36:5Day, and thank you for standing by. Welcome to the Papa Johns' second quarter 2023 conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the call over to your speaker today, Stacy Frole. You may begin. Good morning, welcome to our second quarter earnings conference call. This morning, we issued our 2023 second quarter earnings release. A copy of the release can be obtained on our investor relations website at ir.papajohns.com under the News Releases tab, or by contacting our investor relations department at investor_relations@papajohns.com. On the call this morning are Rob Lynch, our President and CEO, Ravi Thanawala, our new Chief Financial Officer, and Chris Collins, who previously served as our interim Principal Financial and Accounting Officer. Before we begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These statements may involve risks and uncertainties that could cause actual results to differ materially from these statements. Forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our SEC filings. In addition, please refer to our earnings release for the required reconciliation of non-GAAP financial measures discussed on today's call. Lastly, let me thank you in advance for asking only one question and getting back in the queue for more follow-up. Rob? Thank you, Stacy. Good morning, everyone, and thanks for joining us. Before we get started, I want to take a moment to welcome Ravi to the team. We look forward to leaning into his vast experience in finance and operations with global consumer brands, as well as his international expertise. Most importantly, his passion for fostering collaboration and building high-performing teams makes him a great addition to our leadership team. I also want to thank Chris Collins for stepping up and leading our financial team and being a strategic thought partner during this period of transition. Thank you, Chris. As you read in our earnings release this morning, we are pleased with the solid execution that our teams have demonstrated in what continues to be a challenging operating environment. We know that we cannot control inflation or our customers' spending behaviors, but we can control how we execute our operations to drive a better customer experience and better margins, how we create and introduce new menu innovation to expand our customer base and increase frequency, and how we utilize our data to drive insights and revenue management strategies to optimize all sales channels. I'd like to particularly call out our domestic company restaurant performance, as we focused on faster service, enhancing operational efficiencies, and effectively managing margins coming out of the pandemic. These efforts, combined with the continued success of our menu innovation and advancements in our revenue management capabilities, are producing results as our company-owned restaurants achieved 2% comp sales growth in the second quarter and year-over-year margin improvement above and beyond the benefits of moderating food costs. The level of discipline that our teams and franchisees have implemented into our operations over the past year is remarkable. We're also receiving external recognition for these efforts, as the American Customer Satisfaction Index scores recently ranked Papa Johns as number one in guest experience in the pizza category and in the top five for all fast food restaurants. This recognition is further evidence that the operational improvements that we are making are building a solid foundation that is paying dividends today and will continue well into the future. However, the solid performance by our company-owned restaurants was not enough to offset the lower-than-anticipated comps our domestic franchisees experienced during the quarter. Our teams have been partnering with our franchisees to find ways to drive business improvements in an ever-changing consumer environment. We have identified three core areas of opportunities for our franchisees, including modifications to their revenue management strategies, leveraging best operating principles, and deploying marketing optimizations. Our franchisees worked to make the appropriate adjustments, they saw sequential improvement throughout the quarter and delivered positive comps by the end of June. More importantly, these positive trends have accelerated into the third quarter in both our company-owned and franchise restaurants, giving us confidence we'll produce positive comp sales in the back half of 2023 and over the longer term. Let's dive a bit deeper into some of the key drivers of our improving North America sales trends and restaurant-level margins. I'll start with menu innovation. A key component of Papa Johns' strategy is our winning menu innovation pipeline. In May, we launched our new proprietary menu offering, Doritos Cool Ranch Papadia, in partnership with Pepsi and Frito-Lay. With a $7.99 price point, it is a great value. This launch generated a significant amount of buzz and additional traffic to our digital channels. In fact, we saw double-digit growth in digital sessions at the start of the promotion. Following this successful launch, our franchisees experienced improving weekly transactions, while ticket remained consistent with the prior year. Several weeks after introducing Doritos Cool Ranch Papadia, we brought our barbell strategy to life by also promoting our popular extra-large New York-style pizza at an attractive $12.99 national price point. This layered approach to our national promotions contributed to the positive franchisee comparable sales that we began to see by the end of the quarter into our overall higher sales this past month. Continuing with our menu innovation, we recently expanded one of our most popular pizza platforms, Stuffed Crust. Our new limited time Garlic Epic Stuffed Crust Pizza, which launched nationwide this week, is another example of how we are leveraging our brand equity of better ingredients, better pizza. Garlic Epic Stuffed Crust is layered with garlic, one of the ingredients for which Papa Johns is best known, in three different ways: inside the crust, on top of the crust, and on the side with our signature garlic dipping sauce. We're also taking this offering up a notch with the introduction of Spicy Garlic Epic Stuffed Crust at the end of this month to keep the momentum going. Another key driver of our improving sales is our Back to Better operations strategy, which focuses on introducing best-in-class unit-level productivity and operational excellence