Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop Inc. Fiscal Second Quarter 2020 Earnings Conference Call. Please note that this conference is being recorded today, Wednesday, July 29, 2020. On the call, we have Charlie Morrison, Chairman and Chief Executive Officer; and Michael Skipworth, Executive Vice President and Chief Financial Officer. I would now like to turn the call to Michael. Please go ahead.

Thank you, and welcome. Everyone should have access to our fiscal second quarter 2020 earnings release. A copy is posted under the Investor Relations tab on our website at ir.wingstop.com. Our discussion today includes forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect. Our SEC filings describe various risks that could affect our future operating results and financial condition. We use certain non-GAAP financial measures that we believe to be useful in evaluating our performance. Presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are contained in our earnings release. Lastly, for the Q&A session, we ask that you please each keep to one question and a follow-up to allow for as many participants to ask a question as possible. With that, I would like to turn the call over to Charlie.

Thank you, Michael, and good morning, everyone. We appreciate you joining us for this call this morning, and hope everyone is safe and well. Our world has changed so much from where we were 5 months ago when the COVID-19 pandemic started, and our prayers go out to all who have been and impacted by the virus, Before I comment on our business results and recent trends, I'd like to thank our nearly 25,000 team members across the world, our franchisees, whom we affectionately refer to as our brand partners, and our supplier partners for their hard work and commitment every day that aligns with our core values. I'm proud to work alongside all of you during these challenging times, and I'm tremendously inspired by the results we have achieved together. I'm humbled by the continued strong performance in our business during these difficult times, which demonstrates the resiliency of the Wingstop brand. The strength of our brand is the results of our focus on our core values. We remain steadfast in our service-minded attitude, maintaining our authenticity and harnessing our entrepreneurial roots. We refer to our value systems as The Wingstop Way, and believe our culture and our team members are what differentiate us from every other brand. If COVID-19 was not enough to challenge our resolve, on May 25, our country was put to the test again with the senseless killing of George Floyd by former police officers in Minnesota. On June 1, I send an open letter to the Wingstop organization regarding our stance on the social and racial injustice that continues to be prevalent in our country. That included my challenge to leaders across the industry to leverage their voice and challenge each other to open the dialogue in their companies in an effort to listen,…

Thank you, Charlie. As you just heard, we delivered another strong quarter across the board, including 31.9% same-store sales growth, 44.7% on a 2-year basis. Despite the challenging backdrop of COVID-19, we opened 23 net new restaurants, resulting in 1,436 system-wide restaurants at the end of the second quarter, which represents a 10.2% growth rate. Royalties franchise fee and other revenue increased by $6.7 million to $27.9 million for the second quarter, driven primarily by our domestic same-store sales growth and 132 net franchise openings since the year-ago comparable period. Advertising fees and the related income increased $6.4 million to $19.9 million, due primarily to a 37% increase in system-wide sales compared to the second quarter in 2019. Our company-owned restaurant sales increased $4.4 million to $18.3 million for the second quarter. This increase is due primarily to same-store sales growth of 24.7%, the acquisition of one franchise restaurant and the opening of 2 company-owned restaurants since the second quarter of 2019. The cost of sales as a percentage of company-owned restaurant sales decreased by 300 basis points compared to the second quarter of last year. This decrease was primarily due to a 22.7% decline in the cost of bone-in chicken wings and our ability to leverage costs. This was partially offset by higher labor costs due to performance-based bonuses and incentive pay associated with COVID-19 for our team members and within the restaurant. Advertising expenses increased $5.6 million to $18.6 million in conjunction with the increase in system sales. Also, to remind everyone, advertising expenses are recognized at the same time the related advertising revenue is recognized and does not necessarily correspond to the actual timing of the related advertising. Selling, general and administrative expenses were $13.2 million in the quarter, which is a $0.2 million decrease versus the…

[Operator Instructions]. The first question will come from David Tarantino of Baird.

Congratulations on very strong results. Charlie, I was wondering if you could give us an update on how you're thinking about the sustainability of the strength you're seeing in the sales trends. And I guess, secondarily, given that a lot of this is coming to the digital channel, could you maybe give an update on how you're planning to use the data you're collecting as you get these transactions and in developing a CRM system and one-to-one marketing approach going forward?

