Good morning, ladies and gentlemen, and welcome to the Red Robin Gourmet Burgers Inc. Second Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, part of today's discussion will include forward-looking statements within the meaning of the federal security laws. These statements are commonly identified by words such as continue, plan, expect, intend, project, should and other terms with similar meaning. These statements will include, but not be limited to, statements that reflect the company's current expectations with respect to financial conditions of the company, results of operations, plans, objectives, future performances and businesses, including the company's traffic and revenue-driving initiatives, intentions with respect to expense management, plans for deployment of capital and other expectations discussed during the course of this call. Although the company believes the assumptions upon which preliminary and initial results, financial information and forward-looking statements are based are reasonable as of today's date. These forward-looking statements are not guarantees of future performances, and therefore, investors should not place undue reliance on them. Also, these statements are based on facts known and expected as of the date of this conference call, and the company undertakes no obligation to update these statements to reflect events or circumstances that might arise after this call. Participants on this call should refer to the company's Form 10-K and other filings with the SEC for a more detailed discussion of the risks, uncertainties and other factors that could impact the company's future operating results and financial conditions. The company has posted its financial -- fiscal second quarter 2013 press release and supplemental financial information related to the quarter's results on its website at www.redrobin.com, in the Investors section. I would now like to turn the call over to Mr. Steve Carley, Chief Executive Officer of Red Robin. Please go ahead.

Thanks, Jake. And thanks, everyone, for joining us on our call this morning. With me are Eric Houseman, our President and Chief Operating Officer; Denny Post, our Chief Marketing Officer; and Stuart Brown, our Chief Financial Officer. After Stuart and I deliver our prepared remarks, all of us will be available for Q&A. First, let's review our second quarter headlines, which we've included on Slide 2 of our supplemental financials. Certainly, a key takeaway from our second quarter performance is the continuing solid execution of our strategic plan, with results that speak for themselves. In terms of our top line, we've now achieved 3 years of consistent quarterly same-store sales increases. In the second quarter, we grew restaurant revenues by 6.6%, while we continued strengthening our operations and significantly improved our operating margins. Our bottom line financial results were solid, with a 48% increase in diluted earnings per share to $0.77. This is noteworthy when you consider the significant investments we're making in our infrastructure, labor management, plating and food presentations, service and brand transformation. However, while we're encouraged by our performance, we continue to operate in a very challenging environment. And that is very clear to us when we see that we once again outperformed our peers, but continue to chase our goal of positive guest traffic. We're well aware that regardless of everything else, without delivering positive traffic, we can't achieve positive performance on a long-term sustained basis. As we've discussed our 3 areas of focus, include: engagement; efficiency; and expansion, now the backbone of our strategic roadmap. We've shared with you some of the specific tactics on the roadmap, so today, we'll limit our remarks to updates on some of what we view as the most important initiatives. I'll focus on areas of guest engagement and Stuart…

Thanks, Steve. And good morning to everyone. Obviously, we are very proud of our success this quarter as you've read about in our press release. The steps being taken by marketing and operations are clearly resonating with our guests, enabling us to strengthen our brand, both strategically and financially. Our robust operating performance versus a year ago was a result of several factors, including a higher average check with favorable menu mix, lower average costs of those items enjoyed by our guests and some benefit from favorable workers' compensation adjustments. Diluted earnings per share were $0.77 in the second quarter, compared to $0.52 per share a year ago. While year-to-date EPS was $1.43, an increase of 16% over last year. As you see on Slide 9 of our supplemental, total revenue growth was 6.5% in the second quarter. Our outstanding comparable restaurant sales growth of 4.3% was despite the headwinds of a disappointing macro-environment, and was comprised of a 5% increase in average check and a 0.7% decline in traffic. 270 basis points of the average check gain was due to increased sales of appetizers, alcoholic beverages, sides and desserts. The remaining 230 basis points of that increase resulted from pricing. As mentioned on our last call, we adjust our comparable sales for the restaurant level promotional costs, which last year, we reported in other operating costs and totaled $1 million in the quarter. If you recall, our April 2012 launch of Red's Tavern Double brought everyday value to the menu, increasing guest counts and resulted in a slightly lower average check. In April this year, we followed up that successful launch with a new appetizer lineup, that Steve discussed, as well as a new dessert cart. While we knew the cycling over our Tavern Double introduction was likely to…

