Lauren Silberman: Hi. Thanks so much. I wanted to ask about traffic. So, the guide for next year for low single to mid-single-digit comp seems to imply negative traffic in ’24. Can you just talk about how you’re thinking about traffic next year and what you’re seeing in the environment? And any additional color on what you’re seeing with consumer and tech management would be helpful. Thank you.
Darin Harris: Yeah, good question, Lauren. This is one that we really contemplated, do we provide guidance here on price or not? Because what we did is we decided to guide price for Company-only, and the same-store sales guide is for the system. And as you know, we wanted to try to give some better visibility on what the Company impact would be because we have such a large presence in California with AB1228. And the reality of it is, and I think most in the industry are not exactly sure how it’s going to perform. So, although we’re guiding 6% to 8% pricing for the Company, because majority is California, what we’re sharing is, we need that to overcome the wage inflation. That’s really the story there. And so how transactions respond, we’ll continue to keep you updated, if we think there’ll be some transaction decline, but when we’re guiding system sales, it was more for the system versus just for the Company.
Operator: Our next question comes from the line of Gregory Francfort with Guggenheim Securities. Please go ahead.
Gregory Francfort: Hey, thanks for the question. Maybe just a follow-up to that. Darin, can you talk a little bit about what price elasticity has looked like more recently? I — my understanding is, you’ve taken 4 or 5 points less versus 2019 compared to McDonald’s, and so you’ve underpriced them pretty substantially. But looking at even ex the California increase, 3% to 5% next year, what gives you confidence that consumer is maybe not pushing back to that, or how would you adjust if the environment changes at all? Thanks.
Darin Harris: We’ve really invested in our pricing team over the last year and a half in our tools and technology to go in and be surgical and data-driven in how we price. So, I think we at Del and Jack — Del will also take on this in 2024, the same toolbook and tool, and playbook. But the bottom line is, we’ve proven that we can surgically take price and find out where there is opportunities by store, by market, and really try to find how do we reach our guests in the right way. And so, it’s challenging in an environment that’s unknown. We definitely have seen, you know, some softness at Del Taco in the lower-income consumer. We are still performing on the higher income consumer. At Jack, we’re also seeing more of an even performance across all deciles of income.
And so, overall, you know, what we believe is that with the AB1228 and what’s happening in California, that’s where the real price elasticity concern comes in. And we believe that our loyal guests in our home-based state will continue to come back to Jack and Del, and we believe that to be the case.
Gregory Francfort: Thank you.
Operator: Our next question comes from the line of Andrew Charles with TD Cowen. Please go ahead.
Andrew Charles: Great. Thanks. I wanted to learn a little bit more about one of the missing pieces around the re-franchising activity for Del Taco that’s expected next year. I know you guys are on track to get 120 more stores re-franchised to return to 90% franchise mix by 2026. Can you help shape up what next year will look or this year will look like relative to what you did in 2023, or just any other guideposts as we think about the cadence of re-franchising for Del Taco?
Darin Harris: Yeah, we guided to, you know, 120 over the next two years, because right now we have very strong demand even with the external environment, interest rates and AB1228. Jack franchisees and even outside franchisees have shown real interest in Del. And so, we feel really good about that. And we’re going to continue to update you just like we did this year. We’ll use our proceeds accordingly, as we’ve laid out for share repurchase or debt repayment. But we believe, at a minimum, there is somewhere in the neighborhood of 30 to 40 that we’ll do this year. And the real lever here is, do we find the right operator that’s well capitalized, that wants to develop. And as you saw us do last year, if we find that, we’ll go faster. If not, we’ve given you guidance that we’ll pace it out over time and keep you updated along the way as we did in 2023.
Andrew Charles: Thanks, Darin.
Operator: Our next question comes from the line of Dennis Geiger with UBS. Please go ahead.
Dennis Geiger: Great. Thank you. And Darin and Brian, thanks for the commentary and the details on development and how the pipeline looks right now. Just wondering if you could talk a little bit more about the development growth plans, latest on franchisee development sentiment, which I think you said was favorable. Anything on sort of how it’s trended through the year? And I guess, importantly, anything on sort of timing updates as it relates to pressures on development? Has that done anything from a timeline perspective over the next couple of years as you think about that growth trajectory and sort of, yes, so many, but just the last point, anything on closures next year so we have a better sense to think about what net development looks like in ’24? Thank you.
