Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Carrols Restaurant Group, Inc.'s first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions on how to ask a question will be given at that time. I would like to remind everyone that this conference is being recorded today, Thursday, May 11th, 2023, at 8:30 A.M. Eastern Time and will be available for replay. I will now turn the conference over to Jeremy Watchus, Carrols Senior Director of Finance. Please go ahead. Thank you, operator, and good morning, everyone. By now, you should have access to our earnings announcement released earlier today and our earnings presentation that are both available on our website at www.carrols.com under the Investor Relations section. Before we begin our remarks, I would like to remind everyone that our discussion, including answers to questions posed to management, may include forward-looking statements or comments with respect to our strategies, intentions, or plans in the future direction of revenues, input costs, or other aspects pertaining to our business. These statements are not guarantees of future performance, and therefore undue reliance should not be placed on them. We also refer you to our filings with SEC for more details, both with respect to forward-looking statements as well as risks that could impact our business and results. During today's call, we will discuss certain non-GAAP measures that we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. A reconciliation to comparable GAAP measures is available with our earnings release. With that, I will now turn the call over to our new President and CEO, Deborah Derby. Good morning, everyone. Thank you, Jeremy. I'm delighted to be speaking with you this morning on my first call as Carrols' new president and CEO. I just finished up my first week on the job, so to speak. I will keep my initial comments brief and then turn the call over to Tony and Greta to discuss the details of our spectacular first quarter. First, I wanna reiterate how excited I am to be part of the Carrols team during this dynamic period. Some of you may know, I have served on the board of directors of Carrols for the past five years, so I am familiar with the opportunities and challenges of the business, as well as the outstanding people that make up the company. I have seen the team persevere during one of the most challenging business environments of our time, and it is great to see the results of their hard work finally beginning to flow through to the bottom line. Second, I wanna thank our partners at RBI and Burger King on their recent diligent efforts to reinvigorate and reinvest in the brand and their franchisees. Those efforts are also starting to yield results. I spent my first week in Syracuse meeting with our corporate team, as well as training and working the evening shifts in one of our local Burger King restaurants. From that experience, I have a renewed appreciation and respect for what our team members do. My takeaway from my various interactions last week is that we have an incredible group of talented, engaged, and dedicated employees who are passionate about the company, our brands, and our customers. I am confident that this is the foundation which will serve as the springboard for our continued future success and upon which we will continue to grow our business. Thank you for your time today, and I look forward to our continued dialogue during future earnings calls. I will now turn the call over to Tony Hull, our CFO and Treasurer. Thank you, Deborah. Good morning, everyone. We're thrilled with what we were able to achieve in the first quarter of 2023. This included posting 11% growth in total restaurant sales, delivering $30.7 million of adjusted EBITDA, and reducing our net leverage ratio to 5.2x. In the first quarter of this year, our comparable sales increase of 11.7% at our Burger King restaurants was driven by menu price increases and lower promotions and discounting, which together resulted in a low teens increase in average check. Combined with moderating inflation and our continued focus on operational efficiencies, we were able to flow much of the $46 million year-over-year increase in sales during the quarter into higher adjusted restaurant level margins, which improved to 12.2%. To put this in perspective, this is our best first quarter restaurant-level margin in five years. Adjusted EBITDA improved to $30.7 million, an increase of $26.4 million relative to last year. Finally, we greatly improved our capital position as we achieved positive free cash flow during the quarter, paid off the outstanding year-end balance on our revolver, and reduced our net debt leverage ratio to 5.2x, a reduction of almost two full turns relative to the 7.1x reported at the end of 2022. On the sales front, top-line growth was aided by the repositioning of promotion to discount strategies by our franchisor, which showed higher sales of full margin products, along with the cumulative impact of menu price increases taken over the past year. These actions, combined with renewed brand equity investments from the Reclaim the Flame effort and lapping weather-related softness from a year ago, resulted in only a slight traffic decline in the face