

Total revenues decreased $53.3 million, or 10.5%, to $454.8 million for the three months ended September 27, 2026 and decreased $139.8 million, or 9.0%, to $1.4 billion for the nine months ended September 27, 2026, as compared to the prior year comparable periods. Changes in total revenues were impacted by the Domestic Company-owned restaurant refranchising transactions noted above and as detailed in the discussions below.

Previous wording

Company-owned restaurant sales, which include sales from both Domestic and International Company-owned restaurants, decreased $36.8 million, or 20.6%, for the three months ended June 28, 2026 and decreased $67.6 million, or 19.1%, for the six months ended June 28, 2026, as compared to the prior year comparable periods. The decrease for the three and six month periods is primarily attributable to approximately $25 million and $50 million, respectively, in prior-period sales from the formerly-Company owned restaurants refranchised in the 2025 refranchising transaction, as detailed above. The decrease was also due to lower comparable sales of 8.9% and 7.4% for our Domestic Company-owned restaurants for the three and six months ended June 28, 2026, respectively, driven by lower transaction volumes.

Current wording

Company-owned restaurant sales, which include sales from both Domestic and International Company-owned restaurants, decreased $37.1 million, or 22.1%, for the three months ended September 27, 2026 and decreased $104.7 million, or 20.1%, for the nine months ended September 27, 2026, as compared to the prior year comparable periods. The decreases for the three and nine month periods were primarily attributable to approximately $26 million and $76 million, respectively, in prior-period sales from the formerly-Company owned restaurants refranchised in the Domestic Company-owned restaurant refranchising transactions, as detailed above. The decreases were also due to lower comparable sales of 7.5% and 7.4% for our Domestic Company-owned restaurants for the three and nine months ended September 27, 2026, respectively, primarily due to lower transaction volumes.

Previous wording

Franchise royalties and fees, which include revenues generated from both North American and International franchisees, decreased $1.7 million, or 3.6%, for the three months ended June 28, 2026 and decreased $2.2 million, or 2.3%, for the six months ended June 28, 2026, as compared to the prior year comparable periods. The decrease is primarily due to a $3.3 million and $5.5 million decrease in royalties and fees from our North America franchisees due to declines in comparable sales of 8.2% and 7.4% for the three and six months ended June 28, 2026, respectively. International franchise royalties and fees increased $0.6 million and $1.2 million due to growth in International comparable sales of 1.5% and 2.5% for the three and six months ended June 28, 2026, respectively, and due to an increase in international franchise restaurants over the periods compared.

Current wording

Franchise royalties and fees, which include revenues generated from both North America and International franchisees, decreased $3.9 million, or 8.4%, for the three months ended September 27, 2026 and decreased $6.1 million, or 4.3%, for the nine months ended September 27, 2026, as compared to the prior year comparable periods. The decreases for the three and nine month periods were due to lower royalties and fees from our North America franchisees primarily as a result of declines in comparable sales of 8.5% and 7.8% for the respective periods and due to the impact of franchisee incentive programs tied to operational performance that began during the second quarter of 2026. International franchise royalties and fees decreased $0.1 million and increased $1.1 million for the three and nine months ended September 27, 2026, respectively, due to International comparable sales of decline of 1.8% and growth of 1.0%, respectively. North America and International franchise restaurant growth also resulted in slight increases in royalty revenue for the periods compared.

Previous wording

North America franchise restaurant sales are not included in Company revenues; however, our North America franchise royalties are derived from these sales. North America franchise restaurant sales decreased 5.3% to $712.4 million and decreased 4.4% to $1.4 billion for the three and six months ended June 28, 2026, respectively, compared to the prior year comparable periods and excluding the impact of foreign currency fluctuations. The decline in franchise restaurant sales was primarily due to a decrease in comparable sales of 8.2% and 7.4% for the three and six months ended June 28, 2026, respectively. Franchise equivalent units increased 1.6% for the three months ended June 28, 2026 and increased 0.3% for the six months ended June 28, 2026 compared to the prior year comparable periods.

