WING 10-K & 10-Q changes, risk factors and insider trading

As we continue to grow, our existing systems and processes and personnel may not be adequate to support our continued growth. WeAlthough we have made significant investments to date, we may have a continued need to upgrade and expand our infrastructure and information systems, automate more processes and hire, train and retain restaurant employees and corporate support staff, all of which may result in increased costs and inefficiencies.

The failure of our franchisees to comply with applicable laws could negatively impact our reputation or results of operations. For example, our franchisees are solely responsible for making their own hiring, firing and disciplinary decisions, scheduling hours and establishingfunding compensation. Any failure by our franchisees to comply with applicable employment laws could negatively impact our reputation and our ability to hire and/or retain employees. Furthermore, if one of our key franchisees were to become insolvent or otherwise were unable or unwilling to pay us royalties, Ad Fund contributions, or other amounts owed, our business, financial condition, and results of operations could be adversely affected. In a franchisee bankruptcy, the bankruptcy trustee may reject its franchise agreements under the applicable bankruptcy code, in which case there would be no further royalty payments from such franchisee. The amount of the proceeds, if any, that may ultimately be recovered in a bankruptcy proceeding of such franchisee may not be sufficient to satisfy a damage claim resulting from such rejection.

In addition, our reliance on third-party food suppliers and distributors increases the riskrisks that food-borne illness incidents could be caused by factors outside of our control and that multiple restaurants could be affected rather than a single restaurant. We cannot ensure that all food items are properly maintained during transport throughout the supply chain or that our employees and our franchisees and their employees will identify all products that may be spoiled and should not be used. Our industry has also long been subject to the threat of food tampering by suppliers, employees, third-party delivery service providers, and others such as the addition of foreign objects in the food that we sell. Reports, whether or not true, of injuries caused by food tampering have in the past severely injured the reputations and brands of restaurant chains in the quick service restaurant market and could affect us in the future as well. If our customers become ill from food-borne illnesses or injured from food tampering, we could also be forced to temporarily close some restaurants. Moreover, any instances of food contamination, whether or not at our restaurants, could subject our restaurants or our suppliers to a food recall pursuant to the Food and Drug Administration Food Safety Modernization Act or the Federal Food, Drug, and Cosmetic Act.

Our franchisees, contractors, and third parties with whom we do business have experienced cyber incidents and security breaches or intrusions in which confidential or personal information could have been stolen and we, our franchisees, contractors, and third parties with whom we do business may experience cyber incidents and security breaches or intrusions in which confidential or personal information is stolen in the future. Third parties may have the technology or know-how to breach the security of confidential or personal information collected, stored or transmitted by us or our franchisees, and our and their security measures and those of third parties with whom we do business, including technology vendors, solution providers, software manufacturers and supply chain vendors, may not effectively prohibit others from obtaining improper access to this information. Third parties have been and will likely be able to continue to develop and deploy viruses, worms and other malicious software programs, such as ransomware, that attack our systems and the systems of our franchisees’ and third parties with whom we do business or otherwise exploit any security vulnerabilities. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and are often difficult to detect for long periods of time, which may cause a breach to go undetected for an extensive period of time. Advances in computer and software capabilities, technology, new tools or social engineering tactics, and other developments may increase the risk of such a breach. If a person is able to circumvent the security measures of our business, our franchisees’ businesses or those of other third parties, he or she could destroy or steal valuable or personal information or disrupt the operations of our business. In addition, our franchisees, contractors or third parties with whom we do business or to whom we outsource business operations may attempt to circumvent our security measures in order to misappropriate confidential information and may purposefully or inadvertently cause a breach involving such information. The costs to us to eliminate any of the foregoing cybersecurity vulnerabilities or to address a cyber incident could be significant and have a material adverse impact on our business, financial condition, and results of operations. The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks by making cyber incidents more difficult to detect, contain, and mitigate for us, our franchisees, contractors, and third parties with whom we do business.

If we, our employees, franchisees, or vendors fail to comply with applicable laws, regulations, or contract terms, and coveredconfidential or sensitive information is obtained by unauthorized persons, used inappropriately, or destroyed, it could adversely affect our reputation, disrupt our operations and result in costly litigation, judgments, or penalties resulting from violation of laws and payment card industry regulations. Any such claim or proceeding could cause us to incur significant unplanned expenses and significantly harm our reputation, which could have a material adverse impact on our business, financial condition, and results of operations. A cyber incident could also require us to provide notifications, result in adverse publicity, loss of sales and profits, increase fees payable to third parties, and result in penalties or remediation and other costs that could materially adversely affect the operation of our business, financial condition, and results of operations. In addition, our cyber liability insurance coverage may be inadequate or may not be available in the future on acceptable terms, or at all, and defending a suit, regardless of its merit, could be costly and divert management’s attention. See “Item 1C. Cybersecurity” for more information about the Company’s cybersecurity risk management and governance.

