Hello, and welcome to the Third Quarter 2020 Dine Brands Global Earnings Conference Call. My name is Lee, and I will be your conference operator for today. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Please note that this conference call is being recorded. I will now turn the call over to Mr. Ken Diptee, Executive Director of Investor Relations. Sir, you may begin.

Good morning, and welcome to Dine Brands' third quarter conference call. I'm joined by Steve Joyce, CEO; Tom Song, CFO; Jay Johns, President of IHOP; and John Cywinski, President of Applebee's. Before I turn the call over to Steve for opening remarks, please remember our Safe Harbor regarding forward-looking information. During the call, management may discuss the information that was forward-looking and involves known and unknown risks, uncertainties and other factors, which may cause the actual results to be different from those expressed or implied. Please evaluate the forward-looking information in the context of these factors, which were detailed in today's press release and 10-Q filing. The forward-looking statements are as of today and assumes no obligation to update or supplement these statements. You may also refer to certain non-GAAP financial measures, which are described in our press release and also available on our Investor Relations website. With that, I'll turn the call over to Steve.

Thank you, Ken. Good morning, everyone, and thank you for joining us today. I hope you are all safe and doing well. As the industry gradually settles into a new normal for the foreseeable future, the challenges we faced have brought out the best in our franchisees and team members. I am extremely proud of their commitment and fortitude. Additionally, their alignment with our strategy to stabilize our business and restore growth contributed to both brands delivering continued sequential improvements in quarterly comp sales. I am very pleased to report that our off-premise business at both brands posted strong growth in the third quarter, even as states gradually reopened. Off-premise comp sales increased by an impressive 144% at Applebee's and 154% at IHOP. The pandemic has caused a shift in consumer behavior and change how guests access our brands. We believe the convenience of takeout and delivery will remain appealing to our guests even as dining room restrictions are eased across the country. According to a recent McKinsey & Company Consumer Pulse survey related to COVID, 56% of respondents intend to continue using restaurant delivery and 46% intend to continue using restaurant curbside pickup. The survey also showed that 40% of respondents ranked dining indoors at a restaurant or bar as one of their top three activities they are eager to resume following, getting together with friends and getting together with family, which are obviously closely linked. In some states that don't have restaurant capacity restrictions, but still require social distancing, we are seeing consumer demand exceed capacity in certain cases. With that said, we believe the guests returning to our restaurants for dine-in service will compliment on already robust off-premise business and provide additional upside to sales. As we navigate through the pandemic, Dine’s operations team remains fully engaged…

Thank you, Steve. Good morning, everyone. During the early stages of the pandemic, we took certain precautionary measures to augment our financial flexibility during the time of great uncertainty. To that end, we drew $220 million in March of 2020 from a revolving credit facility, all of which remains outstanding as of September 30. As a result of this and other proactive steps, Dine continues to have a strong liquidity position and significant cash on our balance sheet at the end of the third quarter. As Steve mentioned, we had total cash of $390 million, including restricted cash of $80 million. I'd like to highlight that if you exclude the $220 million that was strong, our total cash is nearly the same level of total cash we had at year-end 2019. This is a notable milestone. As restaurants continue to reopen for dine-in service, weekly comp sales trends improved for both brands during the quarter. Just to compare, at the beginning of the third quarter, Applebee's was down 22.3% and IHOP was down 40.4% in comps for the week-ended July 5. In comparison, for the final week of the quarter ended September 27, Applebee's increased 40 basis points and IHOP decreased 23.5%. These comp sales figures represent improvements at 23 and 17 percentage points during the quarter for Applebee's and IHOP, respectively. During September, both brands posted their best weekly comp sales performance since the week-ended March 1. The solid improvement in comp sales trajectory is primarily due to the progressive reopening of our domestic restaurants, as well as the significant growth in off-premise business that Steve mentioned earlier. Now let's turn to our third quarter financial results. For the third quarter, we reported adjusted earnings per diluted share of $0.80 per share, compared to $1.55 per share for the…