Thank you, Stuart. In conclusion, I could not be more proud of the results from our culinary, marketing and operation teams in the second quarter, particularly in light of the industry headwinds and the fact that we lapped our very successful Tavern Double launch last year. Our focus on elevating the guest experience with new food and beverage selections and enhanced service model is beginning to get traction, and we'll continue building awareness and differentiation for Red Robin with our new advertising campaign. The environment for casual dining sector continues to be a challenge, and has softened more than we expected even just a few months ago. This further compounds the challenge of accomplishing our goal of positive guest traffic counts. It's our objective to continue developing a pipeline of products and guest engagement initiatives that we believe will equip us to best weather the continued consumer volatility and the inevitable increase in marketing and promotional efforts of our competitors. Of course, our accomplishments to-date are grounded in the hard work, talent and passion of the Red Robin team. So again, I want to thank my fellow Red Robin team members across the organization, for their commitment and outstanding work, taking care of our guests each and every day. With that, operator, we'd be happy to take questions.

[Operator Instructions] We'll start with Will Slabaugh with Stephens.

I want to ask you first about check mix, and more specifically, the impact the new advertising menu you have on your check. It sounds like that was a big piece for you out of the gates. I'm just curious how it turned it for you throughout the quarter?

Yes, we launched the new appetizer lineup really at the beginning of the quarter, so we got most of that during the quarter, and we'll be continuing, I think, to see some lift of that, right? It's a new lineup, it's resonating well. I think the one thing I'll sort of caution people on, even though that was big driver of our check is, if you do, you'll get a lot of new trial and things like that when you roll these out, and we'd expect to begin see some lift, although I'm not sure we'll continue to see as strong a lift as we sort of roll through the next few quarters.

Got you. And then on the traffic side, I wondered if you could talk how you're strategically impacted as you did lap over the introduction of the Tavern Double that you mentioned. Are there any more commentary you care to share about traffic trends throughout the quarter or in end of July?

We don't really give a lot of traffic trends sort of during the quarter, I mean, obviously, the environment, if you look at Black Box and I think some of the comments from our competitors, I mean, the quarter was fairly weak throughout the quarter. I think we were strong, relatively, throughout the quarter, so there weren't any specific trends in there. I think in last year, we talked about the Olympics, and we did - we performed well during the Olympics last year, during competitors that we had that headwind, as well as Tavern Double.

And we'll now move to the next question. That next question will come from Alex Slagle with Jefferies.

Question u on the average unit volumes, the volumes at the Red Robins not in the comp base; it just seemed to have fallen off some over the last 1.5 years. You used to talk about the new stores, the non-comp stores gapping above the comp base. And I think it's due to some of the bigger NROs back in the 2011, 2012 class normalizing after honeymoons. Just wondering if you could kind of provide some more color on that and what you're seeing geographically or competitively?

Alex, this is Stuart. I just wanted to -- a couple of different things going on: a, if you look in our supplemental, we disclosed sales per square foot. That may help you. So if you look at the NROs, there's a couple of things going on: a, we've got the 4,000 square-foot units and on it. So if you look at AUV basis, those performed a little bit lower although on a per-square-foot basis, at least as well. And the other thing that maybe, if you're looking at trying to back into NRO, because we don't provide NRO numbers, that $1 million adjustment that I talked about between cost of sales last year and sales this year, you got to be sure you're picking that up. Sales would have been $1 million higher if we hadn't made that accounting change, so that may have messed up your numbers. I think our NROs continue to perform strongly in our cash and cash returns. We target over 30% and still delivering that.

Great. That makes sense. And a quick question on the TV advertising strategy, the poll thing strategy you've taking on, what you've seen with it, and is it as effective as you expected at this point?

