Achieved strongest Q2 traffic and restaurant-level operating profit margins in several years, reflecting disciplined execution of the First Choice plan.
Announced three refranchising agreements for 116 restaurants, expected to generate $96 million in gross proceeds and enhance financial flexibility.
Operational discipline, guest satisfaction, and labor efficiency initiatives drove improvements, with team engagement and low turnover supporting consistent guest experience.
Comparable restaurant revenue increased 1.3% in Q2, offsetting declines from restaurant closures.
Adjusted EBITDA for Q2 2026 was $18.9 million, a 16% decrease year-over-year.
Q2 2026 total revenues were $277.6 million, down $6.1 million year-over-year due to restaurant closures, with net income at $0.4 million.
Restaurant-level operating margin rose 20 basis points to 14.7%, the highest Q2 margin in four years.
Adjusted EBITDA was $18.9 million, down from $22.4 million in Q2 2025, mainly due to increased marketing spend.
Selling expense increased to $10.4 million, reflecting investment in value platforms and marketing.
Ended Q2 with $47.8 million in liquidity, including $32.5 million in cash and $25 million in available credit.
2026 guidance reaffirmed: comparable restaurant revenue growth of 0.5%–1.5%, restaurant-level operating margin of ~13%, adjusted EBITDA of $70–$73 million, and capital expenditures of $25–$30 million.
Guidance excludes impact from pending refranchising transactions; updates expected upon transaction completion.
Expect Q4 to outperform Q3 due to easier comparisons and new marketing initiatives.
Menu pricing expected to remain steady at 3.2%–3.3% for the year.
Commodity inflation expected to ease in the back half, with beef and poultry prices moderating.
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