Thanks Tom, and good morning, everyone. Good afternoon, if you are on the East Coast, I've often stated that Applebee's is at its best in times of adversity, and this couldn't be any more evident than it is today. After seven extraordinarily challenging months, we've come full circle from closing our dining rooms in March to achieving our first week of positive comp sales in September. This has been a remarkable story of overcoming adversity and returning Applebee's to its vibrant leadership position in casual dining. After being down 49.4% in Q2, Applebee's comp sales were down 13.3% in Q3. Sequential improvement throughout the quarter was very clear as we moved from minus 18.4% in July to minus 15.2% in August to minus 7.4% in September. And I'm very pleased to report that this strong trajectory has accelerated here in early Q4 with comp sales at minus 1.9% through the first four weeks of October. Now to put this performance in proper context. According to Black Box intelligence, Applebee's has now outperformed the casual dining category over the past 17 consecutive weeks. This terrific momentum coincides with our return to national marketing if you recall back in mid-June after a self-imposed 90-day hiatus at the peak of the pandemic. This is also a strong indicator as to the current health of the brand. Recognizing, we still have several geographies impacted by COVID lockdowns, creating natural variability throughout the system, as you might expect. Additionally, our franchisees have been remarkably consistent in paying the royalty and advertising fees, including our March, April deferrals, which are being paid back over nine months as Tom, referenced beginning in August. Importantly, our 99% collection rate beginning in May has allowed us to quickly reestablish our economic model, very important to us, as well as…

Thank you, John. Good morning, everyone. I hope you're all doing well and staying safe out there. IHOP’s third quarter comp sales declined 30.2%, which represents a sequential improvement of 28.9 percentage points compared to the second quarter of 2020. The brand's performance continued to be impacted by the effects of governmental mandated restrictions on dining room operations and soft traffic across the daypart as consumers continue to mainly work from home. I'd like to highlight that the overall breakfast category in general remains challenged as the morning meal has been oftentimes replaced at home due to the diminished work transit. At the start of the third quarter, our performance in July reflected the resurgence of coronavirus cases and dining room restrictions put in place by state and local governments due to the spike. Also, we did not utilize national media through the first three weeks of July. As a reminder, we opted to discontinue our marketing late in the first quarter, except for some basic local marketing and a brief off-premise campaign. Our weekly comp sales and traffic both improved 10 out of 13 weeks, respectively, during the 13-week period ending September 27. This included our best performing week since early March. I'm pleased with our trajectory and the good progress that we've made. IHOP’s third quarter comp sales continue to be in line with the overall family dining category according to Black Box. I'm delighted to report that IHOP outperformed family dining after trailing the category for the second quarter. We're very focused on recouping the remaining 25% decline in comp sales. The opportunities we're addressing to restore sales, include reopening units, safely reaching higher capacity in our restaurants, driving traffic to the non-PPM dayparts, plus continuing to pusher to-go business channels. To broaden IHOP’s appeal to consumers…

Thanks Jay. To wrap up, we've achieved meaningful improvements in both Applebee's and IHOP comp sales, but we know that more and more needs to be done. Our off-premise business continued to drive solid growth, which we believe the majority of what we can retain and still as consumers continue to take advantage of our to-go services. We again ended the quarter with a strong cash position and liquidity, which positions us to meet our debt obligations and withstand current industry conditions. Lastly, we have a plan in place to restore Dine’s growth trajectory. I have great confidence that our management team with the continued support of the Board will successfully achieve our goals. I am very optimistic about the road ahead for Dine, for our franchisees, and for our team members. Now, with that, we'd be pleased to open the call to any questions you may have. Operator?

[Operator Instructions] And your first question comes from the line of Jake Bartlett from Truist. Your line is now open.

Great. Thanks for taking the questions. My first is on Applebee's and just the strong trajectory of the improvement weekly same-store sales. What do you attribute that to? Maybe if you could give us some examples of what's really driving that trajectory? And I'm wondering whether the addition of plexiglass dividers, the addition of outdoor dining, the marketing obviously, has helped since mid-June. But what is the trajectory, what's driving the trajectory since then?

Sure, Jake. This is John. Good question. I think you referenced a couple of the points there. First and foremost, I'd say our franchisees and restaurant teams have been very overt in visibly demonstrating safety and sanitation practices through our internal research. It clearly is building a level of trust that's essential on this environment. I referenced, I believe in my remarks, brand affinity and revisit intent. We see those – we track those metrics versus year ago and we track them versus a subset of competition. And in both cases, we're seeing significant improvement. So I guess our final point, the marketing activity has certainly resonated. We started out with a very kind of appropriate tone in welcoming America back to Applebee's. If you recall, we featured Welcome Back Kotter music, and then the theme song from Cheers. We coupled that with value propositions that were broadly appealing. We narrowed our menu. It makes it easier for our restaurants to execute. You add all that up and in the face of these headwinds that all brands face, we have a very solid trajectory and very optimistic and hopeful franchisee community as we look to next year.