Current wording

North America franchise restaurant sales are not included in Company revenues; however, our North America franchise royalty revenues are derived from these sales. North America franchise restaurant sales decreased 5.7% to $673.9 million and decreased 4.8% to $2.1 billion for the three and nine months ended September 27, 2026, respectively, compared to prior year comparable periods and excluding the impact of foreign currency fluctuations. The declines in franchise restaurant sales were primarily due to decreases in comparable sales of 8.5% and 7.8% for the three and nine months ended September 27, 2026, respectively, partially offset by an increase in North America franchised restaurants as a result of the Domestic Company-owned restaurant refranchising transactions. Franchise equivalent units increased 0.4% for the three months ended September 27, 2026 and increased 0.3% for the nine months ended September 27, 2026 compared to the prior year comparable periods.

Previous wording

International franchise restaurant sales are also not included in Company revenues; however, our international royalty revenue is derived from these sales. International franchise restaurant sales increased 5.1% to $344.0 million and increased 5.5% to $673.9 million for the three and six months ended June 28, 2026, respectively, compared to the prior year comparable periods and excluding the impact of foreign currency fluctuations. The increase was due to growth in International comparable sales of 1.5% and 2.5% for the three and six months ended June 28, 2026, respectively, as well as restaurant growth.

Current wording

International franchise restaurant sales are also not included in Company revenues; however, our International franchise royalty revenue is derived from these sales. International franchise restaurant sales increased 2.8% to $340.4 million and increased 4.6% to $1.0 billion for the three and nine months ended September 27, 2026, respectively, compared to the prior year comparable periods and excluding the impact of foreign currency fluctuations. The increases were primarily due to growth in the number of International franchise restaurants over the comparable periods. International comparable sales decreased 1.8% and increased 1.0% for the three and nine months ended September 27, 2026, respectively.

Previous wording

Commissary revenues, which includes sales from our North American and International QC Centers, decreased $3.8 million, or 1.6%, for the three months ended June 28, 2026 and decreased $10.1 million, or 2.2%, for the six months ended June 28, 2026 as compared to the prior year comparable periods. The decrease was primarily due to lower transaction volumes, partially offset by higher prices. The decrease in commissary revenues was also partially offset by an increase in franchised restaurants as a result of the 2025 refranchising transaction discussed above, which contributed to an increase of approximately $7 million and $14 million for the three and six months ended June 28, 2026, respectively.

Current wording

Commissary revenues, which includes sales from our North America and International QC Centers, decreased $7.1 million, or 3.1%, for the three months ended September 27, 2026 and decreased $17.2 million, or 2.5%, for the nine months ended September 27, 2026 as compared to the prior year comparable periods. The decreases were primarily due to lower transaction volumes, partially offset by higher prices. The decreases for the three and nine month periods were also partially offset by an increase in the number of franchised restaurants as a result of the Domestic Company-owned restaurant refranchising transactions discussed above, which contributed to increases of approximately $7 million and $21 million for the three and nine months ended September 27, 2026, respectively.

Previous wording

Other revenues, which primarily includes revenues derived from our online and mobile ordering business, decreased $1.7 million, or 7.2%, and decreased $3.6 million, or 7.8%, for the three and six months ended June 28, 2026, respectively, as compared to the prior year comparable periods. The decreases were primarily due to lower revenues generated from technology services as a result of a reduction in the technology fee charged to franchisees that began in the second half of 2025, as well as North America systemwide sales declines of 8.3% and 7.4% for the three and six months ended June 28, 2026, respectively.

Current wording

2026 was primarily due to lower revenues generated from technology services as a result of a reduction in the technology fee charged to franchisees that began in the second half of 2025. North America systemwide sales declines of 8.8% and 7.8% for the three and nine months ended September 27, 2026, respectively, also contributed to the decreases.

