And so, – and I also just remind everyone that we did this in conjunction with $200 million of capital return to shareholders as well as $200 million of debt reduction since 2022. So, all of this is possible only because of our high cash flow conversion model. And you talked about – the second part of your question was about levers that we can pull. Another reminder there is that we’ve been through 2020, right? So we’ve been through the worse. We know that we have the exact playbook to protect our liquidity, protect the long-term fundamentals of the business. And so we know what to do. For the time being we’re seeing progress with investments that we’re doing and so things – we’re not lowering our G&A guidance just yet, but things are tracking according to expectation.
I hope that answers your question.
Jake Bartlett: Yes. That’s very helpful. Thanks a lot.
Operator: Thank you. One moment, please. Our next question comes from the line of Todd Brooks of The Benchmark Company. You may…
Todd Brooks: Hi, thanks for taking my questions. First on Applebee’s and the updated net unit closure guidance. Tony, can you talk through the portfolio review and where you found the additional weaknesses that maybe led you to identify the additional closures? Is it concentrated within one or two franchisees portfolios or concentrated regionally? Is there anything that set the incremental units? And is there a chance that the need for more closures leaks over into 2024 and threatens that move back towards kind of net unit neutrality for the Applebee’s brand?
Tony Moralejo: Yes, absolutely. Happy to add a little bit more context and color. I’ll try to unpack that, but there may have been five different questions there. So we’re now two years post-pandemic. And shortly after taking over the – we decided to take a strategic look at our portfolio and identify additional restaurant locations that are – are no longer in strong markets and that’s due for multiple reasons. Some of those reasons are post-COVID consumer behavior changes that John mentioned earlier. Closing these underperforming restaurants opens up new trade areas. It opens up opportunities for growth especially when you consider our broader development strategy. Our new – Vice President of Development is working closely with franchisees to take advantage of these opportunities.
In terms of how does it impacts beyond 2023, we’re not giving guidance today beyond 2023, but I’ll say that we’re going to work closely with our franchisees to help identify closures and make sure that we always leverage our collective expertise and our knowledge to set them up for long-term financial success. In terms of the different reasons – I’m into the exact reason for every one of the closures, but it’s a mix of those post-COVID changing consumer patterns. Sometimes it’s loss of property control where the franchisee is unable to renew a lease with the landlord. And I think you also have to keep in mind that this is a function of opening up many, many restaurants 20 years ago, and there’s cycles, right? And every year is a little bit different.
In some years we have more renewals that come up than you did in the previous – you may have some more non-renewals than you did in a previous year, et cetera. So it can be a little cyclical as well. Hopefully, I think that that answers your questions.
Todd Brooks: Yes, that was great, Tony. Thanks. And then one more, and I’ll jump back in the queue. If we can talk about CapEx, $33 million to $38 million guidance maintained. It looks like the spending was frontend loaded, I think $23 million year-to-date. I guess what’s maybe rolled off out of the CapEx program? And can you give us what makes up your CapEx kind of the mix of maybe maintenance CapEx, which you shouldn’t really have much other than kind of your corporate related facilities, but between tech and other areas, just trying to get a handle about around the size of the CapEx for a fully franchised operation? Thanks
John Peyton: Sure, Todd. Vance will take that.
Vance Chang: Hi, Todd. So, the CapEx number, as we kind of mentioned last quarter, it actually doesn’t with about $8 million of TI reimbursement that we received year-to-date. And so that piece of it is actually flowing through our working capital. And so, if you net that $8 million against the 2023, it’s actually quite a bit lower than Q1 and also than last year already. So the nature of CapEx, a lot of it is sort of the implementation, the installation of the technology. So things should roll off over time and we’re already seeing that. And the full year guidance of CapEx, again, that does not reflect the TI reimbursement, right? So on a net basis, we’re getting a lot closer to our pre-COVID level already at this point. Does that answer your question?
Todd Brooks: Great, thanks. Yes, it does. Thanks, Vance.
Vance Chang: Great.
Operator: Thank you. One moment please. Our next question comes from the line of Nick Setyan from Wedbush. Please proceed.
Nick Setyan: Thank you. The IHOP add back I think you said it was about $3.5 million within G&A, but I think add back is over $5 million. What’s the difference there?
