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What changed in Wingstop Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Wingstop Inc.'s 2023 and 2024 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 2024 report.

+186 added−186 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in Wingstop Inc.'s 2024 10-K

186 paragraphs added · 186 removed · 153 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn fiscal year 2023, more than 100 community organizations received grant 9 funding totaling over $1.3 million from Wingstop Charities, including our first national partnership with No Kid Hungry. Since its inception, Wingstop Charities has awarded over 300 grants and contributed more than $3 million across three key programs: Community Grants, Team Member Assistance, and the Morrison Family Scholarship Program.
Biggest changeSince its inception, Wingstop Charities has awarded more than 300 grants and contributed more than $6 million across three key programs: Community Grants, Team Member Assistance, and the Morrison Family Scholarship Program. To learn more about how Wingstop Charities is making an impact in our local communities, visit www.wingstopcharities.org.
Under our current standard franchise agreement, each franchisee is required to pay us a royalty of 6% of their gross sales net of discounts. Each restaurant also contributes 5% of gross sales net of discounts to the Ad Fund to fund national marketing and advertising campaigns.
Under our current standard franchise agreement, each franchisee is required to pay us a royalty of 6% of their gross sales net of discounts. Each restaurant also contributes 5.3% of gross sales net of discounts to the Ad Fund to fund national marketing and advertising campaigns.
The national advertising program supports elevated marketing spend and premium placements through an extensive range of social media and digital marketing channels, including search engine, digital video, and social media advertising, to allow us to target core customers and create top of mind consideration with relevant, impactful messaging. 5 The national advertising program also supports our digital initiatives and related strategies, including our focused investments in customer relationship management (“CRM”) and our digital platform, which allows us to deploy a digital platform-based marketing strategy.
The national advertising program supports elevated marketing spend and premium placements through an extensive range of social media and digital marketing channels, including search engine, digital video, and social media advertising, to allow us to target core customers and create top of mind consideration with relevant, impactful messaging. 5 The national advertising program also supports our digital initiatives and related strategies, including our focused investments in customer relationship management and our proprietary digital platform, which allows us to deploy a digital platform-based marketing strategy.
Since 2015, Wingstop Inc.’s common stock has traded on the Nasdaq Global Select Market under the symbol “WING.” We are dedicated to serving the world flavor through an unparalleled guest experience and offering of classic wings, boneless wings, tenders, and chicken sandwiches, always cooked to order, and hand-sauced-and-tossed in 11 bold, distinctive flavors.
Since 2015, Wingstop Inc.’s common stock has traded on the Nasdaq Global Select Market under the symbol “WING.” We are dedicated to serving the world flavor through an unparalleled guest experience and offering of classic wings, boneless wings, tenders, and chicken sandwiches, always cooked to order, and hand-sauced-and-tossed in 12 bold, distinctive flavors.
Our domestic operating model provides for a low average initial investment of approximately $480,000, excluding real estate purchase or lease costs and pre-opening expenses. In year two of operation of a new restaurant, we target a franchisee unlevered cash-on-cash return of approximately 70%+.
Our domestic operating model provides for a low average initial investment of approximately $535,000, excluding real estate purchase or lease costs and pre-opening expenses. In year two of operation of a new restaurant, we target a franchisee unlevered cash-on-cash return of approximately 70%+.
We never use heat lamps or microwaves in the preparation of our food. Our 11 flavor offerings, along with limited time offerings of special flavors, create a differentiated experience that drives demand across multiple day parts and occasions.
We never use heat lamps or microwaves in the preparation of our food. Our 12 flavor offerings, along with limited time offerings of special flavors, create a differentiated experience that drives demand across multiple day parts and occasions.
All food items and packaging goods for Wingstop restaurants in the U.S. are currently supplied through one distributor. Currently, there are 17 geographically diverse distribution centers, which carry all products required for a Wingstop restaurant and service all of Wingstop’s domestic restaurants.
All food items and packaging goods for Wingstop restaurants in the U.S. are currently supplied through one distributor. Currently, there are 21 geographically diverse distribution centers, which carry all products required for a Wingstop restaurant and service all of Wingstop’s domestic restaurants.
Our Vision Our vision is to become a Top 10 Global Restaurant Brand. Based on our internal analysis, we believe there is opportunity for our brand to grow to more than 4,000 restaurants across the United States and to more than 3,000 restaurants internationally.
Our Vision Our vision is to become a Top 10 Global Restaurant Brand. Based on our internal analysis, we believe there is opportunity for our brand to grow to more than 6,000 restaurants across the United States and to more than 4,000 restaurants internationally.
However, increased focus on environmental matters by legislative, governmental or other authorities may lead to new regulatory initiatives, particularly in the area of climate change. We cannot predict the effect of possible future environmental legislation or regulations (including those related to climate change). During the 2023 fiscal year, we had no material environmental compliance-related capital expenditures.
However, increased focus on environmental matters by legislative, governmental or other authorities may lead to new regulatory initiatives, particularly in the area of climate 9 change. We cannot predict the effect of possible future environmental legislation or regulations (including those related to climate change). During the 2024 fiscal year, we had no material environmental compliance-related capital expenditures.
Domestic franchisees are required to contribute 5% of gross sales to the Ad Fund.
Domestic franchisees are required to contribute 5.3% of gross sales to the Ad Fund.
Existing franchisees accounted for more than 90% of franchised restaurants opened in each of 2022 and 2023, which we believe further underscores our restaurant model’s financial appeal. Upon the opening of a new restaurant, its sales volume generally builds year after year. Our domestic average unit volume (“AUV”) has grown consistently, approximating $1.8 million during fiscal year 2023.
Existing franchisees accounted for more than 90% of franchised restaurants opened in each of 2023 and 2024, which we believe further underscores our restaurant model’s financial appeal. Upon the opening of a new restaurant, its sales volume generally builds year after year. Our domestic average unit volume (“AUV”) has grown consistently, approximating $2.1 million during fiscal year 2024.
We have an online ordering platform and mobile ordering applications that integrate with third party delivery providers and our POS system, which makes it easy for our guests to order-ahead, and which we believe leads to higher check averages.
We have a proprietary online ordering platform and mobile ordering applications that integrate with third party delivery providers and our POS system, which makes it easy for our guests to order-ahead, and which we believe leads to higher check averages.
Our domestic market expansion strategy focuses on maximizing our brand market share and visibility in key priority markets. We have a robust development pipeline with approximately 90% of our domestic commitments as of December 30, 2023 from existing franchisees, supporting the strength of our restaurant business model and our positive franchisor-franchisee relationships.
Our domestic market expansion strategy focuses on maximizing our brand market share and visibility in key priority markets. We have a robust development pipeline with approximately 90% of our domestic commitments as of December 28, 2024 from existing franchisees, supporting the strength of our restaurant business model and our positive franchisor-franchisee relationships.
Item 1. Business Throughout this report, unless the context indicates otherwise, Wingstop Inc. (NASDAQ: WING) and its consolidated subsidiaries are referred to as the “Company,” “Wingstop,” or in the first-person notations of “we,” “us,” and “our.” General Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world, with over 2,200 locations worldwide.
Item 1. Business Throughout this report, unless the context indicates otherwise, Wingstop Inc. (NASDAQ: WING) and its consolidated subsidiaries are referred to as the “Company,” “Wingstop,” or in the first-person notations of “we,” “us,” and “our.” General Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world, with more than 2,550 locations worldwide.
Beginning the second fiscal quarter 2024, the advertising fund contribution rate will increase to 5.3% to support digital and technology-related costs. International Franchise Agreements Our markets outside of the United States are operated by master franchisees with franchise and distribution rights for entire regions or countries.
Beginning the fiscal first quarter of 2025, the advertising fund contribution rate will increase to 5.5% to support digital and technology-related costs. International Franchise Agreements Our markets outside of the United States are operated by master franchisees with franchise and distribution rights for entire regions or countries.
Examples of some of our recent efforts and metrics include: • diversity and inclusion education training was offered to team members throughout the year; • 60% of our franchisees and 56% of our board of directors identify as diverse; • 85% of our team members identify as diverse; and • we are a member of the Women’s Foodservice Forum and the Multicultural Foodservice & Hospitality Alliance Group.
Examples of some of our recent efforts and metrics include: • diversity and inclusion education training was offered to team members throughout the year; • 65% of our franchisees and 50% of our board of directors identify as diverse; • 90% of our team members identify as diverse; and • we are a member of the Women’s Foodservice Forum and the Multicultural Foodservice & Hospitality Alliance Group.
We require our franchisees’ electronic information systems, including POS systems, to comply with and be maintained in accordance with established network security standards, including applicable Payment Card Industry and data privacy standards. Human Capital Resources As of December 30, 2023, we employed 1,225 employees, affectionately referred to as “team members,” of whom 271 were full-time corporate-based and regional personnel.
We require our franchisees’ electronic information systems, including POS systems, to comply with and be maintained in accordance with established network security standards, including applicable Payment Card Industry and data privacy standards. Human Capital Resources As of December 28, 2024, we employed 1,335 employees, affectionately referred to as “team members,” of whom 325 were full-time corporate-based and regional personnel.
Therefore, chicken is our largest product cost item and represented approximately 53.3% of all purchases for the 2023 fiscal year. Company-owned and franchised restaurants purchase their bone-in and boneless chicken wings, chicken tenders, and chicken fillets from suppliers that we designate and approve.
Therefore, chicken is our largest product cost item and represented approximately 57.6% of all purchases for the 2024 fiscal year. Company-owned and franchised restaurants purchase their bone-in and boneless chicken wings, chicken tenders, and chicken fillets from suppliers that we designate and approve.
Our Franchise Franchise Overview Our franchisees operated a total of 2,165 restaurants in 45 states and 11 countries and U.S. territories as of December 30, 2023. We have rigorous qualification criteria and training programs for our franchisees and require them to adhere to strict operating standards.
Our Franchise Franchise Overview Our franchisees operated a total of 2,513 restaurants in 45 states and 12 countries and U.S. territories as of December 28, 2024. We have rigorous qualification criteria and training programs for our franchisees and require them to adhere to strict operating standards.
As of December 30, 2023, our domestic franchise base of 216 franchisees had an average restaurant ownership of approximately nine restaurants per franchisee and an average tenure of fourteen years. U.S. Franchise Agreements We enter into area development agreements with U.S. franchisees, pursuant to which they are granted the right to develop restaurants in a defined market area.
As of December 28, 2024, our domestic franchise base of 196 franchisees had an average restaurant ownership of approximately eleven restaurants per franchisee and an average tenure of ten years. U.S. Franchise Agreements We enter into area development agreements with U.S. franchisees, pursuant to which they are granted the right to develop restaurants in a defined market area.
We also believe that there is a significant opportunity to grow our business internationally. In fiscal year 2023, we opened 50 net new international restaurants, and as of December 30, 2023, we had 288 international restaurants located in 10 countries and U.S. territories, all of which were franchised.
We also believe that there is a significant opportunity to grow our business internationally. In fiscal year 2024, we opened 71 net new international restaurants, and as of December 28, 2024, we had 359 international restaurants located in 11 countries and U.S. territories, all of which were franchised.
The national advertising fund contribution rate increased to 5% from 4% effective the first day of the fiscal second quarter 2022. These funds are managed by the Ad Fund and are primarily used to create advertising content and purchase digital and television advertising on a national level.