initiatives across all of our restaurants. Faster out-the-door times at our company-owned restaurants were an early win for us, and they continue to improve, down more than 25% from where we were a year ago. As I previously mentioned, faster delivery ensures our products are hot when they arrive, which is the number one driver of product satisfaction for pizza. Our company-owned restaurants are also reducing make times while delivering continuous improvement in product quality, order accuracy, and labor allocation. These efforts are not only driving comp sales, but are also increasing restaurant margins. Finally, our revenue management team remains focused on driving incremental sales by offering every customer the right product, at the right price, at the right time, in the right channel. During the second quarter, a gap remained between the performance of our company restaurants and that of our franchisees. Over the past year, our franchisees have been increasing their prices at a faster rate than our company-owned restaurants in an effort to preserve margins during this highly inflationary period. As a result, they have experienced a larger decline in transactions relative to our company-owned restaurants this past quarter. We've been performing ongoing business reviews with each franchisee, utilizing cross-functional teams to enhance their business operations, along with identifying opportunities to optimize their pricing and promotional models. This surgical approach is delivering sequential improvement in transactions and higher customer satisfaction ratings system-wide. We are pleased with the progress we have made to date. With more than 85% of our transactions taking place through our digital channels, we see additional opportunities to close the gap by leveraging the data and consumer insights at our disposal to optimize our pricing strategies across the system. One more area of growth that I would like to highlight today is our aggregator model and its channel offerings. To give you some history, we were the first national pizza chain to holistically partner with the leading aggregators, giving us significant experience, deep expertise, and strong capabilities in this channel. Today, we remain competitive on price while still garnering margins comparable to our organic delivery business. Maintaining a strong value proposition in what is an increasingly competitive consumer environment in these marketplaces, has consistently delivered growth quarter after quarter. We feel good about the opportunity to continue leading in the aggregator channel as our entire system embraces the model as a key driver of transaction growth. Going forward, as these marketplaces bring on additional offerings, attracting even more customers, we're excited about the broader opportunity presented to Papa Johns to continue to capture new demand. We expect to deliver positive North America comps in the back half of 2023, do not believe it will be enough to offset the softness already experienced by our franchisees in the first half of the year. As a result, we're adjusting our fiscal 2023 North America comp expectations to flat to up 2%. On a longer term, more normalized basis, we remain confident in our ability to grow North America comp sales between 2% and 4% annually, are not changing that long-term guidance. In our International business, comps were down 1% from last year, which primarily reflects declines in the U.K., our largest international market. However, we are pleased with the improved relative performance in the second quarter in the U.K. as we implement best practices developed within our domestic market, including marketing investments, specifically in the aggregator channels, menu innovation, and operational improvements. Excluding the U.K., our international comp sales for the second quarter were positive, driven by strength in our Asia and Middle Eastern markets. This strength is also translating into accelerated unit development, as we have announced significant long-term development agreements within both of these markets. In June, we established a company-owned restaurant portfolio in the U.K. with the acquisition of 91 restaurants. We also recently acquired 27 additional locations in July, bringing our total ownership in the U.K. to 118 restaurants. I recently visited these locations. After meeting with our leadership team and those in the field, I'm excited about the long-term growth potential of these restaurants in the holistic U.K. market. We continue to make strategic investments across our international organization and infrastructure. It will take some time, but our investments in IT to support sales through improved capabilities like e-commerce, loyalty, and revenue management, are setting our global franchisees up for sustainable long-term success. Which brings me to the final topic I'd like to discuss today: unit development. When I first joined Papa Johns in 2019, I highlighted one of our strategic priorities was to profitably expand our footprint domestically and internationally. At the time, we were experiencing negative domestic unit growth in 2018 and 2019, and due to the pan-pandemic, we only opened five net new restaurants system-wide in 2020. Since that time, we have significantly improved our AUVs and restaurant-level profitability, signed some of the largest development agreements in company history, and continued to accelerate new unit growth. This drove some of the highest system-wide net new unit openings in company history in 2021 and 2022. In 2023, we are tracking to a record year as we remain on schedule to open between 270 and 310 net new units. At the midpoint, this is a 5% increase in total system-wide units. At the beginning of 2022, we introduced a new multiyear development goal of 1,400 to 1,800 net new units between 2022 and 2025. This implied global net new unit growth between 6% and 8% for fiscal years 2023 through 2025. Since we put these targets in place, we have experienced many unforeseen circumstances, including, but not limited to, an extended war in Ukraine, material inflation around the globe, permitting and construction delays within North America, and higher financing costs due to the interest rate increases. Despite these various challenges, we continued to remain confident in our ability to meet our long-term expectations as our global pipeline continued to grow. This was supported by our most recent announcement of 650 new restaurants in India over the next 10 years. We