of an average check increase of 13%. This turned out to be a winning formula for us and one we expect will continue into Q2 of this year. With that, let's discuss the progress we are making in our restaurant operations. The quarter produced continued sequential and year-over-year margin improvement, driven by increased flow-through on our higher average check. In fact, our food, packaging, and labor costs only increased $7 million compared to Q1 of 2022 against the $46 million revenue improvement. The margin leverage we saw in labor was especially encouraging, considering we also expanded our hours of operations and simultaneously reduced labor hours on a year-over-year basis. Additionally, we saw a deceleration in wage increases and a dramatic moderation in team member turnover during the quarter, aiding both efficiency and the guest experience. At the same time these beneficial operating trends unfolded, we meaningfully improved our guest satisfaction scores during the first quarter as compared to the same period last year, with an increase of over 35% at our Burger King restaurants and over 10% at our Popeyes restaurants. Guest satisfaction is a priority for us and one we believe is a key driver of repeat visits and incremental traffic growth. Overall, we've made substantial progress on operations. We're among the top operators in the Burger King system, but we continually strive to be the best. As a result of the financial subsidies we expect to receive from Burger King as part of their Reclaim the Flame initiatives, we have been able to increase the number of high teens return remodel projects we have undertaken. Under our franchisor's Royal Reset program, we are able to proactively upgrade our restaurant digital technology over the next eight months at no incremental cost to Carrols, as long as we match those investments with equivalent spend on restaurant maintenance and improvements. In terms of capital expenditures, we expect to maintain our spending at approximately $40 million for 2023. In the past two quarters, we believe we have showcased the power of our operating model when we have sustained solid top-line growth and a renewed focus on operational excellence. While we are pleased with our results to date, there's much more to be done. We are excited about the positive momentum in our business and what we believe we can achieve during the remainder of 2023 and the years to come. Before I turn over the call to Greta, I'd like to touch on some of our thoughts for the remainder of the year. First, we are optimistic about the positive traffic impact the incremental marketing from Reclaim the Flame could have on our business as additional initiatives are rolled out through the remainder of the year by our franchisor. Second, as I mentioned before, we have seen our average check improve favorably over the past two quarters, driven by reduced discounting and menu price increases. This has provided us with an opportunity to expand restaurant margins and drive EBITDA growth. As we look to the back half of 2023, we do not anticipate the same level of average check benefit for two reasons. One, as inflationary pressures ease, we expect that our ability to raise menu prices in tandem will moderate. Two, we will lap our recently improved promotion and discounting profile in the third quarter of 2023. Consequently, we believe that positive changes in the trajectory of traffic trends in the back half of 2023 will be the most meaningful driver of comparable sales growth. Finally, our top priority remains fortifying our balance sheet and reducing our net debt balances. We expect to stay the course on organic growth and do not currently anticipate making any multi-unit restaurant acquisitions, increasing capital expenditures over the approximate $40 million we've already communicated, or returning cash to shareholders in 2023. In closing, it has been a pleasure working closely with our talented management and restaurant operations team for the first four months of 2023 as interim CEO. I am proud of what we were able to achieve together and look forward to working with Deborah and supporting her efforts to continue to build upon the positive momentum we have generated over the past year. With that, I will now pass the call over to our controller and assistant treasurer, Gretta Miles, for a detailed discussion of our financial results. Thank you, Tony, and good morning, everyone. Restaurant sales in the first quarter increased 11.4% to $445.2 million compared to $399.5 million in the first quarter of 2022. For the quarter, comparable restaurant sales at our Burger King restaurants increased 11.7%, comprised of a 13% increase in average check, which was partially offset by a 1.1% decline in traffic. Comparable restaurant sales at our Popeyes restaurants increased 9.5%, comprised of a 10% increase in average check and a 50 basis point decrease in traffic. Turning to expenses, our cost of food, beverage, and packaging improved 260 basis points to 28.2% of restaurant sales as commodity inflation of approximately 8% was more than offset by the positive benefit from pricing actions and lower promotional discounting. Beef averaged $2.53 per pound during the quarter, which was a 