Sure. Yes, I think as evidenced in the quarter, we're comfortable with the sustaining momentum that we had coming out of Q1, and that's sustained for us through the quarter, and as we noted as well, into July. And I think it's a result of the fact that we have made such investments in our digital and delivery capabilities that it's so easy to access our product. That product fits so well with all occasions, but more importantly, family occasions with the variety that we offer. And so I think as you look forward, that's going to be the thing that would sustain our momentum, barring any unforeseen macro challenges that we would encounter. If I think about coming out of Q1 and into Q2, we had a promotion for free delivery. We gained a lot of new customers into our database since we ended that promotion at the end of April and still maintained really strong results. So we're very happy with that. But as we continue to gain a lot of new customers, we are now engaging them and watching their patterns as they buy with us. And some so that would include waiting for that next purchase cycle, evaluating, whether or not they've hit that milestone, and if not, perhaps leveraging our CRM platform to bring them back in. But the indications early are that we had strong results from our core customers. We have continued new customers coming into the business, and we're seeing those purchase occasions repeat, which is another good indicator for the long-term potential of our performance.

The next question will be from John Glass of Morgan Stanley.

My first question, just a couple of details. Can you maybe just update where digital penetration stood at the end of the quarter or currently? I think last quarter, you said it was at 64%. Can you also talk about the dynamic between check and transactions, many of your QSR peers are noting that as transactions starting to rebuild? In your case, it's a different dynamic, but maybe the check average is coming down. Is that -- where does that dynamic stand between check and transaction growth and that total digital penetration as of now?

John, this is Michael. On your first question around digital, we held that pretty strong digital mix north of 60%. As you heard in our comments, I think -- and we saw in the release, it was 63.7% for the quarter, and we held that pace pretty well throughout the entire quarter. So we didn't see it really tail off in any material regard. As it relates to what we saw in kind of the components of the comp -- the strong comp growth of 31.9%, we did see a little bit of what those other brands referred to. We did see the growth -- the check growth in our comp moderate a little bit, and we saw some nice strength building in transaction growth, which is what we really want to see. And so we're encouraged by that. And a lot of that transaction growth, we're seeing, as Charlie mentioned, repeat from a lot of these new guests. We're also seeing some last users come back into the brand, and then another element that we're really excited about is our core, we're seeing a slight uptick in frequency with our core. So across the board, we're really encouraged with what we're seeing with the transaction growth.

And maybe as a follow-up, can you talk about competition, right? It's now becoming clear to the market that chicken wings is a very good category to be in. So we've seen traditional QSR player Domino's enter the category. We've seen some nontraditional entrants in the case of like Brinker, and they're using your partner, DoorDash to essentially enable that growth. What's the -- how do you assess, first of all, what that dynamic is? How pleased are you that your -- one of your delivery partners are essentially helping others get into this business? How do you defend the position? How do you think about competition more broadly as we've seen these changes start to unfold in the last month or so?

Sure, John. As you know, we've always felt as if we are is category all by ourselves. And although chicken wings are on the menus of almost every restaurant in America, especially casual dining players, as you mentioned, and pizza players, they've had them on their menus for a long, long time. What sets us apart is the focus on quality and the authenticity of our product. Everything starts with fresh wings. We cook them to order, we hand cut potatoes to make our fries, we hand prepare every single order. And we know that that's not case with others in the marketplace. And as it relates to our partners at DoorDash, they've been really great with us. They've been strong in promoting our brands. They do have a business to run that covers the entirety of the industry. And so we don't see that as a challenge for us, just as we haven't seen that we have a true direct competitor at all in the past more going forward, we hope.

The next question will come from Jeffrey Bernstein of Barclays.

Just thinking about the real estate and the unit side of things, I appreciate the guidance in terms of openings for this year. As we think going forward, just wondering what you're seeing in terms of real estate opportunities with the franchisees are finding better sites. Or maybe that's not the case when you're looking at more B and C sites, and perhaps kind of along those lines, it sounds like you already have a pretty good pipeline for 2021. So any color in terms of what could be an acceleration, whether using your traditional design or whether you're maybe perhaps creating a new design of more purely to-go and pick up type locations?

