Good day, and Welcome to Papa John's fourth quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Stacy Frole, Vice President of Investor Relations. Please go ahead. Good morning, and Welcome to our fourth quarter 2024 earnings conference call. This morning, we issued our fourth quarter earnings release. A copy of the release can be obtained on our Investor Relations website at ir.papajohns.com under the News and Events tab, or by contacting our Investor Relations Department at investor_relations@papajohns.com. Joining me on the call this morning are Todd Penegor, our President and Chief Executive Officer, and Ravi Thanawala, our Chief Financial Officer and Executive Vice President International. 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-ups, and now, let me turn the call over to Todd. Thank you, Stacy, and good morning, everyone. I'm excited to talk with you today about the progress we made as we closed out the year. 2024 was a year of transformation and realignment throughout the Papa John's organization. We navigated a dynamic operating and competitive environment while setting in motion near-term strategic priorities. I'd like to take a moment to extend my gratitude to the entire Papa John's team and to each of our franchisees for the continued support and ongoing resilience as we execute our strategy, accelerate sales trends, and deliver on our promise to be the best pizza makers in the business. We're encouraged by the progress and momentum we're seeing as we enter 2025. Our results for the fourth quarter were consistent with our expectations, and our sales comp showed sequential improvement versus the t hird quarter. While we recognize we still have work to do, we see many opportunities ahead to drive the business forward. Last year, we outlined our strategic priorities to accelerate profitable growth within our restaurant system, which included focusing on our core product proposition and innovation, amplifying our marketing message to drive customer consideration and call to action across target segments, investing in our tech stack to enable commercial and operational efficiency through improvements in the end-to-end digital customer experience and our customer relationship management, or CRM platform, differentiating our customer experience to meet and exceed the convenience, value, and quality expectations of the customer's channel of choice, and partnering with and evolving our franchisee base to be growth-oriented, focusing on increasing our market share through strategic new restaurant development and priority markets. Our priorities are centered around franchisee profitability and anchored in operational excellence throughout all levels of the organization. Today, I'd like to share an update on a few specific areas. The first is our focus on our core product proposition and innovation. This past quarter, we launched an initiative to ensure we are delivering on our customers' needs for crave and value. First and foremost, we need to make sure we are living up to our brand promise of Better Ingredients, Better Pizza, and everything we do. Preliminary insights from this work confirm we are making great strides in our value perception and are being recognized for making great pizzas. We also see areas of opportunity. In our relentless pursuit of better, we are realigning our teams to be consumer-centric and enhance cross-functional collaboration as we focus on expanding our pantry of limited-time offers, reinvigorating our core menu offerings, sharpening our value proposition through distinctive quality and competitive offers, and innovating for new occasions and check drivers. These efforts include more robust market testing as part of our Stage-G ate process. Going forward, we plan to test new products, offerings, and media mixes in specific markets to gain better consumer and financial insights for both local and national opportunities. This testing will help us better understand how we can redefine value and price, personalize customer experiences, execute with operational excellence, and provide for more productive franchisee engagement and a more flexible food cost structure.. Recently, our distinctive offerings for major pizza occasions, including an $11.99 XL New York Style Pizza ahead of the Super Bowl and the return of our Heart-Shaped Pizza for Valentine's Day, helped to deliver our highest sales day for each respective occasion in company history. As we enter the spring season, we are returning to our more traditional barbell approach. Currently, we are featuring our popular Epic Stuffed Crust platform at a $13.99 price point nationally, while underscoring our reliable value message, our $6.99 Papa Pairings, and owned channels locally. Shifting focus to the second half of 2025, we're looking forward to introducing some exciting new offerings across the barbell. The next strategic priority I would like to discuss is amplifying our marketing message. Pizza is a game played nationally, but won locally, and when we effectively reach the local consumer, especially in a value-focused environment, we win. In 2025, we are partnering with several franchisees who have offered to participate in additional market tests to determine the appropriate mix of national and local marketing spend throughout our domestic system. As we've previously discussed, we invested approximately $4 million in incremental marketing spend during the fourth quarter. Based on these learnings and current performance, we anticipate spending up to an additional $25 million in marketing investments in 2025 when compared with 2024. This includes investments in our CRM capabilities and our Papa Rewards loyalty program, along with incremental investment in our company-owned regions and nationally as we continue to dial up our share of voice, test optimal channel mixes, and test into the right balance of national and local spend. Additionally, we will continue to test value propositions, tactics, and products to validate and highlight opportunities for the system. I also want to congratulate our marketing team for the successful launch of our Meet the Makers campaign earlier this month. This campaign, which focuses on how we make every part of the pizza experience better, showcases some real team members and answers the question, "Why Papa John's?" by highlighting our passion for pizza and the craftsmanship behind every order, in addition to reinforcing the quality and crave of our offerings. Next, I'd like to touch on differentiating our customer experience as we look to more effectively engage with customers across all channels. In the fourth quarter, we revamped our loyalty rewards program to enable our more than 35 million member accounts to unlock Papa Dough faster. We are now activating