Great. That's helpful. Obviously, a focus for investors today in the market, but just assessing the risk of imposing – new restrictions being imposed on restaurants. Can you tell us what the performance has been at – same-store sales performance has been at stores that have indoor dining and stores that do not have indoor dining? See how that – how in position of restrictions could impact results.

I think from an Applebee's perspective, Jake, we are fundamentally indoor dining at this point. We have restrictions there. And there is variability that is tied directly to the restrictions. And so you'll see a delta from one state to the next – that delta. The good news is all metrics are moving in a northerly direction and that delta between those with heavy restrictions and those with almost no restrictions is getting tighter and tighter. So I won't quantify beyond that.

Hey Jake. This is Jay Johns at IHOP. I'll answer the same question. I think it's probably pertinent. It's very different across the Board, as you know, if you just look kind of state by state right now, we've got about 18 states that we would say are 50% or less in restrictions. So typically that’s 15% or 25%. You've got about nine states that are over 50%. So basically they are at 75% most of the time. Then you got about 22 states with no restrictions. But there is still social distance restriction in some of these locations. So even though the state may be fully open depending on the social distance, six foot of your table, but still kind of limited to about a 50% capacity when you think of it like that. And then California is the X factor, it's very regional and very different. We've had a very big footprint in California. So some places have 25%, some are 50%, a large part of California is still completely closed down in tabular dining only. As far as our footprint, we've got about 20%, 25% of our restaurants predominantly in warm weather states that the prototypes already had patios on them. So they already have the advantage of a patio and its there all the time. We probably have another 20% or so that added on some type of supplemental patio. Again, most of those were in warmer weather climates, which you'll be able to continue that for some time. There are patios that are up in the Northeast and East. And we will have some impact, but the grand team of the size of our organization and the amount of them that are in cold weather places, we just don't think it's going to be that material. The bigger issue is governmental capacity restrictions that states are closing down completely. Then you've really got to double down again on off-premise.

Got it.

I think one of the things that gives us some confidence is if you look at the geographic dispersion of both brands, both brands are heavily distributed in markets that have fairly heavy restrictions. So we're already dealing with those capacity restraints in a lot of the markets we're in and we'll have to wait and see. Obviously, we're going to follow whatever the government tells us to do and make sure that we keep our customers and team members safe. But we already are at the numbers we're achieving in the markets that aren't as strong – aren't as open as a lot of the markets.

Got it. And then my last question is just on the closures at IHOP. And I'm wondering if this is similar to the effort at Applebee's a few years ago where you’re waving any penalty for closing stores. Is there a kind of concerted effort to kind of clean up the system here and provide some relief for the franchisees that are operating those underperforming stores? And related to that, how confident are you that that 100 is the kind of the maximum number of closures over the next six months?

Well, I think the first – this is Jay, again. I think the first thing I would say is that we are looking at significantly underperforming restaurants that were probably going into the pandemic in a much weaker state than other locations. So this isn't a broad franchisee issue. Our Applebee's and IHOP had very different kinds of systems. I've got almost 300 franchisees, 100 of them have only one or two locations. The ability to weather this kind of pandemic maybe very different for a single unit franchisees. This is their job and their livelihood as opposed to [indiscernible] 25 restaurants. And they have one restaurant that's causing them issues. So we're doing that assessment right now. And we really just wanted to make sure that we informed all of you and the Street that we're working on this that we think that up to 100 is the right number at this point for what we know. And there'll be more to come in the future on that.

Great. Thank you very much. I appreciate it.

Your next question comes from the line of Nick Setyan from Wedbush Securities. Your line is now open.

Thank you. Yes, two questions. First, are there still things assuming capacity constraints, don't continue to – these are still things that are potentially implementable to increase sales whether it's the continued implementation of dividers or the continued rollout or maybe tents in the parking lot, et cetera. Are there sort of store specific things that we can continue to do?