Alex, this is Denny. Yes, we thank you for picking up on, exactly what we call it. It's pulsing and it's designed to drive more continuous top of mind awareness amongst our target, and we're very encouraged with the results so far and looking forward to seeing it play out further this year.

Our next question will come from Jeff Farmer, Wells Fargo.

Just wanted to follow up on the first question, I believe, which is really just what consumer factors do you believe have most weight on traffic, your traffic and industry traffic, in general? So what's going on out there? We've heard a lot of different management teams, give us different opinions on this. But from your perspective, what has had the casual dining consumer a little bit screwed scooped over June, July, August?

This is Stuart. I'll start and let my colleagues here jump in. I think everybody's got their own theory on what's causing it and the Wal-Mart came out with their theory this morning as to what's causing their sales slows down. I think it's just in an environment that continue to be volatile from a consumer spending standpoints. Consumers are clearly pulling back at spending in retail. I think as Steve and I both mentioned more than we expected to happen at this point sort of in the economic cycle. Good news is, is that we've got a lot of great things going on in the business to offset that, and those things keep resonating. We can continue to outperform the rest of the industry. So feel good that we've got some things that we've rolled out, some other things in the pipeline, so how much of everything else...

I'm just going to add -- it's Denny that I agree, the consumer and guests remains tentative. They remain cautious. What they're not necessarily looking for is just the best deal, as much as they are looking for the best experience, and I think we have an edge there. We welcome families, we welcome -- we have a uniquely multigenerational concept that if they're going to gather together and come out, Red Robin is one of those places where you're not only get a great meal, you also get a great experience. And I think that's what's going to give us an edge over time.

Okay, and then just one more follow-up. You guys touched on this with your opening remarks, but I think it wasn't until April 2011 that was the first time you did that pretty meaningful new menu launch. You've done a good job of driving mix, appetizers, alcohol, dessert, everything you pointed to. And I think coming here through the second quarter of '13, you've actually seen your average check increase by almost 10% over that little bit more than 2-year period. So according to my data, that's one of the biggest numbers in casual dining, if not the biggest. So on my question, how do you balance the shorter-term benefit of that higher check versus what could be some longer-term traffic pushback with the pretty significant increase in that average check.

We keep a very close pulse on our relative value compared to our competitors. And again, I have not seen any degradation at all in terms of how people view the overall value of Red Robin. And again, we have a lot of choices. We're offering them everything from a $3 appetizer to a $9 one, from a $6.99 burger to a $9.99 LTO. So the guests, when they're in control and they opt in, tend to give you credit for giving them those choices. And we, again, we track our value relative to our competitors, and we've seen no degradation.

And just getting our point out, as we continue to have one of lowest average checks in casual dining, our average check in the quarter was about $12.15. So relative to our peer group, it's still the one of the lowest.

Jeff, this is Steve. The other thing I would point to is, if you've been in a Red Robin restaurant the last several weeks, I'm sure you've noticed the plating and presentation of some of our classic signature burgers. And the feedback we're getting from our guests is very, very positive. And we are literally taking the wrapper off of some of the greatest gourmet burgers in the industry and highlighting them as they come through the dining room, and it also helps deal with the value perception.

It raises the perception.

Next question will come from Bryan Elliott, Raymond James. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: A couple of things, I guess, I'd like to touch on. First, real quick, Denny, so this pulsing strategy with the advertising, would you expect that to, over time, sort of lessen traffic volatility? The brand used to be able to, at times, see some big spikes in traffic, one LTOs are particularly successful but obviously, we come to that expensive check. And would you expect that pulsing to level off that old pattern?

Yes, that's the goal. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: Yes, okay. And Steve, could you give us a quick sort of Burger Works update, what you're seeing as you continue to move forward? And obviously, with the plan to continue to build them, you're happy. But there's been some variability in results, and could you give us a more detailed update on what's happening with that concept?