more members at higher rates to help drive transactions and frequency. The enhancements to our loyalty program have shown positive early results, with approximately 50% of our loyalty orders now redeeming Papa Dough, up from 21% a year ago. We are also seeing increased engagement across all consumer segments, and our new members are buying their second order quicker than before. While we are pleased with the early response, this is just the first step as we plan to make further investments into the loyalty program. We aim to innovate ahead of the category with a program that is easy to understand and creates a strong, emotionally connected consumer relationship that seamlessly integrates with our creative, paid, earned, and owned messaging. In 2025, we believe the greatest impact from our investments will come from driving increased frequency and shrinking the number of days it takes for future visits to occur by delivering personalized brand experiences that matter to our customers. Moving to development, in 2024, we opened more than 300 new restaurants globally, including our 6,000th restaurant, marking an important growth milestone for Papa John's. The North America market remains our most significant development opportunity, with domestic average unit sales of approximately $1.1 million in 2024. Our teams made substantial progress this year in identifying real cost savings throughout the development process. In the second half of 2024, the build cost for company-owned restaurants averaged approximately $515,000, down more than 25% from the prior year period. We are strengthening our foundation and actively working to bring costs below $500,000 in 2025 as we capitalize on opportunities to drive success and value creation over the long term. Internationally, we continue to grow our presence, opening nearly 200 new restaurants in 2024. We anticipate opening a similar amount in 2025 as we see greater penetration in key regions, along with focusing on generating higher average unit volumes. We also continue to evaluate the refranchising of select company-owned restaurants to accelerate development with franchisees as they look to scale in certain markets. At the beginning of the fourth quarter, we refranchised 15 restaurants in the Wisconsin market to an existing franchisee who already owns Papa John's restaurants in this region and is committed to expanding this market. More recently, we are in active discussions to refranchise other company-owned restaurants and have received solid interest. The refranchising of company-owned restaurants has not been contemplated in our outlook, but we would expect these transactions to be neutral to slightly accretive to earnings. My comments today have focused primarily on revenue-driving initiatives, but we also have opportunities to improve our franchisees' forward profitability by improving the efficiency of our supply chain. In 2024, under our new fixed margin structure, approximately 30% of our franchisees earned an incentive-based rebate due to their higher year-over-year case volumes. In 2025, we are initiating a review of our North American Commissary and Distribution Network to identify more opportunities to better serve the restaurant economic model for the system. Looking ahead, we are confident on our path forward. We know Papa John's has what it takes to be the best pizza makers across QSR, deliver the experiences that customers crave, all while growing restaurant profitability and generating sustainable shareholder value over the long term. And with that, I'd like to turn it over to Ravi to discuss our fourth quarter and full year results. Ravi? Thank you, Todd. Good morning, everyone. For the fourth quarter, global system-wide restaurant sales were $1.23 billion, down approximately 8% in constant currency. The lower sales were primarily due to the additional week of operations in the prior year period. Excluding the prior year benefit of the 53rd operating week, global system-wide sales were flat compared with the prior year. North America comparable sales were down 4% in the fourth quarter, a 120 basis points sequential improvement from the third quarter and consistent with our expectations. Transaction comps were down 2% when compared with the year ago. Sequentially, transaction comps improved 230 basis points as we focused on transaction-driving investments that improve our value perception. As we discussed in December, the variable profitability of our transactions is high, and it's clear that as we drive transactions, we will gain leverage in our financial model for our franchisees. Ticket com ps were down 2% from the prior year, primarily due to an approximate 100 basis points impact from the lowering of our loyalty threshold for rewards redemptions beginning in mid-November and an approximate 50 basis point impact from the continued shift in our channel mix driven by the relatively profit-neutral impact of reduced delivery fees. In addition, ticket comps in the quarter were lower year-over-year as a result of our strategic pricing decisions and focus on transaction-driving value offerings. A large portion of our incremental investments in the fourth quarter were intentionally focused on our carryout business as we strategically targeted this segment of the consumer. These investments had a positive impact, with carryout orders up low single digits compared with the prior year's fourth quarter. Orders through our aggregator channel also continued to grow year-over-year. Offsetting the solid transactions in our carryout and aggregator channels was a decrease in orders through our organic delivery channels compared with the fourth quarter of 2023. However, in our organic delivery channel, we are seeing a sequential improvement in trends of approximately 200 basis points as our teams execute on our near-term priorities, including the November enhancements to our loyalty program. International comparable sales were up 2% year-over-year in the fourth quarter. Our international transformation initiatives announced at the beginning of 2024 are taking hold as we are seeing strength across several key markets, including the Middle East. Total revenues for the fourth quarter were $531 million, down 7% from last year. Excluding the $41 million impact from the additional week of operations in 2023, revenue was largely flat, as lower revenue at our company-owned restaurants was offset by higher commissary and advertising funds revenue. Company-owned restaurant revenue in the fourth quarter, which now includes our domestic and international company-owned restaurants, decreased $18 million compared with the prior year's fourth quarter, excluding the extra week. This decrease was primarily driven by a $13 million decline at our