Nick, this is John. I think our franchisees, frankly, for both brands have proven not only resilient, but extraordinarily entrepreneurial in maximizing square footage with social distancing parameters. So there's no stone unturned on that front. And we continue to innovate, so outside of the physical space constraints that you're referencing. We continue to innovate and provide relevant messages for our guests. So even in those situations where the outdoor seating, which is a great example of that kind of entrepreneurial spirit, maybe hampered a bit by cold weather, you couple that with the easing of restrictions in many geographies, not all, but many, and that tends to offset that adverse impact of losing some outdoor seating.

I think on the IHOP side, Nick, I think very similar story. I think the franchisees – remember what I just said about the makeup of my franchisees. These are truly entrepreneurs. These are people that this is their job. It's their career. In many cases, it's their life savings. They get really creative on how to solve problems when these things come up. They've already – even in cold weather areas, they've been working with their local governments on how do you put in five seaters, how do you stay open as long and as much as you can. And I think on the macro level, one of the things you've got to remember, I know there's a lot of thought and question about losing outdoor dining, but there's also a counterbalance for our system. Think about Arizona, they can't use their outdoor patios when it's 118 outside very easily, right? People don't want to be out there. Well, as you get into winter, those capacities actually improve and they increase. So you start to have puts and takes around the country for our system. We have individual franchisees though that we've got to help them and share best practices. And when someone figures out a new way to do things, be it on improvements on Carside or improvements on how you heat a tents on your patio, we'll share those. And we'll make sure that we're leaving no stone unturned to be able to help the franchisees in the system.

Yes. So I think Nick, if you think about it in terms of the levers, obviously one of the biggest levers that would help us would be decrease restrictions. So we'll have to play that out. But we've got lots of other levers to pull. We've got expanded hours because we're still operating at a lesser hour rate for most restaurants. As people return to some level of school that will drive some business. As people, as there are some return to offices that will drive some business. And what we're finding is municipalities are doing a lot to work with us to let us tent parking lots and takeover sidewalks and do all sorts of things because they're interested and their business is surviving and they will get tax revenue. So even if we don't get a lot of restrictions there is other levers we can pull. And in addition to that, we're pushing heavily into digital, which will help us. And we're doing different things with some of the delivery companies, all of which we think will help push off-premise and delivery more.

Nick, I guess the – this is John. The final point here, it's a very interesting note outside of everything that we do, and we control, we have found guests behavior to modify here. They're very savvy and so while business historically has been concentrated in a tight, 5:30 to 7:30 dinner window and a tight 11:30 to 1 o'clock lunch window, we have found guests behavior to modify here. And they are choosing kind of the fringe dayparts, if you will, earlier dinners, later dinners, mid-afternoon. And what that does for us, it allows us to fully leverage capacity and those other dayparts. So we're not trying to filter out as many guests quite honestly at the peak dinner hours, that helps.

Thanks for all the detail. It's very helpful. And on the margin side, the bad debt expense, obviously we saw the sequential decline there. Is that going to continue to decline? Do you think, is there any visibility around, where those levels head from here and also if some of the bad debt expense over the last couple of quarters is recoverable?

Yes. Those are all good questions, Nick. And I'll start from, kind of the leading indicators of how you think about bad debt. One is obviously sales levels, performance of our franchisees, franchisee health. But also we indicated in our scripted portion, some of the other leading indicators, which is on that deferral balance because that doesn't represent them. We're sensitive to the fact that those represent increased payments during that very, very tough period, when a lot of the country was on lockdown, we did provide the deferrals. We thought it was industry-leading deferral program. But the repayments on that program has been very, very strong. And we had a number of franchisee repay the balances in full. And so we feel that's a very good leading indicator as is our collection tree on both brands remains very, very strong. So we think that trajectory will continue Nick. It's good that you did note the sequential improvement and well you never know given all the uncertainties that continue in the market. We hope that's going to continue to improve.

Great. Thank you very much.

Your next question comes from Brian Vaccaro from Raymond James. Your line is now open.

Thank you and good morning. I want to just follow-up on that IHOP capacity topic and sorry if I missed it. But did you say how many units currently have the partitions installed and do you have line of sight into how many might have it by the end of the year within the next six months or some timeline you have in mind?

I think that – and this is a rough estimate of where we are right now. These numbers change all the time as people keep making changes. But we think there's about 20% of our restaurants that have added on some type of outdoor dining or partitions or whatever based on what the local restrictions and/or requirements are for them to invest the money to do that to help expand the capacity.