Sure, Bryan. We've got 5 Burger Works open in 5 pretty disparate trade areas, and that's given us a lot of learning on where we think the concept is going to work from a real estate standpoint. We've made a lot of progress on the four-wall margins and the economic model. We are going to be opening another Burger Works here in a matter of weeks, 8 weeks maybe, in Fort Collins. And we're looking forward to getting some more learning from that. So we are encouraged with the Burger Works performance. We still have some more learning to get under our belts, but we are optimistic going forward, and we'll be able to give you a little bit more detail on our next quarterly call. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: Okay. Great. And last question for Stuart. Could you -- you went pretty fast over some of the guidance and some of the other things. Could you clarify, reiterate the comments on the full remodel, what you're seeing? So they cost $400,000 on average. I know you hope to get that down as you do more of them, maybe get some reengineering going, should you decide to roll out that systemwide. But the returns that you quoted were what again?

Yes. I think I'm so excited about the results in BTI [ph] that maybe I read too fast. So we're getting the average sales lift of around 6% on the full transformations. And so that's giving an IRR well over 12%, and that's versus the control group. And what we're using is sort of a test and learn process, so we got a control group of 25 or so restaurants for those 9 remodels, and so we get pretty good data all the way up and down the P&L as well as guest feedback. And so as Steve talked about, we'll get another 20 done this year. We'll take a little bit of a pause to read that out. And actually, a little bit -- while we're taking that pause, we're also going to look at what do we do with either lower volume restaurants, restaurants with a shorter lease terms. We'll be testing sort of a lower-cost version also sort of earlier next year. So we'll get some -- we're continuing to learn and improve. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: And the 12% hurdle rate includes some cost of capital or some -- that's not a pure 12%, right? There's a hold back or something in that?

Yes. So what there is, is basically the way we look at it is that we remodel our restaurants every 6 or 7 years anyway just to maintain sales. So out of that $400,000, we backed out $100,000 to $125,000, basically sort of the normal facelift cost so the returns will be on the -- the excess capital is where we're going to be getting the return on. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: Okay. And you talked about a 20% -- or a 5-year payback or a 20% cash-on-cash return. Is that just a pure cash flow from the sales lift over the $400k cash investment?

I didn't talk about cash-on-cash returns, but the payback is 5 years or less. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: Well, was it everything you payback in cash-on-cash?

Yes. I guess you end up in the same place, yes. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: I'm just understanding your definitions, right.

Yes, I know. It's really, cash-on-cash -- the way I look at cash-on-cash people can include next -- good lots of banks. So I try not to talk about cash on cash too much because what people include when they measure it are always very different. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: Yes. Okay. So when gave that comment, you were referring to cash flow lift relative to the $400,000 cash investment, full investment?

Yes.

The next question will come from Chris O'Cull with KeyBanc.

Steve, I'm sure I missed your comments about the premium burger test, but are these items expected to be rolled out later this year?

Denny, I'll give that to you.

Yes, and that's a comment. We're still in test with premium and encouraged by what we're seeing. But for competitive reasons, not willing to disclose our plans. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: Fair enough. And do you guys plan to replace the pricing this fall when it rolls off?

No. Currently, no plans to replace the pricing.

Okay. And is that -- is there a reason for that? Is it...

Yes. Commodity has, quite frankly, have come out more favorably than what we expected. So while ground beef costs were actually down year-over-year in the first half, particularly ground beef and some other -- all these other moving items as well, we'll start to cycle against harder numbers. But the pricing that we took in February fully offset the commodity and labor inflation.

Okay, okay. And then, Stuart, the G&A expenses, it's been up more than expected each quarter. And I would think this would be fairly predictable. Would you comment on why you're seeing some of the surprises and how much expense is not likely to reoccur in '14?

