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What changed in CHEESECAKE FACTORY INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CHEESECAKE FACTORY INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+401 added−449 removedSource: 10-K (2026-02-23) vs 10-K (2024-02-26)

Top changes in CHEESECAKE FACTORY INC's 2025 10-K

401 paragraphs added · 449 removed · 329 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

96 edited+15 added−45 removed51 unchanged
Biggest changeNorth Italia and FRC North Italia and FRC execute localized marketing programs focused on awareness, frequency and brand engagement through a variety of channels, including store-level marketing, public relations, in-store events, digital advertising, email programs and social media. Each restaurant is positioned as an individual brand with a neighborhood connection.
Biggest changeIn addition, we work with several premiere third-party gift card distributors, contributing to our brand awareness and gift card sales, as well as our consumer packaged goods licensees on co-branded marketing campaigns. 12 Table of Contents North Italia, Flower Child and Other FRC North Italia, Flower Child and the Other FRC concepts utilize a localized marketing approach focused on increasing awareness, frequency and brand engagement through a variety of channels, including store-level marketing, public relations, in-store events, digital advertising, email programs and social media.
(2) This licensee, or its affiliates, also has the right to develop restaurants in Chile, with the opportunity to expand the agreement to include Argentina, Brazil, Colombia and Peru. (3) This licensee, or its affiliates, also has the right to develop restaurants in Taiwan, with the opportunity to expand the agreement to include Japan, South Korea, Malaysia and Singapore.
(2) This licensee, or its affiliates, also has the right to develop restaurants in Chile, with the opportunity to expand the agreement to include Argentina, Brazil, Colombia and Peru. (3) This licensee, or its affiliates, also has the right to develop restaurants in Taiwan, with the opportunity to expand the agreement to include Japan, Malaysia, Singapore and South Korea.
We expect the majority of our new restaurants to vary between 7,000 and 10,000 interior square feet, generally with additional exterior and/or interior patio seating, selected appropriately for each market and specific site. 6 Table of Contents The relatively high sales productivity of our restaurants provides opportunities to obtain competitive leasing terms from landlords.
We expect the majority of our new restaurants to vary between 7,000 and 10,000 interior square feet, generally with additional exterior and/or interior patio seating, selected appropriately for each market and specific site. 6 Table of Contents We believe the relatively high sales productivity of our restaurants provides opportunities to obtain competitive leasing terms from landlords.
In order to maximize purchasing efficiencies and to obtain the freshest ingredients that meet our required standards, each restaurant’s management determines the quantities of food and supplies needed for their location and orders the items from qualified local, regional, national and international suppliers based upon specifications determined and terms negotiated at a corporate level.
In order to maximize purchasing efficiencies and to obtain the freshest ingredients that meet our required standards, each restaurant’s management determines the quantities of food and supplies needed for their location and orders the items from local, regional, national and international suppliers based upon specifications determined and terms negotiated at a corporate level.
The key elements that drive our total customer experience and help position us from a competitive standpoint include the following: Extensive and Innovative Menu, Made Fresh from Scratch. Our restaurants offer one of the broadest menus in casual dining and feature a wide array of flavors with portions designed for sharing.
The key elements that drive our total customer experience and help position us from a competitive standpoint include the following: Extensive and Innovative Menu, Made Fresh from Scratch. Our restaurants offer one of the broadest menus in upscale casual dining and feature a wide array of flavors with portions designed for sharing.
For more information, please review our most recent CSR report on the Corporate Social Responsibility page on our website at www.thecheesecakefactory.com . The contents of the CSR report and our website are expressly not incorporated by reference into this Form 10-K.
Corporate Social Responsibility For more information, please review our most recent Corporate Social Responsibility “CSR” report on the Corporate Social Responsibility page on our website at www.thecheesecakefactory.com . The contents of the CSR report and our website are expressly not incorporated by reference into this Form 10-K.
In contrast to many restaurant chains, substantially all of our menu items, except those desserts produced at our bakery facilities, are prepared from scratch daily at our restaurants with high-quality, fresh ingredients using innovative and proprietary recipes. One of our competitive strengths is our ability to anticipate customer preferences and adapt our expansive menu to the latest trends.
In contrast to many restaurant chains, substantially all of our menu items, except those desserts produced at our bakery facilities, are prepared from scratch daily at our restaurants with high-quality, fresh ingredients using innovative and proprietary recipes. We believe one of our competitive strengths is our ability to anticipate customer preferences and adapt our expansive menu to the latest trends.
Our menu offerings include appetizers, pizza, seafood, steaks, chicken, burgers, small plates, pastas, salads, sandwiches and omelettes, including a selection of vegan and gluten-free items. Our ability to create, promote and attractively display our unique line of desserts is also important to the competitive positioning and financial success of our restaurants.
Our menu offerings include appetizers, pizza, seafood, steaks, chicken, burgers, bowls, bites, small plates, pastas, salads, sandwiches and omelettes, including a selection of vegan and gluten-free items. Our ability to create, promote and attractively display our unique line of desserts is also important to the competitive positioning and financial success of our restaurants.
Since our restaurants can be successfully executed within a variety of site locations and layouts, we are highly flexible in choosing suitable locations. While there are common decor elements within each of our restaurant sites, the designs are customized for the specifics of each location, including the building type, square footage and layout of available space.
Because our restaurants can be successfully executed within a variety of site locations and layouts, we are highly flexible in choosing suitable locations. While there are common decor elements within each of our restaurant sites, the designs are customized for the specifics of each location, including the building type, square footage and layout of available space.
The Cheesecake Factory restaurants are generally open seven days a week for lunch and dinner, and we offer additional menu items for weekend brunch. All of our restaurants offer a full-service bar where our entire menu is served. During fiscal 2023, alcoholic beverage sales represented 11% of The Cheesecake Factory restaurant sales.
The Cheesecake Factory restaurants are generally open seven days a week for lunch and dinner, and we offer additional menu items for weekend brunch. All of our restaurants offer a full-service bar where our entire menu is served. During fiscal 2025, alcoholic beverage sales represented 11% of The Cheesecake Factory restaurant sales.
We regularly update our ingredients and cooking methods, as well as create new menu items and new categories of food offerings at our restaurants, further enhancing the variety, quality and price points offered and keeping our menu relevant to our customers. All new menu items are selected based on anticipated sales popularity and profitability.
We regularly update our ingredients and cooking techniques, as well as create new menu items and new categories of food offerings at our restaurants, further enhancing the variety, quality and price points offered and keeping our menu relevant to our customers. All new menu items are selected based on anticipated sales popularity and profitability.
Our executive offices are located at 26901 Malibu Hills Road, Calabasas Hills, California 91301, and our telephone number is (818) 871-3000. We maintain a general website at www.thecheesecakefactory.com, as well as websites for our bakery and other subsidiaries, including www.northitalia.com , www.iamaflowerchild.com and www.foxrc.com.
Our executive offices are located at 26901 Malibu Hills Road, Calabasas Hills, California 91301, and our telephone number is (818) 871-3000. We maintain a general website at www.thecheesecakefactory.com , as well as websites for our bakery and other brands, including www.northitalia.com , www.iamaflowerchild. com and www.foxrc.com .
We continue to evaluate the possibility of entering into similar arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing risk and variability associated with such commodities. As of the end of fiscal 2023, we had no financial hedging contracts in place.
We continue to evaluate the possibility of entering into similar arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing risk and variability associated with such commodities. As of the end of fiscal 2025, we had no financial hedging contracts in place.
We utilize a social media and digital marketing strategy that allows us to engage regularly with our customers outside of our restaurants, including communication and paid advertising on social media platforms such as Instagram ® and TikTok ® and other, influencer marketing, Google search advertising and direct email to customers.
We utilize a social media and digital marketing strategy that allows us to engage regularly with our customers outside of our restaurants, including communication and paid advertising on social media platforms such as Instagram ® and TikTok ® , influencer marketing, Google advertising and direct email to customers.
Contemporary design and décor elements including large dining rooms, high ceilings and open kitchen layouts coupled with a focus on exceptional hospitality and high-quality, personalized service creates a warm, lively atmosphere for guests to create memorable experiences.
Contemporary design and décor elements including large dining rooms, high ceilings and open kitchen layouts combined with a focus on exceptional hospitality and high-quality, personalized service creates a warm, lively atmosphere for guests to create memorable experiences.
Our filings are also available on the SEC’s website at www.sec.gov . The content of our websites is not incorporated by reference into this Form 10-K. We utilize a 52/53-week fiscal year ending on the Tuesday closest to December 31 for financial reporting purposes. Fiscal years 2023 and 2021 each consisted of 52 weeks.
Our filings are also available on the SEC’s website at www.sec.gov . The content of our websites is not incorporated by reference into this Form 10-K. We utilize a 52/53-week fiscal year ending on the Tuesday closest to December 31 for financial reporting purposes. Fiscal years 2025, 2024 and 2023 each consisted of 52 weeks.
We offer approximately 45 varieties of proprietary cheesecake and other desserts in our restaurants. Our brand identity and reputation for offering premium desserts results in a significant level of dessert sales, representing approximately 17% of The Cheesecake Factory sales during fiscal 2023.
We offer approximately 45 varieties of proprietary cheesecake and other desserts in our restaurants. Our brand identity and reputation for offering premium desserts results in a significant level of dessert sales, representing approximately 17% of The Cheesecake Factory sales during fiscal 2025.
Seasonality and Quarterly Results While seasonal fluctuations generally do not have a material impact on our quarterly results, year-over-year comparisons can be significantly impacted by factors such as significant differences in year-over-year inflation, the number and timing of new restaurant openings and associated preopening costs, the timing of holidays, inclement weather and the additional week in a 53-week 14 Table of Contents fiscal year.
Seasonality and Quarterly Results While seasonal fluctuations generally do not have a material impact on our quarterly results, year-over-year comparisons can be significantly impacted by factors such as significant differences in year-over-year inflation, the number and timing of new restaurant openings and associated preopening costs, the timing of holidays, inclement weather and the additional week in a 53-week fiscal year.
Food Safety and Quality Assurance Our food safety processes and systems are designed to mitigate the risk of contamination and illness and to ensure compliance with regulatory requirements as well as industry standards. Adherence is monitored through routine restaurant management reviews, third-party health inspection/food safety audits and regulatory agency inspections.
Food Safety and Quality Assurance Our food safety processes and systems are designed to mitigate the risk of contamination and illness and to ensure compliance with regulatory requirements, such as nutritional disclosure requirements, as well as industry standards. Adherence is monitored through routine restaurant management reviews, third-party health inspection/food safety audits and regulatory agency inspections.
While we are in the process of contracting for certain key food and non-food supplies for fiscal 2024, these efforts may not be successful or yield our intended benefits.
While we are in the process of contracting for certain key food and non-food supplies for fiscal 2026, these efforts may not be successful or yield our intended benefits.
Our new restaurants typically open with initial sales volumes well in excess of their future run-rate levels. This initial “honeymoon” effect usually results from grand opening publicity and other customer awareness activities that generate higher than usual customer traffic, particularly in new markets.
Our new restaurants have typically opened with initial sales volumes well in excess of their future run-rate levels. This initial “honeymoon” effect usually results from grand opening publicity and other customer awareness activities that generate higher than usual customer traffic, particularly in new markets.
(See “Restaurant Operations, Development and Training” below.) Our commitment to people-focused programs and creating a great workplace for all of our staff and managers contributed to The Cheesecake Factory being named to Fortune magazine’s list of “100 Best Companies to Work For ® ” in 2023, for the tenth consecutive year. High-Quality, High-Profile Restaurant Locations and Flexible Site Layouts.
(See “Restaurant Operations, Development and Training” below.) Our commitment to people-focused programs and creating a great workplace for all of our staff and managers contributed to The Cheesecake Factory being named to Fortune magazine’s list of “100 Best Companies to Work For ® ” in 2025, for the twelfth consecutive year. High-Quality, High-Profile Restaurant Locations and Flexible Site Layouts.
(See Item 1C – Cybersecurity of this report for further discussion on our cybersecurity.) Marketing and Advertising The Cheesecake Factory We rely on our reputation, as well as our high-profile locations, media exposure and positive “word of mouth,” to maintain and grow market share.
(See Item 1C – Cybersecurity of this report for further discussion on our cybersecurity.) Marketing and Advertising The Cheesecake Factory We rely on our reputation, as well as our high-profile locations, media exposure and positive “word of mouth” to maintain and grow market share.
Consumer Packaged Goods Given the strong affinity for The Cheesecake Factory ® brand, we leverage opportunities in the consumer packaged goods channel by partnering with various third-party manufacturers to offer a variety of products marketed under The Cheesecake Factory At Home ® mark, including our Famous “Brown Bread,” which is available in select retail stores nationwide.
Consumer Packaged Goods Given the strong affinity for The Cheesecake Factory ® brand, we leverage opportunities in the consumer packaged goods channel by partnering with third-party manufacturers to offer products marketed under The Cheesecake Factory At Home ® mark, including our Famous “Brown Bread,” which is available in select retail stores nationwide.
The menu features a broad selection of delicious, handcrafted dishes including appetizers, salads, fresh pastas, pizzas and entrees, and each restaurant includes unique menu items tailored to local markets. North Italia offers an assortment of wines, beers and house-made cocktails which represented 24% of North Italia sales in fiscal 2023.
The menu features a broad selection of delicious, handcrafted dishes including appetizers, salads, fresh pastas, pizzas and entrees, and each restaurant includes unique menu items tailored to local markets. North Italia offers an assortment of wines, beers and house-made cocktails which represented 23% of North Italia sales in fiscal 2025.
This framework delivers enterprise reporting, dashboards and analytics, and allows access to metrics such as quote and wait time accuracy, staff member retention trends, and restaurant quality and service analyses. 13 Table of Contents Our restaurant systems are designed to enhance the guest experience, protect guest information and allow our staff to focus on delivering the best experience possible.
This framework delivers enterprise reporting, dashboards and analytics, and allows access to metrics such as quote and wait time accuracy, staff member retention trends, and restaurant quality and service analyses. Our restaurant systems are designed to enhance the guest experience, protect guest information and allow our staff to focus on delivering the best experience possible.
During the three to six months following the opening of new restaurants, customer traffic generally settles into its normal pattern, resulting in sales volumes that gradually adjust downward to their post-opening run-rate level.
During the three to six months following the opening of new restaurants, customer traffic has generally settled into its normal pattern, resulting in sales volumes that gradually adjust downward to their post-opening run-rate level.
The Cheesecake Factory As of February 26, 2024, we operated 216 The Cheesecake Factory restaurants, which strive to provide a distinctive, high-quality dining experience at moderate prices by offering an extensive, innovative and evolving menu in an upscale casual, high-energy setting with attentive, efficient and friendly service.
The Cheesecake Factory As of February 23, 2026, we operated 216 The Cheesecake Factory restaurants, which strive to provide a distinctive, high-quality dining experience at moderate prices by offering an extensive, innovative and evolving menu in an upscale casual, high-energy setting with attentive, efficient and friendly service.
Retention and engagement of our staff members is fostered by our investment and support particularly in the following areas: Culture Cultivating and maintaining our culture is a key strategic focus. Our core values and purpose reflect who we are and how our staff members interact with one another, as well as with our customers and other external stakeholders.
Retention and engagement of our staff members is fostered by our investment particularly in the following areas: Culture Cultivating and maintaining our culture is a key strategic focus. Our core values and purpose reflect who we are and how our staff members interact with one another, as well as with our customers.
May joined our Company in 2018, from Brinker International, Inc., where she served as Senior Vice President, General Counsel and Secretary from 2014 to 2018. Prior to that, she was Senior Vice President, Chief Legal Officer and Secretary for Ruby Tuesday, Inc. following her earlier career in private practice. 16 Table of Contents
May joined our Company in 2018, from Brinker International, Inc., where she served as Senior Vice President, General Counsel and Secretary from 2014 to 2018. Prior to that, she was Senior Vice President, Chief Legal Officer and Secretary for Ruby Tuesday, Inc. following her earlier career in private practice.
We believe our restaurants are recognized by customers for offering value with a large variety of freshly prepared menu items across a broad array of price points and generous portions at moderate prices.
We believe our restaurants are recognized by customers for offering value with a large variety of freshly prepared menu items across a broad array of price points and generous portions.
As of February 26, 2024, our international licensees operated the following The Cheesecake Factory restaurants: ​ ​ ​ ​ ​ Licensee Location Restaurant Location # of Restaurants Kuwait (1) Bahrain 1 ​ Kingdom of Saudi Arabia 4 ​ Kuwait 3 ​ Qatar 3 ​ United Arab Emirates 6 Mexico (2) Mexico 8 Hong Kong (3) Beijing 1 ​ ​ Chengdu ​ 1 ​ Hong Kong 1 ​ ​ Macau ​ 1 ​ ​ Shanghai ​ 3 ​ ​ Thailand ​ 1 Total 33 (1) This licensee, or its affiliates, also has the right to develop restaurants in Egypt, with the opportunity to expand the agreement to include Algeria, Hungary, Iraq, Libya, Morocco, Poland, Russia, Slovakia, The Czech Republic, Tunisia, Turkey and Ukraine.
As of February 23, 2026, our international licensees operated the following The Cheesecake Factory restaurants: ​ ​ ​ ​ ​ Licensee Location ​ ​ ​ Restaurant Location ​ ​ ​ # of Restaurants Kuwait (1) Bahrain 1 ​ Kingdom of Saudi Arabia 4 ​ Kuwait 3 ​ Qatar 3 ​ United Arab Emirates 6 Mexico (2) Mexico 10 Hong Kong (3) Beijing 1 ​ ​ Chengdu ​ 1 ​ Hong Kong 1 ​ ​ Macau ​ 1 ​ ​ Shanghai ​ 3 ​ ​ Thailand ​ 1 Total ​ 35 (1) This licensee, or its affiliates, also has the right to develop restaurants in Egypt, with the opportunity to expand the agreement to include Algeria, Hungary, Iraq, Libya, Morocco, Poland, Russia, Slovakia, The Czech Republic, Tunisia, Turkey and Ukraine.
Public relations is another important aspect of our marketing approach, and we frequently appear on local and national television in connection with a variety of promotional opportunities, such as National Cheesecake Day, to perform cooking demonstrations and other brand-building exposure. We generated approximately 15.1 billion media impressions in fiscal 2023 at minimal cost to us.
Public relations is another important aspect of our marketing approach, and we frequently appear on local and national television in connection with a variety of promotional opportunities, such as National Cheesecake Day, to perform cooking demonstrations and other brand-building exposure. We generated approximately 52.0 billion media impressions in fiscal 2025 at minimal cost to us.
Additionally, our new restaurants usually require a period of time after reaching normal traffic levels to achieve their targeted restaurant-level margins due to actual-to-theoretical food cost inefficiencies and labor productivity inefficiencies commonly associated with new, highly complex restaurants such as ours.
Additionally, our new restaurants have typically required a period of time after reaching normal traffic levels to achieve their targeted restaurant-level margins due to actual-to-theoretical food cost inefficiencies and labor productivity inefficiencies commonly associated with new, highly complex restaurants such as ours.