international company-owned restaurants, reflecting the net impact of closing and refranchising 105 formerly company-owned restaurants in the U.K. and an approximately $5 million decline at our domestic company-owned restaurants due to lower comparable sales just discussed. Commissary revenues, which now include both North America and international commissaries, were up $14 million when excluding the prior year extra week, reflecting the 100 basis points margin increase and higher commodity prices in the quarter, partially offset by lower volumes. Advertising funds revenues were up $3 million when excluding the prior year's extra week, reflecting the 100 basis points increase to the domestic national marketing fund contribution rate that began in the second quarter of 2024. Turning to profits, adjusted operating income for the fourth quarter of 2024 was $37 million, down $10 million from a year ago, primarily due to an $8 million benefit in the prior year period due to the additional week of operations, along with lower operating margins at our domestic company-owned restaurants as we continue to strategically invest into improving our value perception with customers. Adjusted operating income margin was 7% for the fourth quarter, down from 8.3% in 2023. Excluding the prior year benefit of the additional week, adjusted operating margin was down approximately 40 basis points compared with the prior year. Overall, our domestic company-owned restaurant segment margins declined approximately 400 basis points compared with the prior year fourth quarter and approximately 260 basis points when excluding the additional week in the fourth quarter of 2023. There were several puts and takes to our domestic company-owned margins this year, including an approximate 110 basis points decline from the higher food basket costs, particularly around proteins and cheese, and an approximate 30 basis point decline from lower average ticket. In addition, margins were impacted by a reduction in operating leverage due to lower transactions we discussed earlier and higher insurance costs when compared with the prior year. Our North America commissary segment margins were 4.7% in the fourth quarter, a 70 basis points increase from a year ago, and consistent with our cost-plus fixed margin expectations. Moving on to cash flow and our balance sheet. For the full year 2024, net cash provided by operating activities was $107 million. Free cash flow was $34 million, a decrease compared with the prior year, reflecting unfavorable changes in working capital and timing of cash payments for income taxes, partially offset by a $4 million decrease in capital expenditures. Our business operates with ample liquidity, which at the end of the year totaled approximately $291 million in cash and borrowings available under our revolving credit facility and a gross leverage ratio of 3.2 times. Now to our outlook. As we look to 2025, we are confident we have the strategy in place to accelerate sales throughout the year while investing in long-term growth opportunities. For 2025, we expect system-wide sales to be up between 2% and 5% compared with 2024, reflective of anticipated sequential improvement in North America comparable sales throughout the year and continued net restaurant growth. From a comparable sales perspective, we anticipate North America comparable sales to be flat to up 2% in 2025. From a quarterly cadence standpoint, we anticipate some pressure to remain in the first quarter from the loyalty enhancements discussed earlier, then moving to relatively flat mid-year and exiting 2025 both positive and accelerating. Through the first eight weeks of 2025, North America comparable sales trends were down 3% when compared with the same eight-week period in 2024. This is an approximate 130 basis points improvement in trend from the fourth quarter. Internationally, we anticipate full year 2025 comparable sales to be flat to up 2% as we remain cautious in our outlook given the dynamic operating environment around the world. Beginning with fiscal 2025, we will begin reporting Adjusted EBITDA as a key performance measure of the company's profitability. Adjusted EBITDA is an earnings measure that excludes stock-based compensation, interest expense, taxes, depreciation, and amortization. This measure is more consistent with how we manage our business and we believe how many investors value Papa John's. For 2025, we anticipate Adjusted EBITDA to be between $200-$220 million compared with $227 million in 2024 as our teams execute against our plan and we make incremental strategic investments to drive sustainable long-term growth. In addition, we are hosting our biannual franchisee conference in March and expect to return to a higher payout percentage for performance-based compensation versus the last three years. While 2025 and 2026 will be periods of investment and transformation for Papa John's, we are confident we can deliver high single-digit system-wide sales and Adjusted EBITDA growth over the long term. For modeling purposes, there are some puts and takes to quarterly G&A spend, I believe would be helpful to highlight today. Specific to Q1, we expect to see an approximate $4 million impacted G&A from our biannual franchisee conference and approximately $3-$4 million of the aforementioned incremental marketing and loyalty spend to flow through, while also comping against the prior year G&A benefit from equity forfeitures, which were approximately $4 million. Specific to Q2, we expect to see around $5-$7 million of incremental marketing spend. Our management incentive plan will also reset, and we will comp against additional equity forfeitures from prior year executive changes. Finally, for the second half of 2025, we expect up to $15 million of incremental marketing and loyalty spend to be evaluated based on the first half sales strengths and consumer and loyalty insights, along with roughly $2 million of year-over-year increase related to incentive plans for recent executive hires. In terms of other non-operating expense items, we expect our D&A expense for 2025 to be between $70 and $75 million, our net interest expense to be between $40 and $45 million, our capital expenditures to be between $75 and $85 million, and our tax rate to be in the range of 28% to 32%. The Q1 tax rate is expected to be between 43% and 48% due to an anticipated shortfall from the vesting of restricted shares, resulting in an additional tax expense when compared with the prior year period. From a development perspective, we ended 2024 with 6,030 restaurants across the globe. In 2024, we transformed how we pursued development by successfully investing in new talent, resources, and tools, improving our marketing planning and site selection processes, and