The national advertising fund contribution rate increased to 5.3% from 5%, effective the first day of the fiscal second quarter 2024. These funds are managed by the Ad Fund and are primarily used to create advertising content and purchase digital and television advertising on a national level, as well as to support digital and technology-related costs.
In addition to seeking to acquire new talent in the marketplace that share our values and goals, we recognize and support the growth and development of our team members and offer opportunities to participate in regular talent and development planning reviews to assist us with growing our internal restaurant teams. 8 Government Regulation We and our franchisees are subject to various federal regulations affecting the operation of our business.
In addition to seeking to acquire new talent in the marketplace that share our values and goals, we recognize and support the growth and development of our team members 8 and offer opportunities to participate in regular talent and development planning reviews to assist us with growing our internal restaurant teams.
The foundation of this approach is our culture, which we define as The Wingstop Way, our investment in people as a competitive advantage necessary to continue to scale our organization for the next phase of growth, and our cultivation of a global mindset. The Wingstop Way includes core values centered around being Authentic, Entrepreneurial, Service-minded, and Fun.
The foundation of this approach is our culture, which we define as The Wingstop Way, our investment in people as a competitive advantage necessary to continue to scale our organization for the next phase of growth, and our cultivation of a global mindset.
We and our franchisees are subject to the U.S. Fair Labor Standards Act, the U.S. Immigration Reform and Control Act of 1986, the Occupational Safety and Health Act, and various other federal and state laws governing matters such as minimum wage requirements, overtime, fringe benefits, workplace safety and other working conditions and citizenship requirements.
Immigration Reform and Control Act of 1986, the Occupational Safety and Health Act, and various other federal and state laws governing matters such as minimum wage requirements, overtime, fringe benefits, workplace safety and other working conditions and citizenship requirements.
The distributor is contractually obligated to deliver products to our restaurants at least twice weekly, and provides consolidated deliveries with a tightly controlled and monitored cold chain for perishable items.
The distributor is contractually obligated to deliver products to our restaurants at least twice weekly, and provides consolidated deliveries with a tightly controlled and monitored cold chain for 7 perishable items. The distributor’s national distribution system has a documented recovery plan to handle any disruption.
The Wingstop Way extends to the brand’s environmental, social and governance platform as Wingstop seeks to provide value to all guests. Sustaining Long-Term Same Store Sales Growth We believe in sustaining long-term same store sales growth through a combination of brand awareness, menu innovation, delivery, data-driven marketing and maximizing our digital leadership position.
Sustaining Long-Term Same Store Sales Growth We believe in sustaining long-term same store sales growth through a combination of brand awareness, menu innovation, delivery, data-driven marketing and maximizing our digital leadership position.
Wingstop has also negotiated agreements with its beverage suppliers to offer beverage dispensing systems, along with associated branded products, in all Wingstop restaurants. Information / Technology Systems We have core information systems in place that, together with focused investments we are making in technology (including our digital platform), we believe are designed to scale and support our future growth plans.
Information / Technology Systems We have core information systems in place that, together with focused investments we are making in technology (including our proprietary digital platform), we believe are designed to scale and support our future growth plans.
The distributor’s national distribution system has a documented recovery plan to handle any disruption. 7 Wingstop contracts directly with manufacturers to sell products to the distributor, who in turn receives a fee for delivering these items to our restaurants. The majority of Wingstop’s highest-spend items are formula or fixed-contract priced.
Wingstop contracts directly with manufacturers to sell products to the distributor, who in turn receives a fee for delivering these items to our restaurants. The majority of Wingstop’s highest-spend items are formula or fixed-contract priced. Wingstop has also negotiated agreements with its beverage suppliers to offer beverage dispensing systems, along with associated branded products, in all Wingstop restaurants.
Removed
Community Involvement In 2016, we created Wingstop Charities, a non-profit organization dedicated to enhancing and elevating the community work of our franchisees to make a difference in the communities we serve. We are committed to strengthening those communities through the Wingstop Charities Community Grant Program, which supports nonprofit organizations focused on education, sports, entrepreneurship, the environment, and food.
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Government Regulation We and our franchisees are subject to various federal regulations affecting the operation of our business. We and our franchisees are subject to the U.S. Fair Labor Standards Act, the U.S.
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To learn more about how Wingstop Charities is making an impact in our local communities, visit www.wingstopcharities.org.
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Community Involvement Wingstop Charities, a non-profit organization, is committed to strengthening the communities that we serve by being strong, active, corporate citizens, and good neighbors. We’ve expanded our reach and impact by forming partnerships with No Kid Hungry, St.
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Jude Children’s Research Hospital, and the American Red Cross, funded by the growth of our Round Up Program, which allows our guests to contribute to the great work of these organizations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur information technology systems include the use of electronic payment methods and the collection and storage of personal information from individuals, which may expose us and our franchisees to increased risk of cyber incidents, privacy and/or security breaches or intrusions, and other risks.
Biggest changeAdditionally, the data integration and complexity of our technology systems have increased, particularly in our international markets and our information technology systems include the use of electronic payment methods and the collection and storage of personal information from individuals.
The costs to us to eliminate any of the foregoing cybersecurity vulnerabilities or to address a cyber incident could be significant and have material adverse impact on our business, financial condition, and results of operations.
The costs to us to eliminate any of the foregoing cybersecurity vulnerabilities or to address a cyber incident could be significant and have a material adverse impact on our business, financial condition, and results of operations.
If we are unable to recruit, retain and motivate employees sufficiently to maintain our current business and support our projected growth, our business, financial condition, and operating results may be adversely affected. 22 Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand.
If we are unable to recruit, 22 retain and motivate employees sufficiently to maintain our current business and support our projected growth, our business, financial condition, and operating results may be adversely affected. Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, up to 15,000,000 shares of undesignated preferred stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only upon the request of a majority of our board of directors or by the chairman of the board of directors; 24 • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving staggered three-year terms; and • prohibit cumulative voting in the election of directors.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, up to 15,000,000 shares of undesignated preferred stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; 24 • specify that special meetings of our stockholders can be called only upon the request of a majority of our board of directors or by the chairman of the board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving staggered three-year terms; and • prohibit cumulative voting in the election of directors.
Our operating results may fluctuate significantly because of a number of factors, including: • the timing of new restaurant openings; • profitability of our restaurants, especially in new markets; • inflationary pressures and changes in interest rates; • increases and decreases in average weekly sales and same store sales, including due to the timing and popularity of sporting and other events; • macroeconomic and geopolitical conditions, globally, nationally and locally; • changes in consumer discretionary spending, consumer preferences and competitive conditions; • legal and regulatory changes; • costs associated with litigation; • increases in infrastructure costs; and • fluctuations in commodity prices.
Our operating results may fluctuate significantly because of a number of factors, including: • the timing of new restaurant openings; • profitability of our restaurants, especially in new markets; • inflationary pressures and changes in interest rates; • increases and decreases in average weekly sales and same store sales, including due to the timing and popularity of sporting and other events; • macroeconomic and geopolitical conditions, globally, nationally and locally; • changes in consumer discretionary spending, consumer preferences and competitive conditions; 19 • legal and regulatory changes; • costs associated with litigation; • increases in infrastructure costs; and • fluctuations in commodity prices.
There can be no assurance that we will realize the intended benefits of these investments or achieve expected results, nor can we be certain of our ability to adequately and/or timely implement, execute, transition between, or enhance such technologies, which could result in: platform outages; loss of data; disruptions to or reduced efficiency in our operations; delays in customer service; dissatisfaction from our customers; loss of sales; or negative publicity and damage to our reputation.
There can be no assurance that we will realize the intended benefits of these investments or achieve expected results, nor can we be certain of our ability to adequately and/or timely implement, execute, transition between, maintain, or enhance such technologies, which could result in: platform outages; loss of data; disruptions to or reduced efficiency in our operations; delays in customer service; dissatisfaction from our customers; loss of sales; or negative publicity and damage to our reputation.
Such events could affect our guest traffic, sales and operating costs and/or cause complete or partial closure of one or more distribution centers, cause temporary or long-term disruption or inoperability of our information technology systems (including our digital platform), temporary or long-term disruptions in our delivery channel or the supply of products from suppliers, and disruption and delay in the transport of products, any of which may have a material adverse effect on our business, financial condition, and results of operations.
Such events could affect our guest traffic, sales and operating costs and/or cause complete or partial closure of one or more distribution centers, cause temporary or long-term disruption or inoperability of our information technology systems (including our proprietary digital platform), temporary or long-term disruptions in our delivery channel or the supply of products from suppliers, and disruption and delay in the transport of products, any of which may have a material adverse effect on our business, financial condition, and results of operations.
A regulatory, judicial or legislative determination that we are a “joint employer” with our franchisees or that our franchisees are part of one unified system subject to joint and several liability could subject us and/or our franchisees to liability for employment-related, health and safety related and other liabilities of our franchisees and could cause us to incur other costs that have a material adverse effect on our profitability, which would adversely impact our business, financial condition, and results of operations.
A regulatory, judicial or legislative determination that we are a “joint employer” with our franchisees or that our franchisees are part of one unified system subject to joint and several 17 liability could subject us and/or our franchisees to liability for employment-related, health and safety related and other liabilities of our franchisees and could cause us to incur other costs that have a material adverse effect on our profitability, which would adversely impact our business, financial condition, and results of operations.
We and our franchisees face many challenges in opening new restaurants, including: • selection and availability of and competition for suitable restaurant locations; • availability of financing; • negotiation of acceptable lease and financing terms; • securing required governmental permits and approvals, including zoning approvals; • availability and training of, and compensation for, qualified personnel; • availability of required restaurant equipment; • unanticipated increases in construction and development costs; and • the legal and regulatory requirements applicable to our industry.
We and our franchisees face many challenges in opening new restaurants, including: • selection and availability of, and competition for, suitable restaurant locations; • availability of financing; • negotiation of acceptable lease and financing terms; • securing required governmental permits and approvals, including zoning approvals; • availability and training of, and compensation for, qualified personnel; • availability of required restaurant equipment; • unanticipated increases in construction and development costs; and • legal and regulatory requirements applicable to our industry.
Compliance with privacy, data protection, and information security laws to which we are subject could result in additional costs, and our failure to comply with such laws could result in potentially significant regulatory investigations or government actions, penalties or remediation, and other costs, as well as adverse publicity, loss of sales and profits, and an increase in fees payable to third parties.
Compliance with privacy, data protection, and information security laws to which we are subject could continue to result in additional costs, and our failure to comply with such laws could result in potentially significant regulatory investigations or government actions, penalties or remediation, and other costs, as well as adverse publicity, loss of sales and profits, and an increase in fees payable to third parties.
Our apps and other digital ordering and payment platforms could be damaged or interrupted by power loss, technological failures, cyber-attacks or data breaches, other forms of sabotage or acts of God. Further, we may not be successful in achieving protection of our related intellectual property, or information systems, including those necessary for implementation and management of our digital platform.
Our apps and other digital ordering and payment platforms could be damaged or interrupted by power loss, technological failures, cyber-attacks or data breaches, other forms of sabotage, or acts of God. Further, we may not be successful in achieving protection of our related intellectual property, or information systems, including those necessary for implementation and management of our proprietary digital platform.