The United States, the European Union, and other countries in which we operate are increasingly adopting or revising privacy, information security, and data protection laws and regulations that could have a significant impact on our current and planned privacy, data protection, and information security-related practices, our collection, use, sharing, retention, and safeguarding of consumer and/or employee information, and some of our current or planned business activities. In the United States, these include rules and regulations promulgated under the authority of the FTC, the Health Insurance Portability and Accountability Act of 1996, federal and state labor and employment laws, state data breach notification laws, and state privacy laws such as the California Consumer Privacy Act of 2018 (the “CCPA”) and the California Privacy Rights Act (the “CPRA”). The CPRA expanded the CCPA’s requirements, restricted the use of certain categories of personal information that we handle, and established a new regulatory agency to implement and enforce the law. A number of other states have enacted similar data privacy laws, and other states and countries are considering passing or expanding privacy laws in the near term. Many of these laws and regulations provide consumers and employees with a private right of action if a covered company suffers a data breach related to a failure to implement reasonable data security measures. For example, the CCPA and CPRA provide a private right of action for certain data breaches coupled with statutory damages under certain circumstances. Compliance with the CCPA, CPRA, and other laws relating to the protection of personal information involve significant costs and could result in significant liability in the event we allow an unauthorized disclosure of personal information. In the European Union, this includes the General Data Protection Regulation (the “GDPR”). generally governs the use of certain categories of personal information. We may need to take measures to comply with requirements contained in the GDPR (or similar legislation implemented in the United Kingdom), such as implementing appropriate mechanisms for the cross-border transfer of personal data, follow mandatory data breach notification requirements, and provide robust rights for data subjects. Additionally, several states and localities have also enacted statutes banning or restricting the collection of biometric information. These data privacy and biometric information laws will require us to incur additional costs and expenses in our efforts to comply. An actual or perceived failure to comply with these domestic or international laws and others that may be passed could subject our business to regulatory scrutiny, significant administrative and monetary sanctions, damages under some laws to individuals, and reputational damage. In addition, the FTC and other state and federal agencies have been increasing their scrutiny of the ways in which companies use personally identifiable information for marketing and analytics, as well as the circumstances under which companies share such data with other companies, including social media companies, for such purposes. We may need to continue to make adjustments as updated guidance becomes available, or other privacy, information security or data protection laws and regulations take effect in jurisdictions in which we currently operate or may in the future operate.

The legal framework around privacy issues is rapidly evolving, as various federalfederal, state, and stateinternational government bodies are considering adopting new privacy laws and regulations. These emerging laws and regulations have resulted and will likely continue to result in significant limitations on or changes to the ways in which we can collect, use, host, store, or transmit personal information and other data. Compliance with privacy, data protection, and information security laws to which we are subject could continue to result in additional costs, and our failure to comply with such laws could result in potentially significant regulatory investigations or government actions, penalties or remediation, and other costs, as well as adverse publicity, loss of sales and profits, and an increase in fees payable to third parties. Additionally, the rapid evolution and increased adoption of artificial intelligence technologies and our obligations to comply with emerging laws and regulations may increase scrutiny from or actions by regulators, consumer groups or other third parties, increase the scope of regulation or government restrictions applicable to our business, or subject our business to increased risks of litigation. Each of these implications could materially adversely affect our business, financial condition, and results of operations.

Customers are increasingly using e-commerce websites and apps, both domestically and internationally, like www.wingstop.com, our mobile ordering application, and third-party delivery apps, to order and pay for our products and select optional delivery and curbside services. In the fourth quarter of 2024,2025, digital sales accounted for 70.3%73.2% of our domesticsystem-wide sales.