lowering the cost to build new company-owned restaurants to be more aligned with the industry. In North America, we opened 112 new restaurants while closing 31, bringing our total North America restaurants to 3,514. In 2025, we expect to open between 85 and 115 gross new restaurants in North America. Over the past few years, our teams have done an excellent job in maintaining lower-than-average closures throughout our North America system. Beginning in 2025 and going forward, we anticipate restaurant closures will return to our historical average in a normalized environment of approximately 1.5%-2% of North America's system. From an international perspective, we opened 198 new restaurants in 2024 while closing 155 restaurants, including 73 strategic closures in the U.K., bringing our international restaurant count to 2,516. We continue to make significant progress across our international transformation as our teams work together with franchisees and local markets to build focused development plans and improve unit economics. Continuing to build on the momentum from 2024, we expect to open 180-200 gross new restaurants across our international markets in 2025. Going forward, we anticipate international closures to be between 4 and 5% of our international system, consistent with 2024's performance when excluding specific large strategic market closures like the U.K. restaurants I just mentioned. In summary, Papa John's transformation will continue in 2025. We are confident that the combination of investing in our people, delivering relevant and compelling marketing, enhancing our loyalty program, and great execution in our restaurants will lead to a better customer experience and an even stronger economic model driving long-term value for our stakeholders. Thank you, Ravi. As you've heard from us today, our teams across the organization are working with agility to drive home our recipe for profitable, sustainable growth. Our number one priority remains creating great experiences for our customers and employees in our restaurants while also ensuring the restaurant's economic model is strong. We'll continue to refine our strategic initiatives to drive success across the system and ensure we are well-positioned to compete even stronger across all channels and consumer segments. At this point, we'd like to open up the call for any questions you may have. Thank you. If you'd like to ask a question, please press star one one. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Jim Salera with Stephens. Your line is open. Hey, guys. Good morning. Thanks for taking our question. I wanted to drill down a little bit on some of your expectations around the industry in 2025 and how that flows through into your guidance. We've heard kind of QSR all more broadly is probably going to be flat to downish, like 100 basis points on traffic. How are you guys thinking about your performance relative to the industry, and especially in the back half of the year? Is embedded in your guidance, is that Papa John's taking some share, or is it just the consumer getting better and you guys obviously benefiting from that as that progresses? Yeah, no, thanks for the question, Jim. As you know, the environment is very much value-focused at the moment, and customers are much more deliberate on managing their overall ticket, and we do expect the pizza category to be flattish, just slightly down, but as you think about where our business is going to go during the course of the year, we've got several initiatives in place, right? The work we've been doing on the loyalty program, the leverage we're going to have on all the data with our CRM activities that we have ongoing, some of the investments back to find the right mix between local and national marketing, and the work we did to get ourselves back in position on value and our value perception, those things will help to sequentially build our business during the course of the year and really bring more customers in more often. We've had a big focus on transactions. The opportunity is now to work them up on check. And we would start to see during the course of the year, as we build some momentum in our business, that we're holding to gaining share, especially on the transaction front. Jim, maybe a few specifics I would add. Transaction trends through the first eight weeks of the quarter were down about 0.5% versus the prior year. We saw really solid performance, especially in the first four to six weeks of the quarter from a transaction trend standpoint. As Todd mentioned, there are a number of discrete items that we're driving that give us an opportunity to take share. We're shortening the distance between the first transaction and second transaction from a loyalty standpoint. Carry out continues to perform very well for us, and we think we're building momentum in that space. We continue to see strong performance in our aggregator business, and we're doing a lot of work from a technology standpoint to continue to win on the conversion rate standpoint as well. Great. I appreciate the call, guys. I'll back in the queue. Thanks, Jim. Thank you. Our next question comes from Sara Senatore with Bank of America. Your line is open. Great. Thank you. I wanted to ask about the international growth. We've had a lot of companies, I think, sort of come in light of their expectations. You seem to be the first that's sort of alluded to penetration as opposed to kind of idiosyncratic macro or geopolitical factors. Just could you just talk about the, I guess, which markets you see that as? And I guess are you saying you're kind of approaching saturation, or maybe you could just talk a little bit more about that because it does seem a bit different from, I think, what others are saying? Yeah, and I'll have Ravi talk about some of the specifics as he's running the international business. But I do appreciate the approach that Ravi and the team have taken to really get a focus on being a little more narrow and deep on our core international markets where we know we got a good share position and we can continue to really drive our business and continue to gain share in some of those markets. And we're seeing some nice success in many pockets of the globe. And I'll turn it over to Ravi to talk through some of those areas where we're seeing some momentum. Thanks, Todd. And thanks for the question, Sara. As we talked about at our December investor meeting, we have a focus set at nine countries. I spent my time with the team really digging in there. A couple of things is 50% of our gross development in international will actually come from those focused nine countries. We don't believe we're anywhere near saturation in those markets. And it's those nine markets that's going to fuel the