There can be no assurances that these funds will be sufficient to meet our marketing needs or that additional funds 18 will be provided by our franchisees in the future. The lack of continued financial support for our advertising activities could hinder our marketing efforts, which may materially adversely affect our business, financial condition, and operating results.
There can be no assurances that these funds will be sufficient to meet our marketing needs or that additional funds will be provided by our franchisees in the future. The lack of continued financial support for our advertising activities could hinder our marketing efforts, which may materially adversely affect our business, financial condition, and operating results.
The perception of our social media campaigns, or the inappropriate use of social media by our guests or employees, may materially adversely affect our reputation, business, financial condition, and results of operations. 21 Our expansion into international markets exposes us to a number of risks that may differ in each country where we have franchise restaurants.
The perception of our social media campaigns, or the inappropriate use of social media by our guests or employees, may materially adversely affect our reputation, business, financial condition, and results of operations. Our expansion into international markets exposes us to a number of risks that may differ in each country where we have franchise restaurants.
If we are unable to refinance or repay amounts under the securitized debt facility prior to the expiration of the applicable term, our cash flow would be directed to the repayment of the securitized debt and, other than management fees sufficient to cover minimal selling, general and administrative expenses, would not be available for operating our business.
If we are unable to refinance or repay amounts under the securitized debt facility prior to the expiration of the applicable term, our cash flow would be directed to the repayment of the securitized debt and, other than management fees sufficient to cover 23 minimal selling, general and administrative expenses, would not be available for operating our business.
Also, reduced margins of franchisees could make it more difficult to sell franchises. If menu prices are increased by us and our franchisees to cover increased labor costs, the higher prices could adversely affect transactions which could lower sales and thereby reduce our margins and the royalties that we receive from franchisees.
Also, reduced margins of franchisees could make it more difficult to sell franchises. If menu prices are increased by us and our franchisees to cover increased labor 20 costs, the higher prices could adversely affect transactions which could lower sales and thereby reduce our margins and the royalties that we receive from franchisees.
Failure by our franchisees to comply with employment eligibility or immigration laws may also result in adverse publicity and 20 reputational harm to our brand and could subject them to fines, penalties and other costs. These factors could materially adversely affect our business, financial condition, and results of operations.
Failure by our franchisees to comply with employment eligibility or immigration laws may also result in adverse publicity and reputational harm to our brand and could subject them to fines, penalties and other costs. These factors could materially adversely affect our business, financial condition, and results of operations.
No assurance can be given that any refinancing or additional financing will be possible when needed or that we will be able to negotiate acceptable terms. In addition, our access to capital is affected by prevailing conditions in the financial and capital markets and other factors 23 beyond our control.
No assurance can be given that any refinancing or additional financing will be possible when needed or that we will be able to negotiate acceptable terms. In addition, our access to capital is affected by prevailing conditions in the financial and capital markets and other factors beyond our control.
The establishment of such laws in one state may have a ripple effect in other states, substantially increase labor costs and negatively impact our operating costs. Our success depends in part upon effective advertising and marketing campaigns, which may not be successful, and franchisee support of such advertising and marketing campaigns.
The establishment of such laws in one state may have a ripple effect in other states, substantially increase labor costs and negatively impact our operating costs. 18 Our success depends in part upon effective advertising and marketing campaigns, which may not be successful, and franchisee support of such advertising and marketing campaigns.
Litigation against a franchisee or its affiliates by 17 third parties or regulatory agencies, whether in the ordinary course of business or otherwise, may also include claims against us by virtue of our relationship with the defendant-franchisee, whether under vicarious liability, joint employer, or other theories.
Litigation against a franchisee or its affiliates by third parties or regulatory agencies, whether in the ordinary course of business or otherwise, may also include claims against us by virtue of our relationship with the defendant-franchisee, whether under vicarious liability, joint employer, or other theories.
The risks associated with such negative publicity cannot be eliminated or completely mitigated and may materially affect our business, financial condition, and results of operations. The availability of information on social media platforms is virtually immediate as is its impact.
The risks associated with such negative 21 publicity cannot be eliminated or completely mitigated and may materially affect our business, financial condition, and results of operations. The availability of information on social media platforms is virtually immediate as is its impact.
Compliance with the CCPA, CPRA and other laws relating to the protection of personal information involve significant costs and could result in significant liability in the event we allow an unauthorized disclosure of personal information. In the European Union, this includes the General Data Protection Regulation.
Compliance with the CCPA, CPRA, and other laws relating to the protection of personal information involve significant costs and could result in significant liability in the event we allow an unauthorized disclosure of personal information. In the European Union, this includes the General Data Protection Regulation (the “GDPR”).
Remediation of these or related issues could result in significant, unplanned capital investments. In addition, the 16 availability, distribution and functionality of our apps and updates to our apps are dependent on mobile app stores and their related policies, terms and conditions.
Remediation of these or related issues could result in significant, unplanned capital investments. In addition, the availability, distribution and functionality of our apps and updates to our apps are dependent on mobile app stores and their related policies, terms and conditions.
These factors may materially adversely impact our sales and our brand reputation. We also incur additional costs associated with delivery orders, and it is possible that these orders could cannibalize more profitable carry-out or in-restaurant orders. Uncertainty in the law with respect to the assignment or allocation of liabilities in the franchise business model could materially adversely impact our profitability.
These factors may materially adversely impact our sales and our brand reputation. We also incur additional costs associated with delivery orders, and it is possible that these orders could reduce more profitable carry-out or in-restaurant orders. Uncertainty in the law with respect to the assignment or allocation of liabilities in the franchise business model could materially adversely impact our profitability.
All food items and packaging goods for Wingstop restaurants are currently sourced through one distributor with 17 geographically diverse distribution centers. In this regard, we and our franchisees depend on a group of suppliers and our distributor for food ingredients, beverages, paper goods, and distribution.
Currently, all food items and packaging goods for Wingstop restaurants are currently sourced through one distributor with 21 geographically diverse distribution centers. In this regard, we and our franchisees depend on a group of suppliers and our distributor for food ingredients, beverages, paper goods, and distribution.
Restaurants opened in new markets may also have lower average restaurant sales than restaurants opened in existing markets and may take longer to, or fail to, ramp up and reach expected sales and profit levels. Additionally, new markets may have higher rents and labor costs. These factors could negatively impact our unit economics and overall profitability.
Restaurants opened in new markets may also have lower average restaurant sales than restaurants opened in existing markets and may take longer to, or fail to, grow and reach expected sales and profit levels. Additionally, new markets may have higher rents and labor costs. These factors could negatively impact our unit economics and overall profitability.
Any failure by us or our third-party delivery providers to provide timely and reliable delivery services may materially adversely affect our business and reputation. As of December 30, 2023, delivery services were available at all Wingstop restaurants throughout the United States. Interruptions or failures in our delivery services could prevent the timely or successful delivery of our products.
Any failure by us or our third-party delivery providers to provide timely and reliable delivery services may materially adversely affect our business and reputation. As of December 28, 2024, delivery services were available at all Wingstop restaurants throughout the United States. Interruptions or failures in our delivery services could prevent the timely or successful delivery of our products.
Third parties have been and will likely be able to continue to develop and deploy viruses, worms and other malicious software programs, such as ransomware, that attack our, our franchisees’ and third parties with whom we do business’s systems or otherwise exploit any security vulnerabilities.
Third parties have been and will likely be able to continue to develop and deploy viruses, worms and other malicious software programs, such as ransomware, that attack our systems and the systems of our franchisees’ and third parties with whom we do business or otherwise exploit any security vulnerabilities.
In addition, we or our franchisees may become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information, and we or our franchisees may also be subject to lawsuits or other proceedings relating to these types of incidents.
In addition, we or our franchisees have been and will likely continue to become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information, and we or our franchisees may also be subject to lawsuits or other proceedings relating to these types of incidents.
Our inability to successfully recruit and retain highly-skilled and talented executive officers and other key employees, as well as a qualified workforce in our restaurants, or to successfully execute succession planning for key employees, could have a material adverse effect on our business and prospects and impair our growth, as we may not be able to find suitable individuals to replace such personnel on a timely basis.
Our inability to successfully recruit and retain highly-skilled and talented executive officers and other key employees, as well as a qualified workforce in our restaurants, or to successfully execute succession planning for key employees, could have a material adverse effect on our business and prospects and impair our growth, particularly in the context of current labor shortages, as we may not be able to find suitable individuals to replace such personnel on a timely basis.
In the United States, these include rules and regulations promulgated under the authority of the FTC, the Health Insurance Portability and Accountability Act of 1996, federal and state labor and employment laws, state data breach notification laws, and state privacy laws such as the California Consumer Privacy Act of 2018 (the “CCPA”) and the California Privacy Rights Act (the “CPRA”) (which will become enforceable in March 2024).
In the United States, these include rules and regulations promulgated under the authority of the FTC, the Health Insurance Portability and Accountability Act of 1996, federal and state labor and employment laws, state data breach notification laws, and state privacy laws such as the California Consumer Privacy Act of 2018 (the “CCPA”) and the California Privacy Rights Act (the “CPRA”).
Our ability to effectively manage and grow our business depends significantly on the reliability and capacity of these systems, and we continue to invest in technology innovations, such as our digital platform, as part of our growth strategy.
Our ability to effectively manage and grow our business depends significantly on the reliability and capacity of these systems, and we continue to invest in technology innovations, such as our proprietary digital platform that was implemented in 2024, as part of our growth strategy.
We and our franchisees compete with other restaurant chains and other retail businesses for quality site locations, management, hourly employees, and we also compete for qualified franchisees. We also face the risk that new or existing competitors will copy our business model, menu options, presentation, or ambiance, among other things.
We and our franchisees compete with other restaurant chains and other retail businesses for quality site locations, management, hourly employees, and we also compete for qualified franchisees. We also have experienced and will likely continue to face the risk that new or existing competitors will copy our business model, menu options, presentation, ambiance, marketing or advertising, among other things.
Our industry has also long been subject to the threat of food tampering by suppliers, employees, and others such as the addition of foreign objects in the food that we sell.
Our industry has also long been subject to the threat of food tampering by suppliers, employees, third-party delivery service providers, and others such as the addition of foreign objects in the food that we sell.
As of December 30, 2023, we have franchised restaurants in ten international countries and U.S. territories and plan to accelerate our growth internationally. Expansion in international markets may be affected by local economic, market, and cultural conditions.
As of December 28, 2024, we have franchised restaurants in eleven international countries and U.S. territories and plan to accelerate our growth internationally. Expansion in international markets may be affected by local economic, market, and cultural conditions.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability which could materially affect the operation of our business, our financial condition, and results of operations.
To the extent that any disruption, security breach, or any failure of our disaster recovery and business continuity plans to mitigate such harm were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability which could materially affect the operation of our business, our financial condition, and results of operations.
As of December 30, 2023, approximately 98% of our restaurants were operated by franchisees. As a result, a substantial portion of our revenue comes from royalties generated by our franchised restaurants. Accordingly, we are reliant on the performance of our franchisees in successfully operating their restaurants and paying royalties to us on a timely basis.
As a result, a substantial portion of our revenue comes from royalties generated by our franchised restaurants. Accordingly, we are reliant on the performance of our franchisees in successfully operating their restaurants and paying royalties to us on a timely basis.
Therefore, as we continue to expand internationally, we or our franchisees may not experience the operating margins we expect, our results of operations may be negatively impacted, and our common stock price may decline.
