PBPB - NASDAQ

[Operator Instructions] Our first question is from Mark Smith with Lake Street Capital Markets.

Guys, this is Alex Sturnieks on the line today for Mark Smith. First one for me. As we look at consumer behavior throughout the quarter, did you guys see any trends with comps sequentially? And then to add on to that, are you seeing any consumer shifts with different locations, maybe anything from a CBD location to a suburban store standpoint?

Got it. Yes. No, that's helpful. And then last one for me. Could you give any updates on your desire to sell company units or the demand from others to purchase existing company locations? I know you've previously mentioned being more selective about where and when, but just curious if that has changed at all.

The next question is from Jeremy Hamblin with Craig-Hallum.

And congrats on the strong results. I wanted to start with the franchise unit development. I think this is kind of a milestone here, if I'm not mistaken, the first time that the ending unit count is up on a year-over-year basis in like 6 years. So kudos on that. And I wanted to make sure that I heard the details behind the shovels in the ground, so to speak, in units in progress. Did you say you had 30 that were in progress today and then 10 that were in the early stages. I wanted to get a sense if you could help us think about the cadence of franchise unit openings this year. And then as a back part of that question, how long does it take once you start in on a unit kind of from getting the first work done to complete in the unit and getting it open?

Great. I want to come back to the sales trends for a second. And like get a sense for -- I think a lot of restaurants have called out that Easter had a bit of a negative impact on the March quarter. I wanted to get a sense for whether or not that you saw that impact, particularly given your exposure in CBD areas. And then as we think about the customer spend, are you seeing any change in terms of the average ticket? Are you seeing any check management from your customers?

Got it. And then you guys made great progress on the restaurant-level margins this quarter, particularly in light of a flat comp, 150 basis points, that's pretty impressive. One line item that you saw some deleverage in was your other operating expenses, I think, was down about 90 basis points year-over-year. And I wanted to see if you could provide a bit more color on that. I know that you're making progress on bringing more of the digital orders through your app. So I would think that maybe you would see your exposure to third-party delivery down. But any color you could provide on what was the culprit there on the deleverage on other operating expenses and how we should think about that particular line item the remainder of the year?

Got it. And then just to clarify, of the 90 basis points, how much of it was due to the Brand Fund? Was that 50 basis points or more like 75?

It was a little more than half. It was more than half of the hit.

Got it. And then just the third-party settlement that -- the line item that, that falls under?

It got spread across a couple of line items within shop margin. It sat within our F&P -- sorry, sat within our labor and it sat that within our other OpEx. It sat within labor because it affected our ability to schedule properly and so forth. And on the other OpEx line, it affected our ability to really kind of manage some of the details around how we report and some of those fees that come in from third-parties, et cetera. So kind of evenly split among those 2 items.

The next question is from Todd Brooks with The Benchmark Company.

Would like to lead off. Bob, I was excited to hear about the new work, cementing the new prototype, the 1,800 square feet. I don't think -- did you share a new build cost relative to the prior $650,000 that you're looking at for the new box?

That's great. Two follow-ups, if I may. One, in the discussion with potential franchising partners, now that you can point to this prototype, their excitement, just kind of accelerating the whole effort if you can build the box at 1,800 square feet, do the same AUVs and do it at a lower cost. How much easier is that making it to sell new units? And then if I think about the work that you do for the franchisees as far as site identification within the market, how much does the 1,800 square foot footprint open up the number of sites that some of these franchisees to have to choose from in the market as well?

That's great. Shifting gears, Bob, you talked about maybe the need to -- for in-shop customers, maybe non-digital channel customers to try to deliver some more value to them over the course of this year. Can you -- I'm sure you're not going to walk through specific tactics about how to do that. But can you at least point us in the direction of how you deliver and how you communicate value to that customer where it's fairly overt once they walk into the shop.

Is that a long-tailed effort? Or can that be delivered at the shop-level pretty quickly?

We can deliver it pretty quickly. Yes. Yes.

And then just one quick follow-up to Steve, and I'll jump back in queue. Within the guidance for second quarter same-store sales at flat to up 2%. And I think, Bob, you commented that we're positive low single-digit quarter-to-date. What's the assumption on price mix that's baked into the flat to up 2% assumption?

The next question is from Matt Curtis with William Blair.

Bob, I think last quarter, you said you had the opportunity to get to a 16% restaurant-level margin this year. Is that still in play at this point given the narrowing in full year comp guidance?

Okay. Got it. And then I guess the full year comp guidance implies that traffic will be sort of flattish, I guess, for the full year. So with -- assuming that's the case, would you expect that the unit level margin expansion this year would be more driven by levers like supply chain efficiency and labor optimization as opposed to sales leverage?

Yes. I mean the sales leverage...

Yes, I think that's...

Oh, sorry, Steve. Go ahead.

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 Mr. Bob Wright for closing remarks.

Thank you, and thank you all for joining us today and especially thank you for the questions. As you heard, we're proud of our quarter and proud of the team, especially grateful to all of our associates and our franchisees, our growing body of franchisees and their employees as well. So thanks again for your time. We look forward to talking to you again soon. Have a great night.