growth. We are taking a very consumer-centric approach to this. I'm really excited about the innovation calendar right now in the U.K. and across the world. And I think we're identifying new incremental sales layers in that business to continue to drive gains. We have GMs that are in these respective regions that are bringing a consumer-first mindset. And while we're cautious, we've been encouraged by the results even quarter- to- date. When I look at the U.K., the U.K. is up more than 2% in comp. We're seeing the Middle East up almost 20%. And within there, we're seeing strong gains across UAE, Qatar, KSA. And then in Latin America, we continue to see high single-digits or low double-digit growth out of countries like Chile and Peru. Our focus right now is doubling down from a consumer mindset and a focus standpoint on these nine countries. We think that there's lots of runway. Broadly, when we think about the pizza category on a global scale, we think that the category is still going to grow. We think we are well-positioned in these few countries to continue to take a methodical approach to the development, but definitely see a really meaningful opportunity for our brand to be bigger and our AUVs to continue to grow. Great. Thank you. Just to clarify, when you said the sort of greater penetration piece, it's sort of just growing off a bigger base as opposed to seeing signs of saturation or brand exhaustion or anything like that? Nothing like that at all. Growing the base. And those countries are going to play an outsized role in the next round of development. Thank you. Thank you. Our next question comes from Brian Bittner with Oppenheimer. Your line is open. Hey, thanks. Good morning. As we think about the EBITDA guidance for 2025, $200 million-$220 million, can you just talk about how much investment is built into this outlook, maybe on a year-over-year basis, versus 2024? You talked about the $25 million in advertising. Is that all on the corporate side? I think this is going to be a margin investment here at the store level too. So can you just unpack the buckets of investments and how they're built into the EBITDA guidance? Just secondly on that, Todd, can you just talk about how you are going to balance continuing to put your foot on the gas pedal on value, but also balancing franchisee profitability, which seems a bit challenged? Thanks. Yeah, I'll start with the latter. As we think about our first and foremost job was to get ourselves back in position around the value perception of the brand. And we've made a lot of progress on that. We've had an always-on message on Papa Pairings with a core premium message in the barbell. We've now moved to a more traditional barbell approach with Epic Stuffed Crust at the $13.99 price point, moved to Epic Garlic Stuffed Crust at $14.99. You will see us bring more innovation to life in the back half of the year. The team's been doing a lot of work to rebuild the innovation pipeline. And we've got some things planned in the back half that I feel really good about and that we're going to bring to life in a bigger way. I think those things start to help us to try to balance the overall check for the consumer, but also help folks drive the economic model hard for our system. We are taking some strategic pricing. We're pricing up. We're using our tools like the loyalty program to discount back and be much more targeted. Those things will continue to help the economic model. And then a little bit longer term, we are taking a hard look at our supply chain, as we talked about in our prepared remarks, to figure out where we can drive some more productivity and efficiency. On the guidance front, I'll have Ravi get into the specifics, but there's a couple of buckets that are really baked into the guidance for this upcoming year. Up to $25 million of incremental marketing investments. We talked about five behind CRM and loyalty. The other dollars are really to work both in company and some franchise markets to find the optimal mix of local and national spend. And then really look at the optimal mix of what our traditional linear media is versus digital and social. And Jen and the team are working that really hard. So that's the first big bucket. You're seeing, and you saw a lot of granularity in the detail, kind of resetting to a more normalized G&A base. So we walked through some of the elements of that as we've had some things happen during the course of last year that we're getting kind of onto the normal run rate. And then at the corporate restaurant level, we're really making sure that our local spend is at that 1.5%. So you will see some of that in margin. But I'll let Ravi talk through kind of the specifics on the details of those big elements. Yeah. Thanks, Todd. And thanks, Brian, for the question. So just a couple of components. As Todd talked about, up to $25 million of marketing is implied in the guide. That's off the Papa John's P&L. As Todd mentioned, that's in support of both corporate markets and has us investing behind strong growth-minded franchisees where we see clear, deliberate opportunities to continue to invest. And some of the things that we'll be investing in there are tactical things like bottom of the funnel, paid search, really high ROI investments. We'll be thinking about when we want to add a little bit of extra fuel from a national marketing standpoint to make sure when our innovation barbell is coming to life, we're putting real fuel behind that fire. And the third is the right balance of local activation. So that's a little bit of depth into the marketing side. And just to continue to reinforce, that's up to $25 million. We're going to continue to check and adjust as we see comp trends change and we see the consumer continue to evolve. The second component is Todd's been here about five months now. So we thought it was a great time to make sure that we're getting the franchisees together to rally around the future. We're spending $4 million against our biannual annual franchisee convention, which will be happening in the not-too-distant future. Then, as we shared in the prepared remarks, there's a reset in performance comp. That's about $14 million. Those are the major components that stair-step the year-on-year change from an investment standpoint. What we're truly trying to be a little bit clear on is there are some meaningful investments that we're making this year in the spirit of winning consumer consideration and winning transactions. The last thing I'll add is when you think about the Q1 quarter-to-date performance of down 3% in comps, there are two components. One is transactions are down about 0.5%. We've been pleased in weeks that we are out there chasing transactions hard, that we are winning the transactions. We