Therefore, as we continue to expand internationally, we or our franchisees may not experience the operating margins we expect, we may experience a delay in or loss of royalty income, our results of operations and growth may be negatively impacted, and our common stock price may decline.
The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks. 14 If we, our employees, franchisees, or vendors fail to comply with applicable laws, regulations, or contract terms, and covered information is obtained by unauthorized persons, used inappropriately, or destroyed, it could adversely affect our reputation, disrupt our operations and result in costly litigation, judgments, or penalties resulting from violation of laws and payment card industry regulations.
If we, our employees, franchisees, or vendors fail to comply with applicable laws, regulations, or contract terms, and covered information is obtained by unauthorized persons, used inappropriately, or destroyed, it could adversely affect our reputation, disrupt our operations and result in costly litigation, judgments, or penalties resulting from violation of laws and payment card industry regulations.
If our digital ordering and payment platforms do not meet customers’ expectations in terms of security, speed, attractiveness, or ease of use, customers may be less inclined to return to such platforms.
If our digital ordering and payment platforms do not meet customers’ expectations in terms of security, speed, attractiveness, or ease of use, or if we fail to implement emerging technologies as quickly and efficiently as our competitors, customers may be less inclined to return to such platforms.
As a result, we and our franchisees are increasingly reliant on digital ordering and payment for such sales, and portions of our digital commerce platforms depend on third-party services, including cloud-based technologies and platforms.
In the fourth quarter of 2024, digital sales accounted for 70.3% of our domestic sales. 16 As a result, we and our franchisees are increasingly reliant on digital ordering and payment for such sales, and portions of our digital commerce platforms depend on third-party services, including cloud-based technologies and platforms.
Customers are increasingly using e-commerce websites and apps, both domestically and internationally, like www.wingstop.com, our mobile ordering application, and third-party delivery apps, to order and pay for our products and select optional delivery and curbside services. In the fourth quarter of 2023, digital sales accounted for 67.0% of our domestic sales.
Customers are increasingly using e-commerce websites and apps, both domestically and internationally, like www.wingstop.com, our mobile ordering application, and third-party delivery apps, to order and pay for our products and select optional delivery and curbside services.
These interruptions may be due to unforeseen events that are beyond our control or the control of our delivery providers, such as inclement weather, natural disasters, transportation disruptions, sabotage by an outside party, civil protests or labor shortages or unrest.
These interruptions may be due to unforeseen events that are beyond our control or the control of our delivery providers, such as inclement weather, natural disasters, transportation disruptions, labor shortages, sabotage by an outside party, civil protests or unrest. In addition, changes in business practices of our delivery providers and governmental regulations could materially adversely impact delivery services and/or profitability.
In addition, our cyber liability coverage may be inadequate or may not be available in the future on acceptable terms, or at all, and defending a suit, regardless of its merit, could be costly and divert management’s attention.
In addition, our cyber liability coverage may be inadequate or may not be available in the future on acceptable terms, or at all, and defending a suit, regardless of its merit, could be costly and divert management’s attention. See “Item 1C. Cybersecurity” for more information about the Company’s cybersecurity risk management and governance.
Therefore, as we expand internationally, our franchisees may not experience the operating margins we expect, and our results of operations and growth may be materially adversely affected. Our business, financial condition and results of operations may be adversely affected if the global markets in which our franchised restaurants compete are affected by changes in political, economic, or other factors.
Our business, financial condition and results of operations may be adversely affected if the global markets in which our franchised restaurants compete are affected by changes in political, economic, or other factors.
Moreover, any loss incurred could exceed policy limits and policy payments made to franchisees may not be made on a timely basis. Any such loss or delay in payment could have a material adverse effect on a franchisee’s ability to satisfy obligations under the franchise agreement, including the ability to make royalty payments.
Any such loss or delay in payment could have a material adverse effect on a franchisee’s ability to satisfy obligations under the franchise agreement, including the ability to make royalty payments.
Advances in computer and software capabilities, technology, new tools, and other developments may increase the risk of such a breach. If a person is able to circumvent the security measures of our business, our franchisees’ businesses or those of other third parties, he or she could destroy or steal valuable information or disrupt the operations of our business.
If a person is able to circumvent the security measures of our business, our franchisees’ businesses or those of other third parties, he or she could destroy or steal valuable information or disrupt the operations of our business.
In addition, changes in business practices of our delivery providers and governmental regulations could materially adversely impact delivery services and/or profitability. If our products are not delivered on time and in safe and proper condition, customers may refuse to accept our products and have less confidence in our services, in which case our business and reputation may suffer.
If our products are not delivered on time and in safe and proper condition, customers may refuse to accept our products and have less confidence in our services, in which case our business and reputation may suffer.
Food safety is a top priority, and we dedicate substantial resources so that our customers enjoy safe, high quality food products. However, food-borne illnesses, such as salmonella, E. coli infection, or hepatitis A, and food safety issues, including food tampering or contamination, have occurred in the food industry in the past, and could occur in the future.
However, food-borne illnesses, such as salmonella, E. coli infection, or hepatitis A, and food safety issues, including food tampering or contamination, have occurred in the food industry in the past, and could occur and impact our business in the future.
As our brand profile and our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. Additionally, there has been an increase in data integration and complexity of our technology systems, particularly in our international markets.
As our brand profile and our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced.
We may need to upgrade and expand our infrastructure and information systems, automate more processes and hire, train and retain restaurant employees and corporate support staff, all of which may result in increased costs and inefficiencies Our success depends in significant part on the future performance of existing and new franchise restaurants, and we are subject to a variety of additional risks associated with our franchisees.
We may need to upgrade and expand our infrastructure and information systems, automate more processes and hire, train and retain restaurant employees and corporate support staff, all of which may result in increased costs and inefficiencies.
Such losses could have a material adverse effect on our business, financial condition, and results of operations. Our franchise agreements require each franchisee to maintain certain insurance types and levels. Certain extraordinary hazards, however, may not be covered, and insurance may not be available (or may be available only at prohibitively expensive rates) with respect to many other risks.
Such losses could have a material adverse effect on our business, financial condition, and results of operations. In addition, our franchise agreements require each franchisee to maintain certain insurance types and levels.
As privacy and information security laws and regulations change, we may incur additional costs to ensure that we remain in compliance with those laws and regulations.
The use of personally identifiable information by us is regulated by foreign, federal, and state laws, which continue to evolve, as well as by certain third-party agreements. As privacy and information security laws and regulations change, we may incur additional costs to ensure that we remain in compliance with those laws and regulations.
The legal framework around privacy issues is rapidly evolving, as various federal and state government bodies are considering adopting new privacy laws and regulations. These laws and regulations could result in significant limitations on or changes to the ways in which we can collect, use, host, store, or transmit personal information and other data.
These emerging laws and regulations have resulted and will likely continue to result in significant limitations on or changes to the ways in which we can collect, use, host, store, or transmit personal information and other data.
Because many of our restaurants are concentrated in certain geographic areas, we are susceptible to economic and other trends and developments, including adverse weather conditions, in these areas. 19 As of December 30, 2023, 56% of our 1,926 domestic restaurants were spread across Texas (23%), California (20%), Florida (7%), and Illinois (6%).
In that event, the price of our common stock would likely decrease. Because many of our restaurants are concentrated in certain geographic areas, we are susceptible to economic and other trends and developments, including adverse weather conditions, in these areas.
Further, legislation has been proposed from time to time to require franchisors to be responsible for ensuring franchisee compliance with certain laws.
However, it is possible that the NLRB or another government agency will attempt to restore the proposed 2023 standard through new rulemaking or alternative methods and legislation has been proposed from time to time to require franchisors to be responsible for ensuring franchisee compliance with certain laws.
Each of these implications could materially adversely affect our business, financial condition, and results of operations. Additionally, the rapid evolution and 15 increased adoption of artificial intelligence technologies and our obligations to comply with emerging laws and regulations may require us to develop additional artificial intelligence-specific governance programs.
Each of these implications could materially adversely affect our business, financial condition, and results of operations.
Removed
We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting, and storing such information. The use of personally identifiable information by us is regulated by foreign, federal, and state laws, which continue to evolve, as well as by certain third-party agreements.
Added
Our success depends in significant part on the future performance of existing and new franchise restaurants, and we are subject to a variety of additional risks associated with our franchisees. As of December 28, 2024, approximately 98% of our restaurants were operated by franchisees.
Removed
The effective date of a new joint employer rule announced by the NLRB that would expand liability for franchisors has been extended to February 26, 2024. The status of the rule remains uncertain, pending resolution of legal and legislative challenges with respect to the rule.
Added
Food safety is a top priority, and we dedicate substantial resources so that our customers enjoy safe, high quality food products.
Removed
In that event, the price of our common stock would likely decrease.
Added
These conditions expose us and our franchisees to increased risk of cyber incidents, privacy and/or security breaches or intrusions, and other risks, such as an intentional attack or an unintentional event that results in disruptions to our operations. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting, and storing such information.
Added
Advances in computer and software capabilities, technology, new tools or social engineering tactics, and other developments may increase the risk of such a breach.
Added
The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks by making 14 cyber incidents more difficult to detect, contain, and mitigate for us, our franchisees, contractors, and third parties with whom we do business.
Added
We may need to take measures to comply with requirements contained in the GDPR (or similar legislation implemented in the United Kingdom), such as implementing appropriate mechanisms for the cross-border transfer of personal data, follow mandatory data breach notification requirements, and provide robust rights for data subjects.
Added
Additionally, several states and localities have also enacted statutes banning or restricting the collection of biometric information. These data privacy and biometric information laws will require us to incur additional costs and expenses in our efforts to comply.
Added
An actual or perceived failure to comply with these domestic or international laws and others that may be passed could subject our business to regulatory scrutiny, significant administrative and monetary sanctions, damages under some laws to individuals, and reputational damage.
Added
In addition, the FTC and other state and federal agencies have been increasing their scrutiny of the ways in which companies use personally identifiable information for marketing and analytics, as well as the circumstances under which companies share such data with other companies, including social media companies, for such purposes.
Added
We may need to continue to make adjustments as updated guidance becomes available, or other privacy, 15 information security or data protection laws and regulations take effect in jurisdictions in which we currently operate or may in the future operate.
Added
The legal framework around privacy issues is rapidly evolving, as various federal and state government bodies are considering adopting new privacy laws and regulations.
Added
Additionally, the rapid evolution and increased adoption of artificial intelligence technologies and our obligations to comply with emerging laws and regulations may increase scrutiny from or actions by regulators, consumer groups or other third parties, increase the scope of regulation or government restrictions applicable to our business, or subject our business to increased risks of litigation.
Added
Occasionally, we and our franchisees have experienced or could experience temporary disruptions in ours or their operations due to third-party systems failing to adequately perform.
Added
In March 2024, a federal court blocked the enforcement of the NLRB’s amended 2023 regulation on joint employment, leaving the NLRB’s previous 2020 regulation on joint employment in effect.
Added
As of December 28, 2024, 52% of our 2,204 domestic restaurants were spread across Texas (21%), California (19%), Florida (6%), and Illinois (6%).