We offer all items on our menu, except alcoholic beverages where disallowed by regulation, for off-premise consumption, sales of which comprised approximately 22% of The Cheesecake Factory restaurant sales during fiscal 2023.
We offer all items on our menu, except alcoholic beverages where disallowed by regulation, for off-premise consumption, sales of which comprised approximately 21% of The Cheesecake Factory restaurant sales during fiscal 2025.
In addition, our bakery facilities are Safe Quality Food certified in alignment with the Global Food Safety Initiative’s Global Markets Program. Our restaurants and bakery facilities also follow regulatory guidelines required for conducting and managing ingredient and product traceability.
In addition, our bakery facilities are Safe Quality Food certified in alignment with the Global Food Safety Initiative’s Global Markets Program. Our restaurants and bakery facilities are subject to regulatory guidelines required for conducting and managing ingredient and product traceability.
With over a dozen evolving restaurant brands launched to-date, its concepts are diverse in industry segment, occasions, square footage and geography. Other FRC potential growth concepts include Culinary Dropout and Blanco, which together with the other FRC brands, serve as an ecosystem for talent, menu and design development. Currently, we operate 41 Other FRC locations.
With over a dozen evolving restaurant brands launched to-date, its concepts are diverse in industry segment, occasions, square footage and geography. Other FRC potential growth concepts include Culinary Dropout, The Henry and Blanco, which together with the other FRC brands, serve as an ecosystem for talent, menu and design development.
With Italian cuisine the number one ethnic food category in the United States, coupled with strong national reception of the North Italia concept to-date, we believe there is potential for 200 domestic locations over time, which supports our plan for approximately 20% average annual unit growth.
With Italian cuisine being one of the most popular ethnic food categories in the United States, coupled with strong national reception of the North Italia concept to-date, we believe there is potential for approximately 200 domestic locations over time, which supports our plan for approximately 20% average annual unit growth.
The average check for each customer, including beverages and desserts, was approximately $30.54 during fiscal 2023. 5 Table of Contents Commitment to Excellent Service and Hospitality through the Selection, Training and Retention of High-Quality Staff Members.
The average check for each customer, including beverages and desserts, was approximately $31.79 during fiscal 2025. 5 Table of Contents Commitment to Excellent Service and Hospitality through the Selection, Training and Retention of High-Quality Staff Members.
Average sales per location open for the full year for North Italia restaurants were approximately $7.8 million for fiscal 2023, or approximately $1,200 per productive square foot. We target an average North Italia unit size of 6,000 to 7,000 square feet, and total construction costs average approximately $800 per interior square foot.
Average sales per location open for the full year for North Italia restaurants were approximately $7.6 million for fiscal 2025, or approximately $1,100 per productive square foot. We target an average North Italia unit size of 6,000 to 7,000 interior square feet and average total construction costs of approximately $750 to $850 per interior square foot.
Our international business exposes us to additional laws and regulations, including, without limitation, antitrust and tax requirements, anti-boycott legislation, import/export and customs regulations and other international trade regulations, privacy laws that may differ from U.S. privacy laws, anti-terrorism laws and anti-corruption laws.
Our international business exposes us to additional laws and regulations, including, without limitation, antitrust and tax requirements, anti-boycott legislation, import/export and customs regulations and other international trade regulations, privacy laws that may differ from those in the United States, anti-terrorism laws and anti-corruption laws.
GMs are also eligible to use a Company-leased vehicle. In addition, we provide a longer-term, equity incentive program to our GMs and EKMs based on their extended service with us in their respective positions and their achievement of certain performance objectives.
In addition, we provide a longer-term, equity incentive program to our GMs and EKMs based on their extended service with us in their respective positions and their achievement of certain performance objectives.
We regard our Intellectual Property, including “The Cheesecake Factory,” “North Italia,” and a collection with the Fox Restaurant Concepts subsidiary, as well as our trade dress, as having substantial value and as being important to our marketing efforts. Our policy is to pursue registration of our important Intellectual Property whenever commercially feasible and to vigorously oppose any infringement of it.
We regard our Intellectual Property, including “The Cheesecake Factory,” “North Italia,” and a collection within the Fox Restaurant Concepts subsidiary, as well as our trade dress, as having substantial value and as being important to our marketing efforts. Our policy is to pursue registration of our important Intellectual Property when commercially feasible, and to enforce our intellectual property rights.
Prior to fiscal 2022, we targeted menu price increases of approximately 2% to 3% annually, utilizing a market-based strategy to help mitigate cost pressure in higher-wage geographies. In fiscal years 2022 and 2023, we implemented price increases above our historical levels, including an incremental price increase in the fourth quarter of fiscal 2022, to help offset significant inflationary cost pressures.
Prior to fiscal 2022, we targeted menu price increases of approximately 2% to 3% annually, utilizing a market-based strategy to help mitigate cost pressure in higher-wage geographies. In the last three fiscal years, we implemented price increases above our historical levels, to help offset inflationary cost pressures.
The cost of products and services used in our operations are subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as pandemics, geopolitical events, economic conditions or other unforeseen circumstances. Climate change may further exacerbate a number of these factors.
The cost of products and services used in our operations are subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as geopolitical events, economic conditions, public health emergencies or other unforeseen circumstances.
Gordon joined our Company in 1993 as a Manager and held operational positions, including General Manager, Area Director of Operations, Regional Vice President and Chief Operating Officer prior to his appointment as President. He is also a director of our Foundation. Matthew E. Clark, age 54, was appointed Executive Vice President and Chief Financial Officer in 2017. Mr.
He is also a founding member and director of our Foundation. David M. Gordon, age 61, was appointed President of the Company in February 2013. Mr. Gordon joined our Company in 1993 as a Manager and held operational positions, including General Manager, Area Director of Operations, Regional Vice President and Chief Operating Officer prior to his appointment as President.
Our corporate infrastructure includes a dedicated global development team that works with our international licensees and coordinates the initial training, ongoing quality control, product specifications and brand oversight at our licensed locations. Our internal audit department also performs periodic reviews of our international licensees’ compliance with our licensing agreements.
Our corporate infrastructure includes a dedicated global development team that works with our international licensees and coordinates the initial training, ongoing quality control, product specifications and brand oversight at our licensed locations.
In the United States, many of our locations currently participate in a Tip Reporting Alternative Commitment (“TRAC”) agreement with the Internal Revenue Service (“IRS”) and we intend to apply to participate in any successor program to TRAC.
In the United States, many of our locations currently participate in a Tip Reporting Alternative Commitment (“TRAC”) agreement with the Internal Revenue Service (“IRS”), and we intend to apply to participate in any successor program to TRAC. We are subject to laws and regulations relating to information security, privacy, cashless payments and consumer credit protection and fraud.
North Italia strives to be a modern Italian restaurant with a neighborhood feel, offering classic Italian favorites with a fresh twist made from scratch daily.
North Italia North Italia is a modern interpretation of Italian cooking in the upscale casual dining segment. North Italia strives to be a modern Italian restaurant with a neighborhood feel, offering classic Italian favorites with a fresh twist made from scratch daily.
Our distinctive design and decor require a higher investment per square foot than is typical for the casual dining industry. However, our restaurants have historically generated annual sales per square foot that are also typically higher than our competitors. Total construction costs to build our restaurant premises average approximately $1,100 per interior square foot.
However, our restaurants have historically generated annual sales per square foot that are also typically higher than our competitors. Total construction costs to build our restaurant premises average approximately $1,100 to $1,200 per interior square foot.
We also regularly introduce new and innovative cheesecakes and other baked desserts. In 2023, we launched the Cookie Dough Lover’s Cheesecake with Pecans in conjunction with National Cheesecake Day.
We also regularly introduce new and innovative cheesecakes and other baked desserts. In 2025, we launched the Peach Perfect with Raspberry Drizzle Cheesecake in conjunction with National Cheesecake Day.
The development and opening process usually ranges from six to eighteen months, depending largely on the type and availability of the leased space we intend to occupy, as well as our ability to obtain goods, materials, permits and adequate staffing, and is subject to delays either due to factors outside of our control or to our selective timing of restaurant openings.
The development and opening process usually ranges from six to eighteen months, depending largely on the type and availability of the leased space we intend to occupy, our preferred opening date, as well as our ability to obtain goods, materials, permits and adequate staffing, and a variety of other circumstances beyond our control.
Restaurant-Level Preopening Costs Due to the highly customized and operationally complex nature of our upscale, high-volume concept and the investment we make in properly training our staff to operate our restaurants, our preopening process is more extensive, time consuming and costly than that of many restaurant chains.
We believe that these awards encourage our GMs and EKMs to think and act as business owners, assist in retention of restaurant management and align our managers’ interests with those of our stockholders. 7 Table of Contents Restaurant-Level Preopening Costs Due to the highly customized and operationally complex nature of our upscale, high-volume concept and the investment we make in properly training our staff to operate our restaurants, our preopening process is more extensive, time-consuming and costly than that of many restaurant chains.
Our recruitment, selection, training, retention and internal promotion programs are among the most comprehensive in the restaurant industry, helping us to attract and retain qualified staff members who are motivated to consistently provide excellence in restauranteuring and customer hospitality.
Our recruitment, selection, training, retention and internal promotion programs are among the most comprehensive in the restaurant industry, helping us to attract and retain qualified staff members who we encourage to develop a sense of personal commitment to our core values and culture of excellence.
As we evaluate other international markets, we will consider opportunities to directly operate certain locations and/or enter into licensing, joint venture or partnership arrangements with established third-party companies.
Our internal audit department also performs periodic reviews of our international licensees’ compliance with our licensing agreements. 8 Table of Contents As we evaluate other international markets, we may consider opportunities to directly operate certain locations and/or enter into licensing, joint venture or partnership arrangements with established third-party companies.
Since each of our restaurants has a customized layout and differs in size, an effective method to measure the unit economics of our sites is by square foot. Average sales per productive square foot (defined as all interior square footage plus seasonally adjusted exterior patio square footage) for restaurants open for the full year were approximately $1,132 for fiscal 2023.
Average sales per location for The Cheesecake Factory restaurants open for the full year were approximately $12.4 million for fiscal 2025. Because each of our restaurants has a customized layout and differs in size, an effective method to measure the unit economics of our sites is by square foot.
In order to serve alcoholic beverages in our restaurants or off-premise where permitted, we must comply with alcoholic beverage control regulations which require us to apply to a state and/or other governmental alcoholic beverage control authority for licenses and permits.
As a provider of food products, we are subject to a comprehensive regulatory framework that governs the manufacture (including composition and ingredients), labeling, packaging and safety of food. 13 Table of Contents In order to serve alcoholic beverages in our restaurants or off-premise where permitted, we must comply with alcoholic beverage control regulations which require us to apply to a state and/or other governmental alcoholic beverage control authority for licenses and permits.
Restaurant Operations Our ability to consistently execute a complex menu offering items prepared daily with high-quality, fresh ingredients in an upscale casual, high-volume dining environment is critical to our overall success.
Restaurant Operations Our ability to consistently execute a complex menu offering items prepared daily with high-quality, fresh ingredients in an upscale casual, high-volume dining environment is critical to our overall success. We employ detailed operating procedures, standards, controls, food line management systems and cooking methods and processes designed to accommodate our extensive menu and to drive sales productivity.
Our licensees invest their capital to build and operate the restaurants, and we receive initial development fees, site and design fees and ongoing royalties based on our licensees’ restaurant sales. In addition, these licensees purchase bakery products branded under The Cheesecake Factory ® mark from us.
Licensed Locations We currently maintain licensing agreements with three restaurant operators to develop and operate The Cheesecake Factory ® branded restaurants in selected international markets. Our licensees invest their capital to build and operate these restaurants, and we receive initial development fees, site and design fees and ongoing royalties based on our licensees’ restaurant sales.
Restaurant-level preopening costs are generally higher for larger restaurants and initial entry into new markets and lower when we relocate a restaurant within its local market.
Restaurant-level preopening costs are generally higher for larger restaurants and initial entry into new markets and lower when we relocate a restaurant within its local market. We have typically incurred the most significant portion of restaurant-level preopening costs during the three-month period including the month of a restaurant’s opening and two prior months.
We currently own and operate 334 restaurants throughout the United States and Canada under brands including The Cheesecake Factory ® (216 locations), North Italia ® (37 locations), Flower Child ® (32 locations) and additional brands within our Fox Restaurant Concepts (“FRC”) portfolio (41 locations). Internationally, 33 The Cheesecake Factory ® restaurants operate under licensing agreements.
As of February 23, 2026, we owned and operated 368 restaurants throughout the United States and Canada under brands including The Cheesecake Factory ® (216 locations), North Italia ® (48 locations), Flower Child ® (43 locations) and additional brands within our Fox Restaurant Concepts (“Other FRC”) portfolio (55 locations). Internationally, 35 The Cheesecake Factory ® restaurants operate under licensing agreements.
Generally, with appropriate renewal and use, the registration of our Intellectual Property will continue indefinitely. We have also registered various internet domain names, including, “www.thecheesecakefactory.com,” “www.northitalia.com,” and “www.foxrc.com.” Executive Officers of the Registrant David Overton, age 77, serves as our Chairman of the Board and Chief Executive Officer. Mr.
We have also registered various internet domain names, including, “ www.thecheesecakefactory.com ,” “ www.northitalia.com ,” and “ www.foxrc.com ”. Executive Officers of the Registrant David Overton, age 79, serves as our Chairman of the Board and Chief Executive Officer. Mr. Overton co-founded our predecessor company in 1972 with his parents, Oscar and Evelyn Overton.
Our staff members are not covered by any collective bargaining agreements, and we consider our staff member relations to be good. A significant part of our employee engagement strategy involves staff appreciation and recognition efforts.We hold key cultural events such as our week-long team appreciation celebrations, manager recognitions, Commitment to Excellence staff member awards and new menu rollout all-staff meetings.
We measure our performance in this area through an annual engagement survey and pulse surveys throughout the year. A significant part of our employee engagement strategy involves staff appreciation and recognition efforts. We hold key company cultural events such as our week-long team appreciation celebrations, manager recognitions, Commitment to Excellence staff member awards and new menu rollout all-staff meetings.
Information and cybersecurity is a priority for us and is led by a multi-disciplinary security team, overseen by our interdepartmental Information Security Council representing our key functional areas. We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information.
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information.
The average check for each customer, including beverages and desserts, for fiscal 2023 averaged approximately $33.60 for lunch and approximately $43.25 for dinner. Our North Italia restaurants are generally open seven days a week for lunch, dinner and weekend brunch. Currently, we operate 37 North Italia restaurants.
The average check for each customer, including beverages and desserts, for fiscal 2025 averaged approximately $35.60 for lunch and approximately $45.21 for dinner. Sales through the off-premise channel comprised approximately 13% of North Italia restaurant sales during fiscal 2025. Our North Italia restaurants are generally open seven days a week for lunch and dinner and offer weekend brunch.
We refreshed our website in 2022, including our online ordering capabilities. We launched our Cheesecake Rewards TM program nationally in 2023 with the objective to leverage data analytics and insights to engage more effectively with our guests and drive incremental sales while maintaining our restaurant level margins.
We launched our Cheesecake Rewards ® program nationally in mid-2023 with the objective to leverage data analytics and insights to engage more effectively with our guests and drive incremental sales while maintaining our restaurant level margins. Since launch, the program has supported more targeted guest communications and strengthened our ability to tailor offers to our guests based upon their behaviors.
Our hourly staff members and managers receive a considerable amount of training through a combination of in-person learning and development and online coursework. In addition to company-provided job training, we encourage the pursuit of educational opportunities at The Cheesecake Factory and North Italia restaurants for all hourly staff members through free high school equivalency and associate degree programs.
In addition to company-provided job training, we offer hourly staff members of The Cheesecake Factory and North Italia restaurants free high school equivalency and associate degree programs.
We strive to maintain restaurant-level inventories at a minimum dollar level in relation to sales due to the relatively rapid turnover of the perishable commodities we use in our operations, coupled with the limited storage space at our restaurants. Independent foodservice distributors, including the largest foodservice distributor in North America, deliver most items multiple times per week to our restaurants.
We strive to maintain restaurant-level inventories at a minimum dollar level in relation to sales due to our relatively rapid use of perishable commodities and limited storage space at our restaurants.
Our facility in California accommodates both production operations and corporate support personnel, while our facility in North Carolina houses production operations and a distribution center. In October 2023, we announced plans for a third bakery production facility in Charleston, Indiana.
Bakery Operations We own and operate two bakery production facilities, one in Calabasas Hills, California, and one in Rocky Mount, North Carolina. Our facility in California accommodates both production operations and corporate support personnel, while our facility in North Carolina houses production operations and a distribution center. We continue to evaluate a third bakery production facility in Charlestown, Indiana.
To raise awareness in the off-premise channel, we execute marketing campaigns with our third-party delivery provider and through our online ordering platform. In addition, we work with several premiere third-party gift card distributors, contributing to our brand awareness and gift card sales, as well as our consumer packaged goods licensees on co-branded marketing campaigns.
To raise awareness in the off-premise channel, we execute marketing campaigns with our third-party delivery provider and through our online ordering platform.
Flower Child and Fox Restaurant Concepts Flower Child operates in the fast casual dining segment, offering a customizable menu, made fresh from scratch, featuring locally-sourced, all-natural and organic ingredients. Flower Child provides us an opportunity to diversify our portfolio in a strong and growing niche.
Restaurant-level preopening costs for a typical location in an established market average approximately $0.6 million to $0.8 million. Flower Child Flower Child operates in the fast casual dining segment, offering a customizable menu, made fresh from scratch, featuring locally-sourced, all-natural and organic ingredients.
While we have seen improvements in many of these areas, the absolute level of commodity costs has remained elevated contributing to ongoing inflation above historic levels. We attempt to negotiate short-term and long-term agreements for some of our principal commodity, supply and equipment requirements, such as certain dairy products and poultry, depending on market conditions and expected demand.
Our commodity environment began returning to more historical levels in fiscal 2024. 11 Table of Contents We attempt to negotiate short-term and long-term agreements for some of our principal commodity, supply and equipment requirements, such as certain dairy products and poultry, depending on market conditions and expected demand.
We have similarly promoted our teams’ participation in community volunteer events, and through our gift card program, we contribute to local fundraising events for community non-profit organizations. Additionally, we provide a method for our staff members to assist other staff members in need through our The Cheesecake Factory “HELP” fund.
We also participate in a nationwide food donation program which redirects surplus food away from landfills to local food banks and non-profit organizations. Additionally, we provide a method for our staff members to assist other staff members in need through our The Cheesecake Factory “HELP” fund.
Currently, we operate 32 Flower Child locations and target approximately 15% to 20% average annual unit growth for this concept. Average sales per location open for the full year for the Flower Child restaurants were approximately $4.1 million for fiscal 2023, or approximately $1,100 per interior square foot.
Average sales per location open for the full year for the Flower Child restaurants were approximately $4.7 million for fiscal 2025, or approximately $1,300 per interior square foot. We target an average Flower Child unit size of 3,000 to 4,000 interior square feet and average total construction costs of approximately $700 to $800 per interior square foot.
This popularity is reflected in our average sales per restaurant and per square foot, which are among the highest of any publicly-held restaurant company. Average sales per location for The Cheesecake Factory restaurants open for the full year were approximately $12.2 million for fiscal 2023.