Previous wording

Advertising funds revenue, which includes the operations of PJMF as well as local and International marketing funds, decreased $2.8 million, or 6.4%, and decreased $3.0 million, or 3.4% for the three and six months ended June 28, 2026, respectively, as compared to the prior year comparable periods. The decreases were primarily driven by global system-wide restaurant sales decline of 4.8% and 4.0% for the three and six months ended June 28, 2026, respectively.

Current wording

Advertising funds revenue, which includes the operations of PJMF, as well as local and International marketing funds, decreased $5.0 million, or 12.1%, and decreased $8.0 million, or 6.2% for the three and nine months ended September 27, 2026, respectively, as compared to the prior year comparable periods. The decreases were primarily driven by global system-wide restaurant sales declines of 5.6% and 4.6% for the three and nine months ended September 27, 2026, respectively.

Previous wording

Cost of sales primarily consists of Company-owned restaurant and supply chain costs incurred to generate related revenues. Components of cost of sales include food and paper products, labor, freight and delivery, occupancy costs, local advertising costs, insurance expense, and other costs. Costs of sales by segment for the three and six months ended June 28, 2026 and June 29, 2025 were as follows:

Current wording

Cost of sales primarily consists of Company-owned restaurant and supply chain costs incurred to generate related revenues. Components of cost of sales include food and paper products, labor, freight and delivery, occupancy costs, local advertising costs, insurance expense, and other costs. Costs of sales by segment for the three and nine months ended September 27, 2026 and September 28, 2025 were as follows:

Previous wording

Cost of sales were $339.0 million and $679.9 million for the three and six months ended June 28, 2026, a decrease of $32.7 million and $58.3 million, respectively, from the prior year comparable periods. The decreases in cost of sales were primarily due the Domestic Company-owned restaurant segment as a result of the 2025 refranchising transaction, which resulted in fewer Company-owned restaurants in 2026 compared to the prior year comparable periods and drove a decrease of approximately $23 million and $46 million in cost of sales for the Domestic Company-owned restaurant segment for the three and six months ended June 28, 2026, respectively. The Domestic Company-owned restaurant segment cost of sales also decreased due to improved labor productivity and lower local advertising costs. Cost of sales for the Domestic Company-owned restaurants and Domestic QC Centers also decreased due to lower transaction volumes as a result of lower North America comparable sales. These decreases were partially offset by increases in labor and technology costs for our online and mobile ordering business and were further offset by decreases in intersegment cost of sales due to a decrease in the number of Domestic Company-owned restaurants as a result of the 2025 refranchising transaction discussed above.

Current wording

Cost of sales were $328.6 million and $1.0 billion for the three and nine months ended September 27, 2026, respectively, representing decreases of $40.5 million and $98.8 million, respectively, from the prior year comparable periods. The decreases in cost of sales were primarily from the Domestic Company-owned restaurant segment as a result of the Domestic Company-owned restaurant refranchising transactions, which resulted in decreases of approximately $25 million and $72 million in cost of sales for the Domestic Company-owned restaurant segment for the three and nine months ended September 27, 2026, respectively. The decreases in Domestic Company-owned restaurant segment cost of sales were also due to lower comparable sales, improved labor productivity, and lower local advertising costs. Cost of sales for the Domestic QC Centers decreased primarily due to lower transaction volumes as a result of lower North America comparable sales and due to savings resulting from our supply chain initiatives. These decreases were partially offset by increases in labor and technology costs for our online and mobile ordering business (“All Other”) and were further offset by decreases in intersegment cost of sales due to a decrease in the number of Domestic Company-owned restaurants as a result of the Domestic Company-owned restaurant refranchising transactions discussed above.