Added
Certain extraordinary hazards, however, may not be covered, and insurance may not be available (or may be available only at prohibitively expensive rates) with respect to many other risks. Moreover, any loss incurred could exceed policy limits and policy payments made to franchisees may not be made on a timely basis.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+2 added−1 removed14 unchanged
Biggest changeThe Technology Committee oversees these risks in conjunction with the Audit Committee, which also consists entirely of independent directors, and regularly participates in joint meetings with the Audit Committee to discuss these matters.
Biggest changeThe Technology Committee oversees these risks in conjunction with the Audit Committee, which also consists entirely of independent directors, and, as necessary, participates in joint meetings with the Audit Committee to discuss these matters. 26 Our Vice President of Information Security and Enterprise Information Technology (“CISO”), who reports to our Senior Vice President, Chief Information Officer (“CIO”), oversees our information security program and matters of risk relating to cybersecurity.
Item 1C. Cybersecurity Risk Management The Company maintains a comprehensive information security program that is designed to identify, protect against, detect and respond to, and manage cybersecurity threats.
Item 1C. Cybersecurity Risk Management As part of the Company’s enterprise risk management program, the Company maintains a comprehensive information security program that is designed to identify, protect against, detect and respond to, and manage cybersecurity threats.
Members of our Information Technology team periodically provide risk reports to the Board and its committees, including assessments of the Company’s cybersecurity risks, their potential impact on our business operations, and management’s strategies to monitor and mitigate those risks. The committee chairs, in turn, report to the full Board as part of our general risk management process. 27
Our CISO and members of our Information Technology team, including our CIO, periodically provide risk reports to the Board and its committees, including assessments of the Company’s cybersecurity risks, their potential impact on our business operations, and management’s strategies to monitor and mitigate those risks.
Our Senior Director of Information Security and Data Privacy, who has more than 20 years of experience in information technology-related roles, including engineering, governance, and security, oversees our information security program and 26 matters of risk relating to cybersecurity.
Our CISO possesses more than 20 years of experience in information technology-related roles, including engineering, governance, and security, undergraduate and post-graduate degrees in information technology and security, and industry-recognized cybersecurity certifications.
Removed
In 2023, the Company reinforced its business continuity plan in an effort to provide increased oversight of our third-party service providers and suppliers.
Added
In 2024, the Company has continued to make strategic investments in both its technical and organizational measures to further enhance its security capabilities and planning for detecting, preventing, and responding to cybersecurity attacks.
Added
The committee chairs, in turn, report to the full Board as part of our general risk management process. 27

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeItem 2. Properties We own a 78,000 square foot office building in Addison, Texas, which we use as our corporate headquarters and global support center.
Biggest changeItem 2. Properties The Company leases an office building in Dallas, Texas containing approximately 112,200 square feet, which we use as our corporate headquarters and global support center. We also own a 78,000 square foot office building in Addison, Texas, which we are currently evaluating for future use, and which has not been leased, rented, or currently utilized.
As of December 30, 2023, we and our franchisees operated 2,214 restaurants in 45 states and 11 countries and U.S. territories.
As of December 28, 2024, we and our franchisees operated 2,563 restaurants in 45 states and 12 countries and U.S. territories.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+3 added−3 removed3 unchanged
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information on our share repurchases of our common stock during the fourth quarter of 2023: Period Total Number of Shares Purchased (1) Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1, 2023 - October 28, 2023 — $ — — $ — October 29, 2023 - November 25, 2023 — — — — November 26, 2023 - December 30, 2023 78,801 $ 193.51 78,801 125,000,000 Total 78,801 $ 193.51 78,801 $ 125,000,000 (1) On August 23, 2023, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution to repurchase $125.0 million of the Company’s common stock.
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information on our share repurchases of our common stock during the fourth quarter of 2024: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) September 29, 2024 - October 26, 2024 — $ — — $ 61,082,928 October 27, 2024 - November 30, 2024 — — — 61,082,928 December 1, 2024 - December 28, 2024 551,325 $ 328.54 551,325 311,082,928 Total 551,325 $ 328.54 551,325 $ 311,082,928 (1) On December 9, 2024, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution to repurchase $250.0 million of the Company’s common stock under its Share Repurchase Program (as defined in note (2) below).
This graph is “furnished” and not “filed” with the SEC and it is not “soliciting material,” and should not be incorporated by reference in any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filing. 30 Item 6. Reserved Not applicable.
This graph is “furnished” and not “filed” with the SEC and it is not “soliciting material,” and should not be incorporated by reference in any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filing.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the NASDAQ Global Select Market under the symbol “WING”. As of February 20, 2024, there were 132 stockholders of record of our common stock. This number excludes stockholders whose stock is held in nominee or street name by brokers.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the NASDAQ Global Select Market under the symbol “WING”. As of February 18, 2025, there were 144 stockholders of record of our common stock. This number excludes stockholders whose stock is held in nominee or street name by brokers.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended December 30, 2023 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended December 28, 2024 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
This graph assumes a $100 investment in our common stock and in each of the foregoing indices on December 29, 2018, and assumes the reinvestment of dividends, if any. The indices are included for comparative purposes only.
This graph assumes a $100 investment in our common stock and in each of the foregoing indices on December 28, 2019, and assumes the reinvestment of dividends, if any. The indices are included for comparative purposes only.
As of December 30, 2023, $125.0 million remained available under the Share Repurchase Authorization. 29 Performance Graph The following performance graph compares the dollar change in the cumulative stockholder return on our common stock with the cumulative total returns of the NASDAQ Composite Index and the Standard & Poor’s 400 Restaurant Index (the “S&P 400 Restaurant Index”).
As of December 28, 2024, $311.1 million remained available under the Share Repurchase Program. 29 Performance Graph The following performance graph compares the dollar change in the cumulative stockholder return on our common stock with the cumulative total returns of the NASDAQ Composite Index and the Standard & Poor’s 400 Restaurant Index (the “S&P 400 Restaurant Index”).
Dividends on Common Stock On February 20, 2024, the Company’s board of directors declared a quarterly dividend of $0.22 per share of common stock, to be paid on March 29, 2024 to stockholders of record as of March 8, 2024, totaling approximately $6.5 million.
Dividends on Common Stock On February 18, 2025, the Company’s board of directors declared a quarterly dividend of $0.27 per share of common stock, to be paid on March 28, 2025 to stockholders of record as of March 7, 2025, totaling approximately $7.7 million.
(2) On August 16, 2023, the Company’s Board of Directors approved a new share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Authorization”).
(2) On December 5, 2024, the Company’s board of directors authorized the repurchase of up to an additional $500.0 million of its outstanding shares of common stock under its existing share repurchase program (the “Share Repurchase Program”).
Removed
Pursuant to the terms of the ASR Agreement, the Company paid the financial institution $125.0 million and, on August 25, 2023, the Company received and retired 567,151 shares of its common stock. Final settlement of the ASR Agreement occurred on December 21, 2023, and the Company received and retired an additional 78,801 shares of common stock.
Added
Pursuant to the terms of the ASR Agreement, during the fiscal fourth quarter of 2024 the Company made an initial payment to the financial institution of $250.0 million in cash and received and retired 551,325 shares of its common stock, representing an estimated 75% of the total shares expected to be delivered under the ASR Agreement, based on the closing price on the date of initial delivery of $328.54.
Removed
In connection with the ASR Agreement, the Company received and retired a total of 645,952 shares of common stock at an average share price of $193.51.
Added
The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR Agreement, which is scheduled to occur in the fiscal first quarter of 2025.
Removed
The total number of shares repurchased under the ASR Agreement was based on a daily volume-weighted average share price during the valuation period specified in the ASR Agreement, less a discount and subject to adjustments.
Added
The authorization for the repurchase continues until all such shares have been repurchased or the repurchase plan is terminated by action of our board of directors.

Item 7. Management's Discussion & Analysis

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

50 edited+9 added−24 removed35 unchanged
Biggest change(c) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24% for the periods ended December 30, 2023 and December 31, 2022, which includes provisions for U.S. federal income taxes, and assumes the respective statutory rates for applicable state and local jurisdictions. 35 Results of Operations Year ended December 30, 2023 compared to year ended December 31, 2022 The following table sets forth certain income and expense items included in the Consolidated Statements of Comprehensive Income for fiscal year 2023 and fiscal year 2022 (in thousands, except for percentages): Year ended Increase / (Decrease) December 30, 2023 December 31, 2022 $ % Revenue: Royalty revenue, franchise fees and other $ 207,077 $ 158,614 $ 48,463 30.6 % Advertising fees 157,138 119,011 38,127 32.0 % Company-owned restaurant sales 95,840 79,896 15,944 20.0 % Total revenue 460,055 357,521 102,534 28.7 % Costs and expenses: Cost of sales (1) 70,646 63,395 7,251 11.4 % Advertising expenses 166,583 123,069 43,514 35.4 % Selling, general and administrative 96,898 67,061 29,837 44.5 % Depreciation and amortization 13,239 10,899 2,340 21.5 % Loss on disposal of assets 95 1,164 (1,069) (91.8) % Total costs and expenses 347,461 265,588 81,873 30.8 % Operating income 112,594 91,933 20,661 22.5 % Interest expense, net 18,227 21,230 (3,003) (14.1) % Loss on debt extinguishment and financing transactions — 814 (814) (100.0) % Other (income) expense 57 573 (516) (90.1) % Income before income tax expense 94,310 69,316 24,994 36.1 % Income tax expense 24,135 16,369 7,766 47.4 % Net income $ 70,175 $ 52,947 $ 17,228 32.5 % (1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, but excludes depreciation and amortization, which are presented separately.
Biggest change(d) Includes non-cash, stock-based compensation, net of forfeitures. 34 Results of Operations Year ended December 28, 2024 compared to year ended December 30, 2023 The following table sets forth certain income and expense items included in the Consolidated Statements of Comprehensive Income for fiscal year 2024 and fiscal year 2023 (in thousands, except for percentages): Year ended Increase / (Decrease) December 28, 2024 December 30, 2023 $ % Revenue: Royalty revenue, franchise fees and other $ 288,354 $ 207,077 $ 81,277 39.2 % Advertising fees 217,630 157,138 60,492 38.5 % Company-owned restaurant sales 119,823 95,840 23,983 25.0 % Total revenue 625,807 460,055 165,752 36.0 % Costs and expenses: Cost of sales (1) 91,632 70,646 20,986 29.7 % Advertising expenses 233,306 166,583 66,723 40.1 % Selling, general and administrative 116,801 96,898 19,903 20.5 % Depreciation and amortization 19,490 13,239 6,251 47.2 % (Gain) loss on disposal of assets (1,038) 95 (1,133) NM* Total costs and expenses 460,191 347,461 112,730 32.4 % Operating income 165,616 112,594 53,022 47.1 % Interest expense, net 21,292 18,227 3,065 16.8 % Other (income) expense (2,866) 57 (2,923) NM* Income before income tax expense 147,190 94,310 52,880 56.1 % Income tax expense 38,473 24,135 14,338 59.4 % Net income $ 108,717 $ 70,175 $ 38,542 54.9 % * Not meaningful.
Some of the limitations are: • such measures do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; 33 • such measures do not reflect changes in, or cash requirements for, our working capital needs; • such measures do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; • such measures do not reflect our tax expense or the cash requirements to pay our taxes; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and • other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.
Some of the limitations are: • such measures do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • such measures do not reflect changes in, or cash requirements for, our working capital needs; • such measures do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; 33 • such measures do not reflect our tax expense or the cash requirements to pay our taxes; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and • other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.