Jeff, thanks for the question. Yes, we were very pleased with the results, notably in June, where we opened 17 net new restaurants. And that momentum we expect to continue, and hence, why we provided the range for the year to make sure everybody understood that we do have a really solid pipeline in place for development. Our franchisees have come out of the initial stages of this pandemic, recognizing what we all have known for so long in the strength of this brand, but in a sense are doubling down and capitalizing on this opportunity to put restaurants in the ground and hence, the flurry of activity that we've seen. And we expect that to continue. We have a solid pipeline in place. We do not see any challenges of access to real estate right now. If anything, given the nature of our type of real estate we like, which is other people's B, B-minus and C-plus real estate, that's going to bode well for our traditional restaurants that we built. We have certainly recognized in this world where all locations are off-premise that the concept of a Ghost-Kitchen makes sense for our business, and we believe that so far. In fact, we opened 2 Ghost-Kitchens over the past 2 months outside the U.S. We've also opened them here in the U.S. And right now, we're in a mode of really understanding what those look like, so that we get an idea of how they start-up, how we gain traction. And ultimately, how they perform, but you can expect that the real estate cost is even lower than our already low costs. And the availability of that real estate is quite easy to access as well. And so -- and then the operating economics are stronger. So all in all, we think that's a great strategy to place these in areas where we otherwise would not have put one of our traditional retail locations. And we'll update more as we go as to what we think the potential is for those both in the U.S. as well as overseas.

Got it. And then just a follow-up on the cash usage. Very impressive to see the dividend increase, the confidence the Board has in the momentum. And I know you mentioned your leverage levels haven't fallen. I think you said one turn just in the last quarter. So I'm just wondering your thoughts on the potential of another round of leverage increase in the current environment? Or whether perhaps that wouldn't be ideal and perhaps you'd let the leverage levels fall lower rather than take on incremental debt in the current uncertain environment?

Jeff, this is Michael. We're really excited about the strength of the brand that was demonstrated both through the increase, the 27% increase in our regular dividend, but also the strong deleveraging that we demonstrated in the quarter. A combination of EBITDA growth with strong cash flow generation from our asset-light model, really just demonstrated how quickly we can delever with almost a full turn in one quarter. So we're encouraged by that. But I think in this environment, we're going to monitor how things develop and make sure we're being prudent. But I would say one thing we know for sure is we're going to generate a lot of cash. And we've talked about it before. Last quarter's call, the opportunity we have with how the brand performs in this environment, and as Charlie just talked about, the real estate landscape that's out there, we really believe we have an opportunity accelerate development in 2021. And I think you could see us potentially do something similar to what we did in Kansas City, where we leveraged our balance sheet as a way to accelerate development. So that could be a way that we use some of the cash that we're building on the balance sheet.

The next question will come from Andrew Charles of Cowen.

Charlie, obviously, coming into 2020, you weren't budgeting same-store sales of this magnitude that's produced a robust surplus in your ad fund budget. What are you and the franchise council view as the best use of the surplus? Is it perhaps a third flight of TV advertising in 2020? Is it another free delivery campaign? Are you thinking about spending that surplus in 2020 or perhaps holding on to it in 2021 when you're lapping the tough compares? I would love your insights on how you're thinking about this.

Andrew, great question. Thank you. We have talked about this to an extent. And we are, as you mentioned, generating cash that goes into our ad fund. The company ultimately will make the decisions as to where we go, but in advisement with our counsel. We do talk about what's best for the brand. And you don't know what next year is going to look like compared to where we are now. So it would make sense to be wise about how we allocate our dollars between now and into the future. But right now, we've made no specific decisions. So our end of year, rest of year calendar lines up exactly as we originally intended it to be. As you mentioned, we certainly could use some of that surplus for another free delivery message, if we felt it was necessary. As of right now, we don't have plans to do that either just given the momentum that we've been able to demonstrate here. So more to come on that. We might speak a little bit more about that after the next quarter or into Q4.

Got you. And that's helpful. And just following up on one of the questions earlier just around the amount of competition. This isn't the first national QSR first national competitor that's obviously launched wings in recent memory. Do you -- from past wing launches from competitors and the advertising behind that, have you seen incidence of do you think that, that raises awareness of the category and that served as a tailwind for you guys?

Yes. I'm glad you brought that thought out. It has historically been beneficial to us. Historically, meaning 3, 4, 5 years ago or more, at least during my tenure, that when we saw, for instance, a pizza company, promote wings with their large advertising budget, it does bring attention to the category. It has been beneficial to Wingstop. It certainly is not what is fueling any of our current growth. We don't think that's having a meaningful impact, and it never had a major impact, but it can help versus hurt. So we're not worried about it. We're going to continue to play our playbook, the way we've designed it and have been managing against it over a number of years now. And continue to focus on unit development as our means to continue to expand this brand into a top 10 status, and truly maintain our position as a category by itself.