know that the investments we're making and strategies we are executing today will enable us to capitalize on the significant white space we see all around the world. We also recognize that there are still some near-term headwinds that continue to persist, and therefore, our rate of growth may be slightly lower than our initial target. As a result, we are resetting our long-term net new unit growth rate from a range of 6%-8% to an annual range of 5%-7% going forward, which remains at a very healthy level. This new guidance would imply a net new unit range of 1,150 units-1,400 units between 2022 and 2025, compared with the original guidance of 1,400 net new units-1,800 net new units I mentioned earlier. Ongoing, we will continue our rapid pace of development to take advantage of the global white space that we see. Before I turn the call over to Ravi, I want to reiterate the strength of our business model as demand for Papa Johns remains high, driven by our innovative pipeline and our better ingredients, better pizza brand positioning. Although 2023 will once again be a record year of system sales, we have seen some near-term challenges in the first half of the year, driven by macro pressures and difficult comparisons. Despite these challenges, we are confident heading into the second half of 2023 and over the long term. Our Back to Better strategy, coupled with our product offerings and our strong unit growth plan, both domestically and internationally, positions us well for the future. We have an extremely strong team in place to execute on our strategy, and the future is bright. Now I'd like to turn the call over to Ravi. Thank you, Rob, and good morning, everyone. I'm excited to have the opportunity to talk with you today. While I've only been here for a couple of weeks, I'm pleased to be able to say that what I saw from outside the company is being validated with every conversation I have. Papa Johns is a differentiated brand with a robust pipeline of menu innovation and significant amount of white space for new store growth, both domestically and internationally. I'm excited to partner with our marketing and insights team to activate the vast amount of data we have to incentivize consumer behavior. With more than 85% of our transactions occurring through the digital channels, we are in a unique position within the QSR space to quickly identify and adjust to changing consumer trends, allowing us to optimize their experience each time they order from Papa Johns. I'm also excited to work with and support our franchisees. I grew up in a franchising family, experiencing firsthand how the franchise model creates opportunities for so many people. I've also realized through my professional career how attracting experienced partners to a great brand with great products can enable a company to localize and scale quickly in new markets. I want to thank Chris and our finance team for their leadership and support during this period of transition. They have done an amazing job supporting the business and delivering value to all stakeholders through accurate and timely financials, disciplined financial analysis, and collaborative business partnerships. I also recognize how important it is for me to get to know all of you in the financial community. Stacy is in the process of setting up a schedule to meet with many of you in the next few weeks. I'm looking forward to those meetings and hearing your thoughts firsthand. Now, I'd like to turn the call over to Chris to cover the financial portion of today's call. Chris? Thank you, Ravi, and good morning, everyone. It was a great pleasure serving in the interim role, and I look forward to working closely with Ravi as he steps into the CFO role at Papa Johns. For the second quarter, global system-wide restaurant sales were $1.22 billion, up 2% in constant currency from the prior year. Net unit growth, primarily in international markets, contributed to the higher system-wide sales. North America comp sales were down 1%, a result of 2% increase in our company-owned restaurants, offset by a 2% decrease in franchisee restaurants. For the quarter, our domestic company-owned restaurants saw year-over-year ticket and transaction growth, while franchisee ticket growth was offset by lower transactions. A variety of factors have impacted transaction growth in the short term, including the timing of national promotions relative to the prior year and franchisees prioritizing margin over transactions. As Rob highlighted, both franchisee and company-owned restaurants saw transaction improvement month after month during the quarter, resulting in positive North America comps for the month of June, and we maintained that positive growth into the third quarter. International comps were down 1% in the second quarter as inflation continued to pressure consumer spending in our U.K. market. Strength in other international markets, especially in Asia and the Middle East, largely offset these pressures. In the second quarter, we completed the purchase of 91 formerly franchised restaurants in the U.K. These restaurants began operating as an international company-owned restaurants effective June second. Therefore, our second quarter results include royalty revenues for these restaurants for the period until June 2nd, and the restaurants are consolidated after this date, with results reflected in international revenues and expenses. This transaction's impact on adjusted operating income in the second quarter is nominal and neutral to EPS. Total revenues for the second quarter were $515 million, down $8 million from the second quarter last year. Excluding the purchase of the U.K. restaurants, total revenues were down $10 million versus the prior year. The decrease in year-over-year revenues is largely related to our North America Commissary segment. Revenues for this segment were down due to lower sales volumes at our franchisee restaurants and lower commodity prices, partially offset by the comparable sales growth we saw at our company-owned restaurants. Turning to profits, adjusted operating income for the second quarter was $37 million, compared with $40 million for the same period last year. Adjusted operating margins were 7.2%, a 50 basis point decline versus last year. Our Back to Better strategic initiative led to higher restaurant level margins at our domestic company-owned restaurants through higher comp sales and labor efficiencies, which I'll discuss in a moment. These improvements were offset by