Under the ASR Agreement, the Company paid the financial institution $125.0 million in cash and received and retired a total of 645,952 shares of common stock at an average share price of $193.51. Final settlement of the ASR Agreement occurred on December 21, 2023.
Under the 2023 ASR Agreement, the Company paid the financial institution $125.0 million in cash and received and retired a total of 645,952 shares of common stock at an average share price of $193.51. Final settlement of the ASR Agreement occurred on December 21, 2023.
These estimates may require application of management’s most difficult, subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. While we apply our judgment based on assumptions believed to be reasonable under the circumstances, actual results could vary from these assumptions.
These estimates may require application of management’s most 38 difficult, subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. While we apply our judgment based on assumptions believed to be reasonable under the circumstances, actual results could vary from these assumptions.
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility including our 2022 Variable Funding Notes, will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility including our Variable Funding Notes, will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.
We believe the probability of incurring an actual liability under such indemnifications is sufficiently remote so that no liability has been recorded. 39 Critical Accounting Policies and Estimates The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses.
We believe the probability of incurring an actual liability under such indemnifications is sufficiently remote so that no liability has been recorded. Critical Accounting Policies and Estimates The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses.
Our primary sources of liquidity and capital resources are cash provided from operating activities, cash and cash equivalents on hand, and borrowings available under our securitized financing facility. Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, and dividend payments.
Our primary sources of liquidity and capital resources are cash provided from operating activities, cash and cash equivalents on hand, and borrowings available under our securitized financing facility. Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, 36 and dividend payments.
We define Adjusted EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization, with further adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense.
We define Adjusted EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization, with further adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, system implementation costs, and stock-based compensation expense.
As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense.
As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, system implementation costs, and stock-based compensation expense.
We operate on a 52- or 53-week fiscal year ending on the last Saturday of each calendar year. Our fiscal quarters are comprised of 13 weeks, with the exception of the fourth quarter of a 53-week year, which contains 14 weeks. Fiscal year 2023 contains 52 weeks, while fiscal year 2022 contains 53 weeks.
We operate on a 52- or 53-week fiscal year ending on the last Saturday of each calendar year. Our fiscal quarters are comprised of 13 weeks, with the exception of the fourth quarter of a 53-week year, which contains 14 weeks. Fiscal years 2024 and 2023 each contain 52 weeks, while fiscal year 2022 contains 53 weeks.
On August 23, 2023, the Company entered into the ASR Agreement with a third-party financial institution to repurchase $125.0 million of the Company’s common stock as part of the Share Repurchase Authorization.
On August 23, 2023, the Company entered into an accelerated share repurchase agreement (the “2023 ASR Agreement”) with a third-party financial institution to repurchase $125.0 million of the Company’s common stock as part of the August 2023 Authorization.
The decrease is primarily due to sales leverage related to the company-owned domestic same store sales increase of 8.2%, offset by an increase in company-owned restaurant wages. Other restaurant operating expenses as a percentage of company-owned restaurant sales were 19.1% in fiscal year 2023 compared to 19.3% in the prior fiscal year.
The decrease is primarily due to sales leverage related to the company-owned domestic same store sales increase of 7.7%, offset by an increase in company-owned restaurant wages. Other restaurant operating expenses as a percentage of company-owned restaurant sales were 19.2% in fiscal year 2024 compared to 19.1% in the prior fiscal year.
A comparison of our results of operations and cash flows for fiscal year 2022 compared to fiscal year 2021 can be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 22, 2023.
A comparison of our results of operations and cash flows for fiscal year 2023 compared to fiscal year 2022 can be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023, filed with the SEC on February 21, 2024.
On August 16, 2023, the Company’s Board of Directors approved a new share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Authorization”).
On August 17, 2023, the Company’s board of directors approved a new share repurchase program with authorization to repurchase up to $250.0 million of its outstanding shares of common stock (the “August 2023 Authorization”).
Domestic same store sales have increased for 20 consecutive years beginning in 2004, which includes 5-year cumulative domestic same stores sales growth of 62.2% since the beginning of fiscal year 2019. We believe our asset-light, highly-franchised business model generates strong operating margins and requires low capital expenditures, creating shareholder value through strong and consistent operating cash flow and capital-efficient growth.
Domestic same store sales have increased for 21 consecutive years beginning in 2004, which includes 3-year cumulative domestic same stores sales growth of 41.6% since the beginning of fiscal year 2022. We believe our asset-light, highly-franchised business model generates strong operating margins and requires low capital expenditures, creating shareholder value through strong and consistent operating cash flow and capital-efficient growth.
Fiscal years 2023 and 2022 include approximately $5.2 million and $0.4 million, respectively, in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023.
Fiscal year 2023 includes approximately $5.2 million in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023.
Given the magnitude and scope of these two strategic review initiatives that are not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiatives not reflective of the ongoing costs to operate its business.
Given the magnitude and scope of this strategic review initiative that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiative not reflective of the ongoing costs to operate its business.
In addition to the 2022 Notes, the Company’s outstanding debt consists of its existing Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Notes”). No borrowings were outstanding under the 2022 Variable Funding Notes as of December 30, 2023. Dividends .
In addition to the 2024 Notes, the Company’s outstanding debt consists of its existing Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Notes”) and Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Notes”). No borrowings were outstanding under the Variable Funding Notes as of December 28, 2024. 37 Dividends .
We paid quarterly cash dividends of $0.19 per share of common stock in each of the first two quarters of 2023, and quarterly cash dividends of $0.22 per share of common stock in both the third and fourth quarters of 2023, resulting in aggregate quarterly dividend payments of $24.4 million in fiscal year 2023.
We paid quarterly cash dividends of $0.22 per share of common stock in each of the first two quarters of 2024, and quarterly cash dividends of $0.27 per share of common stock in both the third and fourth quarters of 2024, resulting in aggregate quarterly dividend payments of $28.7 million in fiscal year 2024.
Overview Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world and has demonstrated strong, consistent growth. As of December 30, 2023, we had a total of 2,214 restaurants in our system. Our restaurant base is 98% franchised, with 2,165 franchised locations (including 288 international locations) and 49 company-owned restaurants as of December 30, 2023.
Overview Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world and has demonstrated strong, consistent growth. As of December 28, 2024, we had a total of 2,563 restaurants in our system. Our restaurant base is 98% franchised, with 2,513 franchised locations (including 359 international locations) and 50 company-owned restaurants as of December 28, 2024.
Advertising expenses Advertising expenses were $166.6 million, an increase of $43.5 million, compared to $123.1 million in fiscal year 2022. Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.
Advertising expenses Advertising expenses were $233.3 million, an increase of $66.7 million, compared to $166.6 million in fiscal year 2023. Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.
Selling, general and administrative (“SG&A”) SG&A was $96.9 million in fiscal year 2023, an increase of $29.8 million, or 44.5%, compared to $67.1 million in the prior fiscal year.
Selling, general and administrative (“SG&A”) SG&A was $116.8 million in fiscal year 2024, an increase of $19.9 million, or 20.5%, compared to $96.9 million in the prior fiscal year.
Our net cash used in investing activities was $52.2 million in fiscal year 2023, an increase of $23.5 million, from $28.7 million in fiscal year 2022.
Our net cash used in investing activities was $62.5 million in fiscal year 2024, an increase of $10.3 million, from $52.2 million in fiscal year 2023.
For a reconciliation of net income to Adjusted net income and for further discussion of Adjusted net income and Adjusted earnings per diluted share as non-GAAP measures and how we utilize them, see footnote 3 below. 32 The following table sets forth our key performance indicators for the fiscal years ended December 30, 2023 and December 31, 2022 (in thousands, except unit data): Year ended December 30, 2023 December 31, 2022 Number of system-wide restaurants at period end 2,214 1,959 System-wide sales (1) $ 3,482,370 $ 2,738,920 Domestic AUV $ 1,827 $ 1,606 Domestic same store sales growth (2) 18.3 % 3.4 % Company-owned domestic same store sales growth (2) 8.2 % 1.0 % Total revenue $ 460,055 $ 357,521 Net income $ 70,175 $ 52,947 Adjusted EBITDA (3) $ 146,484 $ 107,644 Adjusted net income (4) $ 74,089 $ 54,466 (1) The percentage of system-wide sales attributable to company-owned restaurants was 2.8% and 2.9% for the fiscal years ended December 30, 2023 and December 31, 2022, respectively.
For a reconciliation of net income to EBITDA and Adjusted EBITDA and for further discussion of EBITDA and Adjusted EBITDA as non-GAAP measures and how we utilize them, see footnote 2 below. 32 The following table sets forth our key performance indicators for the fiscal years ended December 28, 2024 and December 30, 2023 (in thousands, except unit data): Year ended December 28, 2024 December 30, 2023 Number of system-wide restaurants at period end 2,563 2,214 System-wide sales (1) $ 4,765,233 $ 3,482,370 Domestic AUV $ 2,138 $ 1,827 Domestic same store sales growth 19.9 % 18.3 % Company-owned domestic same store sales growth 7.7 % 8.2 % Total revenue $ 625,807 $ 460,055 Net income $ 108,717 $ 70,175 Adjusted EBITDA (2) $ 212,061 $ 146,484 (1) The percentage of system-wide sales attributable to company-owned restaurants was 2.5% and 2.8% for the fiscal years ended December 28, 2024 and December 30, 2023, respectively.
Securitized financing facility . On March 9, 2022, the Company completed a securitized financing transaction, pursuant to which Wingstop Funding LLC (the “Issuer”), a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company, issued $250 million of its Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”).
On December 3, 2024, the Company completed a securitized financing transaction, in which Wingstop Funding LLC, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company (the “Issuer”), issued $500 million of its Series 2024-1 5.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2024 Class A-2 Notes”).
The following table shows summary cash flows information for fiscal years 2023 and 2022 (in thousands): Year ended December 30, 2023 December 31, 2022 Net cash provided by (used in): Operating activities $ 121,601 $ 76,238 Investing activities (52,153) (28,683) Financing activities (155,487) 103,254 Net change in cash, cash equivalents and restricted cash $ (86,039) $ 150,809 Operating activities .
The following table shows summary cash flows information for fiscal years 2024 and 2023 (in thousands): Year ended December 28, 2024 December 30, 2023 Net cash provided by (used in): Operating activities $ 157,610 $ 121,601 Investing activities (62,477) (52,153) Financing activities 144,765 (155,487) Net change in cash, cash equivalents and restricted cash $ 239,898 $ (86,039) Operating activities .
Net cash provided by operating activities was $121.6 million in fiscal year 2023, an increase of $45.4 million from cash provided by operating activities of $76.2 million in the prior fiscal year.
Net cash provided by operating activities was $157.6 million in fiscal year 2024, an increase of $36.0 million from cash provided by operating activities of $121.6 million in the prior fiscal year.
Domestic Company-owned Domestic Franchised International Franchised (1) System-wide Restaurant count at December 25, 2021 36 1,498 197 1,731 Openings 5 187 45 237 Closures (1) (4) (4) (9) Net purchase from (sold by) franchisees 3 (3) — — Restaurant count at December 31, 2022 43 1,678 238 1,959 Openings 4 202 59 265 Closures — (1) (9) (10) Net purchase from (sold by) franchisees 2 (2) — — Restaurant count at December 30, 2023 49 1,877 288 2,214 (1) Includes U.S. territories.