Previous wording

General and administrative expenses (“G&A”) expenses were $59.0 million, or 12.2% of total revenues, and $115.0 million, or 12.0% of total revenues, for the three and six months ended June 28, 2026, respectively, as compared to $70.1 million, or 13.3% of total revenues, and $135.3 million, or 12.9% of total revenues, for the prior year comparable periods, respectively. G&A expenses consisted of the following:

Current wording

General and administrative expenses (“G&A”) expenses were $55.8 million, or 12.3% of total revenues, and $170.8 million, or 12.1% of total revenues, for the three and nine months ended September 27, 2026, respectively, as compared to $56.5 million, or 11.1% of total revenues, and $191.8 million, or 12.3% of total revenues, for the prior year comparable periods, respectively. G&A expenses consisted of the following:

Previous wording

(a)Administrative and other general expenses decreased by $13.3 million and $23.8 million, respectively, for the three and six months ended June 28, 2026. The decrease for the three months ended June 28, 2026 compared to the prior year comparable period was primarily due to a $5.4 million reduction in supplemental advertising costs and a $5.6 million decrease in management and other compensation costs. The decrease for the six months ended June 28, 2026 was primarily due to an $8.0 million year-over-year reduction in supplemental advertising costs, a $6.7 million decrease in management and other compensation costs, and $4.5 million of expenses incurred in the first quarter of 2025 for our bi-annual franchise operating conference that did not recur in 2026.

Current wording

(a)Administrative and other general expenses increased by $1.3 million for the three months ended September 27, 2026 compared to the prior year comparable period primarily due to a $5.1 million increase in supplemental advertising costs, partially offset by a $4.3 million decrease in management and other compensation costs. Administrative and other general expenses decreased by $22.3 million for the nine months ended September 27, 2026 compared to the prior year comparable period. The decrease was primarily due to an $11.0 million decrease in management and other compensation costs, $4.5 million of expenses incurred in the first quarter of 2025 for our bi-annual franchise operating conference that did not recur in 2026, and a $3.0 million year-over-year reduction in supplemental advertising costs.

Previous wording

(b)For the three and six months ended June 28, 2026, represents costs associated with the Enterprise Transformation Plan. For the three and six months ended June 29, 2025, represents costs associated with the International Transformation Plan. Refer to “Note 9. Restructuring” for additional details.

Current wording

(b)For the three and nine months ended September 27, 2026, represents costs associated with the Enterprise Transformation Plan. For the three and nine months ended September 28, 2025, represents costs associated with the International Transformation Plan. Refer to “Note 9. Restructuring” for additional details.

Previous wording

(c)Represents additional net transaction expense (gain), associated with the refranchising of 85 restaurants on November 24, 2025. See “Note 11. Divestitures” for additional details.

Current wording

(c)Represents refranchising transaction (gain) expense associated with the Domestic Company-owned restaurant refranchising transactions. See “Note 11. Divestitures” for additional details.

Previous wording

(d)For the three and six months ended June 28, 2026, represents costs associated with project-based strategic initiatives that are not related to our ongoing operations.

Current wording

(d)For the three and nine months ended September 27, 2026, represents costs associated with project-based strategic initiatives not related to our ongoing operations as well as realizable insurance recoveries arising from tornadoes that damaged the Texas QC Center as well as the restaurant support center and QC Center in Louisville, Kentucky.

Previous wording

Depreciation and amortization expenses were $19.2 million, or 4.0% of total revenues, and $37.0 million, or 3.8% of total revenues, for the three and six months ended June 28, 2026, respectively, as compared to $18.8 million, or 3.6% of total revenues, and $37.2 million, or 3.5% of total revenues, for the prior year comparable periods, respectively. During the three months ended June 28, 2026, we incurred approximately $1.6 million of accelerated depreciation expense related to investments in our new point-of-sale system and omnichannel experience, as well as related to the closure or approved closure of 25 Company-owned restaurants under our Enterprise Transformation Plan. The increase in depreciation expense as a percentage of total revenues over the comparable periods is primarily due to lower transaction volumes and the accelerated depreciation expense discussed above.

Current wording

Depreciation and amortization expenses were $19.2 million, or 4.2% of total revenues, and $56.2 million, or 4.0% of total revenues, for the three and nine months ended September 27, 2026, respectively, as compared to $24.9 million, or 4.9% of total revenues, and $62.1 million, or 4.0% of total revenues, for the prior year comparable periods, respectively. The decreases in depreciation and amortization expense were primarily driven by lower accelerated depreciation expense from investments in our new point-of-sale system and omnichannel experience, partially offset by accelerated depreciation related to the closure or approved closure of 26 Company-owned restaurants under our Enterprise Transformation Plan during 2026. Accelerated depreciation expense totaled $1.8 million and $3.4 million during the three and nine months ended September 27, 2026, respectively, compared to $6.1 million in the three and nine months ended September 28, 2025, respectively.