were down about 2.5% in ticket in the first eight weeks. And there's a couple of components there. The first is we thought the consumer was very value-oriented in January, and we expected that. So we came out with a meaningful value-centric offer that put some pressure on the ticket. Second, as a reminder, we launched our loyalty enhancement in mid-November. And in a blink of an eye, we doubled consumers' Papa Dough balance. The great news is that drove lapsed consumers back into the brand. It showed consumers a very distinctive value proposition that we can offer. So we continue to see a little bit of ticket pressure through the first eight weeks of the quarter from that loyalty transition. We expect that that mix of ticket pressure will abate as we move through the year. Obviously, we've got to keep an eye on where the consumer is. But as we talked about, since the last two to three quarters, winning back value perception and winning back transactions is a critical recipe to long-term success for us. Thank you, guys. Thanks, Brian. Thank you. Our next question comes from Lauren Silberman with Deutsche Bank. Your line is open. Thanks so much. I wanted to follow up actually on that ticket point and the expectations for ticket to improve as you move through the year. What's going to drive that in your view? Is the loyalty redemptions lower? Do you expect the consumer to be a little bit less value-centric, menu innovation? Any color there? Yeah, I think some of it starts with getting back to a more traditional barbell approach. We went a little more deep end of last year with $10.99 and $11.99 on the high end of the barbell. We're managing that now at $13.99 with Epic Stuffed Crust Pizza. But we also have a more robust innovation pipeline coming in the back half of the year. And that'll allow us to continue to manage that barbell quite nicely. Credit to the team with some of the commodity inflation we've seen out there. We've been able to take some strategic pricing and work that through, thinking about all the levers that we can pull to ensure that we're driving not just pricing, but mix through the promotional calendar. So we're working all of those things hard to start to bring some of the check up. It really did start with making sure customers started to show up more often at Papa John's. And we're pleased that in a tough and difficult competitive and consumer environment, we've been able to start to flatten out our transactions a bit more. And now we're working hard to really start to build that check with the initiatives I just talked about. Anything else you'd add, Ravi? Yeah, Todd, maybe a few things. The first is we're seeing consumers vote for medium pizzas right now a little bit more than large. So just as a reminder, when we think about what's happening in the complexion of the tickets, there's two components. There's a product mix change, and then there's an effective price for a comparable product change. We think that consumers over time will start to gravitate more back towards our traditional product mix. But we're going to continue to keep an eye on where consumer health is. And most importantly, we're going to let the consumer decide. If they want more medium pizzas right now, we're going to serve them more of those. Second, just from a commodity standpoint, just keep in mind or share that we think commodity pressure sits a little bit higher in the front half of the year and then starts to ease out in the second half of the year. And then lastly, I think we are just in a constant flow of testing right now to ensure that we're striking the right balance between ticket transactions, sales, margin, and overall contribution margin for our franchisees. Thank you very much. Very helpful. Thanks, Lauren. Thank you. Our next question comes from Brian Mullan with Piper Sandler. Your line is open. Hi. Question on operations. Todd, at the December investor day, you talked about the opportunity to simplify, and in particular, you talked about some rhythm breakers in the stores. Sounds like there's some things you might be able to take off the menu more quickly. Maybe some other things would take some testing, maybe take more time. So if you just talk about where you are with those efforts, what have you been able to do so far, and how much do you think you'll get done this year? Yeah, we're moving with speed on that front because we do need to take those rhythm breakers out to really be the best pizza makers in the business and get focused on the core. Our calendar lined up that way first and foremost through the back half of last year. So we were really focused on fastballs down the middle, making some great pizzas with New York style XL, and then what we did with Shaq-a-Roni coming back to that. We have pulled some SKUs out. We've probably pulled upwards of 10 SKUs off the menu to date. Those were the low-hanging opportunities. Got another handful that'll come during the course of the next couple of months. We've also tested some things around taking some of the rhythm breakers off the menu during heavy promotional times. So during Valentine's Day, for instance, we had Papa Bites off the menu and really allowed us to make some great pizzas along the way. We'll have to see how that plays out over time. But we're working that piece hard to really make sure we set up our general managers and our teams to truly make the best pizzas in the business. So we're well on that journey. We'll continue to focus on it. And then we're going to continue to work around all of it to make sure that some of the things that we've talked about in the past to make sure that our oven time and temp and gas pressures and all are set up to really make the best pizzas in the business and really enable even more creative innovations into the future. Brian, maybe one thing I'd add is when I look at the results week on week, we're continuing to sell more pizzas than we did last year every single week. So when we think about fighting for a share of stomach, even though we've taken a couple of SKUs out, just watching the trends, we're selling more pizzas than last year. Great. Just to clarify, Todd, on the ovens because you brought it up, do you think those will be addressed this year, or is it more right to think that's going to take a couple of years because of the capital involved? We're going to work hard. It's more the time energy. We're going to have to get out and touch every restaurant, look at the ovens. But we got a big focus. That's a core element to making the best pizzas in the business. And we're going to run hard to do that during the course of this year to ensure we bring it to life, whether that's late this year or set up for a lot of success into next year. But a big focus item for