Labor is a primary component of our operating costs. Increased labor costs due to factors such as competition for workers, labor shortages, labor market pressures, increased minimum wage requirements, paid sick leave or vacation accrual mandates, or other legal or regulatory changes, such as predictive scheduling, may adversely impact operating costs for us and our franchisees. Additional taxes or requirements to incur additional employee benefit costs, including the requirements of the Patient Protection and Affordable Care Act or any new or replacement healthcare requirements, could also adversely impact our and our franchisees’ operating costs. From time to time, legislation increases the minimum wage at the federal, state and local level, or creates a council that could, among other things, increase minimum wages and impose additional minimum working or operating standards. The establishment of such laws in one state may have a ripple effect in other states, substantially increase labor costs and negatively impact our operating costs.

•costs associated with litigation or arbitration;

Although we require all workers in our company-owned restaurants and in our corporate support office to provide us with government-specified documentation evidencing their employment eligibility, some of our employees may, without our knowledge, be unauthorized workers. We currently participate in the “E-Verify” program, an Internet-based, free program run by the U.S. government to verify employment eligibility, in all of our company-owned restaurants and in our corporate support office. However, use of the “E-Verify” program does not guarantee that we will successfully identify all applicants who are ineligible for employment. Unauthorized workers may subject us to fines or penalties, and if any of our workers are found to be unauthorized, we could experience adverse publicity that negatively impacts our brand and it may be more difficult to hire and keep qualified employees. We could also become subject to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping obligations of federalfederal, state, and stateinternational employment eligibility or immigration compliance laws. Failure by our franchisees to comply with employment eligibility or immigration laws may also result in adverse publicity and reputational harm to our brand and could subject them to fines, penalties and other costs. These factors could materially adversely affect our business, financial condition, and results of operations.

As of December 28,27, 2024,2025, we have franchised restaurants in eleven18 international countries and U.S. territories and plan to accelerate our growth internationally. Expansion in international markets may be affected by local economic, market, and cultural conditions. Our business, financial condition and results of operations may be adversely affected if the global markets in which our franchised restaurants compete are affected by changes in political, economic, or other factors. These factors, over which neither our franchisees nor we have control, may include:

Our international expansion efforts may require considerable management time as well as start-up expenses for market development before any significant revenues and earnings are generated. Negotiated incentives or discounts provided in connection with the opening of new markets may result in lower cash flows and profits than existing international markets. Operations in new foreign markets may achieve low margins or may be unprofitable, and expansion in existing markets may be affected by local economic and market conditions. Therefore, as we continue to expand internationally, we or our franchisees may not experience the operating margins we expect, we may experience a delay in or loss of royalty income, our results of operations and growth may be negatively impacted, and our common stock price may decline.

There is increasingcontinued focus, public interest, and legislative pressure related to public companies’ ESG practices. Legislative, regulatory or other efforts, including those of the SEC and multiple states and countries, to combataddress ESG concerns could result in new or more stringent forms of oversight and expand mandatory and voluntary reporting, diligence and disclosure, which could increase costs and require resources dedicated toward the collection and disclosure of data (such as information regarding potential risks of climate change or greenhouse gas emissions), and bring additional focus on and further impact our business, results of operations, and financial condition. Further, if our ESG practices fail to meet investor, customer, consumer or employees’ evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship (including climate change, greenhouse gas emissions, packaging and waste), animal welfare, diversity, human capital management, and corporate governance and transparency, our reputation, brand, appeal to current and potential customers and investors, and employee retention may be negatively impacted, which could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, if our competitors’ ESG practices are perceived to be better than our own, certain investors or customers may elect to invest in or be a patron of our competitors instead, which would have an adverse impact on our business, financial condition, and results of operations.

•establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; and

We operate on a 52- or 53-week fiscal year ending on the last Saturday of each calendar year. Our fiscal quarters are comprised of 13 weeks, with the exception of the fourth quarter of a 53-week year, which contains 14 weeks. Fiscal years 2025, 2024 and 2023 each contain 52 weeks, while fiscal year 2022 contains 53 weeks.

Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world and has demonstrated strong, consistent growth. As of December 28,27, 2024,2025, we had a total of 2,5633,056 restaurants in our system. Our restaurant base is approximately 98% franchised, with 2,5132,999 franchised locations (including 359470 international locations) and 5057 company-owned restaurants as of December 28,27, 2024.2025. We generate revenues by charging royalties, advertising fees and franchise fees to our franchisees and by operating a number of our own restaurants.