The next question comes from Andy Barish of Jefferies.

Just an update on your thoughts on dine-in rooms reopening, where are you given the results? It doesn't seem like you really need them, but are there any kind of labor model advantages in your box to not opening dine-in at this point?

Andy, we have not made a decision as to when we would open the dine-in rooms. I think our focus will remain on our -- we've stated this term before, our FILO strategy. We're the first to close and the last to open. Because we do feel like it's in the best interest of our guests as well as our team members from a safety perspective to make sure that there's as little interaction as possible. And so we have been able to perform quite well. It doesn't present a labor opportunity or problem one way or the other, quite frankly. It's probably awash either way, more importantly, it's about safety and taking care of our guests. So at this point, no current plans to reopen the dine-in rooms.

And just a quick follow-up, can you give us any more concrete numbers on sort of new store opening volumes as we move through the first half? Obviously, there's been a lot of changes. But kind of what you're seeing and sort of what percentage of openings are in fortress markets?

Yes. The volumes on new stores continue to be quite strong. Of course, they benefit from this tailwind effect we've had since the pandemic began. So that's a little different than what -- where we were just prior to that. But are continuing to strengthen. Again, most of our development pipeline exists in those fortress markets as much as 75% of it. And so that means that, yes, most of these restaurants are opening in those markets, and we're maintaining a pretty strict discipline towards that. So that it's much more efficient and effective for the brand long term. And I would expect that as our momentum carries into Q3 and Q4 that would remain the same.

The next question comes from Nicole Miller of Piper Sandler.

I wanted to ask about the units that have actually gotten open. If you think about all the complexities in the current environment, frankly, opening 23 stores is pretty amazing. So I guess the question would be just because you have positive comps doesn't mean you didn't have the hurdles that others are having. Could you talk a little bit about the creativity and the hustle that your teams have executed to get those stores open?

Sure, Nicole. I talked to the team and to our brand partners because they did an exceptional job of being very entrepreneurial and focusing their efforts on ways to gain the attention of the local municipalities to be able to get these restaurants open. And a lot of it came through just getting permits and having those offices open, but we have some enterprising team members that actually figured out how to FaceTime permits and get those taken care of, so that people didn't physically have to be present. And we share those best practices across the enterprise, and it's worked well. And as you noted, we opened 23, but 17 alone in the month of June was a very, very strong month for the brand. So it gives us comfort as to what our potential is, certainly, if we can keep this momentum going.

The next question will come from Chris O'Cull of Stifel.

Charlie, I know you started the year out with a focus on attracting heavier QSR users. So with the data you're collecting from increased digital orders, can you give us an update on how much maybe of the comp growth you're seeing from this -- from new trial from this segment? And then I had a follow-up.

Chris, it's Michael. We're seeing some really nice progress, obviously, as we're bringing in a lot of new guests. So in that -- what we referred to as box 12 and 13 at heavy QSR user, we are seeing some really nice progress as we move them up the customer segmentation study that we have around levels of frequency. And so we're encouraged by that. But as I mentioned earlier, we're seeing some really nice growth in other areas as well. We're seeing lapsed users return to us, and then as I referenced, we're seeing a nice little uptick in frequency with our core. And so it's kind of all three of those is really what help you fuel that strong comp growth.

Okay. And then the company's investor presentation at the start of the year, I think, identified the best fit in international markets based on price and off-premise usage. Has the pandemic affected your international growth plans at all? Or made certain countries more or less attractive?

Not at all. Has it changed our outlook nor has it changed the particular markets we would go to? I think we still feel comfortable that the decisions we made and some of the pivots to certain markets are going to be very productive for us. We mentioned on the call that we opened two new restaurants in the U.K., both has come out of the gate very strong as we expected, one with the Dark Kitchen, one was a regular retail location, both quite strong. So I think that's just another testament to the fact that we feel like we're dialing this model in. And as we find the right partners and expand into new markets, it's going to yield the growth outlook that we presented at that point in time.

The next question comes from Michael Tamas of Oppenheimer & Co.