Previous wording

Advertising funds expense was $42.0 million, or 101.5% of advertising funds revenue, and $85.2 million, or 100.5% of advertising funds revenue for the three and six months ended June 28, 2026, respectively, compared with $44.0 million, or 99.7% of advertising funds revenue, and $88.4 million, or 100.6% of advertising funds revenue, for the prior year comparable periods, respectively. Advertising funds expense consists primarily of expenses incurred by PJMF, which is designed to operate at break-even as it spends all annual contributions received from the system. Advertising funds expense also contains expenses incurred through our international marketing funds to support our International business, which may lead to Advertising funds expense being less than or in excess of Advertising funds revenue due to timing differences. The decrease in advertising funds expense for the three and six months ended June 28, 2026 compared to the prior year comparable periods was primarily due to declines in global system-wide restaurant sales in 2026.

Current wording

Advertising funds expense was $36.9 million, or 100.8% of advertising funds revenue, and $122.2 million, or 100.6% of advertising funds revenue for the three and nine months ended September 27, 2026, respectively, compared to $41.5 million, or 99.5% of advertising funds revenue, and $129.8 million, or 100.2% of advertising funds revenue, for the prior year comparable periods, respectively. Advertising funds expense consists primarily of expenses incurred by PJMF, which is designed to operate at break-even as it spends all annual contributions received from the system. Advertising funds expense also contains expenses incurred through our international marketing funds to support our International segment, which may lead to Advertising funds expense being less than or in excess of Advertising funds revenue due to timing differences. The decrease in advertising funds expense for the three and nine months ended September 27, 2026 compared to the prior year comparable periods was primarily due to declines in global system-wide restaurant sales in 2026.

Previous wording

Domestic Company-owned restaurants segment adjusted EBITDA decreased $3.2 million for the three months ended June 28, 2026 primarily due to a decrease in comparable sales of 8.9% and due to fewer Domestic Company-owned restaurants as a result of the 2025 refranchising transaction. The decrease was partially offset by the impact of a prospective change in our internal cost allocation methodology in 2026 to refine internal allocations of certain operating costs to our segments. This change in allocation methodology resulted in a $2.1 million increase in Domestic Company-owned restaurants segment adjusted EBITDA for the three months ended June 28, 2026. Please see “4-wall EBITDA” below for a discussion of this change. Domestic Company-owned restaurants segment adjusted EBITDA decreased $0.4 million for the six months ended June 28, 2026 due primarily to a decrease in comparable sales of 7.4% and due to fewer Domestic Company-owned restaurants as a result of the 2025 refranchising transaction, partially offset by commodity deflation and by the change in cost allocation methodology mentioned above, which resulted in a $4.2 million increase in Domestic Company-owned restaurants segment adjusted EBITDA for the six months ended June 28, 2026.

Current wording

Domestic Company-owned restaurants segment adjusted EBITDA decreased $2.9 million for the three months ended September 27, 2026 and decreased $3.2 million for the nine months ended September 27, 2026 primarily due to comparable sales declines of 7.5% and 7.4%, respectively, and due to fewer Domestic Company-owned restaurants as a result of the Domestic Company-owned restaurant refranchising transactions. The decreases were partially offset by the impact of a prospective change in our internal cost allocation methodology in 2026 to refine internal allocations of certain operating costs to our segments. This change in allocation methodology resulted in increases of $2.1 million and $6.3 million in Domestic Company-owned restaurants segment adjusted EBITDA for the three and nine months ended September 27, 2026, respectively. Please see “4-wall EBITDA” below for a discussion of this change.

