Balance Sheet / Refranchising Progress
Tactical refranchising discussions in final stages with sophisticated prospects; planned use of proceeds to reduce debt. Ended Q1 with $24M cash, $10M restricted cash and $17M available on revolver.
People Metrics Stabilizing
Hourly turnover at historically low levels and employee engagement tracking above industry benchmarks; adoption of enterprise AI (ChatGPT) and field tools supporting scheduling, food cost management and operational efficiencies.
Improved Traffic Momentum
Strongest traffic performance since Q1 2023; same-store sales down 0.6% but traffic sequentially improved versus Q4 and narrowed the gap to the industry; management cites Big Yummm and targeted marketing as key drivers of the rebound.
Highest Q1 Restaurant Operating Margin in Years
Restaurant-level operating margin of 14.8% in Q1, up 50 basis points year-over-year and the highest Q1 margin since 2021, driven by cost savings, labor efficiencies and check increases.
Labor Efficiency Gains
Labor initiatives delivered approximately 130 basis points of year-over-year savings; labor as a percentage of sales was 35.7%, the lowest Q1 labor rate in three years, achieved without compromising guest satisfaction.
Big Yummm Value Platform Traction
Expanded Big Yummm platform mixing at over 13% (13%–14% range) since late January; price points $9.99–$16.99; program drove trial, incremental traffic and favorable menu satisfaction scores.
Disciplined Marketing and Product Innovation
Targeted, data-driven marketing spend increased (selling expenses $13M vs $9M prior year) to improve reach and engagement; new product launches (e.g., towering sliders) produced record menu satisfaction and incremental check growth.
G&A and Corporate Cost Reductions
General & administrative costs fell to $23M from $27M in Q1 year-over-year, a $4M reduction largely due to corporate efficiency initiatives implemented in mid-2025.
Maintained Full-Year Guidance
Company reaffirmed full-year 2026 guidance: comparable restaurant revenues growth of 0.5%–1.5% (ex-deferred loyalty), restaurant-level operating profit margin roughly 13%, adjusted EBITDA of $70M–$73M, and capex of $25M–$30M.