us to really unlock what we need to do to deliver the quality that our consumer deserves day in and day out. Thank you. Thank you. Our next question comes from Peter Saleh with BTIG. Your line is open. Hey, great. Thanks for taking the question. Just a couple of quick ones. I guess the first one on the development incentives in 2025. Just wondering if you guys can comment if there's any change in the U.S. I know you were from a five-year abatement to, I think, a three-year in 2025. Just curious if that has changed at all. And then lastly, on the Papa Rewards, I know you mentioned 50% of the members now redeeming up from 21%. That's a pretty sizable move. Just curious, are you seeing additions to the rewards customers? Are you acquiring more customers? And if so, can you just comment on maybe the profile of those customers versus some of the existing ones? Thank you. Yeah, a couple of things. On the development incentive, you're exactly right. We went from the five-year abatement to the three-year abatement. So that has not changed. On the loyalty scheme, super excited, as Ravi said earlier, that we're getting to that second purchase faster. But we're seeing every step through that whole loyalty journey, folks starting to come back even faster to us. It's pretty powerful when you get to a $2 off of $15 that any average order, by the time you wake up the next morning, you're actually seeing Papa Dough show up in your account, which is a compelling reason to go spend again. And we're not limiting that Dough to specific items. It's cold, hard cash that you can bounce back. So it does also help our value perception along the way. Ravi, you want to talk a little bit about the last point on that question? Yeah. A few things around loyalty. Then I want to circle back on a comment on development as well. First, consumer counts are up year-on-year in our loyalty program in both January and February across most of the recency or frequency bands that we're seeing. We're seeing meaningful gains there. So we're shortening the distance. The The second transaction counts are up. Where we're seeing the biggest positive impact is in carryout. Second, we're seeing meaningful pickup in terms of lapsed consumers and delivery coming back to us. So all things that are underpinned and how we thought about the business go forward. And we think we have a really big carryout opportunity. And we're going to run really hard at that because we think our barbell of innovation, plus a great value offering, really well positions us to take more share in that space. When it comes to development, yes, the three-year abatement is the plan for and what we're executing in 2025. The other thing I want to just quickly mention on the North America development pipeline. The pipeline is actually up year-on-year at this point in time when we look at deals that are in lease negotiations and forward. So we think that the development teams are doing a great job of driving down cost and building a really solid perspective on the pipeline itself. And the reason that we think the pipeline is stronger is not all of our franchisees are operating at the average when it comes to comps and profitability. There are a number of our large franchisees that are performing very well, that are very growth-oriented, that I would say have gotten more aggressive in their stature and approach to growth over the last couple of months, so we continue to be pleased with the progress the development team is making when it comes to market planning, development approach, where to develop, and partnership with the franchisees. Yeah, to your last question, from overall membership, we continue to grow overall members with the new loyalty program, and we really haven't even blown out kind of what the message is, why it's new and improved. We did a little bit of work late last year. That's still an opportunity to drive even more excitement to recruit even more new members into the program, but we are starting to pick up some and feeling positive about that. Thank you very much. Thank you. Our next question comes from Eric Gonzalez with KeyBanc. Your line is open. Hi. Thanks. Maybe just two quick ones here. I think you said you were seeing a sequential improvement of 200 basis points in the organic delivery channel. Can you clarify what time period you're referring to with regards to that improvement and where you're seeing trends in that channel today? And then just on the development side, if you could just level set what you're implying for net openings, I think you said you expect to see roughly, does this imply maybe flat in North America and 80-100 net on the international side? And with regards to refranchising, it sounds like maybe there's some more activity happening on that front. Todd, do you have any thoughts on the potential changes to the long-term franchise mix for the system? Yeah, I'll start on the refranchising front and turn the first two pieces over to Ravi. So on our prepared remarks, we talked about refranchising a Wisconsin market to an existing franchisee that's really going to build out that market. We're in active discussions right now with a market that we've had out there with a lot of interest, both from existing growth-oriented franchisees as well as external folks that want to join the Papa John's family. Don't want to give out any specifics at this stage as we haven't had a lot of those discussions with the teams in that market. But we're going to continue to look at the refranchising opportunity to really make sure that we're rewarding those growth-minded franchisees and scaling them up with development commitments to build out the markets that they're in, as well as recruiting some new franchisees into the system. The neat thing is we're seeing a lot of demand for folks wanting to get into the Papa John's business, so feeling good about those things, and we'll provide more details as the year progresses as those activities take place. I'll come back to Ravi for your first two points. Yeah. So first, when we were referring to sequential improvement in organic delivery, we're referring to Q4 relative to Q3, and what I'd say is that through the first eight weeks of Q1, we're seeing sequential improvement there relative to where we were in Q4. When it comes to development, I just want to reiterate what we shared in the prepared remarks: 85-150 North America gross openings. We expect closures to be between 1.5% and 2%. So that is positive net development in North America. We're still early in the year, and we'll continue to provide updates as we go through the year, but as I said, our pipeline is actually stronger with more deals in the pipeline that are in lease negotiation forward relative to the prior year. Last thing, I just