anticipated higher G&A expense due to the return of our franchisee conference in April for the first time since 2019, and higher variable compensation expense when compared with the second quarter last year. In addition, there was higher depreciation and amortization expense related to our continued investments in restaurants and technology support. For modeling purposes, we anticipate depreciation and amortization expense to be between $60 million-$65 million in 2023. Our teams continue to do an excellent job taking a disciplined approach to managing costs while maintaining our high-performance culture and supporting our strategic growth initiatives. Let's take a deeper dive into our operating segments. In our Domestic Company-Owned Restaurant segment, food basket costs improved 50 basis points compared with the prior year, as we are beginning to experience meaningful relief from prior year peaks, especially in cheese and poultry. Labor costs improved more than 100 basis points during the second quarter, reflecting continued improvements to our labor modeling and adherence to labor scheduling guidelines. These efforts have increased our throughput and reduced our overtime spend, supporting our continued margin improvement in our restaurants. On a combined basis, commodities and labor costs represented more than 150 basis points of margin improvement year-over-year in our Domestic Company-Owned Restaurant segment. Higher than anticipated health insurance claims largely offset these improvements, resulting in an approximate 20 basis point increase in restaurant-level margins compared with a year ago. As we look towards the second half of the year, we expect to see more improvement in our domestic company-owned restaurant margins as food costs continue to moderate and our team continues to execute on our strategic initiatives. In our North America Commissary segment, second quarter revenues declined by 6% year-over-year, driven by the lower volumes and lower commodity pricing I mentioned earlier. Adjusted operating margins remain consistent with our cost plus fixed margin model. For our International Operating segment, adjusted operating income was down in the second quarter compared with the prior year. As mentioned earlier, the U.K. is our largest market, and it is the only international market where we own the commissary. Given that our U.K. market's revenue streams come from royalties and our commissary sales, the challenges we are facing have a more pronounced impact on our international profits. Partially offsetting declines in our U.K. market is our continued development and diversification into other international markets. As of the end of the second quarter, we have seen an 8% increase in net new unit growth within our international markets when compared with a year ago. Moving on to cash flow and balance sheet. For the first six months of the year, net cash provided by operating activities was $94 million, up from $46 million a year ago. Free cash flow increased to $59 million, reflecting favorable changes in working capital, partially offset by a $4 million dollar increase in capital expenditures as we continue to invest in the development of new domestic restaurants and technology innovation. We ended the quarter with ample liquidity, which totaled approximately $270 million in cash and borrowings available under our revolving credit facility and a gross leverage ratio of 3.4x, down from 3.5x at the end of the first quarter. Based on our strong balance sheet and positive outlook, I'm pleased to say that our board has declared a 10% increase in our 2023 third quarter dividend to $0.46 per common share, or $1.84 on an annualized basis. Our capital structure provides us with substantial operating flexibility. We'll continue to take a disciplined and balanced approach to managing our cash flows, creating value for our shareholders through a combination of organic growth investments, cash dividends, and share repurchases. Now to our outlook. As Rob previously announced, we are adjusting our 2023 North America comp guidance to a range of flat to +2%. We do expect to see positive comps for the second half of the year, driven by new menu innovations, execution of our Back to Better strategic initiatives, and continuous improvements in our revenue management capabilities. Furthermore, we are reiterating our expectations of growing our North America comps between 2% and 4% annually over the longer term. For the full year, we anticipate international comps will remain under pressure as challenges within the U.K. continue to persist, but will improve each quarter as our new U.K. restaurants are integrated into our corporate organizational structure, and other international markets continue to perform and grow. We expect our adjusted operating margins to be comparable to up slightly to the level achieved in 2022 as we benefit from several tailwinds, including our Back to Better initiatives, positive North America comps, and the benefit of a 53rd week in 2023. Offsetting these tailwinds are the investments we are making in the U.K., including the creation of some operational and back-office infrastructure to support the recent acquisition of restaurants and higher corporate G&A expenses as performance-based comp ramps back up versus the prior year. I want to emphasize that we expect longer-term margin benefit from our recently acquired U.K. restaurants once they are fully integrated into our corporate structure, but there will be some near-term pressure as we integrate these stores. For modeling purposes, remember that the third quarter is typically our lowest margin quarter due to seasonality of sales. Finally, in terms of non-operating expense items, we expect our net interest expense to remain between $40 million and $45 million, our capital expenditures to remain between $80 million and $90 million, and our tax rate to remain at the higher end of our 21%-24% range. All non-operating expense items are in line with previous guidance. As we look forward, we remain focused on driving growth and profitability at Papa Johns to deliver shareholder value. We have numerous initiatives in place to help us achieve our objectives, including menu innovation, digital enhancements, operational productivity improvements, unit growth, and strategic capital allocation. We remain confident in our ability to capitalize on our position of strength and to execute our long-term strategy, driving value for our customers, our franchisees, and our