Yes. I mean, we'll obviously fill in '14 guidance next year. I mean, it's a -- a couple things that are really driving it. A piece of it is, that are going ahead, is the -- I mentioned, our new IT systems and supply chain. That is taking longer than what we anticipated to get that fully rolled out. So those costs, you get to basically burn rate as your rolling that out. And those costs will be ongoing as what -- sort of reiterated through, well, into 2014. So those costs will keep on going. Obviously, with the out-performance, through bonus plans and things like that, we are accruing higher incentive compensation. I would like to say that would continue to repeat, but the performance will dictate that. And then the investments that we're making so, overall, on staffing and personnel, I think I talked about it on last quarter's call, you look at the results that we're getting from the culinary innovations in our restaurants, that's contribution from some of the new people that we've added. And I think the way I look at it, we got a fairly diligent process, we're adding headcount around the areas, is that those are all people that are adding value either in Red Royalty or culinary and rolling items out, so we're -- those people are giving us some benefit on the top line as well as COGS.

Some of the project costs is issued with -- or the IT project cost, are they -- you say they're ongoing into '14, but I would think, eventually, that project teams would roll off, and you just have the technology. At what point...

Yes. And that's a fair point. And this year, we, obviously, we are rolling out labor management. That won't repeat. But as we've talked about sort of our roadmap and the initiatives, we've got some pretty good initiatives with payback that we see amusing. Going back to Steve's analogy of the airplanes at O'Hare, we've got those opportunities that we're going to continue to look at. So I would anticipate sort of some elevated level of investment, I'd say, for the next 18 to 24 months. And again, those will be giving us -- we'll be getting paybacks on those. But a lot of those development costs, as we sort of catch-up from a number of years of not investing, will continue to be elevated for the next couple of years.

Next question will come from Jeff Omohundro with Davenport & Company. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: Just a couple. First, another one on the remodeling. You got another 20 to do this year, the full remodels. And then it sounds like in 2014, you'll be testing a lower cost remodel. And then you had also mentioned taking a pause. I'm just wondering if there's any update in terms of where you are in this process and how soon you might flip the switch to go on a broader remodel strategy.

Yes. So if you sort of think about timing, so we won't, we probably won't -- we'll take a little bit of a pause if you look at sort of when we hit the green button this year to do the 20. We'll get those 20 done fairly well. So in terms of what our capacity is to do more, we could do more if we continue to see these results. I think you'll see us put our foot on the accelerator a little bit. Just given all the moving parts right now, not willing to go out and put a number out there in terms of how many we can do, but we're casting a variety of scenarios from -- if we continue to work really, really well that we can go to the whole chain fairly quickly. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: Okay. And then on the Wolverine movie tie-in, just some thoughts around this interesting effort, which really seemed to resonate. It seemed like it was well suited from a product standpoint and from a customer demographic standpoint. How pleased were you with that effort? And how unique was it in terms of a creative vehicle for you?

This is Denny. I think what I'm most pleased with is the team found a way to take a July 26 movie release and make it work for us from June all the way through now, essentially. And again, so you got the impact of June in the results we're talking about this morning. It is not at all unique for a restaurant to tie-in with blockbuster films. I think our Burger Authority and our ability to bring forward 2 unique burgers, made it particularly strong. We stayed out of the tchotchkes and items for sale, which I've seen burn many a restaurant chain. I've been a part of some of those. So I think our approach was to focus it on a great, terrific burger and a great tavern style. And it was unexpected. There's also a natural affinity between our concept, Red Robin, and going to the movies. It fits, our location strategy benefits from it. And we actually did some in-theater advertising as well this year that was designed to broaden our awareness at that key time. So I'm real pleased with it, and we'll have more to share, I think -- I know, next quarter. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: And was $1.50 price point on the Kazuri Style trade-up versus the dollar -- how happy were you with that?

We actually tested our way into that by first taking the pig-out up $1.50, which is also our most expensive style, and so I know a decline in appeal. So we will continue to look at appropriate pricing for styles on Tavern. But no evidence that it caused us any harm. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: And then last question just on the pacing of unit development. A little bit below my target in the quarter, resulting in a more back-end loaded development profile this year. I think it might have been Stuart who said that, next year, there'll be a little bit more balance. Maybe elaborate on that statement. And then just in general, what you might be seeing in terms of real estate, in terms of trends and momentum around desirable sites?