7% decrease from the same period last year, but has risen to the mid-$2.80s in the last few weeks. From where we stand today, we expect commodity inflation to be in the mid to high single digits for the second quarter of 2023. Restaurant labor expense decreased 260 basis points to 32.9% of restaurant sales as labor inflation was more than offset by reduced labor hours and the impact of pricing actions and lower discounting. Average hourly wage rates for our team members before overtime increased by 5.6% during the quarter compared to the prior year period. As we look ahead, we expect wage inflation in the mid-single digits in 2023 compared to the high single-digit inflation we saw last year. Other restaurant operating expense increased $3.7 million and decreased by about 80 basis points to 15.5% of sales. The dollar increase was driven by higher royalties on higher sales as well as higher utility costs. Rent expense decreased 60 basis points year-over-year as a percentage of sales compared to the prior year period, primarily from the benefit of higher sales on fixed rental agreements. General and administrative expenses as a percentage of sales increased 30 basis points year-over-year due to incentive compensation accruals that were absent in the prior year period. Excluding non-recurring costs as well as stock compensation expense and including the impact of higher incentive compensation accruals this year relative to last year, we anticipate 2023 G&A expense of $23 million-$24 million per quarter. For the first quarter, our net income was $900,000, or $0.01 per diluted share, compared to net loss of $21.3 million or $0.42 per diluted share in the prior year period. On an adjusted basis, first quarter net income was $7,000, compared to an adjusted net loss of $17.1 million or $0.34 per diluted share in the prior year period. Free cash flow for the first quarter was $1.1 million, a significant improvement compared to negative free cash flow of $39.1 million in the same period last year. As a reminder, our first quarter cash flow included our final $10.8 million repayment of the deferred FICA obligation. In the first quarter of 2023, we used free cash flow generated along with cash on hand to pay down our outstanding revolver balance of $12.5 million in full. Cash and cash equivalents was $4.9 million at the end of the quarter, and long-term debt, including the current portion and finance lease liabilities, was $478.7 million. Our overall interest rate on our debt this past quarter was 5.8%, as approximately 90% of our debt is fixed. As of quarter end, there were no revolver borrowings, and we had $10.5 million of outstanding letters of credit, leaving us with $204.5 million of availability under our revolver at the end of the quarter. With that, this concludes our prepared remarks. We'd like to thank you again for your interest in Carrols, and we are now happy to answer any questions that you may have. In addition to Deborah, Tony, and myself, Joseph Hoffman, our Chief Restaurant Officer, is also available during the Q&A session. Operator, please open the line for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If at any time you wish to remove your question from the queue, please press star two. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Joshua Long with Stephens. Great. Thank you for taking my question. Was hopeful we could talk through kind of the underlying competitive environment and also some of the operating initiatives that you've been working through. It seems like getting some momentum there, and was curious just any sort of trends you could share by day part, what you're seeing by, you know, from the consumer, and just how generally the first quarter shaped up versus your expectations. Sure. So on the day parts, you know, we made a concerted effort to increase our hours of operation. I think from a competitive standpoint, in terms of our results, we saw a pretty significant increase in traffic from the 8:00 P.M. on time period. That's been very well-received and well-executed. That's both operational and competitive, I think. From the consumer standpoint, you know, we're seeing a continuation of what we saw last quarter, which is, you know, the number of items per transaction is pretty much flat, maybe down 1% or so. You know, we're seeing a little bit of reduction in, you know, soda add-on, but so that's one end of the spectrum. Higher, you know, higher coupon usage, higher digital coupon usage. You know, sort of what you'd expect in this environment on, you know, in one part of our consumer response or consumer actions. On the other side, we're seeing, you know, increase in, you know, purchases of full price combo meals, you know, that are outside the value menu and that's, you know, we think that's trade down, you know, which is obviously We think is gonna continue to be a positive driver throughout the year. Mm-hmm. You know, the other thing that's continuing to show strength in the first quarter was delivery. Really, you know, you're seeing, you know, sort of both ends of the spectrum on our customer changing, you know, behavior slightly, but, you know, it's all working in our favor. We're excited with that. That's helpful. Thank you. Maybe