shareholders. With that, I'll turn the call over to Rob for some final comments. Rob? Thank you, Chris. As I mentioned at the beginning of the call, we continue to operate in a challenging environment. Despite a challenging start to the first half of the year, the improving trends throughout the second quarter and solid start to the third supports that we are on the right path forward and that consumer demand for our products remains strong. The foundation of our success has been and will continue to be the solid execution against our strategic priorities. They are building a culture of leaders who believe in diversity, inclusivity, and winning, improving unit-level profitability of our operations and franchisees, establishing the superiority of our pizza through our commercial platforms, building a technology infrastructure that enables our business operations, and expanding our footprint domestically and internationally. We're excited about the opportunities available to us and have confidence in the sustainability of our progress. At this point, we'd like to open the call up for any questions you may have. Certainly. As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from Brian Bittner of Oppenheimer. Your line is open. Good morning. As it relates to the same-store sales, Rob, can you just talk a little bit more about what specifically surprised you in the second quarter relative to the update you gave us in early May? At the time, I think you expected comps to sequentially accelerate throughout the year. And, you know, what, what do you believe, secondly, is bending the trend back in the right direction in June and July? I know you talked a lot about a lot of different things on the call related to sales drivers, but, you know, based on your insights, what's specifically driving this improvement back to kind of where, where you thought you'd be? Thanks. Thanks for the question, Brian. April was the worst month that we've had since I've been at Papa Johns in terms of comp performance. You know, a lot of macro issues and, and, and company-specific issues. You know, that was kind of where we really discovered and, and spent some time talking about, you know, some of the pricing that had gotten out in front of where the, the consumer was willing to, to spend. That's where we really dug in on the revenue management side with our franchisees, making sure that they understood kind of where we were headed from a, you know, from a, a consumer standpoint. In addition to that, you know, it's, it's, it's not talked about a lot, but I think also the discretionary spending power of the customer was impacted in April due to a lot of the decrease in the, in the tax refunds. That, that, that kind of hit us as well. We. You know, when I met with a lot of analysts and investors in May, my bullishness on the quarter was really focused on the innovation that we were about to bring. I knew we had Doritos Papadia, and then, you know, more recently, garlic stuffed crust. So I had a lot of excitement about that. Also, just the work that we were doing in our company restaurants, we were seeing, you know, consistent sequential margin improvement, regardless of some of the challenges on top line sales in the month of April. Over the quarter, we, we did see both improvement in sales and margin throughout the quarter, and that's why we've given some color in the Q3 as well, because Q3 has continued that momentum and actually accelerated. We do believe that the innovation that we brought, the operational improvements that we're making, are driving both top line and bottom line results for our company restaurants, and we are laser-focused on working with our franchisees. We continue to outpace franchisees in terms of, of comp growth in our company restaurants, and a lot of that growth is transaction growth, and that gives us even more confidence because we're not just winning by taking pricing or increasing, you know, our, our revenues. It's, it's about bringing more customers. There is a lot of demand for our products, and that's what gives us a lot of confidence in the back half of this year and moving forward. I know it's just one question, but I have to follow up on that specifically, because you did identify that there's this pricing variance between franchise stores and company-owned stores, and that being a big driver of the traffic issues you're seeing in franchise stores relative to the company-owned. Obviously, the franchise system and, and how they perform from a, a sales perspective is very important to the company. Can you talk about how meaningful the variance in price was, that, that led to the traffic bifurcation in franchise stores? Again, what are you doing specifically to correct this issue and, and help franchise stores restore kind of the price value equation? Yeah. I mean, as I, I think we've talked about it in the past, you know, this is a relative to most traditional QSRs, this is a relatively Complex Revenue Management segment of the QSR industry. In QSR, when you pull into a drive-through and you look at the menu board, what the price that's on the menu board is what you pay. You know, this model that we deal with here in pizza is more of an e-commerce model, where it's planned ahead, and there's shopping that goes on. You know, so as customers come into the storefront, which is essentially our digital channels, you know, they are looking at what is being offered, both from a new product standpoint as well as a special/discount standpoint. In this segment of the industry, you know, there's typically, you know, over 20% discounts applied on average to each transaction. So from a revenue management standpoint, it's not as simple as just saying, "Hey, we're gonna take our menu prices up, or we're gonna take our menu prices down." How our menu prices interact with the specials that we offer, with the promotions that we're running, both national and at the local level, is all kind of an algorithm that has to work together. So as we work with our franchisees, we're, we're not just going in and saying, "Hey, you have to take your prices down on your regular menu price." It's, it's how they show up in pricing on the aggregators. It's how they- execute their, their e-deals and the discounts that they offer on their, in, through the digital channels. All of that is, is in play. Even carryout specials, as, as some volume shifts a little bit from delivery into carryout, making sure you have the right offering there. We are working