We plan to grow our business by opening new franchised restaurants and increasing our same store sales, while leveraging our franchise model to create shareholder value. Domestic same store salesWe have increasedadded forover 211,000 consecutivenet yearsnew beginningunits, representing a 56.0% increase in 2004,our whichsystem-wide includesfootprint, 3-yearand cumulativeachieved domestic same storessystem-wide sales growth of 41.6%95.1% since the beginning of fiscal year 2022.2023. We believe our asset-light, highly-franchised business model generates strong operating margins and requires low capital expenditures, creating shareholder value through strong and consistent operating cash flow and capital-efficient growth.

Highlights for Fiscal Year 2024 Compared to Fiscal Year 20232025

•System-wide sales increased 36.8%12.1% over the prior fiscal year to $4.8approximately $5.3 billion;

•Domestic same store sales increaseddecreased 19.9%3.3% over the prior fiscal year;

•Domestic AUV increasedof to $2.1$2.0 million;

•Net income increased 54.9%60.3% over the prior fiscal year to $108.7$174.3 million, or $3.70$6.21 per diluted share, compared to $70.2$108.7 million, or $2.35$3.70 per diluted share in the prior fiscal year; and

•Adjusted EBITDA,net aincome and adjusted earnings per diluted share, both non-GAAP measure,measures, increasedwere 44.8% to $212.1$114.5 million, or $4.08 per diluted share, compared to adjusted$110.3 EBITDAmillion, ofor $146.5$3.75 millionper diluted share, in the prior fiscal year.year; and

Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only as performance measures and only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, certain system implementation costs, gains and losses on non-recurring transactions, and stock-based compensation expense. We believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants, and complicate comparisons of our internal operating results and operating results of other restaurant companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management measure our core operating performance over time by removing items that are not related to day-to-day operations.

(a) Represents non-recurring transaction costs that are not part of our ongoing operations and expenseswere relatedincurred to ourfacilitate 2024the securitizedsale financingand facilitysubsequent reinvestment of the Company’s unconsolidated equity method investment in LPH, the Company’s United Kingdom master franchisee, during the fiscal first quarter 2025; all transaction costs are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.

(cb) SystemRepresents implementation costs representa non-recurring expensesloss incurred related toon the development and implementationsale of newan enterpriseoffice resourcebuilding planningduring andthe humanfiscal capitalfirst managementquarter technology,2025, which arewas included in Selling,Loss generalon anddisposal administrativeof assets on the Consolidated Statements of Comprehensive Income.

(df) Includes non-cash, stock-based compensation, net of forfeitures.

Royalty revenue, franchise fees and other increased $81.3$33.4 million, of which $36.1 million was due to domestic same store sales growth of 19.9%, and $29.9$22.6 million was due to net new franchise development sinceand December 30, 2023. Other revenue increased by $7.2$19.1 million primarily duerelated to an increase in vendorroyalty rebates.fees since December 28, 2024, partially offset by a decrease of $8.3 million contributed by the 3.3% decline in domestic same store sales growth.

Advertising fees increased $60.5$30.0 million, of which $51.0$19.5 million was due to a 36.8%12.1% increase in system-wide sales during fiscal year 2024,2025, and $9.5$10.5 million was due to an increase in the national advertising fund contribution rate to 5.3% from 5.0%5.5% effective the first day of the fiscal secondyear quarter 2024.2025.

Company-owned restaurant sales increased $24.0$7.6 million, of which $16.0 million was related to company-owned same store sales growth of 7.7%, driven primarily by an increase in transactions, and $8.0$6.4 million was primarily related to company-owned restaurants opened and acquired during fiscal year 2024.2025, and $1.2 million was related to company-owned same store sales growth of 2.6%, driven primarily by an increase in transactions.

OtherFood, restaurantbeverage operatingand expensespackaging costs as a percentage of company-owned restaurant sales were 19.2%36.8% in fiscal year 20242025 compared to 19.1%36.2% in the prior fiscal year. The increase as a percentage of company-owned restaurant sales was primarily due to an increase in theother nationalfood advertisingcosts fund contribution rate to 5.3% from 5.0% effectiveduring the first day of the fiscal second quarter 2024,year, partially offset by salesa leveragedecrease relatedin the cost of bone-in chicken wings as compared to the company-ownedprior domesticfiscal same store sales increase of 7.7%.period.

SG&A was $116.8$128.4 million in fiscal year 2024,2025, an increase of $19.9$11.6 million, or 20.5%,9.9%, compared to $96.9$116.8 million in the prior fiscal year. The increase in SG&A expense was driven by an increase in headcount-related expenses of $10.2$8.8 million to support the growth in our business, an increase in performance-based stock compensation and incentive compensation expense of $7.6 million related primarily to the Company’s performance,business and an increase in professional and consulting fees of $1.2$2.2 million associated with the Company’s strategic initiatives, including system implementation costs.costs and amortization of cloud computing arrangements.