digging into some of the additional hours and maybe that late night day part that you talked about. I think in the past, we talked about part of that was gonna be a staffing pickup or just a normalization of the staffing environment. I also believe that you had shared previously that you were able to do more with less in terms of just being more efficient with a, you know, smaller number of team members at the store level and really focusing on just utilization, efficiency, et cetera. Can you talk about that and what's the staffing environment look like at the store level and just what have your operational initiatives and focus allowed you to do, as you start thinking about building onto the, you know, that later day part? Sure. Well, I'll start and then hand it over to Joe. You know, the headline numbers are that we increased at Burger King hours by 3.5%, 4%, and we were able to actually reduce labor hours by about 3%-4%. You know, that's really, you know, discipline coming out of COVID on the, you know, more productivity at the restaurants, you know, at the same time as we're, you know, increasing hours. I'll turn over to Joe about the whole, you know, the overall labor environment. Yeah, I think from an operational standpoint, the everything kind of clicked this quarter. The application flow has continued to to be pre-COVID level as of now. As the turnover continues to go down, the stability is greater in the restaurants and therefore we're more efficient and we can do it with less people because obviously the tenure of the individual team member is longer, better trained, cross-trained, can do more than one station. As this continues, we should be able to get more efficient in the future as well as we move forward. Great. That's helpful. One follow-up for me, you know, Tony, to your comments on restaurant-level margins. You know, strong results here in the first quarter, and then as we think through the back half of the year, it feels like some of your comments were pointing to the fact that maybe some of those year-over-year gains might moderate. Should we still be able to expect to see some at least upside as we think about up on a year-over-year basis in the second half of 2023 on that restaurant-level margin line item, perhaps upside, but maybe just somewhat moderated versus what you printed in the first quarter here? Yeah. I think, it's really it's an unknown right now what the back half is gonna look like. You know, if things continue to click the way they did 1st quarter, we could see, you know, the Reclaim the Flame media investment, which has really just started. We're gonna see the bulk of the power of that from that come in, you know, from here on out for the year. That should be a positive for traffic. You know, a softer economy, I think we'll get more trade down. It's really, you know, we've sort of locked in the benefit of lower discounting and price increases, I think for the year. Now it's a question of, you know, what's gonna... You know, how strong is the traffic gonna respond to Reclaim the Flame and also our operational improvements? Great. Thank you. Our next question is from Jeremy Hamblin with Craig-Hallum. Thanks and congratulations on the strong results. Deborah, welcome to the team. Thank you, Jeremy. I wanted to start just by making sure that I understood expectations around menu pricing for the remainder of the year. You know, you talked about, you know, average check, I think, was up 13% here in Q1. You know, I wanted to understand where menu pricing was specific to Q1, and then what you're thinking in terms of menu pricing in Q2 and then the back half of the year. Sure. I'll take that. You know, menu pricing was 9.7% to put a five number on it in the first quarter. We did. You know, included in that was about a 3% increase we did in the latter part, you know, of March. I think that 3% is gonna continue to help us, obviously in the second quarter. You know, I think we'll see maybe a slightly lower number in the second quarter because we're rolling off a May increase in the second quarter, May increase from 2022. Still in the high, you know, single digit type area. You know, for the back half of the year, you know, we're eyeing September as the next time we do a price increase. Really that's gonna be highly dependent on what the inflation picture looks like and what the consumer behavior is looking like. If we're in a softer economy and inflation, you know, commodity inflation is starting to come down as we expect and we're, you know, maybe more than we expect, we probably have less ability to raise prices. I think at that point the focus would be on a little more value offering to our consumer, you know, affordable value. That's, that's sort of how the year played out. I would say the, you know, the most striking thing, you know, I'll also say in the back half, we're gonna still be at this nice discounting level. We don't expect that to change in our discussions. We don't, you know, with our franchisor, we don't expect that to change. You know, I think the back half we're gonna have a really strong foundation, on the average check side. We'll be able to flex depending on what the environment, you know, throws our way, you know, the economic