with them, not just to come in and tell them how they can maximize their margin. It's really how they can build the successful long-term relationship between all those different facets of revenue management. Thank you so much. You got it, Brian. Thanks for the question. One moment for our next question. Our next question will come from Joshua Long. Steven, your line's open. Great, thank you for taking my question. Following up on that, when we think about some of these opportunities, Rob, and then also the improvement to date, seems like there's a lot of runway in terms of thinking about those three initiatives you outlined in terms of particularly the revenue management and, you know, the comments you just shared. When you think about that improvement to date, how much of that is being driven by some of these focus points that you've outlined? Then just, I mean, as we look back in the model, you know, comparisons did these or duties as we think about 3Q versus last year. You know, how much of that is just maybe the environment normalizing a little bit after you move past April? Or, you know, what kind of context can you offer up in terms of just what, you know, inning or kind of the, the process of rolling out some of these, what seem to be longer term, you know, meaningful initiatives, in terms of the, you know, top-line profitability, execution at the store level? Thanks for the question, Josh. What I would tell you is that our company restaurants right now are executing at an extremely high level, from an operation standpoint, from a revenue management standpoint, you know, from an advertising and, and promotion standpoint. The way our company restaurants are performing gives me a high degree of confidence in our ability to take advantage of the runway that you, that you, that you highlight. The model really hasn't changed. I mean, we're still focused on driving innovation, both on the product side as well as the technology side, making sure that we're unlocking the white space that we have, both domestically and internationally, and making sure that we are helping making sure that our restaurants are running at a, in an economic model that will warrant continued investment in new stores. We're seeing that in, in the company side, probably stronger. You know, obviously, you have the pandemic period where there was some artificial inflation and, and demand, given the, the, the, the situation that we were all faced with. In, in regards to kind of a normalized run rate, which I do feel like we are, are kind of entering into, you know, Q2 is probably the, the, the quarter where we kind of broke from a lot of kind of the, the pandemic lapping and, and, and comparables. You know, we're, we're entering into a much more normalized run rate, and this is about as strong of an operating model as I've seen in our restaurants to date. Our goal is to make sure, as Brian highlighted, that our franchisees are set up to deliver as strongly moving forward. All the fundamentals are there. I mean, we're selling the same food with the same business model. We just have to tweak some of the, some of the capabilities and, and how it's being executed at scale across our franchise system. We have, we have the ability to do that. We're focused on it. We know where the, the challenges and the gaps are, and, and that's what gives us so much confidence moving forward. Great. Thank you. I'll hop back in the queue. One moment for our next question. Our next question will come from Sara Senatore of Bank of America. Your line is open. Thank you. I, I was interested to hear about your, your comments about the aggregator, mart channel and, and how you, you know, were, were early to that. I was wondering two-part question. One is, you know, can you talk about if there are any differences in, you know, the competitive dynamics online versus offline? You know, I think there's a general view that that's been articulated that aggregator customers are less value-seeking than, you know, perhaps, people who, who are offline. I was, you know, curious, you know, to the extent that you talked about the importance of value, if, if maybe, that was the wrong perception. A related question is, you know, with your faster out-the-door times now at company stores, sounds like, you know, perhaps hiring and, and productivity issues are, are behind you. You know, would you contemplate, you know, bringing all the, the delivery piece in-house as opposed to the delivery as a service component that, that I think you use now? Thanks. Thanks, Sara. You know, when we talk about the competition online versus offline, I mean, everything that we do is online, essentially. You know, 85% of our business comes across digital channels, and 15% that goes into the, you know, is, is our phone calls, now go into a centralized call center and then come in digitally. Everything that we do is online. Now, the, the, the difference is between our organic online and our aggregator online. I think that's where you're, where you're driving the question. I think historically, you have seen aggregators have less price sensitivity and be less value-seeking. I think as the aggregators have scaled and as the aggregators are become a larger population, you're seeing their behaviors and their affinities be more similar to kind of the macro, more to the general population. What I will tell you is that, you know, we are focused and have been able to create a dichotomy where our organic channels offer our repeat customers a better value, primarily through the loyalty program that we offer, our Papa Rewards program. I mean, it's gonna be really hard for someone to go on to one of the aggregators and get a better deal than we can offer them through our organic channels. What you see is a lot of the aggregator volume is incremental because the people that are our best customers are typically buying through our organic Papa Johns website or app, mobile app. I don't know that the consumer price sensitivity is significantly different across the channels at this point. I think it was early on, as you had early adopters coming in. I think that has been a bit more streamlined and more consistent with gen pop, but we are always gonna offer, always aspire to offer a better value than they can in our organic channels. In regards to your second question, and our improved operations and improved staffing, yes, our goal would be to service all of our transactions with our organic drivers. That being said, you know, there