Unit Economics We believe the operation of high-quality restaurants in premier locations fitting our criteria contributes to the continuing customer appeal of The Cheesecake Factory. This popularity is reflected in our average sales per restaurant and per square foot, which are among the highest of any publicly-held full service restaurant company.
Benefits and Wellness We believe access to healthcare is a compelling benefit for many staff members, and we offer healthcare benefits to our hourly staff members who work a minimum of 25 hours per week, on average.
We also offer a limited education reimbursement to our staff seeking post-secondary education. 10 Table of Contents Total Rewards We offer healthcare benefits to our hourly staff members who work a minimum of 25 hours per week, on average, providing a competitive suite of benefits and wellness offerings.
We also encountered delays in opening new restaurants primarily due to delays in permitting and landlord readiness, as well as supply chain challenges. The ongoing impact of geopolitical and macroeconomic events could lead to further shifts in consumer behavior, wage inflation, staffing challenges, product and services cost inflation, disruptions in the supply chain and delay in new restaurant openings.
The impact of ongoing geopolitical and macroeconomic events, including evolving government policies and global trade and tariff dynamics, could lead to further wage inflation, product and services cost inflation, disruptions in the supply chain, staffing challenges, shifts in consumer behavior, and delays in new restaurant openings. Adverse weather conditions and natural disasters may further exacerbate a number of these factors.
Current and future near-term pricing actions may also be at levels above historical norms to keep pace with any significant cost increases. In addition, on a regular basis, we carefully consider opportunities to adjust our menu offerings or ingredients to help manage product availability and cost. Value Proposition.
We will continue to take the cost and inflationary environment into consideration when implementing future pricing decisions. In addition, on a regular basis, we carefully consider opportunities to adjust our menu offerings or ingredients to help manage product availability and cost. Value Proposition.
Clark joined our Company in 2006 as Vice President of Strategic Planning and most recently oversaw the strategy, financial planning, treasury and risk management functions as Senior Vice President, Finance and Strategy. Earlier in his career, Mr. Clark held a number of finance positions of increasing responsibility at Groupe Danone, Kinko’s and The Walt Disney Company.
He is also a director of our Foundation. Matthew E. Clark, age 56, was appointed Executive Vice President and Chief Financial Officer in 2017. Mr. Clark joined our Company in 2006 as Vice President of Strategic Planning and most recently oversaw the strategy, financial planning, treasury and risk management functions as Senior Vice President, Finance and Strategy.
We target approximately 10% to 15% average annual unit growth for the aggregate Other FRC portfolio, complemented by additional market tests of the potential growth concepts. Average sales per location open for the full year for the Other FRC restaurants were approximately $6.5 million for fiscal 2023, or approximately $1,100 per interior square foot.
As of February 23, 2026, we operated 55 Other FRC locations. We target approximately 10% to 15% average annual unit growth for the aggregate Other FRC portfolio, complemented by additional market tests of the potential growth concepts.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOperations at our international Company-owned and licensed restaurants may be negatively affected by factors outside of our control, including, but not limited to: ● difficulties in achieving the consistency of product quality and service as compared to restaurants we operate in the United States; ● changes to our recipes required by cultural norms; ● inability to obtain, at a reasonable cost, adequate and reliable supplies of ingredients and products necessary to execute our diverse menu; ● availability of experienced management to operate international restaurants according to our domestic standards; ● changes in economic conditions of our licensees, whether or not related to the operation of our restaurants; ● differences, changes or uncertainties in economic, regulatory, legal, immigration, social, climatic and political conditions, including the possibility of terrorism, social unrest, trade embargos and/or trade restrictions, which may result in periodic or permanent closure of foreign restaurants, affect our ability to supply our international restaurants with necessary supplies and ingredients and affect international perception of our brand; ● inability of our licensees to locate profitable or suitable sites for development; ● rising cost and scarcity of labor world-wide; ● exchange rate fluctuations; and ● currency fluctuations, trade restrictions, taxes or tariffs adversely affecting our or our licensees’ ability to import goods from the United States and other parts of the world that are required for operating our branded restaurants, including our cakes which are wholly manufactured in the United States.
Biggest changeInternational operations have a unique set of risks and challenges that differ from country to country, and include, among other risks, political instability, governmental corruption, war and threats of war, social, religious and ethnic unrest, anti-American sentiment, delayed and potentially less effective ability to respond to a crisis occurring internationally, changes in global economic conditions (such as currency valuation, disposable income, unemployment levels and increases in the prices of products and services and labor), the regulatory environment, immigration, labor and pension laws, income and other taxes, consumer preferences and practices, as well as changes in the laws and regulations governing foreign investment, joint ventures or licensing arrangements in countries where our restaurants or licensees are located and local import controls. 23 Table of Contents Operations at our international Company-owned and licensed restaurants may be negatively affected by factors outside of our control, including, but not limited to: ● difficulties in achieving the consistency of product quality and service as compared to restaurants we operate in the United States; ● Anti-American sentiment and boycotts of American brands; ● changes to our recipes required by cultural norms; ● inability to obtain, at a reasonable cost, adequate and reliable supplies of ingredients and products necessary to execute our diverse menu; ● availability of experienced management to operate international restaurants according to our domestic standards; ● changes in economic conditions of our licensees, whether or not related to the operation of our restaurants; ● differences, changes or uncertainties in economic, regulatory, legal, immigration, social, climatic and political conditions, including the possibility of terrorism, social unrest, trade embargos and/or trade restrictions, which may result in periodic or permanent closure of foreign restaurants, affect our ability to supply our international restaurants with necessary supplies and ingredients and affect international perception of our brand; ● inability of our licensees to locate profitable or suitable sites for development; ● rising cost and scarcity of labor world-wide; ● exchange rate fluctuations; and ● trade restrictions, taxes or tariffs adversely affecting our or our licensees’ ability to import goods from the United States and other parts of the world that are required for operating our branded restaurants, including our cakes which are wholly manufactured in the United States.
As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our Cyber Environment, confidential or information, or business. We and our third-party vendors have experienced Cybersecurity Incidents and we expect such attacks and incidents to continue in varying degrees.
As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our Cyber Environment, confidential information or business. We and our third-party vendors have experienced Cybersecurity Incidents and we expect such attacks and incidents to continue in varying degrees.
Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements and our inability to maintain a secure environment for customers’ and staff members’ personal data could result in legal liability, financial penalties, reputational harm and loss of customers, which could materially adversely affect our financial performance.
Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements or our inability to maintain a secure environment for customers’ and staff members’ personal data could result in legal liability, financial penalties, reputational harm and loss of customers, which could materially adversely affect our financial performance.
Should this occur, in addition to increasing the overall wages paid to our minimum wage and tip credit wage earners, these increases create pressure to increase wages and other benefits paid to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage.
Should this occur, in addition to increasing the overall wages paid to our minimum wage and tip credit wage earners, these increases create pressure to increase wages paid to and other benefits provided to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage.
Negative publicity directed at any of our brands, regardless of factual basis, such as relating to the quality of our restaurant food or consumer packaged goods, the quality of our restaurant facilities, customer complaints or litigation alleging injury or food-borne illnesses, food tampering or contamination or poor health inspection scores, sanitary or other issues with respect to food processing by us or our suppliers, the condition of our restaurants, labor relations, any failure to comply with applicable regulations or standards, allegations of harassment or disparate treatment based upon race, gender,gender identity, national origin, religion or other class, allegations of sexual harassment, politically motivated accusations or other negative publicity, could damage our reputation.
Negative publicity directed at any of our brands, regardless of factual basis, such as relating to the quality of our restaurant food or consumer packaged goods, the quality and condition of our restaurant facilities, customer complaints or litigation alleging injury or food-borne illnesses, food tampering or contamination or poor health inspection scores, sanitary or other issues with respect to food processing by us or our suppliers, labor relations, any failure to comply with applicable regulations or standards, allegations of harassment or disparate treatment based upon race, gender, gender identity, national origin, religion or other class, allegations of sexual harassment, politically motivated accusations or other negative publicity could damage our reputation.
Furthermore, the Federal Trade Commission (“FTC”) and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.
Furthermore, the Federal Trade Commission (“FTC”) and many state Attorneys General continue to enforce federal and state consumer protection and privacy laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.
As a result, there is no assurance that we will be able to successfully execute our strategies and achieve our sustainability and ESG-related goals, which could damage our reputation and consumer and other stakeholder relationships.
As a result, there is no assurance that we will be able to successfully execute our strategies and achieve our sustainability-related goals, which could damage our reputation and consumer and other stakeholder relationships.
Our collection, storage, handling, use, disclosure and security of personal information is regulated by complex and continually evolving (and at times conflicting) U.S. (federal, state and local) and foreign laws, regulations, and industry standards.
Our collection, storage, handling, use, disclosure, processing and security of personal information is regulated by complex and continually evolving (and at times conflicting) U.S. (federal, state and local) and foreign laws, regulations, and industry standards.
The incurrence of indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: ● increasing our vulnerability to adverse economic and industry conditions; ● limiting our ability to obtain additional financing; ● requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; ● limiting our flexibility to plan for, or react to, changes in our business; 32 Table of Contents ● diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes; and ● placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
The incurrence of indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: ● increasing our vulnerability to adverse economic and industry conditions; ● limiting our ability to obtain additional financing; ● requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; ● limiting our flexibility to plan for, or react to, changes in our business; ● diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes; and ● placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Such factors include, without limitation, loss of, or significant change in contractual terms of, key vendor contracts, vendor or processor failures, technology failures, changes in applicable laws or regulations, Security Incidents, damage to the reputation of any key vendor and mandated employment relationships between companies that facilitate third-party delivery services and their service personnel.
Such factors include, without limitation, loss of, or significant change in contractual terms of, key vendor contracts, vendor or processor failures, technology failures, changes in applicable laws or regulations, Cybersecurity Incidents, damage to the reputation of any key vendor and mandated employment relationships between companies that facilitate third-party delivery services and their service personnel.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.) In addition, the Inflation Reduction Act of 2022 introduced a 1% excise tax on share repurchases, which increases the costs associated with repurchasing shares of our common stock.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our debt.) In addition, the Inflation Reduction Act of 2022 introduced a 1% excise tax on share repurchases, which increases the costs associated with repurchasing shares of our common stock.
We own and have applied to register trade names, logos, service marks, trademarks, copyrights and other intellectual property (collectively, “Intellectual Property”), including The Cheesecake Factory ® , North Italia ® , a collection within the Fox Restaurant Concepts subsidiary and other trademarks related to our restaurant and bakery businesses in the United States and in other countries throughout the world.
We own and have applied to register trade names, logos, service marks, trademarks, copyrights and other intellectual property (collectively, “Intellectual Property”), including The Cheesecake Factory ® , North Italia ® , Flower Child ® , a collection within the Fox Restaurant Concepts subsidiary and other trademarks related to our restaurant and bakery businesses in the United States and in other countries throughout the world.
The United States, on the federal, state and local levels, and other countries are expanding the type, nature and scope of laws and regulations governing other environmental matters, such as climate change, reducing greenhouse gas emissions, use of natural gas and water consumption, including in some cases imposing disclosure requirements with respect to such matters.
The United States, on the federal, state and local levels, and other countries are expanding the type, nature and scope of laws and regulations governing other environmental matters, such as reducing greenhouse gas emissions, use of natural gas and water consumption, including in some cases imposing disclosure requirements with respect to such matters.
In addition, we utilize a third-party security operations center (SOC) provider to monitor and analyze internal network traffic for potential malicious content. However, we can provide no assurance that our security measures will be successful in the event of an attempted or actual Cybersecurity Incident.
In addition, we utilize a third-party security operations center (“SOC”) provider to monitor and analyze internal network traffic for potential malicious content. However, we can provide no assurance that our security measures will be successful in the event of an attempted or actual Cybersecurity Incident.
Compliance with laws relating to privacy, security or the processing of personal information involve significant costs, and could increase our potential liability (including in the event we allow an unauthorized disclosure of or access to personal information), subject to us increased regulatory scrutiny and result in us making changes to our data processing practices.
Compliance with laws relating to privacy, security or the processing of personal information involve significant costs, increase our potential liability (including in the event we experience an unauthorized disclosure of or access to personal information), subject us to increased regulatory scrutiny and could result in us making changes to our data processing practices.
Adverse weather conditions, natural disasters and public health emergencies can impact customer traffic, make it more difficult to fully staff our restaurants and, more severe events, such as hurricanes, earthquakes, tornadoes, blizzards, wildfires and other natural disasters and public health emergencies, such as the COVID-19 pandemic, have resulted in and may in the future result in restaurant closures, underutilization of outdoor patio dining and curtailed operations, impediments to availability of staff and supplies and increased commodity costs, sometimes for prolonged periods of time.
Adverse weather conditions, natural disasters and public health emergencies can impact customer traffic, make it more difficult to fully staff our restaurants and more severe events, such as hurricanes, earthquakes, tornadoes, blizzards, wildfires and other natural disasters and public health emergencies have resulted in and may in the future result in restaurant closures, underutilization of outdoor patio dining and curtailed operations, impediments to availability of staff and supplies and increased commodity costs, sometimes for prolonged periods of time.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.) Our failure to pay a dividend or to increase it over time may negatively impact investor confidence in us and may negatively impact our stock price.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our debt.) Our failure to pay a dividend or to increase it over time may negatively impact investor confidence in us and may negatively impact our stock price.
If we are found to have breached privacy, security or consumer protection laws, regulations or standards, we may be subject to enforcement actions that require us to change our business practices in a manner which may negatively impact our revenue, as well as expose ourselves to litigation, fines, civil and/or criminal penalties and adverse publicity that could cause our customers to lose trust in us, negatively impacting our reputation, brand and business in a manner that harms our financial position.
If we are found to have breached privacy, security or consumer protection laws, regulations or standards, we may be subject to enforcement actions that require us to change our business practices in a manner which could negatively impact our revenue, as well as expose ourselves to litigation (including class action litigation), fines, civil and/or criminal penalties and adverse publicity that could cause our customers to lose trust in us, negatively impacting our reputation, brand and business in a manner that harms our financial position.
Under the Revolver Facility, we are subject to the following financial covenants as of the last day of each fiscal quarter: (i) a maximum ratio of net adjusted debt to EBITDAR (the “Amended Net Adjusted Leverage Ratio”) of 4.25 and (ii) a minimum ratio of EBITDAR to interest and rent expense of 1.90.
Under the Revolver Facility, we are subject to the following financial covenants as of the last day of each fiscal quarter: (i) a maximum ratio of net adjusted debt to EBITDAR (the “Net Adjusted Leverage Ratio”) of 4.25 and (ii) a minimum ratio of EBITDAR to interest and rent expense of 1.90.
Additionally, customers may avoid our restaurants and it may become difficult to adequately staff our restaurants if our customers or staff members become infected with a pathogen which was actually or alleged to be contracted at our restaurants. Any adverse food safety occurrence may result in litigation against us.
Additionally, customers may avoid our restaurants, our reputation may be damaged, and it may become difficult to adequately staff our restaurants if our food or customers or staff members become infected with a pathogen which was actually or alleged to be contracted at our restaurants. Any adverse food safety occurrence may result in litigation against us.
We employ both internal resources and external consultants to conduct auditing and testing for weaknesses in our Cyber Environment, intended to help us reduce the likelihood of any Security Incident, and have developed a multi-discipline Security Incident response plan designed to help ensure that our executives are fully and accurately informed and manage, with the help of content experts, the discovery, investigation and auditing of, and recovery from any Security Incidents that we become aware of.
We employ both internal resources and external consultants to conduct auditing and testing for weaknesses in our Cyber Environment, intended to help us reduce the likelihood of any Cybersecurity Incident, and have developed a multi-discipline Cybersecurity Incident response plan designed to help ensure that our executives are accurately informed and manage, with the help of content experts, the discovery, investigation and auditing of, and recovery from any Cybersecurity Incidents that we become aware of.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 for further discussion of our long-term debt.) In addition, our increased indebtedness and our resulting higher debt-to-equity ratio, as compared to that which has existed on a historical basis, could limit our ability to obtain additional financing in the future and have other material consequences, including: increasing our vulnerability to, and limiting our flexibility in planning for, changing business and market conditions, making us more vulnerable to adverse economic and industry conditions; limiting our ability to use proceeds from any offering or divestiture transaction for purposes other than the repayment of debt; and creating competitive disadvantages compared to other companies with less indebtedness.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 for further discussion of our debt.) 30 Table of Contents In addition, our increased indebtedness and our resulting higher debt-to-equity ratio, as compared to that which has existed on a historical basis, could limit our ability to obtain additional financing in the future and have other material consequences, including: increasing our vulnerability to, and limiting our flexibility in planning for, changing business and market conditions, making us more vulnerable to adverse economic and industry conditions; limiting our ability to use proceeds from any offering or divestiture transaction for purposes other than the repayment of debt; and creating competitive disadvantages compared to other companies with less indebtedness.
(See the risk factor titled “Our inability to respond appropriately to changes in consumer health and disclosure regulations, and to adapt to evolving consumer dining preferences, could negatively impact our operations and competitive position, which could materially adversely affect our financial performance.”) In order to serve alcoholic beverages in our restaurants or off-premise where permitted, we must comply with alcoholic beverage control regulations which require us to apply to a state or other governmental alcoholic beverage control authority for licenses and permits.
(See the risk factor titled “Our inability to respond appropriately to changes in consumer health and disclosure regulations, and to adapt to evolving consumer dining preferences, could negatively impact our operations and competitive position, which could materially adversely affect our financial performance.”) 18 Table of Contents In order to serve alcoholic beverages in our restaurants or off-premise where permitted, we must comply with alcoholic beverage control regulations which require us to apply to a state or other governmental alcoholic beverage control authority for licenses and permits.
(See Note 1 of Notes to Consolidated Financial Statements in Part IV, Item 15 for further discussion of impairment of long-lived assets.) 27 Table of Contents We test our goodwill and other indefinite-lived intangible assets for impairment annually or on an interim basis if events or changes in circumstances between annual tests indicate a potential impairment.
(See Note 1 of Notes to Consolidated Financial Statements in Part IV, Item 15 for further discussion of impairment of long-lived assets.) We test our goodwill and other indefinite-lived intangible assets for impairment annually or on an interim basis if events or changes in circumstances between annual tests indicate a potential impairment.
Responding to actions of an activist investor may be a significant distraction for our management and staff and could require us to expend significant time and resources, including legal fees and potential proxy solicitation expenses. Any of these conditions could materially adversely affect our financial performance. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable. ​
Responding to actions of an activist investor may be a significant distraction for our management and staff and could require us to expend significant time and resources, including legal fees and potential proxy solicitation expenses. Any of these conditions could materially adversely affect our financial performance. 34 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable. ​
Likewise, if sales decline, we may be unable to reduce our infrastructure quickly enough to prevent sales deleveraging. Either circumstance could materially adversely affect our financial performance. Our international license agreements require us to provide training and support to our licensees for their development and operation of The Cheesecake Factory restaurants.