Depreciation and amortization was $19.5$25.1 million in fiscal year 2024,2025, an increase of $6.3$5.6 million, or 47.2%,28.6%, compared to $13.2$19.5 million in the prior fiscal year. The increase in depreciation and amortization was primarily due to softwarecapital assetsexpenditures placed into service during fiscal year 2024 that relaterelated to the launch of our proprietary technology platform: MyWingstop.investments.

Interest expense, net was $21.3$35.8 million in fiscal year 2024,2025, an increase of $3.1$14.5 million, or 16.8%,68.1%, compared to $18.2$21.3 million in the prior fiscal year. The increase was primarily driven by lessthe securitized financing transaction completed on December 3, 2024, which increased our outstanding debt by $500.0 million, partially offset by additional interest income earned duringon fiscal year 2024 due to higherour cash balances duringand fiscalinterest earned on our investments as compared to the year 2023.ended December 28, 2024.

The effective tax rate in fiscal year 20242025 was 26.1%,26.5%, compared to an effective tax rate of 25.6%26.1% in the prior fiscal year. The increase in the effective tax rate was primarily due to an increase in non-deductiblestate expenses.income taxes.

General. Our primary sources of liquidity and capital resources are cash provided from operating activities, cash and cash equivalents on hand, and borrowings available under our securitized financing facility. Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, and dividend payments. Historically, we have operated with minimal positive working capital or with negative working capital. We generally utilize available cash flows from operations to invest in our business, service our debt obligations, pay dividends, and payexecute dividends.our share repurchase program. As of December 28,27, 2024,2025, the Company had $359.6$228.5 million of cash, cash equivalents, and restricted cash equivalents on its balance sheet, including advertisingAd fundFund cash and cash equivalents.

Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility including our Variable Funding Notes,Notes (as defined below), will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.

Net cash provided by operating activities was $157.6$153.1 million in fiscal year 2024,2025, ana increasedecrease of $36.0$4.5 million from cash provided by operating activities of $121.6$157.6 million in the prior fiscal year. The increasedecrease is primarily due to an increase in operating income, as well as changes in Ad Fund cash and cash equivalents, directly related to the timing of payments for expenses incurred for national advertising.advertising, partially offset by higher operating income.

Securitized financing facility. On December 3, 2024, the Companywe completed a securitized financing transaction, in which Wingstop Funding LLC, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company (the “Issuer”), issued $500$500.0 million of its Series 2024-1 5.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2024 Class A-2 Notes”). The Issuer also increased the capacity of its revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”) from $200$200.0 million to $300$300.0 million. Following the increase, borrowing capacity under the Variable Funding Notes permits borrowings of up to a maximum principal amount of $300$300.0 million, of which a portion of which may be used to issue letters of credit. The 2024 Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “2024 Notes.” The proceeds from the securitized financing transaction were used to pay related transaction fees and expenses, strengthen the Company'sour liquidity position and for general corporate purposes, including the repurchase of shares of the Company’s common stock. As of December 27, 2025, no borrowings were outstanding under the Variable Funding Notes.

In addition to the 2024 Notes, the Company’sour outstanding debt consists of its existing Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Notes”) and Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Notes”). No borrowings were outstanding under the Variable Funding Notes as of December 28, 2024.

Highlights for the fiscal firstsecond quarter 2026 compared to the fiscal firstsecond quarter 2025:

•97102 net new openings in the fiscal firstsecond quarter 2026;

•Net income decreasedincreased 67.6%16.9% to $29.9$31.3 million, or $1.08$1.15 per diluted share;

Domestic average unit volume (“AUV”). Domestic AUV consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer. This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our domestic company-owned and franchised restaurant economics. Changes in domestic AUV growth are primarily driven by increaseschanges in same store sales and are also influenced by opening new restaurants.

The following table sets forth our key performance indicators for the thirteen and twenty-six weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 (in thousands, except unit data):

(1) The percentage of system-wide sales attributable to company-owned restaurants was 2.4% and 2.3%2.4% for the thirteen and twenty-six weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively. The remainder was generated by franchised restaurants, as reported by our franchisees.

Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only as performance measures and supplementally. As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, certain system implementation costs, gains and losses on non-recurring transactions, certain restrucutringrestructuring charges, and stock-based compensation expense. We believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants, and complicate comparisons of our internal operating results and operating results of other restaurant companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management measure our core operating performance over time by removing items that are not related to day-to-day operations.

The following table reconciles net income to EBITDA and Adjusted EBITDA for the thirteen and twenty-six weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 (in thousands):

(d) System implementation costs represent non-recurring expenses incurred related to the development and implementation of new enterprise resource planning, human capital management, and global development technology, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income. Costs related to these initiatives are not expected to recur beyond the current period.

The following table reconciles net income to Adjusted net income and calculates adjusted earnings per diluted share for the thirteen and twenty-six weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 (in thousands):

(d) System implementation costs represent non-recurring expenses incurred related to the development and implementation of new enterprise resource planning, human capital management, and global development technology, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income. Costs related to these initiatives are not expected to recur beyond the current period.

(g) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24% for the thirteen and twenty-six weeks ended MarchJune 28,27, 2026, which includes provisions for U.S. federal income taxes, and assumes the respective statutory rates for applicable state and local jurisdictions.

Thirteen Weeks Ended MarchJune 28,27, 2026 compared to Thirteen Weeks Ended MarchJune 29,28, 2025

The following table sets forth our results of operations for the thirteen weeks ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025 (dollars in thousands):

During the thirteen weeks ended MarchJune 28,27, 2026, total revenue was $183.7$185.6 million, an increase of $12.6$11.2 million, or 7.4%,6.4%, compared to $171.1$174.3 million in the comparable period in 2025.

Royalty revenue, franchise fees and other increased $8.7$7.0 million, primarily driven by $12.2$11.2 million from net new franchise restaurant development and a $3.4$0.8 million increase infrom vendor rebates, partially offset by a $5.9$5.0 million decrease attributable to ana 8.7%7.5% decline in domestic same store sales.

Company-owned restaurant sales increased $2.9$1.7 million, driven by sixthree additional corporate stores opened or acquired since the prior year period.

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 35.8%35.2% in the thirteen weeks ended MarchJune 28,27, 2026, compared to 37.4%36.8% in the comparable period in 2025. This decrease as a percentage of company-owned restaurant sales was primarily due to a 13.1%9.1% decrease in the cost of bone-in chicken wings as compared to the prior year period.

OtherLabor restaurant operating expensescosts as a percentage of company-owned restaurant sales were 17.8%22.7% for the thirteen weeks ended MarchJune 28,27, 2026, comparedwhich was comparable to 17.3%22.9% for the thirteen weeks ended MarchJune 29,28, 2025. The increase as a percentage of company-owned restaurant sales was due to repairs and maintenance costs.

During the thirteen weeks ended MarchJune 28,27, 2026, advertising expenses were $67.3$68.4 million, an increase of $1.5$2.9 million compared to $65.8$65.5 million in the comparable period in 2025. Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.

During the thirteen weeks ended MarchJune 28,27, 2026, SG&A expense was $34.4$30.2 million, ana increasedecrease of $3.0$2.7 million compared to $31.4$32.9 million in the comparable period in 2025. The increasedecrease in SG&A expense was primarily driven by $2.4$2.3 million in restructuringreduced chargesstock duringcompensation expense due to forfeitures recognized in the fiscalcurrent firstperiod. quarterAlso 2026 relatedcontributing to the corporatedecrease realignmentwas announceda $1.6 million reduction in Januarypayroll 2026,costs which was partially offset by lowera system$1.5 implementationmillion costsincrease andin otherprofessional expenses compared to the prior year period.fees.

During the thirteen weeks ended MarchJune 28,27, 2026, depreciation and amortization was $6.8$7.2 million, an increase of $0.6$1.0 million compared to $6.2 million in the comparable period in 2025. The increase in depreciation and amortization was primarily due to capital expenditures placed in service during the period related to our technology investments.

During the thirteen weeks ended MarchJune 28,27, 2026, interest expense, net increased to $9.8 million from $8.9$8.5 million in the prior year period, primarily driven by a $0.6$1.0 million decline in interest income due to lower average cash balances and $0.3 million of additional interest expense.

During the thirteen weeks ended MarchJune 28,27, 2026, we recognized income tax expense of $10.7$13.4 million, yielding an effective tax rate of 26.3%,29.9%, compared to an effective tax rate of 25.1%27.2% in the prior year period. The increase in the effective tax rate was primarily due to an increase in state income taxes and other non-deductible items.