want to continue to reinforce, as I said on prior calls, AUVs of our opening restaurants $1.1 million. When I look at the closure potential list for this year, the restaurants are primarily in that $400,000-$675,000 range, slightly higher mix in terms of closures even in 2024, in non-traditional restaurants, so we expect system-wide sales to grow with North America this year. Thank you. Our next question comes from Todd Brooks with The Benchmark Company. Your line is open. Hey, thanks. A quick follow-up and then my question. Following up on Peter's line of questioning, just wondering if we look back to loyalty coming into the program revamp, what% of consumers in that database were lapsed? And I'm just trying to get a sense of how big is that opportunity on reactivating those customers. And then my full question is, if we look to the 0%-2% same-store sales guidance, Todd, you talked about some success with strategic pricing. Can we maybe break down what our contemplation is, traffic versus mix versus pricing lifts that make up the 0%-2%? Thanks. So when we think about the loyalty program, one, I'm going to reinforce customer counts are going up right now, January and February. When we think about the total active 12 months, I think we're just north of 14 million that are active. We see a pretty meaningful opportunity from a lapsed standpoint. Todd mentioned one of the spots that we're making incremental investments right now. We're out there testing and getting more aggressive around trigger-based campaigns, both through our apps and email to win consumers back in. Just for context, for the size of our app business in North America, it's 30%. It is meaningful. It is a way that we connect with our consumers very directly. We're uniquely positioned as a digital company to be able to connect with our consumers, particularly our consumers who have a lot of brand advocacy. Yeah, and if you think about the same- restaurant sales guidance, 0%-2%, I think our commodity inflation is about 2%. We're trying to manage price to offset inflation. They're about the other 2%. So within that guidance, it would have transactions in best case flat, but in most probable case, slightly down, but with nice sequential improvements throughout the year as we continue to bring more customers in more often. Yeah. Maybe some things that we want to talk through is we're prepared to continue to think about where the consumer is and at moments and times plan for competitive responses because winning consumers are important. So our approach to the year is our strategies for peak days and peak periods may look and feel a little bit different than other weeks. So we're taking a really dynamic approach to how we want to manage transaction versus ticket. Second, I think the components here are important. We believe that carryout is going to be a meaningful contributor this year in terms of transaction growth. We believe aggregators are going to continue to be a meaningful contributor to growth. And we're actively working on continuing to bend the curve on organic delivery. But I just want to be clear when we think about it in aggregate that there's some traffic pressure just across the industry. We're seeing two of our highest accretive channels, which are aggregator and carryout. And I mean accretive to the restaurant's four-wall profitability on a dollar and rate basis. Both of those channels are growing, and we continue to see strong tailwinds there. Yeah. And the headwind, as Ravi just mentioned, is really that first-party delivery. And we're really trying to make sure we can manage that well. We know we have a lot of opportunities to create the best experience in first-party delivery. Kevin and the team are working hard on app improvements and even simple things like repeat last order, trying to get that into the world to make it more seamless for our consumer, getting delivery tracking up and running during the course of the year. So we've got the majority of our restaurants with that great experience that we don't have today. Continuing to work the loyalty program to make it even more compelling. We feel good about the early changes we've made. We know we've got opportunities to introduce that to the customer and continue to evolve it. And ultimately, the best deals have to be in the first-party app, and the app needs to be seamless and easy to use. And we're going to continue to work that hard with a lot of focus during the course of this year. That's great. Thank you. Thank you. Our last question comes from Jim Sanderson with Northc oast Research. Your line is open. Hey, thanks for the question. I just want to do a quick clarification. I think you mentioned traffic being down year-to-date about a half a point. Is that equally balanced between the three channels, organic delivery, first-party, and carryout, or do you continue to show the most strength in carryout? Just how should we look at that trend today? Quarter- to -date carryout is growing the fastest on an order basis. But carryout is positive. Aggregators are positive. Organic or first-party delivery is where we are seeing probably the traffic loss. What we do see, some of the ticket complexion changes, as we've talked about over the trailing four quarters, is really because we're seeing consumers opt for carryout a little bit more. As we talked about in the December meeting, it represents in the high 40s% of their business. We think that if that number even edged up as a share of business a little bit, it would be net accretive to four-wall profitability on a dollar and rate basis. Okay. So on a sequential basis, the organic delivery, has that deteriorated relative to prior quarter? Is that? It's improved. Improved. All right. Thank you very much. As a reminder, transactions were down 2% in Q4. They're down 50 basis points Q1 quarter-to-date. And we saw improvement in the organic delivery run rate from a transaction standpoint, quarter-to-date Q1 relative to Q4 and relative to Q3. All right. Thank you. Thank you. [Crosstalk] Well, thanks. I mean, I appreciate it. I'll call back over to Todd for closing remarks. Thank you very much. No, I really appreciate everybody's time this morning. I appreciate all the thoughtful questions. More importantly, we've been out a lot since I've joined the team and got to partner with Ravi and Stacy. Really thank you for your continued support of Papa John's. I also want to put a shout-out to our team members and our franchisees for everything you do for our customers, our communities, and each other. It's an honor to work alongside this great system. Thanks, everybody. Appreciate your time this morning. Thank you for your participation. This concludes the program, and you may now disconnect. Everyone, have a great day.