environment throws our way. I would point out, Jeremy, that, you know, the fact that we were, you know, we were able to have that price, you know, the average check increase in Q1 of 13% with only a modest, very modest traffic impact, we were pretty happy about that. I mean, that was more than, you know, it was, it was definitely above our expectations on both sides of that equation. We were really happy with the results, and we're really happy with the sequential traffic, you know, that we're seeing at quarter-over-quarter. Definitely feeling, you know, in a good spot for the rest of the year. Just to clarify what that meant. You're saying the traffic has improved slightly from Q1? No, no. I was saying Q4 to Q1. I see. I wanted to ask about the Reclaim the Flame and the media spend, you know, that's on tap. It hasn't really, you know, been turned on yet, but I was hoping you might be able to provide a little bit more insight. We heard from parent company. Clearly there's quite a bit of enthusiasm. You know, social media buzz around the BK brand, which, you know, really has been kind of a market share loser over the last several years. It does feel like there's a little bit of an inflection happening here, maybe across the quick service industry, but certainly for the BK brand. I was wondering if you could just provide a little bit more insight as to how you think that is going to impact results and where you think the thrust of that spend is likely to come and benefit, you know, BK franchisees like you guys? I'll jump in here. I think we're pretty excited with the results that we've seen so far from their initiatives in the first part of the year. We know that's actually a relatively minor part of the spend, and that more of that's gonna come in the second half. I think there is some good energy around that. In terms of the timing, I believe there is one coming in mid-May that we're gonna see shortly. There's another one planned for later in the fall. We actually don't have all the details of that. I don't think that's being released at this time. They're very optimistic at it at Burger King. We're pretty optimistic too, that it is gonna be a great traffic driver for us. Honestly, in the second half, it will actually help offset some of the things that we're gonna be comping up against with the, with the traffic, with the discounting, and other things there. Like I said, very optimistic about it. Great. wanted to also ask you just about, you know, food costs. It, it does sound like you're continuing to see some moderation on food price inflation. wanted to see, you know, one, I might have missed this, but, you know, what was the ground beef per pound in Q1? kind of where is it tracking so far in Q2? are there any changes in terms of, you know, kind of the mix in business? Obviously, you know, media spend and marketing has really been centered around the Whopper. are there any other changes that we need to think about in terms of your food cost basket, other proteins that are meaningfully changing one way or another? Sure. I'll take that, Jeremy. Importantly, beef has been doing exactly as we expected for the year, it's continuing in the path that we had anticipated. In the prepared remarks, we did mention, $2.53 per pound for beef in the first quarter, that was about 7% less than the first quarter of last year. We have seen that rise to the mid-$2.80s in the last few weeks. To the mid-$ 2.80s? Mm-hmm. That's right. Okay. Got it. I mean, again, that's what it's to happen because of the supply demand dynamics happening in that industry. We're a little bit sheltered versus some of our QSR competitors because, you know, a good chunk of our beef is kinda pre-purchased from, you know, internationally, so we don't get the full brunt of it. We're definitely seeing The U.S. beef market do what we thought it would do, which is, you know, there was a culling of the herd, so that put a damper on supply. As we get into the summer months, you know, there's increased demand as there is every year. We expect that to, you know, continue for maybe a few months, and then, you know, it'll start to, as it always, you know, as it has typically start to come down, you know, starting in the third quarter and the fourth quarter. Got it. Fair to assume that your cost of sales, percent would track up here in Q2, probably more than 100 basis points, I would assume. There's a lot. Uh- I mean, if that's what you think, that's great, but- I'm sorry. Nope. I didn't hear that answer. I'm just saying there's a lot of moving parts in that you know, in that equation. You know, I wouldn't jump to that conclusion necessarily. The impact of the lower promos and discounts has had a huge impact on our cost of sales margins. Like we said, I mean, we saw like an 8% in commodity inflation in the quarter, it was more than offset by the positive impacts we had from price and promos and discounts and getting our average check up to a place to kinda offset all the inflation we've seen in the last quarter, series of quarters with vendor. Great. Thanks for taking the questions and best of luck on the continued momentum. Thanks, Jeremy. Thank you. Thank you. Thank you. Our next question is from Jake Bartlett with