Domestic Company-owned Domestic Franchised International Franchised (1) System-wide Restaurant count at December 31, 2022 43 1,678 238 1,959 Openings 4 202 59 265 Closures — (1) (9) (10) Net purchase from (sold by) franchisees 2 (2) — — Restaurant count at December 30, 2023 49 1,877 288 2,214 Openings 4 274 77 355 Closures — — (6) (6) Net purchased from (sold by) franchisees (3) 3 — — Restaurant count at December 28, 2024 50 2,154 359 2,563 (1) Includes U.S. territories.
On February 20, 2024, the Company’s board of directors approved a dividend of $0.22 per share, to be paid on March 29, 2024 to stockholders of record as of March 8, 2024, totaling approximately $6.5 million.
On February 18, 2025, the Company’s board of directors approved a dividend of $0.27 per share, to be paid on March 28, 2025 to stockholders of record as of March 7, 2025, totaling approximately $7.7 million.
Advertising fees increased $38.1 million, of which $34.6 million was due to a 27.1% increase in system-wide sales during fiscal year 2023, and $6.2 million was due to an increase in the national advertising fund contribution rate to 5% from 4% effective the first day of the fiscal second quarter 2022.
Advertising fees increased $60.5 million, of which $51.0 million was due to a 36.8% increase in system-wide sales during fiscal year 2024, and $9.5 million was due to an increase in the national advertising fund contribution rate to 5.3% from 5.0% effective the first day of the fiscal second quarter 2024.
Royalty revenue, franchise fees and other increased $48.5 million, of which $25.6 million was due to domestic same store sales growth of 18.3%, and $16.5 million was due to net new franchise development since December 31, 2022. Other revenue increased by $4.2 million primarily due to an increase in vendor rebates.
Royalty revenue, franchise fees and other increased $81.3 million, of which $36.1 million was due to domestic same store sales growth of 19.9%, and $29.9 million was due to net new franchise development since December 30, 2023. Other revenue increased by $7.2 million primarily due to an increase in vendor rebates.
Historically, we have operated with minimal positive working capital or with negative working capital. We generally utilize available cash flows from operations to invest in our business, service our debt obligations, and pay dividends.
Historically, we have operated with minimal positive working capital or with negative working capital. We generally utilize available cash flows from operations to invest in our business, service our debt obligations, and pay dividends. As of December 28, 2024, the Company had $359.6 million of cash and cash equivalents on its balance sheet, including advertising fund cash and cash equivalents.
Income tax expense The effective tax rate in fiscal year 2023 was 25.6%, compared to an effective tax rate of 23.6% in the prior fiscal year. The increase in the effective tax rate was primarily due to the impact of tax benefits associated with stock awards forfeited during fiscal year 2022 . Liquidity and Capital Resources General.
Income tax expense The effective tax rate in fiscal year 2024 was 26.1%, compared to an effective tax rate of 25.6% in the prior fiscal year. The increase in the effective tax rate was primarily due to an increase in non-deductible expenses. Liquidity and Capital Resources General.
Highlights for Fiscal Year 2023 Compared to Fiscal Year 2022 (1) • System-wide sales increased 27.1% over the prior fiscal year to $3.5 billion; • System-wide restaurant count increased 13.0% over the prior fiscal year to a total of 2,214 worldwide locations, driven by 255 net unit openings; • Domestic same store sales increased 18.3% over the prior fiscal year; • Company-owned domestic same store sales increased 8.2% over the prior fiscal year; • Digital sales increased to 67.0% of system-wide sales; • Domestic AUV increased to $1.8 million; • Total revenue increased 28.7% over the prior fiscal year to $460.1 million; • Net income increased 32.5% over the prior fiscal year to $70.2 million, or $2.35 per diluted share, compared to $52.9 million, or $1.77 per diluted share in the prior fiscal year; • Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, increased 36.0% to $74.1 million, or $2.48 per diluted share, compared to $54.5 million, or $1.82 per diluted share in the prior fiscal year; and • Adjusted EBITDA, a non-GAAP measure, increased 36.1% to $146.5 million, compared to adjusted EBITDA of $107.6 million in the prior fiscal year.
Highlights for Fiscal Year 2024 Compared to Fiscal Year 2023 • System-wide sales increased 36.8% over the prior fiscal year to $4.8 billion; • System-wide restaurant count increased 15.8% over the prior fiscal year to a total of 2,563 worldwide locations, driven by 349 net unit openings; • Domestic same store sales increased 19.9% over the prior fiscal year; • Company-owned domestic same store sales increased 7.7% over the prior fiscal year; • Digital sales increased to 70.3% of system-wide sales; • Domestic AUV increased to $2.1 million; • Total revenue increased 36.0% over the prior fiscal year to $625.8 million; • Net income increased 54.9% over the prior fiscal year to $108.7 million, or $3.70 per diluted share, compared to $70.2 million, or $2.35 per diluted share in the prior fiscal year; and • Adjusted EBITDA, a non-GAAP measure, increased 44.8% to $212.1 million, compared to adjusted EBITDA of $146.5 million in the prior fiscal year. 31 Key Performance Indicators Key measures that we use in evaluating our restaurants and assessing our business include the following: Number of restaurants.
In fiscal year 2023, incentive compensation and performance-based stock compensation expense increased $9.3 million primarily related to the Company’s current fiscal year performance, professional and consulting fees increased $7.2 million associated with the Company’s strategic initiatives, and headcount related expenses increased $4.1 million to support the growth in our business.
The increase in SG&A expense was driven by an increase in headcount-related expenses of $10.2 million to support the growth in our business, an increase in performance-based stock compensation and incentive compensation expense of $7.6 million related primarily to the Company’s performance, and an increase in professional and consulting fees of $1.2 million associated with the Company’s strategic initiatives, including system implementation costs.
The following table reconciles net income to EBITDA and adjusted EBITDA for the fiscal years ended December 30, 2023 and December 31, 2022 (in thousands): Year ended December 30, 2023 December 31, 2022 Net income $ 70,175 $ 52,947 Interest expense, net 18,227 21,230 Income tax expense 24,135 16,369 Depreciation and amortization 13,239 10,899 EBITDA $ 125,776 $ 101,445 Additional adjustments: Loss on debt extinguishment and financing transactions (a) — 1,124 Consulting fees (b) 5,150 875 Stock-based compensation expense (c) 15,558 4,200 Adjusted EBITDA $ 146,484 $ 107,644 (a) Represents costs and expenses related to our 2022 securitized financing facility and payment of a special dividend, as well as the extinguishment of our 2020 variable funding note facility; all transaction costs are included in Loss on debt extinguishment and financing transactions during the year ended December 31, 2022, with the exception of $310,000 that is included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
The following table reconciles net income to EBITDA and adjusted EBITDA for the fiscal years ended December 28, 2024 and December 30, 2023 (in thousands): Year ended December 28, 2024 December 30, 2023 Net income $ 108,717 $ 70,175 Interest expense, net 21,292 18,227 Income tax expense 38,473 24,135 Depreciation and amortization 19,490 13,239 EBITDA $ 187,972 $ 125,776 Additional adjustments: Transaction costs (a) 316 — Consulting fees (b) — 5,150 System implementation costs (c) 1,713 — Stock-based compensation expense (d) 22,060 15,558 Adjusted EBITDA $ 212,061 $ 146,484 (a) Represents costs and expenses related to our 2024 securitized financing facility; all transaction costs are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
These should not be viewed as an alternative to cash flows from operating activities as a measure of our liquidity.
EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. These should not be viewed as an alternative to cash flows from operating activities as a measure of our liquidity.
(3) EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP.
The remainder was generated by franchised restaurants, as reported by our franchisees. (2) EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”).
These increases were partially offset by approximately $1.5 million in sales from the 53 rd week in the prior fiscal year. 36 Cost of sales Year ended As a % of company-owned restaurant sales Year ended As a % of company-owned restaurant sales December 30, 2023 December 31, 2022 Food, beverage and packaging costs $ 31,697 33.1 % $ 30,579 38.3 % Labor costs 22,963 24.0 % 19,234 24.1 % Other restaurant operating expenses 18,314 19.1 % 15,380 19.3 % Vendor rebates (2,328) (2.4) % (1,798) (2.3) % Total cost of sales $ 70,646 73.7 % $ 63,395 79.3 % Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 33.1% in fiscal year 2023 compared to 38.3% in the prior fiscal year.
Company-owned restaurant sales increased $24.0 million, of which $16.0 million was related to company-owned same store sales growth of 7.7%, driven primarily by an increase in transactions, and $8.0 million was primarily related to company-owned restaurants opened and acquired during fiscal year 2024. 35 Cost of sales Year ended As a % of company-owned restaurant sales Year ended As a % of company-owned restaurant sales December 28, 2024 December 30, 2023 Food, beverage and packaging costs $ 43,371 36.2 % $ 31,697 33.1 % Labor costs 28,317 23.6 % 22,963 24.0 % Other restaurant operating expenses 23,025 19.2 % 18,314 19.1 % Vendor rebates (3,081) (2.6) % (2,328) (2.4) % Total cost of sales $ 91,632 76.5 % $ 70,646 73.7 % Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 36.2% in fiscal year 2024 compared to 33.1% in the prior fiscal year.
The total number of shares repurchased under the ASR Agreement was based on a daily volume-weighted average share price during the valuation period specified in the ASR Agreement, less a discount and subject to adjustments. As of December 30, 2023, $125.0 million remained available under the Share Repurchase Authorization.
The number of shares to be delivered upon final settlement is based on the daily volume-weighted average share prices during the valuation period specified in the ASR Agreement, less a discount and subject to adjustments.
Interest expense, net Interest expense, net was $18.2 million in fiscal year 2023, a decrease of $3.0 million, or 14.1%, compared to $21.2 million in the prior fiscal year.
Interest expense, net Interest expense, net was $21.3 million in fiscal year 2024, an increase of $3.1 million, or 16.8%, compared to $18.2 million in the prior fiscal year. The increase was primarily driven by less interest income earned during fiscal year 2024 due to higher cash balances during fiscal year 2023.
The decrease is primarily related to a decrease in pre-opening expenses as compared to the prior year fiscal period, offset by an increase in the national advertising fund contribution rate to 5% from 4% effective the first day of the fiscal second quarter 2022.
The increase as a percentage of company-owned restaurant sales was primarily due to an increase in the national advertising fund contribution rate to 5.3% from 5.0% effective the first day of the fiscal second quarter 2024, partially offset by sales leverage related to the company-owned domestic same store sales increase of 7.7%.
The decrease is primarily due to a 27.1% decrease in the cost of bone-in chicken wings as compared to the prior year period. Labor costs as a percentage of company-owned restaurant sales were 24.0% in fiscal year 2023 compared to 24.1% in the prior fiscal year.
During fiscal year 2024, we were able to move the majority of our purchases of bone-in chicken wings away from the spot market to provide more predictable food cost. Labor costs as a percentage of company-owned restaurant sales were 23.6% in fiscal year 2024 compared to 24.0% in the prior fiscal year.
The Company’s existing revolving financing facility of Series 2020-1 Class A-1 Notes was terminated in connection with the transaction. The proceeds from the securitized financing transaction were used to pay related transaction fees and expenses, strengthen the Company's liquidity position and for general corporate purposes, which included a return of capital to the Company’s stockholders.