Jeff, so in terms of new unit openings, yes, they are fairly back-end weighted this year, and that's just sort of the way the spaces became available. And then, next year, it will be actually more front-end weighted. So you'll see more, probably in the first quarter, than you will in the second, third and fourth. So we've got a lot of great size in the pipeline. I think from a real estate availability location, you continue to see high demand for sites, very little new development -- So some of our sites or conversion, either from other retail or other restaurant chains. And I think it's a testament to our relationships with, particularly the large developers, and the sales momentum that we have that we're able to be a preferred tenant for casual dining spaces. The Burger Works spaces and also the 4,000 square foot that we're testing, it continues to be pretty good demand for both of those spaces. Burger Works sites, everybody's out there looking for 2,000 to 2,200 square feet. And unless you -- we're learning as you get -- we're almost willing to sign the day you see the space to lock it up. So there's a lot of competition out there for retail sites. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: And the $1.7 million year-over-year preopening in H2 versus the prior year, I think you said the bulk of that in Q3?

Exactly. So the total for the year -- the total for the back half will be about $3.5 million, and most of that in Q3.

And we'll now move to the next question coming from Conrad Lyon with B. Riley & Co.

First, I'll say this. I do like the new presentation, checked it out. Question, I noticed you also tweaked some of the core burgers, which I liked. Are you seeing any cost of goods favorability from that? And let me just elaborate a little bit too, I noticed -- I don't know what you call them, but kind of like a cup for the fries, that looks like you can get more consistent portion sizes as well. But the core question here is, are you going to be COGS neutral, maybe COGS unofficial with the new menu and so forth?

Always to be COGS neutral with the investment and some of the things like the garnishes, which is I think what you're speaking to, like the fried jalapeno on top or the other elements that we're bringing along. So we're looking to elevate presentation across the board, and some of those are minor investments.

Okay. Let me shift back towards the unit development store. I just want to -- I appreciate your excitement, too. So I think you said, what, 5.2% operating week growth or thereabouts in the back half, is that what I heard?

Yes.

Okay. And does that assume just normal size Red Robins in the back half or are there any other smaller footprints going in?

No. There'll be about 5 of the midsized, the 4,000 square-foot unit, 5 of the 15 will be mid-sizes.

Okay. Got you there. And then regarding CapEx for the first half, just kind of backing it. I think you said something like $21 million for the 5 units. Is that strictly for the 5 units, roughly $4 million a unit, is that right?

Yes. No, the $21 million includes development of cost of some of the units that will be opening in the back half.

And now we'll hear from Joe Buckley with Bank of America.

Just a few details that you may have touched on, but let me try -- I get them. Can you give us the alcohol mix in the quarter and how that might have changed?

Yes. That's about 7.5%, so we continue to claw back sort of 30 to 50 basis points year-over-year. So in the third quarter, I think it was up -- I'm sorry, second quarter was up about 30 basis points. The first quarter was about 50, so 7.5% mix.

Okay. And Stu, what was the food basket inflation in the quarter and what are you thinking now for the second half?

Overall, for the year, I think our commodity inflation basket is going to be around 2%, which was down from our initial 4%, which we had brought down to 3%. And this is as ground beef continues to be favorable through the second quarter. So that inflation will be sort of look at what's going forward. Obviously, the grain markets, where corn prices are, is great. It's going to take a while for some of that to flow through. So ground beef, obviously, will take a long time to flow through. Chicken, you should start to see some benefit from the harvest, really, late first quarter next year. It takes a few months for that to flow through. So we still got a little bit of headwinds on COGS in the second half, and feel a little bit better right now where things are, at least given the harvest in.

Okay. And then the 20 remodels plan for this year, the 20 additional ones, are those all full remodels, full transformation?

Yes. I think we said on the last call, this will all be full transformation. 15 of those were selected, basically, using our test and learn software, and ones that we think should continue to perform really well. We've got the 5 in there that continue to learn from in terms of different demographics, different types of trade areas.

And next we'll hear from John Glass with Morgan Stanley.

Just a couple of follow-ups as well. First, just on the advertising spend, what was it relative year-over-year? Was there an increase that may have accounted for the better-than-industry average sales? And also, maybe the weeks on air, was that significantly different year-on-year?