Likewise, if sales decline, we may be unable to reduce our infrastructure quickly enough to prevent sales deleveraging. Either circumstance could materially adversely affect our financial performance. 25 Table of Contents Our international license agreements require us to provide training and support to our licensees for their development and operation of The Cheesecake Factory restaurants.
All our core and critical applications are housed in an external tier 3 data center, which is a location with redundant and dual-powered servers, storage, network links and other IT components. To mitigate business interruptions, we employ a disk-based data backup and replication infrastructure between our onsite and external data centers.
All our core and critical applications are housed in an external tier 3 data center, which is a location with redundant and dual-powered servers, storage, network links and other information technology components. To mitigate business interruptions, we employ a disk-based data backup and replication infrastructure between our onsite and external data centers.
Further, we may become subject to litigation or the imposition of regulatory penalties, which could result in negative publicity and significantly harm our reputation, either of which could materially adversely affect our financial performance. 31 Table of Contents Risks Related to Our Indebtedness Any failure to satisfy financial covenants and/or repayment requirements under our credit facility could harm our financial condition.
Further, we may become subject to litigation or the imposition of regulatory penalties, which could result in negative publicity and significantly harm our reputation, either of which could materially adversely affect our financial performance. Risks Related to Our Indebtedness Any failure to satisfy financial covenants and/or repayment requirements under our credit facility could harm our financial condition.
Goods we purchase on 22 Table of Contents the international market may be subject to even greater fluctuations in cost and availability, which could result from a variety of factors, including the value of the U.S. dollar relative to other currencies, international trade disputes, tariffs, geopolitical unrest and varying global demand.
Goods we purchase on the international market may be subject to even greater fluctuations in cost and availability, which could result from a variety of factors, including the value of the U.S. dollar relative to other currencies, international trade disputes, tariffs, geopolitical unrest and varying global demand.
Share repurchases could have an impact on the trading price of our common stock, increase the volatility of the price of our common stock or reduce our available cash balance such that we will be required to seek financing to support our operations. Our stock price could be adversely affected by future sales or other dilution of our equity.
Share repurchases could have an impact on the trading price of our common stock, increase the volatility of the price of our common stock or reduce our available cash balance such that we will be required to seek financing to support our operations. 33 Table of Contents Our stock price could be adversely affected by future sales or other dilution of our equity.
(See the risk factor titled “Failure to adequately address environmental, social and governance (“ESG”) matters, could adversely affect our brand, business, results of operations and financial condition.”) We may incur significant additional costs and require operational changes to comply with these laws and regulations and may face fines, penalties or other sanctions, adverse publicity and incur legal liability in the event of our failure to do so.
(See the risk factor titled “Failure to appropriately address environmental and social matters could adversely affect our brand, business, results of operations and financial condition.”) We may incur significant additional costs and require operational changes to comply with these laws and regulations and may face fines, penalties or other sanctions, adverse publicity and incur legal liability in the event of our failure to do so.
Even a perceived failure to comply could result in negative publicity that could damage our reputation and materially adversely affect our financial performance. 20 Table of Contents We are also subject to the regulations of the Department of Homeland Security, the U.S. Citizenship and Immigration Services and U.S. Immigration and Customs Enforcement.
Even a perceived failure to comply could result in negative publicity that could damage our reputation and materially adversely affect our financial performance. We are also subject to the regulations of the Department of Homeland Security, the U.S. Citizenship and Immigration Services and U.S. Immigration and Customs Enforcement.
The share repurchase program does not have an expiration date, does not require the Company to purchase a specific number of shares and may be modified, suspended or terminated at any 34 Table of Contents time, which may result in a decrease in the trading price of our common stock.
The share repurchase program does not have an expiration date, does not require the Company to purchase a specific number of shares and may be modified, suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.
Any of these factors may have an adverse impact on our business and materially adversely affect our financial performance. Our inability to grow comparable restaurant sales could materially adversely affect our financial performance. We strive to increase comparable restaurant sales by improving customer traffic trends and growing average check.
Any of these factors may have an adverse impact on our business and materially adversely affect our financial performance. 15 Table of Contents Our inability to grow comparable restaurant sales could materially adversely affect our financial performance. We strive to increase comparable restaurant sales by improving customer traffic trends and growing average check.
Our inability to maintain an experienced and qualified work force comprised of individuals who meet all legal citizenship or residency requirements could result in a disruption in our work force, sanctions against us and adverse publicity, any of which could materially adversely affect our financial performance.
Our inability to maintain an experienced and qualified workforce comprised of individuals who meet all legal citizenship or residency requirements could result in a disruption in our workforce, sanctions against us and adverse publicity, any of which could materially adversely affect our financial performance.
In order to supply bakery products to restaurants in other countries, we may be required to adapt certain recipes to eliminate locally prohibited ingredients, comply with labeling requirements that differ from those in the United States and maintain certifications required to export to such countries.
In order to supply bakery products to restaurants in other countries, we are and in the future may be further required to adapt certain recipes to eliminate locally prohibited ingredients, comply with labeling requirements that differ from those in the United States and maintain certifications required to export to such countries.
We acquired North Italia and the remainder of Fox Restaurant Concepts’ business for the purpose of accelerating unit growth and to develop innovating concepts for future growth.
We acquired North Italia, Flower Child and the remainder of Fox Restaurant Concepts’ business for the purpose of accelerating unit growth and to develop innovating concepts for future growth.
Adverse weather conditions, natural disasters, climate change and public health emergencies could unfavorably impact our restaurant sales, which could materially adversely affect our financial performance.
Adverse weather conditions, natural disasters and public health emergencies could unfavorably impact our restaurant sales, which could materially adversely affect our financial performance.
ESG matters have also been the subject of increased scrutiny by regulators in different jurisdictions which may expose us to potential regulatory scrutiny or enforcement actions related to our ESG activities. Further, a variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicized.
Environmental and social matters have also been the subject of increased scrutiny by regulators in different jurisdictions which may expose us to potential regulatory scrutiny or enforcement actions related to these activities. Further, a variety of organizations measure the performance of companies on environmental and social topics, and the results of these assessments are widely publicized.
These matters typically involve claims by customers, staff members and others regarding issues such as food-borne illness, food safety, premises liability, dram shop liability, compliance with wage and hour requirements, work-related injuries, discrimination, harassment, disability and other operational issues common to the foodservice industry.
These matters typically involve claims by customers, staff members and others regarding issues such as food-borne illness, food safety, premises liability, dram shop liability, compliance with wage and hour requirements, compliance with pay transparency and secure scheduling requirements, work-related injuries, discrimination, harassment, disability and other operational issues common to the foodservice industry.
Many of these laws, regulations and standards are subject to change and uncertain interpretation and could result in claims, changes to our business practices, penalties, increased cost of operations, or otherwise harm our business.
Many of these laws, regulations and standards are subject to change and uncertain interpretation and could result in claims, investigations or enforcement actions, changes to our business practices, penalties, increased cost of operations, or otherwise harm our business.
Remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that 29 Table of Contents are present in many non-corporate and home networks.
Remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Similar laws have been passed in other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States and creating the potential for a patchwork of overlapping but different state laws.
Similar laws have been passed and taken effect in other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States and creating a patchwork of overlapping but different state laws.
General Risk Factors Changes in tax laws and resulting regulations could result in changes to our tax provisions and expose us to additional tax liabilities that could materially adversely affect our financial performance. We are subject to income and other taxes in the U.S. and foreign jurisdictions.
General Risk Factors Changes in tax laws and resulting regulations could result in changes to our tax provisions and expose us to additional tax liabilities that could materially adversely affect our financial performance. We are subject to income and other taxes in the United States and foreign jurisdictions.
In addition, all conversions of the Notes will be settled partially or entirely in cash. We may not have enough available cash or be able to obtain financing at the time we are 33 Table of Contents required to repurchase the Notes or pay the cash amounts due upon conversion.
All conversions of the Notes will be settled partially or entirely in cash. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Notes or pay the cash amounts due upon conversion.
Our international licensees have access to certain elements of our intellectual property within their Cyber Environment and may not have developed adequate processes to secure their Cyber Environments against a Security Incident and may not maintain robust discovery, investigation, auditing or recovery protocols, or have the ability to promptly and effectively respond to a Security Incident.
Our international licensees have access to certain elements of our intellectual property within their Cyber Environment and may not have developed adequate processes to secure their Cyber Environments against a Cybersecurity Incident and may not 28 Table of Contents maintain robust discovery, investigation, auditing or recovery protocols, or have the ability to promptly and effectively respond to a Cybersecurity Incident.
We provide support for our restaurant operations, with the exception of design and construction, from our corporate headquarters in Calabasas, California, an area that is prone to natural disasters such as earthquakes and wildfires. Corporate support for our bakery operations is also performed from this centralized location.
We provide support for our restaurant operations, with the exception of FRC and the design and construction department, from our corporate headquarters in Calabasas, California, an area that is prone to and has been impacted by natural disasters such as earthquakes and wildfires. Corporate support for our bakery operations is also performed from this centralized location.
Our failure to quickly and effectively adapt to any significant shift in consumer dining preference could cause our or our licensees’ restaurants to lose market share, which could materially adversely affect our financial performance. 21 Table of Contents Our failure to effectively develop, grow and operate North Italia and our other branded concepts could materially adversely affect our financial performance.
Our failure to quickly and effectively adapt to any significant shift in consumer dining preference could cause our or our licensees’ restaurants to lose market share, which could materially adversely affect our financial performance. Our failure to effectively develop, grow and operate North Italia, Flower Child and our other branded concepts could materially adversely affect our financial performance.
These requirements may not always be uniform across jurisdictions, which may result in increased complexity, and cost, for compliance.
These requirements may not always be uniform across jurisdictions and may have uncertain interpretation, which may result in increased complexity, and cost, for compliance.
If we are unable to attract and retain qualified personnel, our restaurants and bakery operations could be short staffed, we may be forced to incur overtime expenses, and our ability to operate and expand our concepts effectively and to meet our customers’ demand could be limited, any of which could materially adversely affect our financial performance.
If we are unable to attract and retain qualified personnel, including due to increasingly competitive labor markets, our restaurants and bakery operations could be short staffed, we may be forced to incur overtime expenses, and our ability to operate and expand our concepts effectively, grow our business and revenues and meet our customers’ demand could be limited, any of which could materially adversely affect our financial performance.
We cannot guarantee that our share repurchase program will be utilized to the full value approved or that it will enhance long-term stockholder value. Our Board of Directors has authorized a share repurchase program of up to 61.0 million shares, of which approximately 4.5 million shares remained available for repurchase as of January 2, 2024.
We cannot guarantee that our share repurchase program will be utilized to the full value approved or that it will enhance long-term stockholder value. As of December 30, 2025, our Board of Directors has authorized a share repurchase program of up to 61.0 million shares, of which approximately 1.1 million shares remained available for repurchase.
If we are unable to quickly and effectively respond, any negative publicity could “go viral” causing nearly immediate and potentially significant harm to our brand and reputation, whether or not factually accurate. Our marketing strategy includes an emphasis on social media.
Any negative publicity could “go viral” causing nearly immediate and potentially significant harm to our brand and reputation, whether or not factually accurate. Our marketing strategy includes an emphasis on social media.
(See the risk factor titled “Changes in, or any failure to comply with, applicable laws or regulations could materially adversely affect our ability to operate our restaurants and/or increase our cost to do so, which could materially adversely affect our financial performance.”) We may incur considerable liability in the event we or our licensees fail to comply with foreign or domestic laws relating to our or their operation of any international restaurant and can provide no assurance that our insurance programs or contractual indemnification rights would be effective to protect against such liabilities.
(See the risk factor titled “Changes in, or any failure to comply with, applicable laws or regulations could materially adversely affect our ability to operate our restaurants and/or increase our cost to do so, which could materially adversely affect our financial performance.”) We may incur considerable liability in the event we or our licensees fail to comply with foreign or domestic laws relating to our or their operation of any international restaurant and can provide no assurance that our insurance programs or contractual indemnification rights would be effective to protect against such liabilities. 24 Table of Contents Our inability to secure an adequate number of high-quality sites for future restaurant openings could adversely affect our ability to grow our business.
The failure of third-party vendors to provide adequate services, including, as result of any Security Incident, or to generally fail to employ up-to-date and appropriate data security and internal control practices, could significantly harm our operations and reputation, which could materially adversely affect our financial performance.
The failure of third-party vendors to provide adequate services (especially those that may be a sole source provider of certain services), including, as result of any Security Incident, or to generally fail to employ up-to-date and appropriate data security and internal control practices, could significantly harm our operations and reputation, which could materially adversely affect our financial performance.
Changes in applicable U.S. or foreign tax laws and regulations, such as the 2017 enactment of Federal legislation commonly referred to as the Tax Cuts and Jobs Act, The Coronavirus Aid, Relief, and Economic Security Act of 2020 , and the Inflation Reduction Act of 2022 (collectively, the “Tax Acts”), or their interpretation and application, including the possibility of retroactive effect and changes to state tax laws that may occur in response to the Tax Acts, could affect our tax expense and profitability.
Changes in applicable U.S. or foreign tax laws and regulations, such as the 2017 enactment of Federal legislation commonly referred to as the Tax Cuts and Jobs Act, The Coronavirus Aid, Relief, and Economic Security Act of 2020, the Inflation Reduction Act of 2022, and H.R. 1, commonly referred to as H.R.1, passed the 119 th Congress and was signed into law on July 4, 2025 (collectively, the “Tax Acts”), or their interpretation and application, including the possibility of retroactive effect and changes to state tax laws that may occur in response to the Tax Acts, could affect our tax expense and profitability.
Dining out is a discretionary expenditure that is influenced by domestic and global economic conditions, including, but not limited to: geopolitical instability, including armed conflicts, supply shortages, interest rates (including recent interest rates above historical norms), unemployment, significant cost inflation, health emergencies including the COVID-19 pandemic, consumer confidence, consumer purchasing and saving habits, credit conditions, stock market performance, home values, population growth, household incomes and tax policy.
Dining out is a discretionary expenditure that is influenced by domestic and global economic conditions, including, but not limited to: geopolitical instability, including armed conflicts, supply shortages, interest rates, changes to the terms of international trade agreements, unemployment, significant cost inflation, public health emergencies, consumer confidence, consumer purchasing and saving habits, credit conditions, stock market performance, home values, population growth, household incomes and tax policy.
As a result, we need to continuously innovate and develop our social media strategies. 24 Table of Contents If we do not appropriately use and manage our social media strategies, our marketing efforts in this area may not be successful, and any failure to effectively respond to negative or potentially damaging social media, whether accurate or not, could damage our reputation, which could materially adversely affect our financial performance.
If we do not appropriately use and manage our social media strategies, our marketing efforts in this area may not be successful, and any failure to effectively respond to negative or potentially damaging social media, whether accurate or not, could damage our reputation, which could materially adversely affect our financial performance.
Material increases in healthcare costs could materially adversely affect our financial performance. 18 Table of Contents While we seek to offset labor cost increases through menu price increases, more efficient purchasing practices, productivity improvements, greater economies of scale and by offering a variety of health plans to our staff members, including lower cost high deductible health plans, there can be no assurance that these efforts will be successful.
While we seek to offset labor cost increases through menu price increases, more efficient purchasing practices, productivity improvements, greater economies of scale and by offering a variety of health plans to our staff members, including lower cost high-deductible health plans, there can be no assurance that these efforts will be successful.
For instance, the California Consumer Privacy Act (“CCPA”) became effective on January 1, 2020, which created individual privacy rights for California residents and increased the privacy related obligations of covered businesses handling personal information about California residents.
For instance, the California Consumer Privacy Act (“CCPA”) created individual privacy rights for California residents and increased the privacy related obligations of covered businesses handling personal information about California residents.
Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition. Finally, we cannot guarantee that any costs and liabilities incurred in relation to a Cybersecurity Incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
Finally, we cannot guarantee that any costs and liabilities incurred in relation to a Cybersecurity Incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
As social media continues to grow in popularity, many of our competitors have expanded and improved their use of social media, making it more difficult for us to differentiate our social media messaging.
As social media continues to grow in popularity, many of our competitors have expanded and improved their use of social media, making it more difficult for us to differentiate our social media messaging. As a result, we need to continuously innovate and develop our social media strategies.
A default under the indenture governing the Notes or the fundamental change itself could also lead to a default under the Loan Agreement and agreements governing our other or future indebtedness, which may result in that other indebtedness becoming immediately payable in full. We may not have sufficient funds to satisfy all amounts due under such indebtedness and the Notes.
A default under the indenture governing the Notes or the fundamental change itself could also lead to a default under the Loan Agreement and agreements governing our other or future indebtedness, which may result in that other indebtedness becoming immediately payable in full.
The number and timing of new restaurants opened during any given period, and their associated contribution to the growth of our business, depend on a number of factors including, but not limited to: ● unforeseen delays due to market conditions; ● the identification and availability of high-quality locations; ● an increase in competition for available premier locations; ● the influence of consumer shopping trends on the availability of sites in traditional locations, such as premier shopping centers; ● acceptable lease terms and the lease negotiation process; ● the availability of suitable financing for our landlords; ● the financial viability of our landlords; ● timing of the delivery of the leased premises to us from our landlords in order to perform build-out construction activities, which contributed to delays in opening new restaurants in 2023; ● obtaining, on a timely basis, all governmental licenses and permits necessary to construct and operate our restaurants, which has become more challenging as we are experiencing longer than usual governmental delays in the licensing and permitting process; ● obtaining, on a timely basis, all utility connections; ● obtaining, on a timely basis, all third-party consents necessary to construct and operate our restaurants; ● successfully managing the complex design, construction and preopening processes for our highly customized restaurants; ● the availability and/or cost of raw materials and labor used in construction; ● the availability of qualified tradespeople in the local market; ● any unforeseen engineering or environmental problems with the leased premises; and ● adverse weather or other delays during the construction period. 26 Table of Contents We have encountered and expect to continue to experience delays in opening new restaurants due to delays in permitting and landlord readiness, as well as supply chain challenges.
The number and timing of new restaurants opened during any given period, and their associated contribution to the growth of our business, depend on a number of factors including, but not limited to: ● unforeseen delays due to market conditions; ● the identification and availability of high-quality locations; ● an increase in competition for available premier locations; ● the influence of consumer shopping trends on the availability of sites in traditional locations, such as premier shopping centers; ● acceptable lease terms and the lease negotiation process; ● the availability of suitable financing for our landlords; ● the financial viability of our landlords; ● timing of the delivery of the leased premises to us from our landlords in order to perform build-out construction activities; ● the timing and extent of other construction activities in and around the shopping centers in which we plan to open; ● the occupancy and tenant-mix of the shopping centers in which we plan to open. ● obtaining, on a timely basis, governmental licenses and permits necessary to construct and operate our restaurants; ● obtaining, on a timely basis, utility connections; ● obtaining, on a timely basis, third-party consents necessary to construct and operate our restaurants; ● successfully managing the complex design, construction and preopening processes for our highly customized restaurants; ● the availability and/or cost of raw materials and labor used in construction; ● the availability of qualified tradespeople in the local market; ● any unforeseen engineering or environmental problems with the leased premises; and ● adverse weather or other delays during the construction period.