Okay. So that would be – I think you mentioned 20% outdoor or partitions, just kind of broader initiatives to expand capacity.

Yes. And in lot of cases, those tend to be similar that’s across over there, right. A lot of those are at the same locations. It just the way the government restrictions are. Those restrictions on indoor dining, some of those are in same states and same municipalities kind of allow both of those.

Okay, great. And I guess shifting gears to franchisee profitability. Can you maybe touch on that for each brand and maybe start with IHOP? Where's the four-wall profitability in the down 25% to 30% range or average weekly sales 25%, 26%, 27% range? Can you provide an update on that front?

Yes. This is Jay. I'll start with IHOP. Overall, our franchisee financial health given what they've been going through is actually pretty good. It's hard to – I will say averages lie. If you look at an average, you think, okay, well, we're getting closer and closer making money, but so many different franchisees are in different places. And just giving example, looking at state results, in a recent week, I had one state that was down over 50% another state that was plus 10. So you hit the disparity between how this is working. Generically speaking, once the franchisees get to set 70%, 80%, 85% range of sales, those are pretty good shape as far as flowing some cash. And obviously, they're not making the kind of money they were, but as far as they can even paying their bills, et cetera. If they can get their individual restaurants and their business up to that level, they can sustain a lot longer in this kind of environment that we're dealing with right now. But if you're down 50%, that's a different issue and then how they are as a franchisee is very different based on what's their footprint, do they have a restaurant – do they have restaurants only in California where maybe all the restaurants are still closed, except for off-premise? That's one issue. If they've got five restaurants in California and five more in Arizona, maybe that's a different issue. They can balance out the portfolio a little bit with their profitability. So it's kind of all over the Board, but when they get up to about that 80% of their previous sales level, they start being a little better place than they were before.

Hey, Brian, this is Tom. I'll answer on behalf of Applebee's because we have our own company operating portfolio, which really is a lot of respects represents that kind of average portfolio in the system in terms of size. We have 69 units in North and South Carolina. Really pleased with how that team has brought back those restaurants into an open status – and have been flourishing despite these very, very tough conditions. So when we look at the four-wall profits there, Brian, we anticipate we're going to be in a fairly solid four-wall profitability perspective, EBITDA positive for the year and a cash flow positive at this point in time. So again, Applebee's is in a more favorable position, sales wise clearly than IHOP. We are, again aware of that, but hopefully that gives you some insights on that, on the Applebee’s side.

Yes. I think it's also worth noting Brian, that a lot of our franchisees took advantage of the PPP program. So that has significantly helped cash positions. And I think is in part wide. We're experiencing the kind of receivables and cash flow that we are. So obviously that program – and we are working very closely through our associations and we're involved with most of them to push for another program, which will hopefully help franchisees again and then also working with them on Main Street Lending Program and SBA loan programs. So we're trying to work both ends of it. Obviously, the most important is bringing the business background. But the other is pushing for financial support for our franchisees as we approach them through the various associations and various advocate programs that we've got going. It doesn't look like – obviously it's going to happen in pre-election, but it'll be fast and furious following the election because everybody's going to be scrambling for federal dollars. And we want to make sure that we're at the front of the line.

Yes Brian, this is John. The mission is returning to positive sales. On the Applebee's front, when you look in particular at the trajectory in Q3 and in particular first month of Q4 as a franchisee, recognizing there's some variability across geographies, we get back to positive sales and we're in great shape. Our mission right now is to get all franchisees in the portfolio back to that position.

Yes. That's great. And then just last one, I just had two quick clarifications on the guidance if I could. Tom, for the guidance on G&A, the $45 million, is there any lumpiness or timing or non-recurring items kind of pushing that number to $45 million? And is there a way to maybe tease out a more normalized quarterly run rate? Or is that a new quarterly run rate? And then can you clarify on the tax rate too, I think you gave an annual number. Would you be willing to give kind of a quarterly number just to make sure we're on the same page? Thank you.