Consistent with our pulsing strategy, we did have more weeks on air, but we're spending it differently, not more, at this point. So overall, we're not increasing our spending, we're just spending it differently.

Overall weeks, John, year-over-year, we're fairly consistent.

Okay. That's helpful. And then as it relates to development next year, it seems like you're very focused on both your remodels, as well as in to your smaller prototypes. Can you talk about, if you haven't before, what the overall capacity growth you think of as next year? And also, can you talk about franchise acquisition? There was a time when the brand thought franchise acquisitions was a better way to grow, maybe valuations more attractive. How did those factor in to growth going forward? Are there any ones or geographies that are still attractive less out there for you?

I'll touch first on sort of the capital deployment strategy, which is sort of the, you sit down and say, okay, we're generating cash, what's the best way for us to put that to use? And the returns that we're seeing both from new units and from the brand transformation continue to really score well. And so that's, to us, well, we've got to sit -- as we sit down and finalize our plans for next year, balance that out from a capacity standpoint, impact on the organization because as you add new units, each new unit supports new managers, some training. So we're going through and sort of figuring that balance out right now, but feel good about the opportunities. And as you sort of mentioned, the 4,000 square foot unit is performing well also. And using that to sort of fill in, in some our existing markets, feels great. I'm not sure the second part of the question, John?

Was franchise acquisitions. And by extension also, their willingness to develop, if you're not in the acquiring business, are they willing to develop, given all these developments?

Yes. Let me start and I'll hand over to Eric. So we've gotten franchises, opened up 1 new unit in the second quarter. There's a couple more in the pipeline probably to open this year, one may move into January. And so they're starting development, also excited about the 4,000 square foot. Eric?

Yes. Our franchise community is very excited about the 4,000 square foot as well as the potential works down the road. We're not -- obviously, we always want to be an exit strategy for great operators out there, and we'll always be opportunistic and weigh that against our cost to capital and how we exercise that.

Robert Derrington with Wunderlich Securities has the next question.

I'm kind of curious, last year, Steven or maybe Denny, you can answer this a little bit better. The Tavern Double was especially successful for you during that period of time, the Olympics. And as we commended this period of time with a weak economic backdrop, does that give you a tool that you might use to flex during this period of time, talking about it with your Red Royalty loyalty fans? How should we think about your strategy as we go forward?

Absolutely, Robert. That's why part of the reason that we, obviously, wanted it on the menu is there for us every day. It's an everyday value. And we still have a lot of awareness that we can create of the $6.99 Tavern Double and importantly, $6.99 Tavern Double with bottomless fries, which makes it even more of a unique offering. So that's why we continue to focus on new styles that we bring to bear and balancing our overall media strategy and creative strategy. We continue to use that as part of our -- one of our many 24, or 1 million reasons. In fact, I know that we're planning to posting. You'll see the reel today on our site that include some of the things that are on air now. And you'll see a spot called Burger Daddy that focuses on that exact offering.

The other thing that I scratch my head over is, there's a question earlier on the call about the fact that your average check is up over the last couple of years. But however, when I look at your menu, you've got a broader variety of items at more price points that kind of let consumers flex up and down. Have you seen anything that's giving you any reason why consumers would be standoffish or concerned about how much they pay for your experience?

No. I have not. And again, we keep our finger on the pulse of how the guest perceives our value relative to competition. And value isn't just about price, it's about the experience that they have. And we think, overall, between new plating and presentation, between our tremendous service, between us welcoming them in a way that no others do, the absolute value of the Red Robin experience is superior to any of our competitors.

We'll now hear from Steve Anderson, Miller Tabak. Stephen Anderson - Miller Tabak + Co., LLC, Research Division: Taking a look at your pay-down of debtors, where I think is an unsung achievement that you've done to date. Looking at your run rate, it looks like you're probably going to be going at maybe about 2.8 annual interest cost maybe going to next year versus you were running in the low $4 million range. And as you contemplate possible expansion of the concept as well as the remodels, do you see having a need to go into your credit facility to expand it?