Over the past several years we have experienced and continue to experience significant labor cost inflation, which has and may continue to significantly increase our cost of doing business.
In past years we have experienced and may again experience significant labor cost inflation, which has and may in the future significantly increase our cost of doing business.
In addition, we have reserved approximately 3.1 million shares of common stock for grant under our The Cheesecake Factory Incorporated Stock Incentive Plan as of January 2, 2024.
In addition, we have reserved approximately 6.3 million shares of common stock for grant under our The Cheesecake Factory Incorporated Stock Incentive Plan as of December 30, 2025.
Our vendors’ systems have experienced cybersecurity incidents, including credential stuffing attacks in which compromised user credentials were used to breach the systems, and are vulnerable to a 23 Table of Contents variety of risks, including, without limitation, theft, casualties such as fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external cybersecurity threats, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as malfeasance by insiders, human or technological error, malicious code embedded in open-source software, or misconfigurations, “bugs” or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) network infrastructure, products or services, security breaches, denial of service attacks, viruses, worms, malware, ransomware, social engineering/phishing, breaches of the algorithms used to encrypt and protect data and other malicious, or disruptive or unauthorized events that jeopardize the confidentiality, integrity or availability of information systems or information residing therein, including confidential information and personal information (each, a “Cybersecurity Incident” and collectively, “Cybersecurity Incidents”).We also rely on third party services to effectively operate our restaurants including, for example, gift card distribution and transaction processing services, point-of-sale system services, online ordering services and food delivery services, and our Cheesecake Rewards TM program.
Our vendors’ systems are vulnerable to a variety of risks, including, without limitation, theft, casualties such as fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external cybersecurity threats, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as malfeasance by insiders, human or technological error, malicious code embedded in open-source software, or misconfigurations, “bugs” or other vulnerabilities in or issues with commercial software that is integrated into our (or our suppliers’ or service providers’) network infrastructure, products or services, security breaches, denial of service attacks, viruses, worms, malware, ransomware, social engineering/phishing, breaches of the algorithms used to encrypt and protect data and other malicious, or disruptive or unauthorized events that jeopardize the confidentiality, integrity or availability of information systems or information residing therein, including confidential information and personal information (each, a “Cybersecurity Incident” and collectively, “Cybersecurity Incidents”), and have also experienced Cybersecurity Incidents.
Furthermore, we have not registered all our Intellectual Property throughout the world, and doing so may not be feasible because of associated costs, various foreign trademark law prohibitions or registrations by others. Our failure or inability to protect our Intellectual Property worldwide could limit our ability to globally expand our brand.
Furthermore, we have not registered all our Intellectual Property throughout the world, and doing so may not be feasible because of associated costs, various foreign trademark law prohibitions or registrations by others.
The indenture governing the Notes does not contain any meaningful restrictive covenants and does not prohibit us or our subsidiaries from incurring additional indebtedness in the future. Accordingly, we may incur a significant amount of additional indebtedness to meet future financing needs.
The 2026 Notes and 2030 Notes are collectively referred to as the “Notes.” The indentures governing the Notes do not contain any meaningful restrictive covenants and do not prohibit us or our subsidiaries from incurring additional indebtedness in the future. Accordingly, we may incur a significant amount of additional indebtedness to meet future financing needs.
Additionally, there can be no assurance that our stakeholders will agree with our strategies, and any perception, whether or not valid, that we have failed to achieve, or to act responsibly with respect to, such matters or to effectively respond to new or additional legal or regulatory requirements regarding climate change, sustainability or ESG matters could result in adverse publicity or potential regulatory or investor engagement or litigation and adversely affect our business and reputation.
Additionally, any perception, whether or not valid, that we have failed to achieve, or to act responsibly with respect to, such matters or to effectively respond to new or additional legal or regulatory requirements regarding greenhouse gas emissions, sustainability or social matters could result in adverse publicity or potential regulatory or investor engagement or litigation and adversely affect our business and reputation.
Any Security Incident or adverse impact to the availability, integrity or confidentiality of our Cyber Environment (or information residing therein, including confidential information or personal information) could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs.
Any Cybersecurity Incident or adverse impact to the availability, integrity or confidentiality of our Cyber Environment (or information residing therein, including confidential information and personal information) could result in legal claims or proceedings (such as class actions and securities litigation), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers (which may become more likely due to new data breach notification laws including the new cybersecurity incident disclosure rules promulgated by the SEC), and/or significant incident response, system restoration or remediation and future compliance costs.
Changes in customer traffic and average check amount may be impacted by a variety of factors, including, without limitation: macroeconomic conditions that impact consumer discretionary spending (See the risk factor titled “The impact global and domestic economic conditions have on consumer discretionary spending could materially adversely affect our financial performance.”); perception of our concepts’ offerings in terms of quality, price, value and service; increased competition; changes in consumer eating habits; the evolving retail landscape, which is becoming increasingly influenced by technology and a growing consumer preference for convenience, value and experience; adverse weather conditions; and demographic, economic and other adverse changes in the trade areas in which our restaurants are located and changes in the regulatory environment.
Changes in customer traffic and average check amount may be impacted by a variety of factors, including, without limitation: macroeconomic conditions that impact consumer discretionary spending; perception of our concepts’ offerings in terms of quality, price, value and service; the competitive environment; changes in consumer eating or drinking habits; the evolving retail landscape, which is becoming increasingly influenced by technology and a growing consumer preference for convenience, value and experience; weather conditions; natural disasters; and demographic, economic and other changes in the trade areas in which our restaurants are located and changes in the regulatory environment.
For example, we are currently a defendant in a number of cases containing class or collective-action allegations, or both, in which the plaintiffs have brought claims under federal and state wage and hour laws.
For example, we are currently a defendant in a number of cases asserting class or collective action claims under federal and state wage and hour laws.
The impacts of and our failure to effectively respond to pandemics, epidemics, endemics and other public health emergencies, or food safety and food-borne illness, could reduce customer traffic to our restaurants, disrupt our food supply chain or cause us to be the target of litigation, which could materially adversely affect our financial performance .
Health risks associated with our restaurants or products, such as food safety concerns and food-borne illness, pandemics, epidemics, endemics and other public health emergencies could negatively impact customer traffic to our restaurants, disrupt our food supply chain or cause us to be the target of litigation, which could materially adversely affect our financial performance .
These provisions provide for the identification of material weaknesses in internal control over financial reporting - a process to provide reasonable 35 Table of Contents assurance regarding the reliability of financial reporting for external purposes in accordance with accounting principles generally accepted in the United States.
We are subject to the ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002. These provisions provide for the identification of material weaknesses in internal control over financial reporting - a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with accounting principles generally accepted in the United States.
Our financial performance may be materially adversely affected if our actual claims costs significantly exceed our estimates. Our inability or failure to execute on comprehensive business continuity and disaster recovery plans following a major disaster could interfere with our business operations, which could materially adversely affect our financial performance.
Our inability or failure to execute on comprehensive business continuity and disaster recovery plans following a major disaster or disruption could interfere with our business operations, which could materially adversely affect our financial performance.
For example, we transmit confidential credit card information in connection with credit card transactions, we are required to collect and maintain certain personal information in connection with our employment practices, including the administration of our benefit plans, and we collect information in relation to our Cheesecake Rewards TM program.
For example, we are required to collect and maintain certain personal information in connection with our employment practices, including the administration of our benefit plans, and we collect information for a variety of other reasons, including, in connection with our Cheesecake Rewards ® program.
If we are unable to execute our disaster recovery procedures in whole or in part, we may experience delays in recovery and losses of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal operating procedures that could expose us to administrative and other legal claims, any of which could materially adversely affect our financial performance. 28 Table of Contents A closure of or material damage to one or both of our bakery facilities could impede our ability to supply bakery products to our own and our international licensees’ restaurants as well as to other bakery customers.
If we are unable to execute our disaster recovery procedures in whole or in part, we may experience delays in recovery and losses of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal operating procedures that could expose us to administrative and other legal claims, any of which could materially adversely affect our financial performance.
While it remains unclear to what extent consumers may reconsider dining preferences in response to such requirements, it is clear that consumer dining preferences continue to evolve, and these preferences may evolve more rapidly in response to any of these new requirements.
While it remains unclear to what extent consumers may reconsider dining preferences in response to such requirements, consumer dining preferences continue to evolve, and these preferences may evolve more rapidly in response to any of these new requirements. New and current medical treatments such as GLP-1 agonists may shift consumer preferences.
However, such initiatives may be costly and may not have the desired effect. For example, execution of these strategies and achievement of our goals is subject to risks and uncertainties, many of which are outside of our control.
We have engaged, and expect to continue to engage, in certain voluntary corporate social responsibility initiatives and related reporting. However, such initiatives may be costly and may not have the desired effect. For example, execution of these strategies and achievement of our sustainability goals is subject to risks and uncertainties, many of which are outside of our control.
For example, we may be subject to various disclosure requirements (such as information on greenhouse gas emissions, climate risks, use of offsets, and emissions reduction claims) from the State of California, the International Sustainability Standards Board (ISSB) global sustainability standards, to the extent adopted by jurisdictions in which we operate, as well as the SEC’s climate disclosure proposal, if finalized, among other regulations or requirements.
For example, we are subject to various disclosure requirements (such as information on greenhouse gas emissions, climate risks, use of offsets, and emissions reduction claims) from the State of California, and may be subject to further disclosure requirements to the extent adopted by jurisdictions in which we operate.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program includes: ● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, and our broader enterprise information technology environment, including, by regularly scanning our environment for vulnerabilities, performing penetration testing and engaging third parties to assess the effectiveness of our technical cybersecurity practices. ● a multi-disciplinary security team overseen by our Information Security Council, principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; ● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls, including, third-party network security reviews, scans, and audits, on at least an annual basis; ● the use of a third-party Managed Security Service Provider (MSSP) that includes a 24x7 security operations center (SOC) that is designed to monitor and analyze suspected suspicious activity on our internal network and remediate or escalate activity as appropriate; ● regular cybersecurity awareness training for employees with access to our information systems, incident response personnel, and senior management; ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; ● a disaster recovery plan and controls designed to protect against business interruption, including by backing up our critical systems; ● use of end-to-end encryption and tokenization technology, a public key infrastructure, designed to ensure that only trusted devices can access our enterprise information technology network, and Intrusion Detection and Intrusion Prevention (IDS/IPS) that scans data in transit to help detect and prevent the execution of harmful code; and ● a third-party risk management process for service providers, suppliers, and vendors who have access to our information systems. 36 Table of Contents There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or are effective in protecting our systems and information.
Biggest changeOur cybersecurity risk management program includes: ● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, and our broader enterprise information technology environment, including, by regularly scanning our environment for vulnerabilities, performing penetration testing and engaging third parties to assess the effectiveness of our technical cybersecurity practices; ● a multi-disciplinary security team overseen by our Information Security Council, principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to Cybersecurity Incidents; ● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls, including, third-party network security reviews, scans, and audits, on at least an annual basis; ● the use of a third-party Managed Security Service Provider (“MSSP”) that includes a 24x7 security operations center (“SOC”) that is designed to monitor and analyze suspected suspicious activity on our internal network and remediate or escalate activity as appropriate; ● regular cybersecurity awareness training for employees with access to our information systems, incident response personnel, and senior management; ● a Cybersecurity Incident response plan that includes procedures for responding to Cybersecurity Incidents; ● a disaster recovery plan and controls designed to protect against business interruption, including by backing up our critical systems; ● use of end-to-end encryption and tokenization technology, a public key infrastructure, designed to ensure that only trusted devices can access our enterprise information technology network, and Intrusion Detection and Intrusion Prevention (IDS/IPS) that scans data in transit to help detect and prevent the execution of harmful code; and ● a third-party risk management process for service providers, suppliers, and vendors who have access to our information systems.
Our management formed an interdepartmental Information Security Council (ISC), comprised of senior executives from multiple disciplines, including our CIO and Vice President of Infrastructure Services, to assess and manage our material risks from cybersecurity threats. The ISC has primary responsibility for our overall cybersecurity risk management program.
Our management formed an interdepartmental Information Security Council (“ISC”), comprised of senior executives from multiple disciplines, including our CIO and Vice President of Infrastructure Services, to assess and manage our material risks from cybersecurity threats. The ISC has primary responsibility for our overall cybersecurity risk management program.
We design and assess our program generally based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF). Although our program may not meet the technical requirements of the NIST CSF, we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
We design and assess our program generally based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”). Although our program may not meet the technical requirements of the NIST CSF, we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Board of Directors members receive presentations on cybersecurity topics from our Chief Information Officer (CIO), internal security staff and/or external experts, as appropriate, as part of the Board of Directors’ continuing education.
Board of Directors members receive presentations on cybersecurity topics from our Chief Information Officer (“CIO”), internal security staff and/or external experts, as appropriate, as part of the Board of Directors’ continuing education.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The full Board of Directors also receives briefings from management on our cyber risk management program.
In addition, management updates the Committee, as necessary, regarding any material Cybersecurity Incidents, as well as any incidents with lesser impact potential. 35 Table of Contents The Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The full Board of Directors also receives briefings from management on our cyber risk management program.
Our CIO, Vice President of Infrastructure Services, and others within our Information Technology department supervise both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CIO and Vice President of Infrastructure Services have a combined 50+ years of experience in information technology, with increasing oversight of cybersecurity responsibilities over the past 20+ years.
Our CIO, Vice President of Infrastructure Services, and others within our Information Technology department supervise both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CIO and Vice President of Infrastructure Services both have 35+ years of experience in information technology, with increasing oversight of cybersecurity responsibilities over the past 20+ years.
Additionally, as we accept credit cards as a form of payment, we consider the requirements of the Payment Card Industry Data Security Standards (PCI DSS) in relation to our program.
Additionally, as we accept credit cards as a form of payment, we consider the requirements of the Payment Card Industry Data Security Standards (“PCI DSS”) in relation to our program.
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There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or are effective in protecting our systems and information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBelow is a table showing the number of Company-owned restaurants by location. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Cheesecake ​ ​ ​ ​ ​ ​ ​ ​ Location Factory North Italia Other FRC Other Total Alabama 2 ​ 1 ​ — ​ — ​ 3 Arizona 6 ​ 4 ​ 25 ​ 7 ​ 42 California 38 ​ 7 ​ 3 ​ 3 ​ 51 Colorado 3 ​ 1 ​ 2 ​ 2 ​ 8 Connecticut 3 ​ — ​ — ​ — ​ 3 Delaware 1 ​ — ​ — ​ — ​ 1 District of Columbia 2 ​ 1 ​ — ​ 1 ​ 4 Florida 23 ​ 5 ​ 1 ​ 1 ​ 30 Georgia 5 ​ 2 ​ 2 ​ 3 ​ 12 Hawaii 2 ​ — ​ — ​ — ​ 2 Idaho 1 ​ — ​ — ​ — ​ 1 Illinois 6 ​ — ​ 1 ​ — ​ 7 Indiana 2 ​ — ​ — ​ — ​ 2 Iowa 1 ​ — ​ — ​ — ​ 1 Kansas 1 ​ 1 ​ — ​ — ​ 2 Kentucky 2 ​ — ​ — ​ — ​ 2 Louisiana 1 ​ — ​ — ​ — ​ 1 Maryland 6 ​ — ​ — ​ 1 ​ 7 Massachusetts 7 ​ — ​ — ​ — ​ 7 Michigan 2 ​ — ​ — ​ — ​ 2 Minnesota 2 ​ — ​ — ​ — ​ 2 Missouri 3 ​ — ​ — ​ — ​ 3 Nebraska 1 ​ — ​ — ​ — ​ 1 Nevada 5 ​ 1 ​ — ​ 3 ​ 9 New Jersey 10 ​ — ​ — ​ 1 ​ 11 New Mexico 1 ​ — ​ — ​ — ​ 1 New York 12 ​ — ​ — ​ 1 ​ 13 North Carolina 5 ​ 1 ​ 1 ​ 1 ​ 8 Oklahoma 2 ​ — ​ — ​ 1 ​ 3 Ohio 7 ​ — ​ — ​ — ​ 7 Oregon 2 ​ — ​ — ​ — ​ 2 Pennsylvania 6 ​ 1 ​ — ​ — ​ 7 Puerto Rico 1 ​ — ​ — ​ — ​ 1 Rhode Island 1 ​ — ​ — ​ — ​ 1 South Carolina 1 ​ — ​ — ​ — ​ 1 Tennessee 6 ​ 2 ​ 3 ​ — ​ 11 Texas 19 ​ 8 ​ 3 ​ 14 ​ 44 Utah 2 ​ — ​ — ​ — ​ 2 Virginia 7 ​ 2 ​ — ​ 1 ​ 10 Washington 5 ​ — ​ — ​ — ​ 5 Wisconsin 3 ​ — ​ — ​ — ​ 3 Ontario, Canada 1 ​ — ​ — ​ — ​ 1 Total 216 ​ 37 ​ 41 ​ 40 ​ 334 ​ ​
Biggest changeBelow is a table showing the number of Company-owned restaurants by location as of December 30, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Cheesecake ​ ​ ​ ​ ​ ​ ​ ​ Location ​ ​ ​ Factory ​ ​ ​ North Italia ​ ​ ​ Other FRC ​ ​ ​ Other ​ ​ ​ Total Alabama 2 ​ 1 ​ 1 ​ — ​ 4 Arizona 6 ​ 6 ​ 30 ​ 9 ​ 51 California 39 ​ 8 ​ 7 ​ 2 ​ 56 Colorado 4 ​ 1 ​ 2 ​ 2 ​ 9 Connecticut 3 ​ — ​ — ​ — ​ 3 Delaware 1 ​ — ​ — ​ — ​ 1 District of Columbia 2 ​ 1 ​ — ​ — ​ 3 Florida 24 ​ 5 ​ 1 ​ 2 ​ 32 Georgia 5 ​ 2 ​ 1 ​ 3 ​ 11 Hawaii 2 ​ — ​ — ​ — ​ 2 Idaho 1 ​ 1 ​ — ​ — ​ 2 Illinois 7 ​ — ​ 1 ​ — ​ 8 Indiana 2 ​ — ​ 1 ​ 1 ​ 4 Iowa 1 ​ — ​ — ​ — ​ 1 Kansas 1 ​ 1 ​ — ​ — ​ 2 Kentucky 2 ​ — ​ — ​ — ​ 2 Louisiana 1 ​ — ​ — ​ — ​ 1 Maryland 6 ​ — ​ — ​ 1 ​ 7 Massachusetts 7 ​ — ​ — ​ — ​ 7 Michigan 2 ​ — ​ — ​ — ​ 2 Minnesota 2 ​ — ​ — ​ — ​ 2 Missouri 2 ​ — ​ — ​ 1 ​ 3 Nebraska 1 ​ 1 ​ — ​ — ​ 2 Nevada 5 ​ 2 ​ — ​ 4 ​ 11 New Jersey 10 ​ — ​ — ​ 1 ​ 11 New Mexico 1 ​ — ​ — ​ — ​ 1 New York 12 ​ — ​ — ​ 1 ​ 13 North Carolina 5 ​ 4 ​ 1 ​ 2 ​ 12 Oklahoma 2 ​ — ​ — ​ 1 ​ 3 Ohio 7 ​ — ​ — ​ — ​ 7 Oregon 2 ​ — ​ — ​ — ​ 2 Pennsylvania 6 ​ 1 ​ — ​ — ​ 7 Puerto Rico 1 ​ — ​ — ​ — ​ 1 Rhode Island 1 ​ — ​ — ​ — ​ 1 South Carolina 1 ​ — ​ — ​ — ​ 1 Tennessee 5 ​ 2 ​ 5 ​ 1 ​ 13 Texas 19 ​ 9 ​ 6 ​ 16 ​ 50 Utah 3 ​ 1 ​ — ​ 1 ​ 5 Virginia 7 ​ 2 ​ — ​ 1 ​ 10 Washington 4 ​ — ​ — ​ — ​ 4 Wisconsin 3 ​ — ​ — ​ — ​ 3 Ontario, Canada 1 ​ — ​ — ​ — ​ 1 Total 218 ​ 48 ​ 56 ​ 49 ​ 371 ​ ​
FRC’s headquarters are located in Phoenix, Arizona in approximately 22,000 square feet of leased office space. 37 Table of Contents All of our Company-owned restaurants are located on leased properties, and we have no current plans to own the real estate underlying our restaurants.