are different situations and different markets that, that still require a pretty heavy usage of DoorDash Drive. If you think about, particularly on the West Coast, where the cost of labor and the accessibility of labor has been really challenged, we find our, our franchisees out there are leaning more heavily on DoorDash Drive. In the markets where we have been able to staff up, the markets where we have been able to, you know, productively leverage our own labor, you see lower rates. I don't see DoorDash Drive ever going away. I think it, you know, labor on demand is a, is a great asset that we've leveraged for a long time, but optimally, we would be able to leverage our organic drivers to a larger extent moving forward. Understood. I guess just to your point, online versus offline, just it sounds like when I talk about online, kind of an aggregator, you can see literally on the same screen, but it sounds like there isn't that much distinction anymore between, you know, how competition works there versus, you know, to your point, you know, people who are looking at your proprietary, you know, ordering and, and maybe in, in, you know, isolation versus comparing you directly to competition. The same sort of advantages prevail on the aggregators as, as they do elsewhere. Yeah, I, you know, I would tell you that, like, the, the shopping behavior is pretty similar. You know, obviously, by definition, aggregator, obviously, they're aggregating all of them into one site. But even, even on the organic channels, I mean, they're still shopping multiple sites. It's just as easy to have, you know, four apps side by side, Little Caesars, Papa Johns, Pizza Hut, and Domino's, sitting there on your phone, as it is to go into DoorDash and see them all stacked up inside their platform. I think that competitive shopping dynamic that, it, you know, exists in both of those channels. Thank you very much. Very helpful. Got it. One moment for our next question. Our next question will come from Chris O'Cull of Stifel. Your line is open. Great. Thanks, and good morning. Rob, I know you've said in the past that much of the transaction growth from the pandemic period came from capturing incremental customers, and that average frequency hadn't changed much over that period. I'm just curious, with some of the operational changes that you've made, particularly in company stores, whether you're making any progress on increasing average frequency among your existing customers? Yeah, I mean, that is absolutely the long-term goal, right? As we continue to improve service levels, we will create more loyalty and therefore, more frequency. You know, I, as we called out earlier, one of the things we're really proud of is that we were just recognized by the ACSI as number one in service in this industry, which is a huge external validation of all the Back to Better work that we're doing. I mean, fundamentally, I believe that this business and all restaurant businesses are you know, live and die with operations. If you can't deliver a great customer experience, it doesn't matter how fancy your product innovation is or how fancy your marketing is, and that's what we've been focused on, really, for the last year, year and a half. I mean, during the pandemic, it was all about keeping, you know, just keeping the stores open, keeping people safe, and everyone was scrambling to try and make sure that we were doing that, and the staffing challenges that everyone has talked incessantly about. Now, as we come out of the pandemic and staffing improves, you know, we had to clean up some things. You know, we, we had lost some discipline, and now we have reinstituted that discipline. We've got great operations leadership that's driving the kind of behaviors that we want. Yes, I mean, our, our goal long term is to significantly increase frequency. We think it's a huge untapped or a huge opportunity for our business, and we, we will continue to kind of share out with you as we make more progress there, how that's transpiring. You know, today, you know, we're still in the early throes of that, so we're not necessarily sharing that data, but moving forward, we'll be able to talk more about how frequency evolves as our operations improve. Great. Thanks, guys. Thanks, Chris. One moment for our next question. Our next question comes from Eric Gonzalez of KeyBanc. Your line is open, Eric. Thanks for the question. The question is about the cost outlook. In the prepared remarks, you talked about margin improvement above and beyond the benefits of moderating food co-costs. In the second quarter, it sounded like you expanded margins in the company stores at a much faster rate than it would seem due to some health insurance claims. I'm wondering if you could comment on your expectations for the company margin in the back half. Also, take into account the fact that cheese prices have spiked a bit in the last few weeks, and relative to those expectations, those expectations relative to the second quarter. I didn't hear this in the prepared remarks, but should we still assume that flat operating margins this year? Thanks. Right. Sure. I mean, we've, we've been talking about sequential improvement in our restaurant margins in 2023. I think we've we shared that in our, you know, first call of the year, that we did expect to see that. I think we have even more confidence in that happening as we, we look towards the next couple of quarters and the improvements we've seen in our company restaurants. Yeah, with you, the last couple of weeks of cheese prices, you know, we, we were really excited about the cheese prices that we saw over the last three months. You know, significant improvement, and, and we have seen that flow through. It has in our on our company margins, some of that has been mitigated through some of these kind of health claim, health insurance claims. You know, we're a self-insured company, and we had some claims that we weren't expecting. You know, that's not something that we would, you know, expect to continue on. If we can maintain that continued improvement in run rate and efficiency and productivity in our restaurants, we should despite seeing a little bit higher cheese prices come back through, the last few weeks, we should continue to see sequential improvement in our restaurant operating margins. Is the flat year-over-year op margin still, the right way to think about the full year? Yeah, I'd say that we're still, we're still tracking towards that. Great. One moment