The 2024 Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “2024 Notes.” The proceeds from the securitized financing transaction were used to pay related transaction fees and expenses, strengthen the Company's liquidity position and for general corporate purposes, including the repurchase of shares of the Company’s common stock.
Depreciation and amortization Depreciation and amortization was $13.2 million in fiscal year 2023, an increase of $2.3 million, or 21.5%, compared to $10.9 million in the prior fiscal year.
Depreciation and amortization Depreciation and amortization was $19.5 million in fiscal year 2024, an increase of $6.3 million, or 47.2%, compared to $13.2 million in the prior fiscal year. The increase in depreciation and amortization was primarily due to software assets placed into service during fiscal year 2024 that relate to the launch of our proprietary technology platform: MyWingstop.
The Issuer also entered into a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit.
Following the increase, borrowing capacity under the Variable Funding Notes permits borrowings of up to a maximum principal amount of $300 million, a portion of which may be used to issue letters of credit.
Cash provided by financing activities of $103.3 million in fiscal year 2022 was primarily 38 related to the net cash provided by additional borrowings under our 2022 Class A-2 Notes (as defined below) of $250 million, partially offset by the payment of a special dividend in connection with the securitized financing transaction totaling $119.5 million, as well as deferred financing and other debt related costs incurred of $5.4 million.
The change is primarily related to the net cash provided by additional borrowings under our 2024 Class A-2 Notes (as defined below) of $500 million in fiscal year 2024, partially offset by an increase of $189.3 million in common stock repurchased under our share repurchase program as compared to the prior fiscal year. Securitized financing facility .
The increase in cash used in investing activities was primarily due to an increase in purchases of property and equipment during the current fiscal year, as well as an increase in restaurant acquisition costs as compared to the prior fiscal year. Financing activities .
The increase in cash used in investing activities was primarily due to an increase in capital expenditures related to our technology investments, as well as the impact of additional restaurants acquired from franchisees as compared to the prior fiscal year period, partially offset by the sale of seven company-owned restaurants to a franchisee in fiscal year 2024. Financing activities .
(b) Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
(c) System implementation costs represent non-recurring expenses incurred related to the development and implementation of new enterprise resource planning and human capital management technology, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
Revenue During fiscal year 2023, total revenue was $460.1 million, an increase of $102.5 million, or 28.7%, compared to $357.5 million in the prior fiscal year.
(1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, but excludes depreciation and amortization, which are presented separately. Revenue During fiscal year 2024, total revenue was $625.8 million, an increase of $165.8 million, or 36.0%, compared to $460.1 million in the prior fiscal year.
Removed
Change in Presentation Beginning in the first quarter of 2023, gains and losses on disposal of assets are no longer presented as an adjustment to EBITDA or Net income in our calculation of Adjusted EBITDA, Adjusted net income, and Adjusted earnings per diluted share.
Added
The increase is primarily due to a 43.0% increase in the cost of bone-in chicken wings as compared to the prior year period. Our purchases in the prior fiscal year period were tied primarily to the spot market, which benefited from significant deflation in the cost of bone-in chicken wings.
Removed
EBITDA, Adjusted EBITDA, Adjusted net income, and Adjusted earnings per diluted share are non-GAAP measures and are defined below. Prior period gains and losses on disposal of assets have been excluded from these measures to conform to the current presentation. This reclassification had no impact on operating income, balance sheets or statements of cash flows.
Added
Our net cash provided by financing activities was $144.8 million in fiscal year 2024, a change of $300.3 million, from net cash used in financing activities of $155.5 million in fiscal year 2023.
Removed
(1) The fiscal year ended December 31, 2022 benefited from a 53 rd week as compared to fiscal 2023. 31 Key Performance Indicators Key measures that we use in evaluating our restaurants and assessing our business include the following: Number of restaurants.
Added
The Issuer also increased the capacity of its revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”) from $200 million to $300 million.
Removed
For a reconciliation of net income to EBITDA and Adjusted EBITDA and for further discussion of EBITDA and Adjusted EBITDA as non-GAAP measures and how we utilize them, see footnote 2 below. Adjusted Net Income and Adjusted Earnings Per Diluted Share.
Added
On December 5, 2024, the Company’s board of directors authorized the purchase of up to an additional $500.0 million of its outstanding shares of common stock under its existing share repurchase program (the “December 2024 Authorization” and together with the August 2023 Authorization, the “Share Repurchase Program”), following the substantial completion of purchases of common stock under the August 2023 Authorization.
Removed
We define Adjusted net income as net income adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and related tax adjustments that management believes are not indicative of the Company’s core operating results or business outlook over the long-term.
Added
On December 9, 2024, the Company entered into an accelerated share repurchase agreement (the “2024 ASR Agreement”) with a third-party financial institution to repurchase $250.0 million of the Company’s common stock under its Share Repurchase Program.
Removed
We define Adjusted earnings per diluted share as Adjusted net income divided by weighted average diluted share count.
Added
Pursuant to the ASR Agreement, during the fiscal fourth quarter of 2024 the Company made an initial payment to the financial institution of $250.0 million in cash and received and retired an initial delivery of 551,325 shares of common stock, representing an estimated 75% of the total shares expected to be delivered under the ASR Agreement, based on the closing price on the date of initial delivery of $328.54.
Removed
The remainder was generated by franchised restaurants, as reported by our franchisees. (2) Fiscal 2022 included a 53 rd week; same store sales percentages were calculated excluding the 53 rd week.
Added
The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR Agreement, which is scheduled to occur in the fiscal first quarter of 2025.
Removed
Fiscal year 2022 includes approximately $0.5 million of third-party consulting fees incurred relating to a strategic initiative to consider the development of a business plan and financial model for potential vertical integration of a poultry complex, which review was completed in fiscal year 2022.
Added
During fiscal year 2024, the Company repurchased and retired 720,804 shares at an average share price of $339.95, inclusive of the shares repurchased under the 2024 ASR Agreement. During fiscal year 2023, the Company repurchased and retired 645,952 shares at an average share price of $193.51 under the 2023 ASR Agreement.
Removed
Given the magnitude and scope of these two strategic review initiatives that are not expected to recur in the 34 foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiatives not reflective of the ongoing costs to operate its business. (c) Includes non-cash, stock-based compensation, net of forfeitures.
Added
As of December 28, 2024, $311.1 million remained available under the Share Repurchase Program. Since the inception of the Company’s share repurchase program in August 2023, the Company has repurchased and retired 1,366,756 shares of its common stock at an average price of $272.89 per share.
Removed
(4) Adjusted net income and adjusted earnings per diluted share are supplemental measures of operating performance that do not represent and should not be considered alternatives to net income and earnings per share, as determined by GAAP. These measures have not been prepared in accordance with Article 11 of Regulation S-X promulgated under the Securities Act.
Removed
Management believes adjusted net income and adjusted earnings per diluted share supplement GAAP measures and enable management to more effectively evaluate the Company’s performance period-over-period and relative to competitors.
Removed
The following table reconciles net income to adjusted net income and calculates adjusted earnings per diluted share for the fiscal years ended December 30, 2023 and December 31, 2022 (in thousands): Year Ended December 30, 2023 December 31, 2022 Numerator: Net income $ 70,175 $ 52,947 Adjustments: Loss on debt extinguishment and financing transactions (a) — 1,124 Consulting fees (b) 5,150 875 Tax effect of adjustments (c) (1,236) (480) Adjusted net income $ 74,089 $ 54,466 Denominator: Weighted-average shares outstanding - diluted 29,856 29,963 Adjusted earnings per diluted share $ 2.48 $ 1.82 (a) Represents costs and expenses related to our 2022 securitized financing facility and payment of a special dividend, as well as the extinguishment of our 2020 variable funding note facility; all transaction costs are included in Loss on debt extinguishment and financing transactions during the year ended December 31, 2022, with the exception of $310,000 that is included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
Removed
Fiscal year 2022 includes approximately $0.5 million of third-party consulting fees incurred relating to a strategic initiative to consider the development of a business plan and financial model for potential vertical integration of a poultry complex, which review was completed in fiscal year 2022.
Removed
Fiscal years 2023 and 2022 include approximately $5.2 million and $0.4 million, respectively, in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023.
Removed
These increases were partially offset by approximately $3.0 million in royalties from the 53 rd week in the prior fiscal year.
Removed
These increases were partially offset by approximately $2.7 million in advertising fees from the 53 rd week in the prior fiscal year.
Removed
Company-owned restaurant sales increased $15.9 million primarily due to an increase of $10.3 million related to the increase in the number of company-owned restaurants as compared to the prior fiscal year, as well as an increase of $7.1 million related to company-owned same store sales growth of 8.2%, which was driven by an increase in transactions.
Removed
The prior fiscal year was impacted by the benefit of $5.4 million in forfeited stock awards, offset by additional expenses of approximately $1.0 million in expenses related to the 53 rd week.
Removed
The increase in depreciation and amortization was primarily due to capital expenditures related to our technology investments, partially offset by an estimated $0.3 million related to the 53 rd week in the prior fiscal year.
Removed
The decrease was due to $3.9 million of additional interest income earned during fiscal year 2023, as well as approximately $0.4 million in interest expense related to the 53 rd week in the prior fiscal year.
Removed
These decreases were partially 37 offset by an increase in interest expense related to the securitized financing transaction completed on March 9, 2022, which increased our outstanding debt by $250 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBone-in chicken wings accounted for approximately 16.8% and 23.1% of our company-owned restaurant costs of sales in fiscal years 2023 and 2022. A hypothetical 10.0% increase in the bone-in chicken wing costs in fiscal year 2023 would have increased company-owned restaurant costs of sales by approximately $1.2 million during the year.
Biggest changeA hypothetical 10.0% increase in the bone-in chicken wing costs in fiscal year 2024 would have increased company-owned restaurant costs of sales by approximately $1.8 million during the year. We do not engage in speculative financial transactions nor do we hold or issue financial instruments for trading purposes. Interest Rate Risk.
The Company is exposed to interest rate increases under the 2022 Variable Funding Notes; however, the Company had no outstanding borrowings under its 2022 Variable Funding Notes as of December 30, 2023.
The Company is exposed to interest rate increases under the Variable Funding Notes; however, the Company had no outstanding borrowings under its Variable Funding Notes as of December 28, 2024.
We do not engage in speculative financial transactions nor do we hold or issue financial instruments for trading purposes. Interest Rate Risk. Our long-term debt, including current portion, consisted entirely of the $720.9 million incurred under the 2022 Notes and 2020 Notes as of December 30, 2023 (excluding unamortized debt issuance costs).
Our long-term debt, including current portion, consisted entirely of the $1,220.9 million incurred under the 2024 Notes, 2022 Notes and 2020 Notes as of December 28, 2024 (excluding unamortized debt issuance costs).
Although we attempt to minimize the effect of price volatility by negotiating fixed price contracts for the supply of key ingredients, there are no established fixed price markets for bone-in chicken wings, and as a result we are subject to prevailing market conditions.
Although we enter into arrangements in an effort to mitigate the price volatility of food costs, there are no established fixed price markets for fresh bone-in chicken wings, so we may be subject to prevailing market conditions. Bone-in chicken wings accounted for approximately 19.8% and 16.8% of our company-owned restaurant costs of sales in fiscal years 2024 and 2023.

Other WING 10-K year-over-year comparisons