FRC’s headquarters are located in Phoenix, Arizona in approximately 22,000 square feet of leased office space. 36 Table of Contents All of our Company-owned restaurants are located on leased properties, and we have no current plans to own the real estate underlying our restaurants.
The bakery production facility is a 60,000 square foot facility on an approximately three-acre parcel of land. Our second bakery facility located in Rocky Mount, North Carolina is a 100,000 square foot facility on an approximately 31-acre parcel of land. In October 2023, we announced plans for a third bakery production facility in Charleston, Indiana.
The bakery production facility is a 60,000 square foot facility on an approximately three-acre parcel of land. Our second bakery facility located in Rocky Mount, North Carolina is a 100,000 square foot facility on an approximately 31-acre parcel of land. In October 2023, we announced plans for a third bakery production facility in Charlestown, Indiana.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS See Note 13 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for a summary of legal proceedings. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 38 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS See Note 13 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for a summary of legal proceedings. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 37 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table presents our purchases of our common stock during the fiscal quarter ended January 2, 2024 (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Total Number of Shares Maximum Number of ​ ​ Number ​ Average ​ Purchased as Part of ​ Shares that May Yet ​ ​ of Shares ​ Price Paid ​ Publicly Announced ​ Be Purchased Under the Period Purchased (1) per Share (2) Plans or Programs Plans or Programs October 4 — November 7, 2023 ​ 233 ​ $ 29.72 233 4,539 November 8 — December 5, 2023 ​ 4 ​ 32.89 — 4,534 December 6, 2023 — January 2, 2024 ​ 81 ​ 34.04 69 4,453 Total ​ 318 ​ ​ 302 ​ (1) The total number of shares purchased includes 15,922 shares withheld upon vesting of restricted share awards to satisfy tax withholding obligations.
Biggest changeThe following table presents our purchases of our common stock during the fiscal quarter ended December 30, 2025 (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares ​ ​ ​ Maximum Number of ​ ​ Number ​ Average ​ Purchased as Part of ​ Shares that May Yet ​ ​ of Shares ​ Price Paid ​ Publicly Announced ​ Be Purchased Under the Period ​ ​ ​ Purchased (1) ​ ​ ​ per Share (2) ​ ​ ​ Plans or Programs ​ ​ ​ Plans or Programs October 1 — November 4, 2025 ​ 20 ​ $ 54.67 ​ — ​ 1,293 November 5 — December 2, 2025 ​ 59 ​ ​ 46.71 ​ 59 ​ 1,234 December 3 — December 30, 2025 ​ 149 ​ ​ 49.11 ​ 149 ​ 1,085 Total ​ 228 ​ ​ ​ ​ 208 ​ ​ (1) The total number of shares purchased includes 20,231 shares withheld upon vesting of restricted share awards to satisfy tax withholding obligations.
Shares Authorized for Issuance under Equity Compensation Plans The information required by Item 201(d) of Regulation S-K under Item 5 is incorporated by reference to the section entitled “Equity Compensation Plan Information” in our definitive proxy statement for the annual meeting of stockholders expected to be held on May 30, 2024 (the “Proxy Statement”). 40 Table of Contents ITEM 6. [RESERVED]
Shares Authorized for Issuance under Equity Compensation Plans The information required by Item 201(d) of Regulation S-K under Item 5 is incorporated by reference to the section entitled “Equity Compensation Plan Information” in our definitive proxy statement for the annual meeting of stockholders expected to be held on May 28, 2026 (the “Proxy Statement”). 39 Table of Contents ITEM 6. [RESERVED] ​
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The Nasdaq Global Select Market under the symbol CAKE. There were approximately 1,460 holders of record of our common stock at February 13, 2024, and we estimate there were approximately 134,600 beneficial stockholders on that date.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The Nasdaq Global Select Market under the symbol CAKE. There were approximately 1,490 holders of record of our common stock at February 11, 2026, and we estimate there were approximately 148,800 beneficial stockholders on that date.
(See Item 1A — Risk Factors — “Our stock price could be adversely affected if we are unable to pay or increase dividends.”) During the fiscal quarter ended January 2, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K). 39 Table of Contents Price Performance Graph The following graph compares the cumulative five-year total return provided to stockholders on the Company’s common stock relative to the S&P 400 Midcap Index, the NASDAQ US Benchmark TR Index and the S&P 600 Restaurants Index.
(See Item 1A — Risk Factors — “Our stock price could be adversely affected if we are unable to pay or increase dividends.”) 38 Table of Contents Price Performance Graph The following graph compares the cumulative five-year total return provided to stockholders on the Company’s common stock relative to the S&P 400 Midcap Index, the NASDAQ US Benchmark TR Index and the S&P 600 Restaurants Index.
The historical stock performance presented below is not intended to and may not be indicative of future stock performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/18 12/31/19 ​ 12/31/20 ​ 12/31/21 ​ 12/31/22 ​ 12/31/23 The Cheesecake Factory Incorporated ​ $ 100 ​ $ 92 ​ $ 89 ​ $ 94 ​ $ 76 ​ $ 84 S&P 400 Midcap Index ​ $ 100 ​ $ 124 ​ $ 139 ​ $ 171 ​ $ 146 ​ $ 167 NASDAQ US Benchmark TR Index (1) ​ $ 100 ​ $ 131 ​ $ 159 ​ $ 200 ​ $ 161 ​ $ 203 S&P 600 Restaurants Index (2) ​ $ 100 ​ $ 111 ​ $ 140 ​ $ 134 ​ $ 106 ​ $ 126 (1) Underlying data provided by Nasdaq Global Indexes.
The historical stock performance presented below is not intended to and may not be indicative of future stock performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/20 ​ ​ ​ 12/31/21 ​ ​ ​ 12/31/22 ​ ​ ​ 12/31/23 ​ ​ ​ 12/31/24 ​ ​ ​ 12/31/25 The Cheesecake Factory Incorporated ​ $ 100 ​ $ 106 ​ $ 88 ​ $ 100 ​ $ 138 ​ $ 150 S&P 400 Midcap Index ​ $ 100 ​ $ 125 ​ $ 108 ​ $ 126 ​ $ 144 ​ $ 155 NASDAQ US Benchmark TR Index (1) ​ $ 100 ​ $ 126 ​ $ 101 ​ $ 128 ​ $ 159 ​ $ 187 S&P 600 Restaurants Index (2) ​ $ 100 ​ $ 96 ​ $ 76 ​ $ 93 ​ $ 110 ​ $ 94 (1) Underlying data provided by Nasdaq Global Indexes.
Under this authorization, we have cumulatively repurchased 56.5 million shares at a total cost of $1,811.7 million, excluding the excise tax, through January 2, 2024 with 0.3 million shares repurchased at a cost of $9.8 million, excluding the excise tax, during the fourth quarter of fiscal 2023.
Under this authorization, we have cumulatively repurchased 59.9 million shares at a total cost of $1,983.6 million, excluding the excise tax, through December 30, 2025, with 228,106 shares repurchased at a cost of $11.2 million, excluding the excise tax, during the fourth quarter of fiscal 2025.
Removed
Following the suspension that began in fiscal 2020 due to the impact of COVID-19 on our business and in conjunction with the terms of our Loan Agreement, our Board declared a quarterly dividend in the second quarter of fiscal 2022 and has declared quarterly dividends since then.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents, for the periods indicated, a summary of our key cash flows from operating, investing and financing activities (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ Cash provided by operating activities ​ $ 218.4 ​ $ 161.9 Additions to property and equipment ​ ​ (151.6) ​ ​ (112.5) Acquisition-related deferred consideration and compensation ​ ​ (24.2) ​ ​ (18.3) Borrowings on credit facility ​ ​ 15.0 ​ ​ 130.0 Repayments on credit facility ​ ​ (15.0) ​ ​ (130.0) Common stock dividends paid ​ ​ (53.2) ​ ​ (42.3) Treasury stock purchases ​ ​ (46.1) ​ ​ (63.1) ​ Cash Provided by Operating Activities Cash flows from operations increased by $56.5 million from fiscal 2022 primarily due to higher net income, a higher payroll accrual due to the timing of payments and higher incentive compensation accrued in fiscal 2023 compared to fiscal 2022 and the collection of our fiscal 2020 net operating loss carryback refund in fiscal 2022.
Biggest changeThe following table presents, for the periods indicated, a summary of our key cash flows from operating, investing and financing activities (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ Cash provided by operating activities ​ $ 301.3 ​ $ 268.3 Additions to property and equipment ​ ​ (146.2) ​ ​ (160.4) Repayments on credit facility ​ ​ (110.0) ​ ​ (20.0) Proceeds from long-term convertible debt ​ ​ 575.0 ​ ​ — Repayment on long-term convertible debt, including premium on extinguishment ​ ​ (289.8) ​ ​ — Issuance cost associated with long-term debt ​ ​ (16.5) ​ ​ — Proceeds from exercise of stock options ​ ​ 24.6 ​ ​ 12.5 Common stock dividends paid ​ ​ (52.2) ​ ​ (53.0) Treasury stock purchases, inclusive of excise tax ​ ​ (153.9) ​ ​ (18.2) ​ Cash Provided by Operating Activities Cash flows from operations increased by $33.0 million from fiscal 2024 primarily due to higher net income after excluding non-cash activity, timing of operating lease commencements and a decrease in inventory levels, partially offset by lower gift card liabilities, a decrease in prepaid expenses during fiscal 2024 due to a higher balance in fiscal 2023 related to the timing of January rent payments and higher income tax payments.
(See the discussion of our contracting activities in Part II, Item 7A — “Quantitative and Qualitative Disclosures About Market Risk.”) For new restaurants, food and beverage costs are typically higher for a period of time after opening until our management team becomes more accustomed to predicting, managing and servicing the sales volumes at these restaurants.
(See the discussion of our contracting activities in Part II, Item 7A — “Quantitative and Qualitative Disclosures About Market Risk.”) For new restaurants, food and beverage costs are typically higher for a period of time after opening until our management team becomes more accustomed to predicting and managing the sales volumes at these restaurants.
Future decisions to pay or to increase or decrease dividends or to repurchase shares are at the discretion of the Board and will be dependent on a number of factors, including limitations pursuant to the terms and conditions of the Loan Agreement and applicable law.
Future decisions to pay, increase or decrease dividends or to repurchase shares are at the discretion of the Board and will be dependent on a number of factors, including limitations pursuant to the terms and conditions of our Loan Agreement and applicable law.
(See Note 1 in Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of these impairments.) Long-Lived Assets We assess the potential impairment of our long-lived assets on an annual basis or whenever events or changes in circumstances indicate that the carrying value of the assets or asset group may not be recoverable.
(See Note 1 in Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of impairment testing.) Long-Lived Assets We assess the potential impairment of our long-lived assets on an annual basis or whenever events or changes in circumstances indicate that the carrying value of the assets or asset group may not be recoverable.
These judgments may produce materially different amounts of operating lease assets and liabilities, rent expense and interest expense than would be reported if different assumptions were used. Recent Accounting Pronouncements See Note 1 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for a summary of new accounting standards. ​ 51 Table of Contents
These judgments may produce materially different amounts of operating lease assets and liabilities, rent expense and interest expense than would be reported if different assumptions were used. Recent Accounting Pronouncements See Note 1 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for a summary of new accounting standards. ​
Longer-term, we believe our domestic revenue growth (comprised of our targeted annual unit growth of 7%, in aggregate across concepts, and comparable sales growth), combined with margin expansion, planned debt repayments and an anticipated capital return program will support our long-term financial objective of 13% to 14% total return to shareholders, on average.
Longer-term, we believe our domestic revenue growth (comprised of our targeted annual unit growth of 7% in aggregate across concepts and comparable sales growth) combined with margin expansion, planned debt repayments and an anticipated capital return program will support our long-term financial objective of 10% to 15% total return to shareholders, on average.
Average check variations are driven by menu price increases and/or changes in menu mix. We generally update The Cheesecake Factory menus twice each year, and our philosophy is to use price increases to help offset key operating cost increases in a manner that balances supporting both our margin objectives and customer traffic levels.
Average check variations are driven by menu price increases and/or changes in menu mix. We generally update The Cheesecake Factory menus twice a year, and our philosophy is to use price increases to help offset key operating cost increases in a manner that supports both our margin and customer traffic objectives.
We utilize a 52/53-week fiscal year ending on the Tuesday closest to December 31 for financial reporting purposes. Fiscal years 2023 and 2021 each consisted of 52 weeks, while fiscal year 2022 consisted of 53 weeks. Fiscal year 2024 will consist of 52 weeks. The following MD&A includes a discussion comparing our results in fiscal 2023 to fiscal 2022.
We utilize a 52/53-week fiscal year ending on the Tuesday closest to December 31 for financial reporting purposes. Fiscal years 2025, 2024 and 2023 each consisted of 52 weeks. Fiscal year 2026 will consist of 52 weeks. The following MD&A includes a discussion comparing our results in fiscal 2025 to fiscal 2024.
In fiscal 2023, we recorded $29.5 million of expense primarily related to the impairment of three The Cheesecake Factory (one previously impaired), one North Italia (previously impaired), one Other FRC and two Other restaurant lease terminations.
In fiscal 2023, we recorded $29.5 million of expense primarily related to the impairment of three The Cheesecake Factory (one previously impaired), one North Italia (previously impaired), one Other FRC and two Grand Lux Cafe lease terminations.
We are continuing our efforts on a number of initiatives, including menu innovation, a greater focus on increasing customer throughput in our restaurants, leveraging our gift card program, working with a third party to provide delivery services for our restaurants, increasing customer awareness of our online ordering capabilities and improving the pick-up experience, augmenting our marketing programs, including our Cheesecake Rewards TM program, enhancing our training programs and leveraging our customer satisfaction measurement platform.
We are continuing our efforts on a number of initiatives, including menu innovation, increasing customer throughput in our restaurants, leveraging our gift card program, partnering with a third party to provide delivery services for our restaurants, increasing customer awareness of our online ordering capabilities and improving the pick-up experience, augmenting our marketing programs, including our Cheesecake Rewards ® program, enhancing our training programs and leveraging insights from our customer satisfaction measurement platform.
As further discussed in Note 14 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report, in February 2024, our Board declared a quarterly dividend to be paid in March 2024.
As further discussed in Note 19 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report, in February 2026, our Board declared a quarterly dividend to be paid in March 2026.
(See Note 17 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of income taxes.) Non-GAAP Measures Adjusted net income and adjusted diluted net income per share are supplemental measures of our performance that are not required by or presented in accordance with GAAP.
(See Note 17 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of income taxes.) Non-GAAP Measures Adjusted net income, adjusted diluted net income per share and adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) are supplemental measures of our performance that are not required by or presented in accordance with GAAP.
In connection with the cash dividend that was declared by our Board on February 15, 2024, on March 5, 2024 we will adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the Notes in accordance with the terms.
In connection with the cash dividend that was declared by our Board on February 12, 2026, on March 4, 2026, we will adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the 2026 Notes in accordance with the terms.
Our objective is to recapture our pre-COVID-19 pandemic margins and longer-term to drive margin expansion, by leveraging incremental sales to increase restaurant-level margins at The Cheesecake Factory concept, leveraging our bakery operations, international and consumer packaged goods royalty revenue streams and G&A expense over time, and optimizing our restaurant portfolio.
Our objective is to drive margin expansion over time by leveraging incremental sales to increase restaurant-level margins at The Cheesecake Factory concept, leveraging our bakery operations, international and consumer packaged goods royalty revenue streams and G&A expense, and optimizing our restaurant portfolio.
The increase from fiscal 2022 was primarily driven by an increase in average check of 4.0% (based on an increase of 9.4% in menu pricing, partially offset by a 5.4% negative change from menu mix), partially offset by decreased customer traffic of 1.0%.
The increase from fiscal 2024 was primarily driven by an increase in average check of 2.4% (based on an increase of 4.3% in menu pricing, partially offset by a 1.9% negative change from menu mix), partially offset by decreased customer traffic of 2.3%.
We plan to employ a balanced capital allocation strategy, comprised of investing in new restaurants that are expected to meet our targeted returns, repaying borrowings under our Revolver Facility and returning capital to shareholders through our dividend and share repurchase programs, the latter of which offsets dilution from our equity compensation program and supports our earnings per share growth.
We plan to employ a balanced capital allocation strategy, comprised of investing in new restaurants that are expected to meet our targeted returns, managing our aggregate debt levels and returning capital to shareholders through our dividend and share repurchase programs, the latter of which offsets dilution from our equity compensation program and supports our earnings per share growth.
See Notes 1 and 6 of Notes to Consolidated Financial Statements in Part 1V, Item 15 of this report for further discussion of our long-lived and intangible assets. Acquisition-Related Contingent Consideration, Compensation and Amortization Expense We recorded $11.7 million and $13.4 million of expense during fiscal 2023 and 2022, respectively, of acquisition-related contingent consideration, compensation and amortization.
See Notes 1 and 6 of Notes to Consolidated Financial Statements in Part 1V, Item 15 of this report for further discussion of our long-lived and intangible assets. Acquisition-Related Contingent Consideration, Compensation and Amortization Expense We recorded $14.4 million and $2.4 million of expense during fiscal 2025 and 2024, respectively, of acquisition-related contingent consideration, compensation and amortization.
These estimates, as well as the selection of comparable companies and valuation multiples used in the market approaches, are subjective, and our ability to realize future cash flows and asset fair values is affected by factors such as changes in economic conditions and operating performance.
These estimates, as well as the selection of comparable companies and valuation multiples used in the market approaches, are subjective, and our ability to realize future cash flows and asset fair values is affected by factors such as changes in economic conditions and operating performance. These fair value assessments could change materially if different estimates and assumptions were used.
(4) Real estate obligations include construction commitments, net of up-front landlord construction contributions, and legally binding minimum lease payments for leases signed but not yet commenced. Amounts exclude agreements that are cancelable without significant penalty. Also includes the commitments associated with the third bakery production facility.