Steve, this is Stuart. Thanks for pointing that out. It's always near and dear to a CFO's heart to focus on seasonality. So we will, I mean, we are obviously increasing the number of unit openings here in the second half. We've got brand transformation coming. So in turn we will be using more cash relative to cash flow generated in the second half than we did in the first half. And I think you'll continue to see that next year as well with the new unit openings and the remodels. So I don't -- if we have deepen the credit facility, it would be a minimal amount. And just given where our leverage is, well under 1x, it's $72 million of debt and EBITDA over the last 4 quarters has been over -- about $105 million. So from a leverage standpoint, in great shape.

The next question will come from Peter Saleh with Telsey Advisory Group.

Great. Denny, I wanted to ask about the NFL tie-in. It's something you guys just recently launched. Is this something that's going to continue throughout the course of the season? Is there any way to tie this in with your loyalty program? And maybe you can talk a little bit about your expectations for that.

Sure. I'll be happy to, Peter. That grew out of a long-standing relationship that we've had here in our home market, with the Broncos. What used to be a feel-good relationship in promotion, we turned into a traffic driver last year with a triggered promotion associated with Saks for the Broncos. So we learned about it first here, last year. We had 2 opportunities, so it's not an overall NFL relationship. It's a selective opportunity in 2 different markets. In addition to the Broncos, we've added the Seahawks this year which, of course, benefits a large percentage of our system. And we've added the Bears in Chicago, which is more of an emerging market than an opportunity for us. I'll remind you, these aren't both -- these are all triggered promotions, so they are not certain in terms of triggering what's called a Tavern Double Tuesday following the game. But again, speaking back to the question earlier, it's another great way to keep Tavern Double in the conversation, and it fits our overall desire to have a balance of men and women in our concept. And in fact, we're working closely with the Broncos now on how do we help them build their female fan base through our Red Robin Royalty program associated with their Orange Crush initiative. So any time we have things that can relate back to Red Robin Royalty, we love it, and particularly when they can help us get forward that story of everyday value at Tavern Double.

Should we expect to see more markets this year coming on?

Not this year, no, not likely. Again, these take a while to negotiate, and we're not as deep-pocketed as some of our competitors, but we think we have a lot to offer. And so we'll certainly continue to consider them in appropriate markets.

Great. And then, Stuart, I wanted to ask about, just going back to the remodels. For the new units that you guys are going to build in the back end of the year, what, maybe 1 or 2 key elements from the remodels, are you going to be incorporating into those new units?

Peter, why don't I get you to hold that thought. We're actually -- we'll be touring a ground up unit that will take some of the decor items in Secaucus, New Jersey and are planning to do an investor meeting there, we'll take everybody through that in early November. So I think it is the second week of November, I think. We're working on a hold the date in getting that out and -- so hold that question till then.

And just to tease a little further, we might even feed you.

[Operator Instructions] We'll now take a follow-up from Bryan Elliott with Raymond James. Bryan C. Elliott - Raymond James & Associates, Inc., Research Division: I just wanted to follow-up on the NFL tie-in as well. I'd like to get some help for my own purposes here. So I'd like to know the depth of research that you did. You're implicitly betting on the Seahawks offense and the Bears secondary. Could you go through the logic on your analysis there and help us out as we're putting our fantasy picks in?

There you go. Well, my biggest concern is I need Von Miller to stay out of jail right now. So yes, we actually triggered all 3 first week out. So we were very pleased with that. And we did do some research, but I'm sorry, I can't help you with your fantasy league, Bryan.

Bryan, this is a little known area of strength for Denny. She may be available outside of this environment to provide you with some of that feedback.

As the youngest daughter in the family, I watched a lot of football with my dad, trust me.

And that will conclude our question-and-answer session. I'll turn it back over to Steve Carley for any closing remarks.

Well, thanks, everyone for joining us this morning. We're looking forward to talking with you again in early November when we'll share our third quarter results for 2013. Have a great day. Take care.

Ladies and gentlemen, this will conclude your conference for today. We do thank you for your participation.