Great. Obviously, free delivery gave you guys a nice boost in your sales and doesn't seem like you've seen much deceleration after that ended. So once you move off the free delivery, are you seeing customers just continuing to use delivery and they just pay for it? Or do they shift towards pickup? Just wondering if you can comment on that?

Michael, its Michael. We are seeing a little bit of shift. As I referenced, we're seeing some nice frequency with our core, a little uptick there. But we have seen a little bit of an uptick in the digital carryout business as that free delivery promotion expired. And so you could see some users switching over to carry out. But what we did, and I think what helped kind of sustain that momentum is when that value expired with the free delivery promotion. At the same time, we launched the all-in bundle. Which is a $19.99 bundle offer, that's a nice value offer. So we introduced something else in the mix, if you will, to provide value to guests, which helped continue to drive the growth that we saw. And we've been able to sustain a delivery mix that when we compare it to pre-COVID levels, even after the free delivery promotion is 2x kind of where we were before COVID hit.

Great. And then when you think about some of the States and areas that have had to roll back some of the reopening plans. Just curious if there's been any noticeable change in your trends in some of those areas relative to the rest of your State?

No, nothing I'd call out, Michael, to really -- that's material or overall significant to the business.

Next question will come from Jared Garber of Goldman Sachs.

I just wanted to -- obviously, the unit growth pipeline remains really strong and very encouraging, especially with everything that's going on. Just wanted to get a sense of if you're seeing more interest from sort of non-current franchisees looking to enter the brand and get involved with Wingstop? Or is it still primarily current franchisees reinvesting into the brand?

Jared, the primary interest has in the past and continues to be from existing franchisees. That's where we focus most of our efforts unless there's a strategic need for a net new opportunity in a particular market. But those existing franchisees are the ones that are investing aggressively in our business right now.

And I guess a follow-up to that would be, just how are you guys thinking about kind of the fortressing strategy versus entering new market strategy?

I think consistent with the comment earlier, Jared, if you look at our pipeline that's in the mix today, about 75% of it is in fortress markets with the balance in new or emerging markets. And so that's a good indication of kind of how we would anticipate near-term development playing out.

The next question will come from Jon Tower of Wells Fargo.

Great. I am curious, I think there's a little bit of trepidation building in the market regarding industry same-store sales as supplemental unemployment insurance starts to wane, and the Government hasn't quite come up with another solution yet. So can you discuss perhaps how your customer base, which has historically skewed a little bit lower income relative to others in the fast-casual space? How that's transitioned over time, particularly as you've grown across the country?

I think it still is generally represented of that middle to lower income a little bit today, a little bit more ethnically diverse as we sit here today. But obviously, as we described a heavy QSR user, and it is a little bit higher income, a little bit younger as well. And so that's starting to work kind of into our overall consumer base. But as we think about what's in front of us. I think as Charlie referenced earlier, we feel our brand is well positioned to navigate the various scenarios you can play out for the balance of the year. And I think guests are rewarding us for the quality and convenience when they use us. And if you think about the fact that 2019 marked our 16th consecutive year of positive same-store sales growth, there's clearly a few recessions in that range, if you will, where we were able to continue to grow as a brand. Because guests typically use us as an indulgent occasion. And that seems to be an occasion they're less likely to give up and maybe the more frequent QSR visit.

And then just kind of a follow-up on the near term, obviously, your business is doing quite well with a disjointed sports calendar, but we're coming into a period now in the fall, where I think wing consumption spikes and is -- remains relatively high. So how are you thinking about the sports calendar this fall, particularly, if college football and/or professional football is in play and how you plan on potentially marketing to consumers to ensure that your business doesn't really slip all that much throughout this period?

Yes, John, actually, as we look at our business, we don't see a lot of seasonality when we think about fall sports. It's been -- it's pretty consistent throughout the calendar year. That being said, we've created the flexibility in our marketing calendar and strategy, to if there is sports, we can be there as part of the mix. It's not a heavy mix of our advertising, but we can be there. And if there's not sports in a scenario, you'll see us do probably what we did earlier this year and that's show some agility. And able to pivot our advertising to other areas where we believe guests are consuming content.

The next question will come from Matthew DiFrisco of Guggenheim.

Most of my questions were answered, but I just had, I guess, a bookkeeping one. Did you disclose what delivery was as a percent of sales? And I think there was a reference, it's 2x. Is that 2x pre COVID? Or that 2x year-over-year?