(4) Real estate obligations include construction commitments, net of up-front landlord construction contributions, and legally binding minimum lease payments for leases signed but not yet commenced. Amounts exclude agreements that are cancelable without significant penalty.
For a discussion comparing our results from fiscal 2022 to fiscal 2021, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 3, 2023, filed with the SEC on February 27, 2023.
For a discussion comparing our results from fiscal 2024 to fiscal 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 24, 2025.
Financially, we are focused on prudently managing expenses at our restaurants, bakery facilities and corporate support center, and leveraging our size to make the best use of our purchasing power. Investing in new Company-owned restaurant development is our top long-term capital allocation priority, with a focus on opening our concepts in premier locations within both new and existing markets.
Financially, we are focused on prudently managing expenses at our restaurants, bakery facilities and corporate support center, while leveraging our scale, purchasing power and operational discipline to support financial performance. 40 Table of Contents Investing in new Company-owned restaurant development is our top long-term capital allocation priority, with a focus on opening our concepts in premier locations within both new and existing markets.
At January 2, 2024, there were nine The Cheesecake Factory restaurants and seven North Italia restaurants not yet in the comparable sales base. International licensed locations and restaurants that are no longer in operation, including those which we have relocated, are excluded from comparable sales calculations.
At December 30, 2025, there were seven The Cheesecake Factory restaurants, nine North Italia restaurants and 11 Flower Child locations not yet in the comparable sales bases. International licensed locations and restaurants that are no longer in operation, including those which we have relocated, are excluded from comparable sales calculations.
We expect to open as many as 22 new restaurants in fiscal 2024 across our portfolio of concepts, with approximately 75% of the openings occurring in the second half of fiscal 2024. We anticipate approximately $180 to $200 million in capital expenditures to support this level of unit development, as well as required maintenance on our restaurants.
We expect to open as many as 26 new restaurants in fiscal 2026 across our portfolio of concepts, with approximately one third of the openings occurring in the first half of fiscal 2026. We anticipate approximately $210 million in capital expenditures to support this level of unit development, as well as required maintenance on our restaurants.
(See Item 1A — Risk Factors — “Our stock price could be adversely affected if our performance falls short of our financial guidance and/or market expectations.”) 42 Table of Contents Results of Operations The following table presents, for the periods indicated, information from our consolidated statements of income expressed as percentages of revenues. ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Revenues 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ Costs and expenses: ​ ​ Food and beverage costs ​ 23.4 24.6 Labor expenses ​ 35.7 36.7 Other operating costs and expenses ​ 26.8 26.7 General and administrative expenses ​ 6.3 6.2 Depreciation and amortization expenses ​ 2.7 2.8 Impairment of assets and lease termination expenses ​ 0.9 1.0 Acquisition-related contingent consideration, compensation and amortization expenses ​ 0.3 ​ 0.4 ​ Preopening costs ​ 0.7 0.4 Total costs and expenses ​ 96.8 98.8 ​ ​ ​ ​ ​ ​ Income from operations ​ 3.2 1.2 Interest and other expense, net ​ (0.3) (0.2) Income before income taxes ​ 2.9 1.0 Income tax benefit ​ (0.0) (0.3) Net income ​ 2.9 % 1.3 % ​ Fiscal 2023 Compared to Fiscal 2022 Revenues Revenues increased 4.1% to $3,439.5 million for fiscal 2023, compared to $3,303.2 million for fiscal 2022, which included approximately $78.4 million contributed by the 53rd week, due to an increase in comparable restaurant sales, as well as additional revenue related to new restaurant openings.
(See Item 1A — Risk Factors — “Our stock price could be adversely affected if our performance falls short of our financial guidance and/or market expectations.”) 41 Table of Contents Results of Operations The following table presents, for the periods indicated, information from our consolidated statements of income expressed as percentages of revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ Revenues 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ Costs and expenses: ​ ​ ​ Food and beverage costs ​ 21.7 ​ 22.5 Labor expenses ​ 35.0 ​ 35.3 Other operating costs and expenses ​ 27.0 ​ 26.7 General and administrative expenses ​ 6.5 ​ 6.4 Depreciation and amortization expenses ​ 2.9 ​ 2.8 Impairment of assets and lease termination expenses ​ 0.6 ​ 0.4 Acquisition-related contingent consideration, compensation and amortization expenses ​ 0.4 ​ 0.1 ​ Preopening costs ​ 0.9 ​ 0.8 Total costs and expenses ​ 95.0 ​ 95.0 ​ ​ ​ ​ ​ ​ Income from operations ​ 5.0 ​ 5.0 Interest expense, net ​ (0.3) ​ (0.3) Loss on extinguishment of debt ​ (0.4) ​ — ​ Other income, net ​ 0.0 ​ 0.1 ​ Income before income taxes ​ 4.3 ​ 4.8 Income tax provision ​ 0.3 ​ 0.4 Net income ​ 4.0 % 4.4 % ​ Fiscal 2025 Compared to Fiscal 2024 Revenues Revenues increased 4.7% to $3,751.8 million for fiscal 2025 compared to $3,581.7 million for fiscal 2024, primarily due to additional revenue related to new restaurant openings.
Our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. In the future, we may incur expenses or generate income similar to the adjusted items.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. In the future, we may incur expenses or generate income similar to the adjusted items.
Accordingly, our lease arrangements reduce, to some extent, our capacity to utilize funded indebtedness in our capital structure. We are not limited to the use of lease arrangements as our only method of opening new restaurants. However, we believe our operating lease arrangements continue to provide appropriate leverage for our capital structure in a financially efficient manner.
Accordingly, our lease arrangements reduce, to some extent, our capacity to utilize funded indebtedness in our capital structure. We are not limited to the use of lease arrangements as our only method of opening new restaurants.
The liability for this contingent consideration provision was $25.5 million at January 2, 2024. See Note 2 in Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for discussion of the fair value measurement for this liability.
See Note 2 in Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for discussion of the fair value measurement for this liability.
Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of the Loan Agreement and applicable law, and other such factors that the Board considers relevant. 48 Table of Contents Share Repurchases On October 26, 2022, our Board increased the authorization to repurchase our common stock by 5.0 million shares to 61.0 million shares.
Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of the Loan Agreement and applicable law, and other such factors that the Board considers relevant.
As of January 2, 2024, we had net availability for borrowings of $236.5 million, based on a $130.0 million outstanding debt balance and $33.5 million in standby letters of credit under the Revolver Facility.
As of December 30, 2025, we had net availability for borrowings of $366.5 million, based on no outstanding debt balance and $33.5 million in standby letters of credit under the Revolver Facility.
Prior to fiscal 2022, we targeted menu price increases of approximately 2% to 3% annually, utilizing a market-based strategy to help mitigate cost pressure in higher-wage geographies.
Prior to fiscal 2022, we targeted menu price increases of approximately 2% to 3% annually, utilizing a market-based strategy to help mitigate cost pressure in higher-wage geographies. In the last three fiscal years, we implemented price increases above our historical levels, to help offset significant inflationary cost pressures.
Our overall revenue growth is primarily driven by revenues from new restaurant openings and increases in comparable restaurant sales. 41 Table of Contents For The Cheesecake Factory concept, our strategy is to increase comparable restaurant sales by growing average check and maintaining customer traffic through (1) continuing to offer innovative, high quality menu items that offer customers a wide range of options in terms of flavor, price and value, (2) focusing on service and hospitality with the goal of delivering an exceptional customer experience and (3) continuing to provide our customers with convenient options for off-premise dining, as we believe there is opportunity for a longer-term elevation of our off-premise mix compared to pre-COVID-19 pandemic levels.
For The Cheesecake Factory concept, our strategy is to increase comparable restaurant sales by growing average check while maintaining customer traffic through (1) continuing to offer innovative, high quality menu items that offer customers a wide range of options in terms of flavor, price and value, (2) focusing on service and hospitality with the goal of delivering an exceptional dining experience and (3) continuing to provide our customers with convenient options for off-premise dining.
We opened 16 restaurants in fiscal 2023 comprised of six The Cheesecake Factory, three North Italia, six Other FRC, and one Flower Child location compared to 13 restaurants in fiscal 2022 comprised of three The Cheesecake Factory, four North Italia, three Other FRC, and three Flower Child locations.
We opened 25 restaurants in fiscal 2025 comprised of four The Cheesecake Factory, six North Italia, nine Other FRC and six Flower Child locations compared to 23 restaurants in fiscal 2024 comprised of three The Cheesecake Factory, six North Italia, eight Other FRC and six Flower Child locations.
Property and Equipment Capital expenditures for new restaurants, including locations under development as of each fiscal year-end, were $98.4 million and $55.1 million for fiscal 2023 and 2022, respectively.
Property and Equipment Capital expenditures for new restaurants, including locations under development as of each fiscal year-end, were $70.5 million and $99.0 million for fiscal 2025 and 2024, respectively.
In fiscal 2023, the fair value of the contingent consideration and compensation liability decreased by $3.1 million due to a payment of $13.0 million per the FRC acquisition agreement, partially offset by $9.9 million increase in the fair value primarily stemming from a change in the volatility factors, as well as an increase in fiscal 2023 revenues and estimated future revenues utilized in the calculation and amortization.
In fiscal 2024, we recorded $4.3 million of amortization, partially offset by a $1.9 million decrease in the fair value of the contingent consideration and compensation liability primarily stemming from a change in the volatility factors, as well as a decrease in estimated fiscal 2025 revenues and future revenues utilized in the calculation.
At January 2, 2024, we were in compliance with all covenants in effect at that date. (See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.) Common Stock Dividends Common stock dividends of $53.2 million and $42.3 million were paid in fiscal 2023 and 2022, respectively.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our debt.) Common Stock Dividends Common stock dividends of $52.2 million and $53.0 million were paid in fiscal 2025 and 2024, respectively.
Other Operating Costs and Expenses Other operating costs and expenses consist of all other restaurant-level operating costs, the major components of which are occupancy expenses (rent, common area expenses, insurance, licenses, taxes and utilities), dining room and to-go supplies, repairs and maintenance, janitorial expenses, credit card processing fees, marketing including delivery commissions, incentive compensation, and bakery production overhead.
For new restaurants, labor expenses are typically higher for a period of time after opening while our management team becomes more accustomed to predicting and managing the sales volumes at the new restaurants. 43 Table of Contents Other Operating Costs and Expenses Other operating costs and expenses consist of all other restaurant-level operating costs, the major components of which are occupancy expenses (rent, common area expenses, insurance, licenses, taxes and utilities), dining room and to-go supplies, repairs and maintenance, janitorial expenses, credit card processing fees, marketing including delivery commissions, incentive compensation, and bakery production overhead.
This contingent consideration and compensation is payable annually from 2022 through 2027 and is based on achievement of revenue and profitability targets for the FRC brands other than North Italia and Flower Child.
The FRC acquisition agreement also included a contingent consideration provision which is payable annually from 2022 through 2027 and is based on achievement of revenue and profitability targets for the FRC brands other than North Italia and Flower Child. The liability for this contingent consideration provision was $24.6 million at December 30, 2025.
The increase from fiscal 2022 was primarily driven by an increase in average check of approximately 5% (based 43 Table of Contents on an increase of 8% in menu pricing, partially offset by a 3% negative impact from mix), as well as increased customer traffic of 3%.
North Italia comparable sales decreased approximately 2% from fiscal 2024. The decrease from fiscal 2024 was primarily driven by decreased customer traffic of 5%, partially offset by an increase in average check of 3% (based on an increase of 4% in menu pricing, partially offset by a 1% negative impact from mix).
(See Note 14 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our repurchase authorization and methods.) Contractual Obligations and Commercial Commitments The following table summarizes our undiscounted contractual obligations and commercial commitments as of January 2, 2024 (amounts in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ Less than ​ ​ ​ ​ More than ​ Total 1 Year 1 ‑ 3 Years 4 ‑ 5 Years 5 Years Contractual obligations ​ ​ ​ ​ ​ Recorded contractual obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating leases liabilities (1) ​ $ 2,079.2 ​ $ 138.5 ​ $ 291.3 ​ $ 292.3 ​ $ 1,357.1 Long-term debt ​ 470.0 ​ — ​ ​ 340.0 ​ ​ 130.0 ​ ​ — Uncertain tax positions (2) ​ 3.8 ​ 0.3 ​ 3.5 ​ — ​ — Unrecorded contractual obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase obligations (3) ​ ​ 101.4 ​ ​ 78.7 ​ ​ 19.9 ​ ​ 2.3 ​ ​ 0.5 Real estate obligations (4) ​ 414.8 ​ 126.0 ​ 43.3 ​ 23.2 ​ 222.3 Total ​ $ 3,069.2 ​ $ 343.5 ​ $ 698.0 ​ $ 447.8 ​ $ 1,579.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other commercial commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Standby letters of credit ​ $ 33.5 ​ $ 33.5 ​ $ — ​ $ — ​ $ — (1) Includes $710.3 million related to options to extend lease terms that are reasonably certain of being exercised.
(See Notes 14 and 19 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our repurchase authorization and methods and increased authorized amount under our share repurchase program, respectively.) Contractual Obligations and Commercial Commitments The following table summarizes our undiscounted contractual obligations and commercial commitments as of December 30, 2025 (amounts in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ More than ​ ​ ​ ​ Total ​ ​ ​ 1 Year ​ ​ ​ 1 ‑ 3 Years ​ ​ ​ 4 ‑ 5 Years ​ ​ ​ 5 Years Contractual obligations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recorded contractual obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities (1) ​ $ 2,291.0 ​ $ 173.1 ​ $ 342.2 ​ $ 299.6 ​ $ 1,476.1 Debt ​ 644.0 ​ ​ 69.0 ​ ​ 575.0 ​ ​ — ​ ​ — Uncertain tax positions (2) ​ 5.0 ​ ​ — ​ ​ 5.0 ​ ​ — ​ ​ — Unrecorded contractual obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase obligations (3) ​ ​ 135.0 ​ ​ 110.0 ​ ​ 24.1 ​ ​ 0.8 ​ ​ 0.1 Real estate obligations (4) ​ 392.9 ​ ​ 85.2 ​ ​ 50.4 ​ ​ 22.9 ​ ​ 234.4 Total ​ $ 3,467.9 ​ $ 437.3 ​ $ 996.7 ​ $ 323.3 ​ $ 1,710.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other commercial commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Standby letters of credit ​ $ 33.5 ​ $ 33.5 ​ $ — ​ $ — ​ $ — (1) Includes $817.4 million related to options to extend lease terms that are reasonably certain of being exercised.
Changes in costs for one commodity sometimes can be offset by cost changes in other commodity categories. The principal commodity categories for our restaurants include general grocery items, dairy, produce, seafood, poultry, meat and bread.
The Cheesecake Factory restaurant menus are among the most diversified in the foodservice industry and, accordingly, are not overly dependent on a few select commodities. Changes in costs for one commodity sometimes can be offset by cost changes in other commodity categories. The principal commodity categories for our restaurants include general grocery items, dairy, produce, seafood, poultry, meat and bread.
We currently own and operate 334 restaurants throughout the United States and Canada under brands including The Cheesecake Factory ® (216 locations), North Italia ® (37 locations), Flower Child ® (32 locations) and additional brands within our FRC portfolio (41 locations). Internationally, 33 The Cheesecake Factory ® restaurants operate under licensing agreements.
As of February 23, 2026, we owned and operated 368 restaurants throughout the United States and Canada under brands including The Cheesecake Factory ® (216 locations), North Italia ® (48 locations), Flower Child ® (43 locations) and additional brands within our FRC portfolio (55 locations). Internationally, 35 The Cheesecake Factory ® restaurants operate under licensing agreements.
At January 2, 2024, the conversion rate for the Notes was 13.4936 shares of common stock per $1,000 principal amount of the Notes, which represents a conversion price of approximately $74.11 per share of common stock.
At December 30, 2025, the conversion rate for the 2026 Notes was 14.1644 shares of common stock per $1,000 principal amount of the 2026 Notes, which represents a conversion price of approximately $70.61 per share of common stock.
We are also required to provide financing to FRC in an amount sufficient to support achievement of these targets during the five years after closing. 49 Table of Contents Cash Flow Outlook We believe that our cash and cash equivalents, combined with expected cash flows provided by operations and available borrowings under the Revolver Facility, will provide us with adequate liquidity for the next 12 months and the foreseeable future.
Cash Flow Outlook We believe that our cash and cash equivalents, combined with expected cash flows provided by operations and available borrowings under the Revolver Facility, will provide us with adequate liquidity for the next 12 months and the foreseeable future.
We calculate these non-GAAP measures by eliminating from net income and diluted net income per common share the impact of items we do not consider indicative of our ongoing operations. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.
We calculate these non-GAAP measures by eliminating from net income, diluted net income per common share and EBITDA the impact of items we do not consider indicative of our ongoing operations. Additionally, EBITDA and adjusted EBITDA exclude the impact of certain non-cash transactions.
We implemented effective menu price increases of approximately 3.5% and 2.0% in the first and third quarters of fiscal 2023, respectively. We are in the process of implementing an approximate 2.5% price increase in the first quarter of fiscal 2024.
We implemented menu price increases of approximately 2.4% and 1.5% in the first and third quarters of fiscal 2025, respectively. We are in the process of implementing an approximate 1.5% menu price increase in the first quarter of fiscal 2026. Sales through the off-premise channel comprised approximately 21% of our restaurant sales during both fiscal 2025 and fiscal 2024.
Our objectives with regard to share repurchases have been to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth.
We repurchased 0.5 million shares at a cost of $18.0 million, excluding excise tax, during fiscal 2024. 48 Table of Contents Our objectives with regard to share repurchases have been to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth.
We plan to continue expanding The Cheesecake Factory and North Italia concepts, and in addition, our FRC subsidiary serves as an incubation engine, innovating new food, dining and hospitality experiences to create fresh, exciting concepts.
We plan to continue expanding The Cheesecake Factory, North Italia and Flower Child concepts. In addition, our FRC subsidiary serves as an incubator, innovating new food, dining and hospitality experiences to create differentiated, high-quality concepts. Our revenue growth is primarily driven by new restaurant openings and increases in comparable restaurant sales.
Overview Our strategy is driven by our commitment to customer satisfaction and is focused primarily on menu innovation, service and operational execution to continue to differentiate ourselves from other restaurant concepts, as well as to drive competitively strong performance that is sustainable.
Overview Our strategy is driven by our commitment to deliver exceptional food and hospitality, and is centered primarily on menu innovation, service and operational execution to differentiate our concepts and drive competitively strong performance that is sustainable over the long-term.
Impairment of Assets and Lease Termination Expenses During fiscal 2023, we recorded impairment of assets and lease termination expenses of $29.5 million primarily related to the impairment of long-lived assets for three The Cheesecake Factory (one previously partially impaired), one North Italia (previously partially impaired), one Other FRC and two Other restaurant lease terminations.
Impairment of Assets and Lease Termination Expenses During fiscal 2025, we recorded $23.0 million of expense primarily related to the impairment of long-lived assets for one North Italia, one Grand Lux Cafe and four Other FRC locations (one previously partially impaired) and lease termination expense, net related to two Grand Lux Cafes (one that closed in fiscal 2023 and one that closed in early 2026) and one Other FRC (that closed in early 2026).