Truist Securities. Great. Thank you so much for taking the question and also welcome, Deborah. Great to have you on board. My question is on the momentum in the business, and if you could help us understand how, you know, sales, same store sales trended, you know, by month in the quarter, and then any commentary on April momentum would be helpful. What I'm trying to understand is the underlying momentum. I know there was successful, you know, promotion. I think that the spicy chicken fries, I think, sold out earlier than expected. You had a pretty catchy jingle throughout the quarter, you know, early in the quarter. I'm just wondering on momentum and specifically, you know, whether that's continued quarter to date. Yeah. I would say the monthly, you know, the monthly results aren't that informative because we had some weather lapping and, you know, some huge weather in January of 2022, plus COVID, believe it or not, was still pretty rampant in January of 2022. It was pretty even month to month, you know, if you take those factors sort of out. You know, we're pretty happy with, again, with the overall result, which we had, you know, good average check improvement and very modest traffic decline. You know, on sort of looking ahead, you know, we think this quarter is gonna be a high single digit type number based on what we've seen sort of halfway through the quarter so far. Great. That's really helpful. Then, you, I know there's a lot of moving pieces here, but I'm wondering if you can kind of rank order the drivers to the same store sales in the first quarter. I remember, and I think it was the fourth quarter that you attributed most of the improvement to less discounting. I heard you talk about, I think it was 3.5% more hours. There is still a lot less discounting year-over-year. You do have the Reclaim the Flame promotion or, you know, campaign kicking in. How would you rank order the drivers to the, you know, the strong same store sales in the first quarter? Number one was menu price increases. Number two was lower discounting. I think the other, you know, I think customer service, which is our, what we control operationally, has been dramatically improved. So I think that was very helpful. You know, obviously hours of operation improving was there. Then I, you know, I think that the most from an operational standpoint, I'll speak for Joe, but I think that the consequential positive impact of lower turnover is gonna be, you know, is gonna be the, you know, is gonna be where we add to the traffic the most over the, you know, between happy customers and repeat customers. I think that's gonna really drive, you know, really help drive our numbers for the rest of the year. Great. Then my last question is on the commodity outlook. It sounds like you're expecting, you know, commodity inflation to be about the same in the second quarter versus the first. Any more visibility on the back half, just the year as a whole, whether you... I think, you know, my expectation is that commodity inflation is gonna decelerate for you by the back half of the year, but I just wanted to get your perspective. You know, is that a valid, you know, assumption or, you know, is it still very much up in the air in your view? We would agree with your conclusion on that or your assumption on that, sorry. It's gonna decelerate. We think it's gonna decelerate in the back half. Okay. Would you think it would decelerate but remain inflationary or, I mean, is there? Yeah. Is there a possibility that we-? I think I would-. Mm-hmm. I mean, I don't, you know, I guess the answer is. Yeah. You know, I think it's gonna be the economy, you know, it's gonna be the economy that, I mean, if we, if we go into some sort of, you know, meaningful recession, I think, you know, the, you know, I think the commodity thing is gonna be much less, you know, much less of a headwind, you know, in that period. Either way, I think it's gonna decelerate. Got it. Great. Really the last question is, I think it's gonna come out in the queue, what was the level of the percentage of promotional sales discounts? I think last first quarter was 18%. I have 14% in my model, what was the actual number, you know, in the first quarter? I know it improved 7.5 basis points, so. 7. Wow. Yeah. To about nine? For Burger King, it improved 7.5 basis points. It's, I, it's, it was low, double digits, you know, low teens. Wow. Okay. Do you think that level is gonna continue for the rest of the year or? You know, plus or minus, you know, I think it's gonna continue. Plus or minus a small number, it's gonna continue. You know, we, you know, again, we don't think that's gonna, you know, we don't think that's gonna change dramatically as the year progresses. You know, it's great to have that. You know, we view that as the, you know, step one of Reclaim the Flame, which was incredibly helpful to our profitability. We are very grateful to our franchisor for that strategy and executing on it so well. Great. Thank you so much. I appreciate it. Our next question is from Hale Holden with Barclays. Hey, good morning. I had two. Deborah, I was wondering if you could just give us some big picture thoughts on where you thought the business was going, any kind of