Underperforming Units Impact
Q: How do the 70 underperforming units affect EBITDA?
A: The 70 underperforming restaurants are dragging down margins by 215 basis points and have collectively lost a little over $6 million on the income statement over the trailing 12 months. Management believes in these locations and is supporting them to execute turnaround plans, while keeping a close eye on their performance.

Same-Store Sales Trends
Q: What are the recent same-store sales trends and traffic figures?
A: In the first four weeks of Q4, traffic has been down about 4%, but overall per-person average (PPA), including menu prices and discounts, is up about 6%, resulting in a net 2% increase in same-store sales. Management is optimistic about building momentum for the rest of the quarter.

Margin Outlook and Improvement Levers
Q: What challenges and levers exist to improve margins into 2025?
A: Improving margins will focus on driving positive traffic to boost sales, enhancing labor productivity through the relaunch of hot schedules, and closely monitoring controllable expenses. Management has successfully reduced costs in areas like utilities and supply chain, even in an inflationary environment. They are also optimizing third-party business and being prudent with G&A expenses and marketing investments. Addressing the bottom 70 restaurants, which are pulling down margins by 215 basis points, is crucial for significant margin improvement.

Discounting Levels vs. Pre-COVID
Q: How does current discounting compare to pre-COVID levels?
A: Prior to the North Star plan, in 2021-2022, discounts were around 4% of sales. The company had reduced discounting but has strategically increased it again to attract customers amid competitive pressures. Management believes that bringing people in will result in a great experience that fosters repeat business.

Strengthening Sales Trends
Q: Are you seeing strengthening trends in sales similar to others in the industry?
A: Yes, the company is experiencing similar strengthening trends. Same-store sales are up 2% in the first four weeks of Q4, excluding loyalty adjustments. Management is optimistic about the trajectory for the rest of the quarter.

Loyalty Program Impact
Q: How is the loyalty program affecting customer visits and marketing efficiency?
A: The loyalty program has been exceedingly successful, with return visits and reward redemptions exceeding internal expectations. Guests are using rewards with minimal breakage. The program allows for highly targeted messaging, making it more efficient than traditional media and improving marketing ROI.

Operations Efficiency and Guest Satisfaction
Q: How are operations changes impacting efficiency and guest satisfaction?
A: Management is measuring efficiency by comparing like-for-like restaurants, focusing on labor performance, and sharing best practices. They are improving productivity, especially in high labor cost areas like the West Coast, while monitoring key metrics more closely than ever. To ensure guest satisfaction remains high, they utilize various feedback mechanisms like SMG surveys, Google reviews, Yelp reviews, and loyalty surveys. Despite achieving more efficient labor management, they have maintained high levels of guest satisfaction.

Seasonality and Holiday Expectations
Q: What is the seasonality impact on Q4 and expectations for the holiday season?
A: Q4 is a backloaded quarter, with the majority of profitability coming in the Thanksgiving to New Year's window. While seasonality troughs in Q3, business picks up significantly in the last several weeks of the year. The late Thanksgiving this year is not expected to significantly shift business. Management is optimistic about the holiday season performance.