Yes. So that's a good question. So Q3 G&A was roughly $37 million. We're guiding and it's bumping up to $45 million. Let me provide a bit of a bridge. I think it'll help. We do have a bit of an extra pay period in that fourth quarter. So that's a couple million dollars. We have frankly some deferrals, during our Q2 austerity, and beginning of Q3 austerity mode, as we were in the cash preservation, as our primary motivator for G&A. We do have some deferred items in there that we – we made a decision to hold back on, but then come online. So that's another $3 million or so. And then we have some COVID related expenses that elevate our G&A above our typical norm. That's another few million, so that kind of bridges between the $37 million and the $45 million. And just remember, we brought back all outstanding furloughed employees. At this point, we had 97% of our restaurants open. We really do need to support our franchisees. And so we are fully resourced at this point. Hopefully, that answers your question.

Yes. That’s helpful. Thank you.

Your next question comes from the line of Jeffrey Bernstein from Barclays. Your line is now open.

Great. Thank you very much. Couple of questions. My first one, just specific to the Applebee's brand. John, I think you mentioned a talk of a virtual brand, like that's the theme this morning with your largest peer, perhaps pursuing something similar, although it seems like you guys are using Grubhub. I'm just wondering if you can give any color. I think you said 700 units thus far and the entire system in the first quarter of next year, but whatever you could share in terms of early feedback on sales or margins, or incrementality, whatever early learnings you have would be very helpful? And I have a follow-up.

Sure, Jeff. I think we probably see some differences between brands. I know you're referencing another competitive brand specifically. We've kind of dipped our toe in the water here in this initial 700 restaurant pilot. We have some very good learning, won't share results. I will tell you that the learning is leading us to fundamentally reposition in terms of relevance and menu and branding. That'll take place in Q1 probably towards the back half of Q1. And at that point in time, I'll share more information in terms of everything from delivery partners to naming to menu and marketing. We believe it's a significant incremental lever that we just haven't pulled that yet with any meaningful activity, but the learning is robust.

Okay. And then just in terms of the broader industry. There's lots of talk about independent closures, and I know this came up last quarter on your call, obviously significant independent closures would presumably be a silver lining for the larger chains allowing for some market share gains. I think last quarter, you've mentioned a very large forecast. I'm just wondering three months having gone by now, what you're seeing thus far in terms of industry-wide independent closures. Obviously, you've got touch points in pretty much 50 states. So any color you could provide in terms of the closure outlook thus far would be great.

So clearly, we're not hoping that other people are suffering through this crisis. So however, if you look at the industry forecast from the various associations, there's a significant number of closures that have occurred and that will continue to occur as this extends out. And those numbers range broadly based on the study, and it is mostly believed to be an independent restaurant issue. But you’ve also seen a bunch of changes are struggling. So we're not sure what the total fallout is. Clearly, when there is empty restaurants, it could be opportunity for us. We're not hoping to gain on other people's losses. However, it will be an opportunity for us as those numbers are substantial. And in terms of restaurants, the numbers range in the 30 percentage points, and in terms of independence, they range higher than that. So those are the general numbers we're seeing. We don't have any insight other than what we're seeing from the industry studies. And that's what we're here.

Yes. And I think the national – Jeff, the National Restaurant Association has published that they are currently seeing about a 100,000 closures in the industry. They haven’t categorized that by category. They haven’t defined whether the breakout there around independence and change. I think Steve brings up a very good point. Don't make the assumption, this thing is just impacting independence. It’s impacting vulnerable change to be clear winners. Certainly our brands will be at the top of that list and there'll be others that struggle because they don't have the scale or the infrastructure or the talent that some of these more formidable brands like Applebee's and IHOP have.

Understood. And then just lastly, it's been great working with Steve over the past number of years. I know you guys talked about at some point a transition to a new CEO in early 2021. Just wondering, well, perhaps a delicate topic, just if there's any update in terms of how that search goes or whether Steve decides he's going to stick with us for the next few years.

Actually, it's not that delicate at all. So the process is the same. The Board is working diligently along the process. They will make an announcement at some point, when they decided the final positioning of it. Obviously, I'm here working surprisingly full-time as we continue on this process and we'll do that until we've got somebody new to report to you, that'll come in and hopefully build the brands from here.

Great. Thank you.

I would now like to turn the call back over to our presenters for their closing remarks.

So thank you. We appreciate your time. Appreciate the questions. Obviously, we feel pretty good about where we are, but it is a cautious optimism based on what we might face going forward. However, we think we're in a great position with a great business model, great brands, great franchisees. We'll look forward to speaking with you again in hopefully a healthier and more profitable new year.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you for your participation.