Previous wording

North America franchising segment adjusted EBITDA decreased $3.1 million and $5.0 million for the three and six months ended June 28, 2026 primarily due to decreases in comparable sales of 8.2% and 7.4%, respectively.

Current wording

North America franchising segment adjusted EBITDA decreased $5.3 million and $10.3 million for the three and nine months ended September 27, 2026, respectively, primarily due to comparable sales declines of 8.5% and 7.8%, respectively, and the impact of franchisee incentive programs tied to operational performance that began during the second quarter of 2026.

Previous wording

North America commissaries segment adjusted EBITDA increased $2.7 million for the three months ended June 28, 2026 primarily due to higher prices, partially offset by lower transaction volumes in 2026. North America commissaries segment adjusted EBITDA decreased $4.2 million for the six months ended June 28, 2026 primarily due to lower transaction volumes, franchisee food cost subsidies during the first quarter, and timing of planned pricing during the year.

Current wording

North America commissaries segment adjusted EBITDA increased $0.7 million for the three months ended September 27, 2026 primarily due to higher prices and savings resulting from our supply chain initiatives, partially offset by lower transaction volumes. North America commissaries segment adjusted EBITDA decreased $3.5 million for the nine months ended September 27, 2026 primarily due to lower transaction volumes, franchisee food cost subsidies, and timing of planned pricing during the year, partially offset by savings resulting from our supply chain initiatives and commodity deflation compared to the prior period.

Previous wording

4-wall EBITDA and 4-wall EBITDA margin are presented in the table below. Segment revenue and segment cost of sales for our Domestic Company-owned restaurants in the table below are presented in the segment footnote to our Condensed Consolidated Financial Statements in accordance with Accounting Standards Codification 280. See “Note 12. Segment

Current wording

4-wall EBITDA and 4-wall EBITDA margin are presented in the table below. Segment revenue and segment cost of sales for our Domestic Company-owned restaurants in the table below are presented in the segment footnote to our Condensed Consolidated Financial Statements in accordance with Accounting Standards Codification 280. See “Note 12. Segment Information” of the “Notes to Condensed Consolidated Financial Statements,” for further information on our segments.

Previous wording

4-wall EBITDA decreased $6.3 million to $15.6 million for the three months ended June 28, 2026 as compared to the prior year comparable period. The decrease was partially due to the 2025 refranchising transaction, which contributed to a decrease of approximately $2 million due to fewer Domestic Company-owned restaurants. The decrease was also due to lower transaction volumes and higher prices, partially offset by lower labor costs due to increased productivity and lower local advertising costs.

Current wording

4-wall EBITDA decreased $6.5 million to $9.8 million for the three months ended September 27, 2026 as compared to the prior year comparable period. The decrease was partially due to the Domestic Company-owned restaurant refranchising transactions, which contributed to a decrease of approximately $1 million due to fewer Domestic Company-owned restaurants. The decrease was also due to lower transaction volumes and higher food costs, partially offset by lower labor costs due to increased productivity and lower local advertising costs.

Previous wording

4-wall EBITDA margin for the three months ended June 28, 2026 decreased 1.3% primarily due to lower transaction volumes and higher prices, partially offset by lower labor costs due to increased productivity and lower local advertising costs. This decrease was also partially offset by the impact of the 2025 refranchising transaction, which drove a 0.7% margin increase over the comparable periods.

Current wording

4-wall EBITDA margin for the three months ended September 27, 2026 decreased 2.3% primarily due to lower transaction volumes and higher food costs, partially offset by lower labor costs due to increased productivity. This decrease was also partially offset by the impact of the Domestic Company-owned restaurant refranchising transactions, which drove a 1.0% margin increase over the comparable period.

Previous wording

4-wall EBITDA decreased $7.6 million to $32.2 million for the six months ended June 28, 2026, as compared to the prior year comparable period. The decrease was partially due to the 2025 refranchising transaction, which contributed to a decrease of approximately $4 million. The decrease was also due to lower transaction volumes and higher prices, partially offset by lower labor costs due to increased productivity and lower local advertising costs.