Preopening costs can fluctuate significantly from period to period based on the number, mix and timing of restaurant openings and the specific preopening costs incurred for each restaurant. The increase in preopening cost from fiscal 2022 primarily relates to a higher number of openings and the mix of new restaurant openings.
Preopening costs can fluctuate significantly from period to period based on the number, mix and timing of restaurant openings and the specific preopening costs incurred for each restaurant. 44 Table of Contents Loss on Extinguishment of Debt In fiscal 2025, we recorded a $15.9 million loss on early debt extinguishment.
As of January 2, 2024, we had no financing transactions, arrangements or other relationships with any unconsolidated entities or related parties. Additionally, we had no financing arrangements involving synthetic leases or trading activities involving commodity contracts.
As of December 30, 2025, we had no financing transactions, arrangements or other relationships with any unconsolidated entities or related parties.
We implemented effective menu price increases of approximately 4.0% and 3.7% in the second and fourth quarters of fiscal 2023, respectively. Flower Child sales per restaurant operating week increased 6.5% to $79,714 in fiscal 2023 from $74,852 in fiscal 2022. Total operating weeks at Flower Child increased 4.2% to 1,599 in fiscal 2023 compared to 1,534 in the prior year.
We implemented menu price increases of approximately 2.0% and 1.5% in the second and fourth quarters of fiscal 2025, respectively. Flower Child sales increased 27.8% to $185.3 million for fiscal 2025 compared to $145.0 million for fiscal 2024. Flower Child sales per restaurant operating week increased 4.0% to $87,684 in fiscal 2025 from $84,351 in fiscal 2024.
Labor Expenses As a percentage of revenues, labor expenses, which include restaurant-level labor costs and bakery production labor, including associated fringe benefits, were 35.7% and 36.7% in fiscal 2023 and fiscal 2022, respectively. This decrease was primarily due to menu price increases in excess of wage rate inflation and improved staffing levels (1.0%).
Labor Expenses As a percentage of revenues, labor expenses, which include restaurant-level labor costs and bakery production labor, including associated fringe benefits, were 35.0% and 35.3% in fiscal 2025 and fiscal 2024, respectively.
Critical Accounting Estimates Critical accounting policies are those we believe are most important to portraying our financial condition and results of operations and also require the greatest amount of subjective or complex judgments by management. Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions.
Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. We consider the following policies to be the most critical in understanding the judgment that is involved in preparing our consolidated financial statements.
In addition, on a regular basis, we carefully consider opportunities to adjust our menu offerings or ingredients to help manage product availability and cost. Margins are subject to fluctuations in commodity costs, labor, restaurant-level occupancy expenses, general and administrative (“G&A”) expenses and preopening expenses.
Margins are subject to fluctuations in commodity costs, labor, restaurant-level occupancy expenses, general and administrative (“G&A”) expenses and preopening expenses.
As a percentage of revenues, other operating costs and expenses were 26.8% and 26.7% in fiscal 2023 and fiscal 2022, respectively.
As a percentage of revenues, other operating costs and expenses were 27.0% and 26.7% in fiscal 2025 and fiscal 2024, respectively. This variance was primarily driven by higher facility-related costs (0.2%).
We also encountered delays in opening new restaurants primarily due to delays in permitting and landlord readiness, as well as supply chain challenges. The ongoing impact of geopolitical and macroeconomic events could lead to further shifts in consumer behavior, wage inflation, staffing challenges, product and services cost inflation, disruptions in the supply chain and delay in new restaurant openings.
The impact of ongoing geopolitical and macroeconomic events, including evolving government policies and global trade and tariff dynamics, could lead to further wage inflation, product and services cost inflation, disruptions in the supply chain, staffing challenges, shifts in consumer behavior, and delays in new restaurant openings. Adverse weather conditions and natural disasters may further exacerbate a number of these factors.
Along with the COVID-19 pandemic, our operating results were impacted by geopolitical and macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation. Some of these factors continued to impact our operating results in fiscal 2023, contributing to significantly increased commodity and other costs.
Geopolitical and Other Macroeconomic Impacts to our Operating Environment In recent years, our operating results were impacted by geopolitical and macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation. Our commodity and wage inflationary environment began returning to more historical levels in fiscal 2024.
Convertible Senior Notes On June 15, 2021, we issued $345.0 million in aggregate principal amount of convertible senior notes (“Notes”), which will mature on June 15, 2026, unless earlier repurchased, redeemed or converted. The net proceeds from the sale of the Notes were approximately $334.9 million after deducting issuance costs related to the Notes.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our debt.) 2026 Convertible Senior Notes On June 15, 2021, we issued $345.0 million in aggregate principal amount of convertible senior notes (“2026 Notes”), which will mature on June 15, 2026, unless earlier repurchased, redeemed or converted.
These fair value assessments could change materially if different estimates and assumptions were used. 50 Table of Contents We did not record any impairment charges related to indefinite-lived intangible assets in fiscal 2023, 2022 or 2021.
We did not record any impairment charges related to indefinite-lived intangible assets in fiscal 2025, 2024 or 2023.
Excluding the impact of the 53rd week in fiscal 2022, total sales increased 13.1% compared to $112.7 million in the prior year. Other FRC average sales per restaurant operating week decreased 2.0% to $138,469 in fiscal 2023 from $141,316 in fiscal 2022. Average sales per restaurant operating week are impacted by new restaurant openings as well as the concept mix.
Average sales per restaurant operating week are impacted by new restaurant openings as well as the concept mix and a decrease in comparable sales. Total operating weeks at Other FRC increased 18.2% to 2,675 in fiscal 2025 compared to 2,264 in the prior year. Restaurants become eligible to enter the comparable sales base in their 19 th month of operation.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of the Notes.) Credit Facility On October 6, 2022, we entered into a Fourth Amended and Restated Loan Agreement (the “Loan Agreement” and the revolving credit facility provided thereunder, the “Revolver Facility”).
This estimate includes new restaurant construction expenses, some of which may be classified as operating lease assets instead of additions to property and equipment in the statement of cash flows. Credit Facility On October 6, 2022, we entered into a Fourth Amended and Restated Loan Agreement (the “Loan Agreement” and the revolving credit facility provided thereunder, the “Revolver Facility”).
During fiscal 2023, the fair value of the contingent consideration and compensation liability decreased by $3.1 million to $25.5 million due to a payment of $13.0 million per the FRC acquisition agreement, partially offset by $9.9 million increase in the fair value primarily stemming from a change in the volatility factors, as well as an increase in fiscal 2023 revenues and estimated future revenues utilized in the calculation, and amortization.
In fiscal 2025, we recorded a $10.5 million increase in the fair value of the contingent consideration and compensation liability primarily stemming from updating the probability of achievement due to passage of time as well as recent performance and $3.9 million of amortization.
This variance was primarily driven by higher marketing costs, including launch costs related to our Cheesecake Rewards TM program (0.3%), partially offset by a decrease in off-premise costs due to sales mix (0.2%). 44 Table of Contents G&A Expenses G&A expenses consist of the restaurant management recruiting and training program, restaurant field supervision, corporate support and bakery administrative organizations, as well as gift card commissions to third-party distributors.
G&A Expenses G&A expenses consist of the restaurant management recruiting and training program, restaurant field supervision, corporate support and bakery administrative organizations, as well as gift card commissions to third-party distributors. As a percentage of revenues, G&A expenses were 6.5% and 6.4% for fiscal 2025 and fiscal 2024, respectively.
Preopening Costs Preopening costs were $25.4 million for fiscal 2023 compared to $16.8 million for fiscal 2022.
Preopening Costs Preopening costs were $33.1 million for fiscal 2025 compared to $27.5 million for fiscal 2024.
North Italia average sales per restaurant operating week increased 5.0% to $149,727 in fiscal 2023 from $142,532 in fiscal 2022. Total operating weeks at North Italia increased 7.8% to 1,729 in fiscal 2023 compared to 1,604 in the prior year.
North Italia average sales per restaurant operating week decreased 0.9% to $146,877 in fiscal 2025 from $148,231 in fiscal 2024. Average sales per restaurant operating week were impacted by the acceleration of new restaurant openings that have not matured. Total operating weeks at North Italia increased 16.5% to 2,355 in fiscal 2025 compared to 2,021 in the prior year.
During fiscal 2022, we recorded impairment of assets and lease terminations expense of $31.4 million primarily related to the impairment of long-lived assets for three The Cheesecake Factory, one Other FRC and three Other restaurants that are primarily located in areas which have not fully recovered from the pandemic.
During fiscal 2024, we recorded impairment of assets and lease terminations expense of $13.6 million primarily related to impairment of long-lived assets for one The Cheesecake Factory (previously partially impaired) and six Other FRC locations (one previously partially impaired), partially offset by lease termination income, net for four The Cheesecake Factory restaurants (including two relocations), one Grand Lux Cafe location, one Flower Child location, one Social Monk location and one Other FRC location (that closed in early fiscal 2025).
These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as changes in economic conditions and operating performance.
These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as changes in economic conditions and operating performance. 50 Table of Contents In fiscal 2025, we recorded $23.0 million of expense primarily related to the impairment of long-lived assets for one North Italia, one Grand Lux Cafe and four Other FRC locations (one previously partially impaired) and lease termination related to two Grand Lux Cafes (one that closed in fiscal 2023 and one that closed in early 2026) and one Other FRC (that closed in early 2026).
In fiscal 2022, we recorded $31.4 million of expense primarily related to the impairment of three The Cheesecake Factory, one Other FRC and three Other restaurants. In fiscal 2021, we recorded $16.3 million of expense primarily related to the impairment of long-lived assets for three The Cheesecake Factory and two Other restaurants.
In fiscal 2024, we recorded impairment of assets and lease termination expenses of $13.6 million primarily related to impairment of long-lived assets for one The Cheesecake Factory (previously partially impaired) and six Other FRC locations (one previously partially impaired) and lease termination income, net for four The Cheesecake Factory restaurants, one Grand Lux Cafe location, one Flower Child location, one Social Monk location and one Other FRC location (that closed in early fiscal 2025).
Excluding the impact of the 53rd week in fiscal 2022, total operating weeks increased 1.6% compared to 10,841 in the prior year. The Cheesecake Factory comparable sales increased by 3.0%, or $73.6 million, from fiscal 2022 and increased 13.9% from fiscal 2019 on an operating week basis.
Total operating weeks at The Cheesecake Factory restaurants remained relatively flat with 11,218 in fiscal 2025 and 11,214 in the comparable prior year period. The Cheesecake Factory comparable sales increased by 0.1%, or $2.2 million, from fiscal 2024.
Capital expenditures also included $47.8 million and $51.8 million for our existing restaurants and $5.4 million and $5.6 million for bakery and corporate capacity and infrastructure investments in fiscal 2023 and 2022, respectively. 47 Table of Contents We opened 16 restaurants in fiscal 2023 comprised of six The Cheesecake Factory, three North Italia, six Other FRC and one Flower Child location compared to 13 restaurants in fiscal 2022 comprised of three The Cheesecake Factory, four North Italia, three Other FRC and three Flower Child locations.
We opened 25 restaurants in fiscal 2025 comprised of four The Cheesecake Factory, six North Italia, nine Other FRC, and six Flower Child locations compared to 23 restaurants in fiscal 2024 comprised of three The Cheesecake Factory (including two relocations), six North Italia, eight Other FRC, and six Flower Child locations.
Under this authorization, we have cumulatively repurchased 56.5 million shares at a total cost of $1,811.7 million, excluding excise tax through January 2, 2024. We repurchased 1.4 million shares at a cost of $46.1 million, excluding excise tax during fiscal 2023 compared to 2.0 million shares at a cost of $63.1 million fiscal 2022.
Share Repurchases Under authorization by our Board to repurchase up to 61.0 million shares of our common stock, we have cumulatively repurchased 59.9 million shares at a total cost of $1,983.6 million, excluding excise tax through December 30, 2025.
Therefore, average check is generally higher for off-premise orders as most of these orders are for more than one customer. In turn, the lower mix of sales in the off-premise channel during fiscal 2023 compared to fiscal 2022 comprised approximately 1% of the negative change in mix with a positive correlative impact to traffic.
We account for each off-premise order as one customer for traffic measurement purposes. Therefore, average check is generally higher for off-premise orders as most of these orders are for more than one customer. 42 Table of Contents North Italia sales increased 15.5% to $345.9 million for fiscal 2025 compared to $299.6 million for fiscal 2024.
Excluding the impact of the 53rd week in fiscal 2022, total operating weeks increased 10.1% compared to 1,571 in the prior year. North Italia comparable sales increased approximately 8% from fiscal 2022 and increased approximately 31% compared to fiscal 2019 on an operating week basis.
Total operating weeks at Flower Child increased 22.9% to 2,113 in fiscal 2025 compared to 1,719 in the prior year. Flower Child comparable sales increased approximately 5% from fiscal 2024. The increase from fiscal 2024 includes an increase of 3% in menu pricing.
On October 6, 2022, we repaid the outstanding balance under the prior credit facility and borrowed the same amount on the Revolver Facility. In November 2023, we borrowed $15.0 million on the Revolver Facility and repaid it in December 2023.
In the fourth quarter of fiscal 2023, we borrowed and then repaid $15.0 million on the Revolver Facility. In the fourth quarter of fiscal 2024, we repaid $20.0 million on the Revolver Facility. In the first quarter of fiscal 2025, we repaid $110.0 million on the Revolver Facility.
Removed
Geopolitical and Other Macroeconomic Impacts to our Operating Environment During fiscal 2021 and 2022, the COVID-19 pandemic continued to affect our business during periods of accelerated case counts in which we experienced increased restaurant staff absenteeism and temporary shifts in consumer behavior, such as changes in customer traffic or the mix between on-premise and off-premise channels.
Added
We will continue to take the cost and inflationary environment into consideration when implementing future pricing decisions. In addition, on a regular basis, we carefully consider opportunities to adjust our menu offerings or ingredients to help manage product availability and cost.
Removed
In fiscal years 2022 and 2023, we implemented menu price increases above our historical levels, including an incremental price increase in the fourth quarter of fiscal 2022, to help offset significant inflationary cost pressures. Current and future near-term pricing actions may also be at levels above historical norms to keep pace with any significant cost increases.
Added
As part of our annual assessment of gift card breakage during fiscal 2025, we had a change in historical redemption pattern related to gift cards and aligned the recognition of gift card breakage to the updated estimated redemption pattern. As a result, in fiscal 2025, we recognized $17.3 million of additional gift card breakage.
Removed
The Cheesecake Factory average sales per restaurant operating week increased 3.0% to $235,701 in fiscal 2023 from $228,741 in fiscal 2022. Total operating weeks at The Cheesecake Factory restaurants decreased 0.4% to 11,010 in fiscal 2023 compared to 11,052 in the comparable prior year period.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+2 added−1 removed5 unchanged
Biggest changeThis exposure relates to the component of the interest rate on the Loan Agreement that is indexed to market rates. Based on outstanding borrowings at January 2, 2024 and January 3, 2023, a hypothetical 1% rise in interest rates would have increased interest expense by $1.3 million on an annual basis.
Biggest changeBased on outstanding borrowings at December 31, 2024, a hypothetical 1% rise in interest rates would have increased interest expense by $1.1 million on an annual basis.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following discussion of market risks contains forward-looking statements and should be read in conjunction with our consolidated financial statements and related notes in Part IV, Item 15 of this report, the “Risk Factors” in Part I, Item 1A of this report, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations”in Part II, Item 7 of this report and the cautionary statements included throughout this report.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following discussion of market risks contains forward-looking statements and should be read in conjunction with our consolidated financial statements and related notes in Part IV, Item 15 of this report, the “Risk Factors” in Part I, Item 1A of this report, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report and the cautionary statements included throughout this report.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.) We are also subject to market risk related to our investments in variable life insurance contracts used to support our Non-Qualified Plans to the extent these investments are not equivalent to the related liability.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our debt.) We are also subject to market risk related to our investments in variable life insurance contracts used to support our Non-Qualified Plans to the extent these investments are not equivalent to the related liability.
We continue to evaluate the possibility of entering into similar arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing risk and variability associated with such commodities. As of the end of fiscal 2023, we had no hedging contracts in place.
We continue to evaluate the possibility of entering into similar arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing risk and variability associated with such commodities. As of the end of fiscal 2025, we had no hedging contracts in place.
The cost of products and services used in our operations is subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as geopolitical events, economic conditions or other unforeseen circumstances. Climate change may further exacerbate a number of these factors.
The cost of products and services used in our operations is subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as geopolitical events, economic conditions or other unforeseen circumstances. Adverse weather and natural disasters may further exacerbate a number of these factors.
While we are in the process of contracting for certain key food and non-food supplies for fiscal 2024, these efforts may not be successful or yield our intended benefits.
While we are in the process of contracting for certain key food and non-food supplies for fiscal 2026, these efforts may not be successful or yield our intended benefits.
However, under such scenario, net income would have declined by $2.4 million and $2.0 million at January 2, 2024 and January 3, 2023, respectively. ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements required to be filed hereunder are set forth in Part IV, Item 15 of this report. ​ ITEM 9.
However, under such scenario, net income would have declined by $3.2 million and $2.9 million at December 30, 2025 and December 31, 2024, respectively. ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements required to be filed hereunder are set forth in Part IV, Item 15 of this report. ​ ITEM 9.
We may not have the ability to increase menu prices or vary menu items in response to food commodity price increases. For fiscal 2023 and 2022, a hypothetical increase of 1% in food costs would have negatively impacted food and beverage costs by $8.0 million and $8.1 million, respectively.
We may not have the ability to increase menu prices or vary menu items in response to food commodity price increases. For both fiscal 2025 and 2024, a hypothetical increase of 1% in food costs would have negatively impacted food and beverage costs by $8.1 million.
Based on balances at January 2, 2024 and January 3, 2023, a hypothetical 10% decline in the market value of our deferred compensation asset and related liability would not have impacted income before income taxes.
Based on balances at December 30, 2025 and December 31, 2024, a hypothetical 10% decline in the market value of our deferred compensation asset and related liability would not have impacted income before income taxes.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 52 Table of Contents
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
While we have seen improvements in many of these areas, the absolute level of commodity costs has remained elevated. We attempt to negotiate short-term and long-term agreements for some of our principal commodity, supply and equipment requirements, such as certain dairy products and poultry, depending on market conditions and expected demand.
Our commodity and wage inflationary environment began returning to more historical levels in fiscal 2024. 51 Table of Contents We attempt to negotiate short-term and long-term agreements for some of our principal commodity, supply and equipment requirements, such as certain dairy products and poultry, depending on market conditions and expected demand.
Removed
During fiscal 2021, we began to experience certain supply shortages and transportation delays largely attributable to impacts of the COVID-19 pandemic. These shortages continued in fiscal 2022 and were exacerbated by geopolitical unrest and macroeconomic events. The aggregate impact of these and other factors contributed to significant cost inflation.
Added
In recent years, our operating results were impacted by geopolitical and macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation.
Added
This exposure relates to the component of the interest rate on the Revolver Facility that is indexed to market rates. As of December 30, 2025, we had no outstanding borrowings under the Revolver Facility.

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