Yes. Thanks, Matt. That was pre-COVID. So, if you refer to some of our comment prior to COVID-19 hitting, we were -- our delivery mix was running low to mid-teens, and so we've seen kind of throughout the quarter, it sustains kind of 2x that mix level.

So 30%, around?

That would be mathematically within the range I provided.

Okay. And then just also another clarification. Did you actually spend then less -- and given that there were no live sports during most of 2Q? Did you spend less in absolute dollars in marketing or put to work into the marketplace than you did in 2Q '19?

No. We did not cut back against our original advertising plan, which was an increase, if you think about how system sales grew year-over-year, north of 20%, we spent the planned dollars. We obviously pivoted on where we spent those, but we spent against budget. And I think what we've talked about earlier is this strong top line growth is actually bringing more dollars into the ad firm than originally planned.

Okay. And then one real quick easy one, I guess, for you here. The labor side, I thank you for calling that out. I think you said you did a COVID compensation in 2Q. Is that correct to assume in the company-owned stores that would sunset in the second half as well? Did the franchisees pay something similar? And also will that sunset in the second half?

Yes. I think that the situation out there is pretty fluid. We're going to continue to reward our team members who are on the frontline, taking care of our guests and providing that great Wingstop experience. So we'll see. It's a plague today, but we'll see how much longer it stays in the mix. And we have shared this as the best practice with our brand partners throughout the system, and quite a few of them are adopting that or something similar.

The next question will come from Jeff Farmer of Gordon Haskett.

Just following up on Matt's question. Relative to in-restaurant pickup, can you guys give us a sense of what the delivery margin looks like for both marketplace orders and your white label or dispatch orders? Just any sort of order of magnitude in terms of margins would be helpful?

Yes, just for competitive reasons, Jeff, we don't disclose that. One thing to make clear is, based on some changes we made in late 2019, the economics on a marketplace delivery order or a delivery order through wingstop.com, they're at parity. And so our brand partners on the P&L are agnostic on kind of -- from an economics perspective, which channel the order comes from.

Okay. And then as another follow-up, just trying to understand a little bit of a case study here. So just using Houston as a case study for one of the major Wingstop markets used accounts. How did the Wingstop customer's interaction with the concept evolve or change in that market jumped? Did you see transactions from your core customers move up? Or what happened there? That's interesting to understand how this whole dynamic plays out in the COVID backdrop for us?

Yes. Top of mind, Jeff, I can't call anything out specific, but in the Houston market as it relates to any recent spikes in COVID cases. I do know that obviously, guests are continuing to use Wingstop because of the social distancing measures we've put in place because of the carryouts that we have and then obviously, delivery. And so we're well positioned for consumers, and I think they've demonstrated that throughout the quarter to continue to use us because they feel comfortable interacting with the brand.

The next question will be from Andrew Strelzik of BMO.

Had a question about how you're thinking about wing costs from here after what was a very favorable quarter. Now that you've got the other kind of ramping? And when you think about the new entrants to the category, does that incremental purchasing have the potential to move active around that?

Andrew, thanks for the question. As we sit today, the price of wings is $1.68 a pound. It's still lower than it was last year. And there is traditionally some seasonality into the fall with wing prices. And so as of right now, we would expect to follow that traditional seasonal curve. But that being said, where prices are today and where they could seasonally kind of move to is still really far from a level that could impact development as an example. I think as you refer to some of these recent entrants into wings, really kind of what we saw, was we offer a Jumbo Wing on our menu, and we actually saw prices go up for the smaller wing -- smaller to medium-sized bird wings of what a lot of these other brands are using. But I think one thing we've seen -- or see in inflation, brands who are [indiscernible] retreat quickly because of the volatility in the commodity.

And then just one other one for me, if I could squeeze it in, if you could talk about the spread between the company store comp perspective, is that just geographic mix or kind of cycling, delivery? Or what are the dynamics that caused that wider spread than we've seen kind of over the last several quarters?

It's tough to overthink 30 restaurants out of a system of 1,436. We're pretty excited about the comp of 24.6% for the quarter for our company-owned stores. And probably more exciting is the fact that, that AUV is approaching $2 million, which is really encouraging. And we're also seeing the AUV for the whole system climb up and quickly approach $1.4 million. So we're excited about the results.

And this concludes our question-and-answer session, and also concludes today's conference call. We want to thank you all for attending today's presentation. You may now disconnect your lines. Have a great day.