Current wording

4-wall EBITDA decreased $14.2 million to $42.0 million for the nine months ended September 27, 2026, as compared to the prior year comparable period. The decrease was partially due to the Domestic Company-owned restaurant refranchising transactions, which contributed to a decrease of approximately $5 million. The decrease was also due to lower transaction volumes and higher food costs, partially offset by lower labor costs due to increased productivity and lower local advertising costs.

Previous wording

4-wall EBITDA margin for the six months ended June 28, 2026 was 11.5%, consistent with the prior year comparable period. Margin decreases due to lower transaction volumes and higher prices in 2026 were offset by commodity deflation, lower labor costs due to increased productivity, lower local advertising costs, and were also offset by the impact of the 2025 refranchising transaction, which drove a 0.6% margin increase over the comparable periods.

Current wording

4-wall EBITDA margin for the nine months ended September 27, 2026 decreased 0.6% primarily due to lower transaction volumes and higher food costs, offset by commodity deflation, lower labor costs due to increased productivity, and the impact of the Domestic Company-owned restaurant refranchising transactions, which drove a 0.7% margin increase over the comparable periods.

Previous wording

Net interest expense decreased $1.1 million and $1.5 million for the three and six months ended June 28, 2026, respectively, compared with the prior year comparable periods, primarily due to lower average interest rates.

Current wording

Net interest expense decreased $0.5 million and $2.0 million for the three and nine months ended September 27, 2026, respectively, compared to prior year comparable periods, primarily due to lower average interest rates as well as lower outstanding debt balances.

Previous wording

Our effective income tax rate was 36.4% and 36.8% for the three and six months ended June 28, 2026, respectively, as compared to an effective income tax rate of 30.5% and 31.6% for the prior year comparable periods, respectively. The higher effective tax rate was primarily due to a shift in income between jurisdictions, tax shortfall generated by vesting of restricted shares, and lower projected income tax credits.

Current wording

Our effective income tax rate was 32.2% and 36.0% for the three and nine months ended September 27, 2026, respectively, as compared to an effective income tax rate of 28.2% and 31.0% for the prior year comparable periods, respectively. The higher effective tax rate was primarily due to a shift in income between jurisdictions, tax shortfall generated by vesting of restricted shares, and lower projected income tax credits.

Previous wording

Net income included $0.2 million of income attributable to noncontrolling interests for the three months ended June 28, 2026 and $0.2 million of losses attributable to noncontrolling interests for the six months ended June 28, 2026, compared with income of $0.1 million and $0.3 million, respectively, in the prior year comparable periods.

Current wording

Net income included income of $0.1 million and losses of less than $0.1 million attributable to noncontrolling interests for the three and nine months ended September 27, 2026, respectively, compared with losses of $0.2 million and income of less than $0.1 million, respectively, in the prior year comparable periods.

Previous wording

Diluted earnings per common share were $0.24 and $0.46 for the three and six months ended June 28, 2026, respectively, as compared to $0.28 and $0.56 for the prior year comparable periods, respectively, representing a decrease of $0.04 and $0.10, respectively. Adjusted diluted earnings per common share, a non-GAAP measure, was $0.46 and $0.78 for the three and six months ended June 28, 2026, respectively, as compared to adjusted diluted earnings per common share of $0.41 and $0.77 for the prior year comparable periods, respectively, representing an increase of $0.05 and $0.01, respectively. See “Non-GAAP Measures” for additional information.

Current wording

Diluted earnings per common share were $0.09 and $0.55 for the three and nine months ended September 27, 2026, respectively, as compared to $0.13 and $0.69 for the prior year comparable periods, respectively, representing decreases of $0.04 and $0.14, respectively. Adjusted diluted earnings per common share, a non-GAAP measure, was $0.16 and $0.94 for the three and nine months ended September 27, 2026, respectively, as compared to adjusted diluted earnings per common share of $0.32 and $1.09 for the prior year comparable periods, respectively, representing a decrease of $0.16 and $0.15, respectively. See “Non-GAAP Measures” for additional information.