for our next question. Our next question will come from Alexander Slagle of Jefferies. Your line is open. Thanks. Good, good morning. Wanted to just touch on the development ramp and your confidence in this path to the 23 guidance that you reiterated. It seems like the first quarter or second quarter openings were below the typical pace we'd expect to get there and realize the external environment's, you know, certainly not typical, but would be helpful to just gain some more color on, you know, what investors can hang their hat on here, as it seems like development's become more difficult for a number of franchise brands, just given the backdrop. Any, any perspective there would be helpful. Yeah, I mean, development has become significantly more difficult domestically. You know, I, I, I am focused on increasing our domestic development, but one benefit of, you know, being disproportionately global, contributing to our development is that it's not as difficult globally. We are seeing really strong global development. We have a significant pipeline that gives us a lot of confidence in our ability to deliver the number that we have signed up for. You know, obviously, with the number of units we've seen in the front half, we're going to have to accelerate in the back half. You know, our team has a lot of confidence that they're going to be able to see that pull through. You know, that's why we've reiterated that guide. You know, I think despite the macro challenges, there's still a lot of white space for us and a lot of drive, particularly in our international markets, to fill up that white space. We have a lot of confidence in our ability to get between $270 and $310 for the year. Thanks, Rob. Sure. One moment for our next question. Our next question will come from Andrew Strelzik of BMO Capital Markets. Your line is open. Hey, good morning. Thanks for taking the question. The, the discussion around value, you know, is more kind of revenue management focused, but I'm curious how you're thinking about the approach on, on more overtly communicated value. I know it's not an area the brand tends to be particularly aggressive with, but with the deflation and the margin improvements you've talked about, do you see an opportunity to lean in more, or how do you think about balancing that? I guess, as you talk about some of the value dynamics, have you seen any change in your customer value perception scores or anything around the metrics? Sure. Yeah, I think, I think, you know, our sequential improvement in our comps, particularly in, in the company restaurants, are indicative of our ability to deliver value in a compelling way. You know, although we don't come out and do a lot of, like, 50% off discounts, I mean, when you're selling an extra large one-topping pizza for $12.99, that's a great value. You know, a $7.99 price point for our Papadia is a great value. Our Papa Pairings, which, you know, we promote every day on our digital channels at $6.99 is a great value. We are 100% committed to delivering value, and I think the amount of transaction growth that our system is experiencing right now, and has been really for the last three periods, getting better, you know, essentially every period, is indicative of our ability to be very competitive in this value-oriented environment. One moment for our next question. Our next question will be coming from Brian Mullan of Piper Sandler. Your line's open. Hi. Good morning. This is Aisling on for Brian. I wanted to ask about the recently acquired U.K. stores. I was wondering if you could expand on your thoughts for, you know, your initial plan on these stores. Do they need a lot of TLC to get them to the levels you want internally? I guess separately, what does the remaining franchisee health look like in the U.K.? Thanks. Sure. I mean, when you say TLC, I would say yes, from an operating standpoint, but our we're not planning on having to invest a ton of capital. They don't all need to be remodeled. I mean, we have a great operating footprint with the stores that we bought. We've had to build out a bit of a, obviously, a field operations infrastructure and, and the support that goes behind that, some HR, finance, those types of things. Those are the costs that, you know, we've had to put into that investment above and beyond just the purchase of, of the assets. You know, the rest of the franchisees, you know, it, it, with 118 restaurants, we now own almost a quarter of the U.K. market, and we are leveraging that, that asset base to make sure that we fully understand how to optimize that model, similar to what we're doing in the U.S., and then scale those optimizations and those improvements across the franchisee base. The franchisees that are gonna win are the ones that are gonna adopt those principles. We're already partnering with multiple franchisees in that market to do some consolidation, not, not on our part, but helping them to consolidate, some restaurants with, with, you know, franchisees that we believe will be the best operators moving forward. Yeah, there may be some, some changes that happen over there, but, you know, I think that the, the, the model that we're building is going to scale pretty, pretty rapidly, and our intention is for those restaurants to, to become more profitable. We may choose to operate those for the long term. We may find franchisee partners who can come in and grow with us and refranchise some of those assets. We have a lot of optionality over there, dependent upon what the right situation is, to make sure we-we're setting that system up for long-term success. Great. Thank you for the color. You got it. Yeah. I would now like to turn the conference back to Rob for closing remarks. Thank you. I would like to sincerely thank you for your time this morning and your continued support of Papa Johns. I'd also like to thank our team members and franchisees. As we mentioned, it's been a challenging 12 months with some of the macro challenges that we've all faced, and they've shown unbelievable resiliency and agility during these unique times. I'm incredibly proud of both our company, employees and restaurants, and our franchisees for how they've worked together to persevere through these challenges. As highlighted on the call today, we have a lot of confidence both in the back half of this year and moving forward. Thank you very much for your time, and all the best. This concludes today's conference call. Thank you for participating. You may now disconnect.