strategic overlays. I know it's only one week into the job, and it sounds like you work nights most of the week. Any thoughts would help. Well, first of all, nice to meet you, Hale. Very excited to be here at this time. I mean, I think there's just great momentum in the business already. It's an exciting time, both from internally at Carrols and what's going on and some of the initiatives that Jim and his team are working on, and also simultaneously what's going on with our franchisor and the whole Reclaim the Flame. Like I said, in the five years that I've been on the board, this is probably the most exciting time that I see, right now for joining the company. You know, at a high level, I think there's lots of opportunities, and I'm not gonna go into a detailed strategy on today's call because I really have to dig deeper into, you know, the business and, you know, validate that with the team. There are certainly opportunities, I think, at a, at a very high level for kind of identifying best practices and finding ways to leverage those across the company. I think there's opportunities for cost efficiencies and leveraging our economies of scale. At a very high level, those are the types of things I think we'll be digging deeper into. There's been great work done in the past by both, you know, Paulo and others to kind of identify some of the operational initiatives, and we'll be fine-tuning those and really focusing on those that are gonna deliver the biggest impact and going from there. Great. The, the other question I had was, you know, it would seem to me as we go forward, whether there's a shallow, no recession, deep recession, however you wanna define it, that the level of promotional intensity that you might have in the back half of the year will be probably one of the bigger drivers in terms of where margins go. I was wondering if you could talk about your ability to kinda hold promotional cadence at the depth of promotion that you're seeing it now, or do we think it's gonna possibly deepen or increase? You know, I think, I think we're very aligned with our franchisor. Obviously, they're very interested in keeping the... You know, they worked hard to get to the promotional level we are at now, and they are focused on, you know, franchisee profitability as they've been very transparent about that. Obviously anything they did to, you know, go a different way on discounting would be a negative to profitability. I think we're all aligned. I feel really good that, you know, if it does change, as I said in the last answer, it's, I think it's gonna be, you know, a point or two, not 600 points or something like that. You know, I just think we're it's great that we're all aligned and I think that's gonna keep, you know... That is something they, you know, it's something they control. I think we're on the same page on that one. I feel very confident that that'll go our way. I think another thing to remember is that we always focus on our competitors as well to make sure that our price point and our average check is providing a good value for our customer, that we have value options for the consumers that are coming in to look for a good deal. I think from a promotional perspective, you know, if you could see if commodities come in, there's things that could impact that, but we feel like we're in a very competitive place with our direct competitors on our price. Great. Thank you so much. I appreciate the time. Thanks. Ladies and gentlemen, as a reminder, to ask a question, please press star one. Our next question is from Carla Casella with JP Morgan. Hi. Most of my business questions have been answered. Just one debt question. You mentioned that you've locked in some rates on the term loan. I'm wondering if the interest rate hedges you've put in place limit you from kind of prepaying term loan as you look to repay debt and you've no more revolver to repay. I mean, yes, we could pay down some more, not very much as you're pointing out, 'cause our we wanna take advantage of the revolver. We don't wanna be exposed beyond our, you know, outstanding on the Term Loan B on the hedge. I think the one, you know, the one message that we wanna make sure comes across is that, you know, we wanna, we're gonna continue to focus, we're gonna stay the course on deleveraging. It may be deleveraging because of increasing cash at, which is netted out of the net debt number. You know, at this point, we haven't really, you know, that's really the most we've discussed with the board is stay the course. That, you know, it's not, you know, as I mentioned, what we're not gonna do and, you know, we're not gonna veer from, you know, from where we've been, you know, over the last year. That's really the capital allocation is to reduce the net debt. That's, I think for this year, that's gonna be mostly from, just increasing our cash balance. Okay, great. Thank you. Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn the call back over to Deborah Derby for closing remarks. Thank you again, everyone, for joining us this morning and for your interest in Carrols. We appreciate your time, and we look forward to speaking with you next quarter. Thank you. This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.